FPL Group Announces First Quarter Earnings.JUNO BEACH This article is about the beach codenamed in WWII. For other uses, see Juno Beach (disambiguation) Juno Beach was one of the landing sites for Allied invaders on the coast of Normandy during D-Day. It was situated between Sword Beach and Gold Beach. , Fla. -- FPL FPL feline panleukopenia. Group, Inc. (NYSE NYSE See: New York Stock Exchange : FPL): --FPL Energy posts outstanding quarter with excellent results from existing assets and new project additions --Florida Power & Light results negatively impacted due to mild weather --FPL Group reaffirms 2006 and 2007 adjusted earnings expectations FPL Group, Inc. (NYSE: FPL) today reported 2006 first quarter net income on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis of $248 million, or $0.63 per share, compared with $137 million, or $0.36 per share, in the first quarter of 2005. FPL Group's net income for the first quarter of 2006 included a net unrealized after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. gain of $23 million associated with the mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. effect of non-qualifying hedges and $3 million of after-tax merger related costs. The results for last year's first quarter included a net unrealized after-tax loss of $31 million associated with the mark-to-market effect of non-qualifying hedges. Excluding the mark-to-market effect of non-qualifying hedges and merger- related costs, FPL Group's earnings would have been $228 million or $0.58 per share for the first quarter of 2006, compared with $168 million, or $0.44 per share, in the first quarter of 2005. FPL Group's management uses adjusted earnings internally for financial planning Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against , for analysis of performance, for reporting of results to the Board of Directors and for the company's employee incentive compensation plan. FPL Group also uses earnings expressed in this fashion when communicating its earnings outlook to analysts and investors. FPL Group management believes that adjusted earnings provide a more meaningful representation of FPL Group's fundamental earnings power. "FPL Group is off to an excellent start in 2006 driven by an outstanding performance at FPL Energy that more than offset rather tepid tep·id adj. 1. Moderately warm; lukewarm. 2. Lacking in emotional warmth or enthusiasm; halfhearted: "the tepid conservatism of the fifties" Irving Howe. results from Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and Power & Light," said Lew a. 1. Lukewarm; tepid. Hay, chairman, president and chief executive officer of FPL Group. "FPL Energy had another excellent performance across virtually every segment of its business. The contribution from existing assets and new project additions, coupled with outstanding operational performance, benefited quarterly results. For the first time since its formation, FPL Energy's contributions on an adjusted earnings basis exceeded those of FPL. While we do not expect FPL Energy to outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. FPL every quarter in terms of earnings contribution, it does help illustrate the strength of FPL Energy's business model. "While Florida Power & Light continues to enjoy strong customer growth, its results were dampened somewhat by mild weather conditions. Although earnings were up quarter over quarter, we had hoped to do better." Florida Power & Light Company Florida Power & Light, FPL Group's principal subsidiary, reported first quarter net income of $122 million or $0.31 per share, compared to $111 million or $0.30 per share for the prior-year quarter. In the last 12 months, the average number of FPL accounts increased by 92,000 or 2.2 percent, which is modestly above the average growth experienced since 2000, but slightly below the growth over the last couple of years. Retail sales of electricity grew 1.7 percent during the first quarter. Operations and maintenance (O&M) expense was up compared to the prior year quarter due primarily to cost pressures associated with increased staffing at FPL's nuclear plants to meet enhanced regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. and to ensure long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. reliability and higher electric distribution costs distribution costs distribute npl → Vertriebskosten pl driven by increases in fleet vehicle costs and additional restoration expenses. Depreciation expense decreased in the first quarter compared to the prior year quarter. The depreciation expense was down primarily due to the extension of the useful lives of the generation fleet and the elimination of the decommissioning Decommissioning is a general term for a formal process to remove something from operational status. Some specific instances include:
n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. , both of which were approved by the Florida Public Service Commission Florida Public Service Commission (FPSC) is an independent regulatory agency serving the public of Florida by managing its public utilities such as telecommunications, electricity, natural gas, water, and wastewater. (PSC (Public Service Commission) Same as PUC. ) and implemented under the August 2005 rate stipulation An agreement between attorneys that concerns business before a court and is designed to simplify or shorten litigation and save costs. During the course of a civil lawsuit, criminal proceeding, or any other type of litigation, the opposing attorneys may come to an agreement and settlement agreement. "Mild weather in the first quarter of this year reduced FPL's revenues. The combination of heating and cooling degree days, a common metric used for determining weather impacts on energy usage, was down more than 14 percent in the quarter compared to normal," said Hay. "Although revenues were down due to mild weather, the fundamental attractiveness of the Florida economy coupled with continued population growth should lead to continued strong customer growth at FPL." In January January: see month. , FPL filed a petition petition Written instrument directed to an individual, government official, legislative body, or court in order to seek redress of grievances or to request a favour. with the PSC seeking recovery of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $816 million of prudently pru·dent adj. 1. Wise in handling practical matters; exercising good judgment or common sense. 2. Careful in regard to one's own interests; provident. 3. Careful about one's conduct; circumspect. incurred restoration costs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the 2005 storm season. In that petition, FPL proposed combining these amounts with the remaining unrecovered deficit from 2004 as well as rebuilding the storm reserve to approximately $650 million. Two alternatives were proposed: the use of securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. was the primary recommendation and a surcharge An overcharge or additional cost. A surcharge is an added liability imposed on something that is already due, such as a tax on tax. It also refers to the penalty a court can impose on a fiduciary for breaching a duty. was the alternate alternate /al·ter·nate/ (awl´ter-nit) 1. following in turns. 2. pertaining to every other one in a series. 3. occurring in place of another; acting as a substitute. . Since the petition was filed FPL has refined its estimates of final costs based on new information and has reduced the total estimated unrecovered costs by approximately $46 million. In April, the PSC held three days of hearings on the prudency Pru´den`cy n. 1. Prudence. of the 2005 costs as well as the considerations that should lead to choosing securitization or surcharge and the level of the reserve that should be targeted. FPL continues to believe its actions were prudent and that its accounting approach concerning storm costs is appropriate. The PSC is due to vote on all outstanding issues in this matter on May 15. Also during the first quarter, FPL concluded that its West County Energy Center proposal is the best and most cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. option to provide additional electricity for FPL customers beginning in 2009. Under FPL's proposal, the new plant will consist of two natural gas-fired gas-fired adj → de gas gas-fired adj → au gaz gas-fired adj (heater etc) → Gas- units of approximately 1,200 megawatts each. FPL has already filed for a determination of need petition with the PSC. Assuming all of the necessary approvals are received in a timely manner, the first generating unit of the West County Energy Center is expected to be completed by 2009 and the second in 2010. FPL also notified the Nuclear Regulatory Commission Nuclear Regulatory Commission (NRC), an independent U.S. government commission, created by the Energy Reorganization Act of 1974 and charged with licensing and regulating civilian use of nuclear energy to protect the public and the environment. of its intention to submit a license application in 2009 for a new nuclear plant in Florida. A decision to build is still several years away and would be evaluated on several factors, including regulatory climate regulatory climate The extent to which a regulated firm or industry is permitted to earn an adequate return on the stockholders' investment. This term is nearly always used in reference to utilities, which are required to obtain approval for rate changes. , financial market conditions and competing fuel technologies. FPL Energy FPL Energy, the competitive energy subsidiary of FPL Group, reported first quarter net income on a GAAP basis of $151 million or $0.38 per share, compared to $37 million or $0.10 per share in the prior year quarter. FPL Energy's net income for the first quarter of 2006 included a net unrealized after-tax gain of $23 million associated with the mark-to-market effect of non-qualifying hedges. The results for last year's first quarter included a net unrealized after-tax loss of $31 million associated with the mark-to-market effect of non-qualifying hedges. Excluding the mark-to-market effect of non-qualifying hedges, net income for FPL Energy would have been $128 million or $0.32 per share compared to $68 million or $0.18 per share in 2005. FPL Energy's growth in adjusted earnings in the first quarter is due primarily to the strong performance of its existing assets, the addition of new projects and strong operational performance across the portfolio coupled with favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. market conditions and weather resources that were close to historical averages. "FPL Energy's performance during the first quarter was outstanding, and its excellent overall results reflect the strength of its growing, diversified diversified (di·verˑ·s portfolio, improved market conditions and a continuing focus on operational excellence," said Hay. "During the first quarter, we also saw a return to a more normal wind resource that benefited FPL Energy's existing wind assets and new project additions." FPL Energy continued to make good progress during the first quarter in selling forward the output from its power plants for 2007. As of March 31, 2006, FPL Energy's overall 2006 contract coverage has changed little since year end 2005, with approximately 87 percent of the capacity of its current portfolio under contract. Approximately 90 percent of FPL Energy's 2006 expected gross margin for the wholesale generation fleet is protected against fuel and power market volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the . For 2007, contract coverage stands at approximately 72 percent, with more than 80 percent of 2007 expected gross margin for its wholesale generation fleet protected against fuel and power market volatility. During the first quarter, an FPL Energy subsidiary completed the purchase of a 70 percent interest in the Duane Arnold Energy Center The Duane Arnold Energy Center is located on a 500 acre (2 km²) site on the west bank of the Cedar River, two miles north of Palo, Iowa, USA, or eight miles northwest of Cedar Rapids. It is Iowa's only nuclear power plant. DAEC entered operation in June 1974. , a nuclear power plant located northwest For names and places containing the slightly longer word 'northwestern' (or variants), see . Northwest or north west is the ordinal direction halfway between north and west on a compass. It is the opposite of southeast. of Cedar Rapids Cedar Rapids, city (1990 pop. 108,751), seat of Linn co., E central Iowa, on the Cedar River; inc. as a city 1856. The second largest city in Iowa, it is named for the surging rapids in the river. , Iowa, from Interstate in·ter·state adj. Involving, existing between, or connecting two or more states. n. One of a system of highways extending between the major cities of the 48 contiguous United States. Noun 1. Power and Light. All of the power from FPL Energy's share of the Duane Arnold Energy Center is being sold under a long-term contract to Interstate Power and Light. FPL Energy's 2006 wind program continues to make excellent progress. Thus far in 2006, FPL Energy has about 760 megawatts of new wind projects that have either been completed or are expected to reach commercial operation by the end of the year. With the two-year extension of the federal wind production tax credit, a strong pipeline of wind projects and corresponding equipment contracts in place, FPL Energy expects to add 1,250 to 1,500 megawatts over the course of the 2006/2007 period. Corporate and Other Corporate and Other negatively impacted net income by $25 million or $0.06 per share, primarily driven by interest expense, corporate interest income, corporate expenses and merger related expenses. Outlook "Although it is still early in the year, FPL Energy is off to a good start. The outstanding performance at FPL Energy in the first quarter puts us ahead of where we had expected to be at this point in the year," said Hay, "but this is partially offset by the first quarter weakness at Florida Power & Light, and the general rise in interest rates, which is likely to pressure the Corporate & Other segment over the course of the year. "With a solid first quarter behind us and numerous growth prospects for the future, we remain comfortable with our full-year 2006 and 2007 adjusted earnings expectations for FPL Group." For 2006, FPL Group expects adjusted earnings of $2.80 to $2.90 per share assuming normal weather for the balance of the year, normal operating conditions, continued customer growth at FPL, and a satisfactory outcome to FPL's storm cost recovery proceedings and excluding the cumulative effect of adopting new accounting standards, the mark-to-market effect of non-qualifying hedges, and merger-related expenses, none of which can be determined at this time. Similarly, for 2007 FPL Group expects adjusted earnings to be in the range of $3.15 to $3.35 per share. Constellation Constellation, ship Constellation (kŏnstĭlā`shən), U.S. frigate, launched in 1797. It was named by President Washington for the constellation of 15 stars in the U.S. flag of that time. Merger "In addition to executing our business plan, we have also been focused on our proposed merger with Constellation Energy Constellation Energy (NYSE: CEG), headquartered in Baltimore, Maryland, generates, trades, supplies, and distributes energy. The company operates over 35 power plants in 11 states (mainly Maryland, Pennsylvania, New York, West Virginia, and California) under its operating . We remain very positive on the strategic rationale rationale (rash´  nal´),n the fundamental reasons used as the basis for a decision or action. for the merger, which holds the prospect of enabling us to build the industry-leading competitive energy business while simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics offering modest incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. benefits to the customers of the two regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. utilities," said Hay. "At the same time, however, we cannot be blind to some of the negative political developments in Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). which, under some possible scenarios, could inhibit inhibit /in·hib·it/ (in-hib´it) to retard, arrest, or restrain. in·hib·it v. 1. To hold back; restrain. 2. or prevent us from realizing the potential value of the deal. We continue to believe that FPL Group is a strong independent company with excellent stand-alone (jargon) stand-alone - Capable of operating without other programs, libraries, computers, hardware, networks, etc. Exactly what is absent is presumed to be obvious from context. "We only run Windows on stand-alone PCs because it's too dangerous to run it on networked ones." growth prospects and we will not allow the potential value of the deal to be compromised simply in order to meet politically imposed hurdles. We remain committed to protecting and enhancing FPL Group shareholder value." Non-solicitation This communication is not a solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of a proxy See proxy server. (networking) proxy - A process that accepts requests for some service and passes them on to the real server. A proxy may run on dedicated hardware or may be purely software. from any security holder of FPL Group or Constellation Energy. Constellation Energy intends to file with the Securities and Exchange Commission a registration statement that will include a joint proxy statement/prospectus of Constellation Energy and FPL Group and other relevant documents to be mailed to security holders in connection with the proposed transaction. WE URGE URGE Uniform Rating of Generating Equipment INVESTORS TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT FPL GROUP, CONSTELLATION ENERGY, AND THE PROPOSED TRANSACTION. A definitive proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. will be sent to security holders of FPL Group and Constellation Energy seeking approval of the proposed transaction. Investors and security holders will be able to obtain these materials (when they are available) and other documents filed with the SEC free of charge at the SEC's website, www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . In addition, a copy of the joint proxy statement/prospectus (when it becomes available) may be obtained free of charge from Constellation Energy, Shareholder Services, 750 E. Pratt Street, Baltimore Baltimore, city (1990 pop. 736,014), N central Md., surrounded by but politically independent of Baltimore co., on the Patapsco River estuary, an arm of Chesapeake Bay; inc. 1745. , MD 21201, or from FPL Group, Shareholder Services, P.O. Box 14000, 700 Universe Blvd Blvd abbr (= boulevard) → Bd ., Juno Beach, Florida Juno Beach is a town in Palm Beach County, Florida, United States. The population was 3,262 at the 2000 census. As of 2004, the population recorded by the U.S. Census Bureau is 3,391. 33408-0420. This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful Contrary to or unauthorized by law; illegal. When applied to promises, agreements, or contracts, the term denotes that such agreements have no legal effect. The law disapproves of such conduct because it is immoral or contrary to public policy. prior to registration or qualification under the securities laws of such jurisdiction. No offering of securities shall be made except by means of a prospectus A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. meeting the requirements of Section 10 of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . FPL Group, Constellation Energy, and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding FPL Group's directors and executive officers is available in its Form 10-K/A filed with the SEC by FPL Group on April 28, 2006, and information regarding Constellation Energy's directors and executive officers is available in its Form 10-K/A filed with the SEC by Constellation Energy on May 1, 2006. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. As previously announced, FPL Group's first quarter earnings conference call is scheduled for 9 a.m. ET on Tuesday Tuesday: see week. , May 2, 2006. The webcast is available on FPL Group's website by accessing the following link, http://www.FPLGroup.com/investor/contents/investor_index.shtml. The slides accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. the presentation may be downloaded at www.FPLGroup.com beginning at 7:30 a.m. ET today. For persons unable to listen to the live webcast, a replay will be available for 90 days by accessing the same link as listed above. This press release should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the attached unaudited financial information. Profile FPL Group, with annual revenues of more than $11 billion, is nationally known as a high-quality, efficient, and customer-driven organization focused on energy-related products and services. With a growing presence in 26 states, it is widely recognized as one of the country's premier power companies. Its principal subsidiary, Florida Power & Light Company, serves more than 4.4 million customer accounts in Florida. FPL Energy, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , FPL Group's competitive energy subsidiary, is a leader in producing electricity from clean and renewable fuels Renewable fuels are alternative fuel sources such as ethanol, biodiesel (e.g. soy, vegetable oils, animal fats, or recycled restaurant greases) or hydrogen, in contrast to non-renewable fuels such as natural gas, LPG (propane). . Additional information is available on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.FPLGroup.com, www.FPL.com and www.FPLEnergy.com. Cautionary Statements And Risk Factors That May Affect Future Results In connection with the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 (Reform Act), FPL Group, Inc. (FPL Group) and Florida Power & Light Company (FPL) are hereby providing cautionary statements identifying important factors that could cause FPL Group's or FPL's actual results to differ materially from those projected in forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. (as such term is defined in the Reform Act) made by or on behalf of FPL Group and FPL in this presentation, on their respective websites, in response to questions or otherwise. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as will likely result, are expected to, will continue, is anticipated, believe, could, estimated, may, plan, potential, projection projection, in psychology: see defense mechanism. See rear-projection TV, front-projection TV and LCD panel. (theory) projection - In domain theory, a function, f, which is (a) idempotent, i.e. , target, outlook) are not statements of historical facts and may be forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. . Forward-looking statements involve estimates, assumptions and uncertainties. Accordingly, any such statements are qualified in their entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. by reference to, and are accompanied ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. by, the following important factors (in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements) that could cause FPL Group's or FPL's actual results to differ materially from those contained in forward-looking statements made by or on behalf of FPL Group and FPL. Any forward-looking statement speaks only as of the date on which such statement is made, and FPL Group and FPL undertake no obligation to update any forward-looking statement to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , including unanticipated events, after the date on which such statement is made. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. The following are some important factors that could have a significant impact on FPL Group's and FPL's operations and financial results, and could cause FPL Group's and FPL's actual results or outcomes to differ materially from those discussed in the forward-looking statements: --FPL Group and FPL are subject to complex laws and regulation, and to changes in laws or regulations, including the Public Utility Regulatory Policies Act The Public Utility Regulatory Policies Act (or PURPA) was a law passed in 1978 by the United States Congress as part of the National Energy Act. It was meant to promote greater use of renewable energy. of 1978, as amended (PURPA PURPA Public Utility Regulatory Policy Act of 1978 ), the Public Utility Holding Company Act Public Utility Holding Company Act The 1935 act that gives the SEC authority over the security issues, the accounting systems, the corporate structures, and the intercompany transactions of public utilities. , as amended (Holding Company Act), the Federal Power Act, the Atomic Energy Act The Atomic Energy Act may refer to a number of different laws around the world, usually meant to govern nuclear power and/or nuclear weapons production. In the United States, there are two federal laws known by the name: tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. actions, including those of the Federal Energy Regulatory Commission The Federal Energy Regulatory Commission (FERC) is the United States federal agency with jurisdiction over electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. (FERC FERC Federal Energy Regulatory Commission FERC FEMA Emergency Response Capability ), the Florida Public Service Commission (FPSC FPSC Florida Public Service Commission FPSC Financial Planners Standards Council (Canada) FPSC Field Programmable System Chip (Lucent Technologies) FPSC Fundación Promoción Social de la Cultura ) and the legislatures and utility commissions of other states in which FPL Group has operations, and the U.S. Nuclear Regulatory Commission (NRC NRC abbr. 1. National Research Council 2. Nuclear Regulatory Commission Noun 1. NRC - an independent federal agency created in 1974 to license and regulate nuclear power plants ), with respect to, among other things, allowed rates of return, industry and rate structure, operation of nuclear power facilities, operation and construction of plant facilities, operation and construction of transmission facilities, acquisition, disposal, depreciation and amortization of assets and facilities, recovery of fuel and purchased power costs, decommissioning costs, return on common equity (ROE A fictitious surname used for an unknown or anonymous person or for a hypothetical person in an illustration. A lawsuit is generally named for the persons who are parties to it. ) and equity ratio limits, and present or prospective wholesale and retail competition (including but not limited to retail wheeling and transmission costs). The FPSC has the authority to disallow To exclude; reject; deny the force or validity of. The term disallow is applied to such things as an insurance company's refusal to pay a claim. recovery by FPL of any and all costs that it considers excessive or imprudently im·pru·dent adj. Unwise or indiscreet; not prudent. im·pru  dent·ly adv.Adv. 1. incurred. --The regulatory process generally restricts FPL's ability to grow earnings and does not provide any assurance as to achievement of earnings levels. --FPL Group and FPL are subject to extensive federal, state and local environmental statutes, rules and regulations, as well as the effect of changes in or additions to applicable statutes, rules and regulations, relating to air quality, water quality, waste management, wildlife mortality, natural resources and health and safety that could, among other things, restrict In the C programming language, the data pointed to by a pointer declared with the restrict qualifier may not be pointed to by any other pointer. This allows for more effective optimization. or limit the output of certain facilities or the use of certain fuels required for the production of electricity and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. require additional pollution control equipment and otherwise increase costs. There are significant capital, operating and other costs associated with compliance with these environmental statutes, rules and regulations, and those costs could be even more significant in the future. --FPL Group and FPL operate in a changing market environment influenced by various legislative and regulatory initiatives regarding deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. or restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , regulation or restructuring of the energy industry, including deregulation of the production and sale of electricity. FPL Group and its subsidiaries will need to adapt to these changes and may face increasing competitive pressure. --FPL Group's and FPL's results of operations could be affected by FPL's ability to renegotiate re·ne·go·ti·ate tr.v. re·ne·go·ti·at·ed, re·ne·go·ti·at·ing, re·ne·go·ti·ates 1. To negotiate anew. 2. To revise the terms of (a contract) so as to limit or regain excess profits gained by the contractor. franchise agreements with municipalities and counties in Florida The links in the column FIPS County Code are to the Census Bureau Info page for that county. List of 67 counties in the U.S. state of Florida: State Abbr. FIPS State Code State FL 12 Florida Index # on Map FIPS County Code County Name 1 001 Alachua County . --The operation of power generation facilities involves many risks, including start up risks, breakdown breakdown /break·down/ (brak´doun) 1. the act or process of ceasing to function. 2. an often sudden collapse in health. 3. loss of self-control. or failure of equipment, transmission lines or pipelines, use of new technology, the dependence on a specific fuel source, including the supply and transportation of fuel, or the impact of unusual or adverse weather conditions (including natural disasters such as hurricanes), as well as the risk of performance below expected or contracted levels of output or efficiency. This could result in lost revenues and/or increased expenses, including the requirement to purchase power in the market at potentially higher prices to meet its contractual obligations. Insurance, warranties warranties, n.pl the details of a contract; considered less important than the conditions. Whereas the penalty for breach of conditions is the termination of the contract, the penalty for breach of warranties is payment of damages to the innocent party. or performance guarantees may not cover any or all of the lost revenues or increased expenses, including the cost of replacement power. In addition to these risks, FPL Group's and FPL's nuclear units face certain risks that are unique to the nuclear industry including the ability to store and/or dispose of dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. spent nuclear fuel Spent nuclear fuel, occasionally called used nuclear fuel, is nuclear fuel that has been irradiated in a nuclear reactor (usually at a nuclear power plant) to the point where it is no longer useful in sustaining a nuclear reaction. , the potential payment of significant retrospective LAW, RETROSPECTIVE. A retrospective law is one that is to take effect, in point of time, before it was passed. 2. Whenever a law of this kind impairs the obligation of contracts, it is void. 3 Dall. 391. insurance premiums, as well as additional regulatory actions up to and including shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down of the units stemming stemming - stemmer from public safety concerns, whether at FPL Group's and FPL's plants, or at the plants of other nuclear operators. Breakdown or failure of an FPL Energy, LLC (FPL Energy) operating facility may prevent the facility from performing under applicable power sales agreements which, in certain situations, could result in termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of the agreement or incurring in·cur tr.v. in·curred, in·cur·ring, in·curs 1. To acquire or come into (something usually undesirable); sustain: incurred substantial losses during the stock market crash. 2. a liability for liquidated damages Monetary compensation for a loss, detriment, or injury to a person or a person's rights or property, awarded by a court judgment or by a contract stipulation regarding breach of contract. . --FPL Group's and FPL's ability to successfully and timely complete their power generation facilities currently under construction, those projects yet to begin construction or capital improvements to existing facilities within established budgets is contingent upon Adj. 1. contingent upon - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent on, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent many variables and subject to substantial risks. Should any such efforts be unsuccessful, FPL Group and FPL could be subject to additional costs, termination payments under committed contracts, and/or the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of their investment in the project or improvement. --FPL Group and FPL use derivative instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. , such as swaps, options, futures and forwards, to manage their commodity and financial market risks, and, to a lesser extent, engage in limited trading activities. FPL Group could recognize financial losses as a result of volatility in the market values of these contracts, or if a counterparty Counterparty The other participant, including intermediaries, in a swap or contract. fails to perform. In the absence of actively quoted market prices and pricing information from external sources, the valuation of these derivative instruments involves management's judgment or use of estimates. As a result, changes in the underlying assumptions or use of alternative valuation methods could affect the reported fair value of these contracts. In addition, FPL's use of such instruments could be subject to prudency challenges and if found imprudent im·pru·dent adj. Unwise or indiscreet; not prudent. im·pru dent·ly adv. , cost recovery
could be disallowed by the FPSC.
--There are other risks associated with FPL Group's competitive energy businesses, particularly FPL Energy. In addition to risks discussed elsewhere, risk factors specifically affecting FPL Energy's success in competitive wholesale markets include the ability to efficiently develop and operate generating assets, the successful and timely completion of project restructuring activities, maintenance of the qualifying facility status of certain projects, the price and supply of fuel (including transportation), transmission constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. , competition from new sources of generation, excess generation capacity and demand for power. There can be significant volatility in market prices for fuel and electricity, and there are other financial, counterparty and market risks that are beyond the control of FPL Energy. FPL Energy's inability or failure to effectively hedge its assets or positions against changes in commodity prices, interest rates, counterparty credit risk or other risk measures could significantly impair im·pair tr.v. im·paired, im·pair·ing, im·pairs To cause to diminish, as in strength, value, or quality: an injury that impaired my hearing; a severe storm impairing communications. FPL Group's future financial results. In keeping with industry trends, a portion of FPL Energy's power generation facilities operate wholly or partially without long-term power purchase agreements. As a result, power from these facilities is sold on the spot market or on a short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. contractual basis, which may affect the volatility of FPL Group's financial results. In addition, FPL Energy's business depends upon transmission facilities owned and operated by others; if transmission is disrupted dis·rupt tr.v. dis·rupt·ed, dis·rupt·ing, dis·rupts 1. To throw into confusion or disorder: Protesters disrupted the candidate's speech. 2. or capacity is inadequate or unavailable, FPL Energy's ability to sell and deliver its wholesale power may be limited. --FPL Group is likely to encounter significant competition for acquisition opportunities that may become available as a result of the consolidation of the power industry, in general, as well as the passage of the Energy Policy Act of 2005. In addition, FPL Group may be unable to identify attractive acquisition opportunities at favorable prices and to successfully and timely complete and integrate them. --FPL Group and FPL rely on access to capital markets as a significant source of liquidity for capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. not satisfied by operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. . The inability of FPL Group, FPL Group Capital Inc (FPL Group Capital) and FPL to maintain their current credit ratings could affect their ability to raise capital on favorable terms, particularly during times of uncertainty in the capital markets, which, in turn, could impact FPL Group's and FPL's ability to grow their businesses and would likely increase interest costs. --FPL Group's and FPL's results of operations are affected by the growth in customer accounts in FPL's service area. Customer growth can be affected by population growth as well as economic factors in Florida, including job and income growth, housing starts and new home prices. Customer growth directly influences the demand for electricity and the need for additional power generation and power delivery facilities at FPL. --FPL Group's and FPL's results of operations are affected by changes in the weather. Weather conditions directly influence the demand for electricity and natural gas and affect the price of energy commodities, and can affect the production of electricity at wind and hydro-powered facilities. --FPL Group's and FPL's results of operations can be affected by the impact of severe weather which can be destructive, causing outages and property damage, may affect fuel supply and could require additional costs to be incurred. At FPL, recovery of these costs is subject to FPSC approval. --FPL Group and FPL are subject to costs and other effects of legal and administrative proceedings An administrative proceeding is a non-judicial determination of fault or guilt and may include in some cases penalties of various forms. A "Captain's Mast", held by a commanding officer of a warship is one such proceeding. , settlements, investigations and claims, as well as the effect of new, or changes in, tax laws, rates or policies, rates of inflation, accounting standards, securities laws and corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. requirements. --FPL Group and FPL are subject to direct and indirect effects of terrorist threats and activities. Generation and transmission facilities, in general, have been identified as potential targets. The effects of terrorist threats and activities include, among other things, terrorist actions or responses to such actions or threats, the inability to generate, purchase or transmit To send data over a communications line. See transfer. power, the risk of a significant slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in growth or a decline in the U.S. economy, delay in economic recovery in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , and the increased cost and adequacy of security and insurance. --FPL Group's and FPL's ability to obtain insurance, and the cost of and coverage provided by such insurance, could be affected by national, state or local events as well as company-specific events. --FPL Group and FPL are subject to employee workforce factors, including loss or retirement of key executives, availability of qualified personnel, collective bargaining agreements The contractual agreement between an employer and a Labor Union that governs wages, hours, and working conditions for employees and which can be enforced against both the employer and the union for failure to comply with its terms. with union employees and work stoppage stoppage - /sto'p*j/ Extreme lossage that renders something (usually something vital) completely unusable. "The recent system stoppage was caused by a fried transformer." . --FPL Group's ability to successfully complete and integrate the proposed merger between FPL Group and Constellation Energy is subject to certain risks and uncertainties including; the ability to obtain governmental approvals of the transaction on the proposed terms and schedule; the failure of FPL Group or Constellation Energy shareholders to approve the transaction; the risk that anticipated synergies will not be achieved or will take longer to achieve than expected; disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. from the transaction making it more difficult to maintain relationships with customers, employees, suppliers or governmental entities; unexpected transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). or liabilities; economic conditions; and other specific factors discussed in documents filed with the SEC by both FPL Group and Constellation Energy. These risks, as well as other risks associated with the merger, will be more fully discussed in the joint proxy statement/prospectus that will be included in the Registration Statement on Form S-4 that Constellation Energy will file with the SEC in connection with the proposed merger. The issues and associated risks and uncertainties described above are not the only ones FPL Group and FPL may face. Additional issues may arise or become material as the energy industry evolves. The risks and uncertainties associated with these additional issues could impair FPL Group's and FPL's businesses and financial results in the future. Note to Editors: High-resolution high-res·o·lu·tion adj. 1. Relating to an image that has fine detail. 2. a. Of or relating to an output device that produces images that contain a large number of dots per unit of area and are therefore sharp and logos and executive head shots are available for download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. at http://www.fpl.com/news/logos.shtml.
FPL Group, Inc.
Condensed Consolidated Statements of Income
(millions, except per share amounts)
(unaudited)
Florida FPL
Three Months Ended Power FPL Corporate Group,
March 31, 2006 & Light Energy & Other Inc.
----------------------------------------------------------------------
Operating Revenues $ 2,584 $ 952 $ 48 $ 3,584
Operating Expenses
Fuel, purchased power and
interchange 1,538 487 28 2,053
Other operations and
maintenance 330 133 11 474
Merger-related - - 5 5
Amortization of storm reserve
deficiency 32 - - 32
Depreciation and amortization 195 87 4 286
Taxes other than income taxes 243 21 2 266
---------------------------------------
Total operating expenses 2,338 728 50 3,116
---------------------------------------
Operating Income (Loss) 246 224 (2) 468
---------------------------------------
Other Income (Deductions)
Interest charges (68) (63) (38) (169)
Equity in earnings of equity
method investees - 11 - 11
Gains (losses) on disposal of
equity method investees and
leveraged leases - net - - - -
Allowance for equity funds
used during construction 4 - - 4
Interest Income 1 5 2 8
Other - net (2) 4 (1) 1
---------------------------------------
Total other income
(deductions) - net (65) (43) (37) (145)
---------------------------------------
Income (Loss) Before Income
Tax Expense (Benefit) 181 181 (39) 323
Income Tax Expense (Benefit) 59 30 (14) 75
---------------------------------------
Net Income (Loss) $ 122 $ 151 $ (25) $ 248
---------------------------------------
Reconciliation of Net Income
(Loss) to Adjusted Earnings (Loss):
Net Income (Loss) $ 122 $ 151 $ (25) $ 248
Adjustments, net of income taxes:
Merger-related costs - - 3 3
Net unrealized mark-to-market
(gains) losses associated
with non-qualifying hedges - (23) - (23)
---------------------------------------
Adjusted Earnings (Loss) $ 122 $ 128 $ (22) $ 228
---------------------------------------
Earnings (Loss) Per Share
(assuming dilution) $ 0.31 $ 0.38 $ (0.06) $ 0.63
Adjusted Earnings (Loss) Per
Share $ 0.31 $ 0.32 $ (0.05) $ 0.58
Weighted-average shares
outstanding (assuming dilution) 393
FPL Energy's interest charges are based on a deemed capital structure
of 50% debt for operating projects and 100% debt for projects under
construction. Residual non-utility interest charges are included in
Corporate & Other. Corporate & Other represents other business
activities, other segments that are not separately reportable,
eliminating entries, and may include the net effect of rounding.
FPL Group, Inc.
Condensed Consolidated Statements of Income
(millions, except per share amounts)
(unaudited)
Florida FPL
Three Months Ended Power FPL Corporate Group,
March 31, 2005 & Light Energy & Other Inc.
----------------------------------------------------------------------
Operating Revenues $ 2,041 $ 372 $ 24 $ 2,437
Operating Expenses
Fuel, purchased power and
interchange 1,077 154 7 1,238
Other operations and
maintenance 310 94 11 415
Amortization of storm reserve
deficiency 19 - - 19
Depreciation and amortization 230 72 5 307
Taxes other than income taxes 204 19 1 224
---------------------------------------
Total operating expenses 1,840 339 24 2,203
---------------------------------------
Operating Income (Loss) 201 33 - 234
---------------------------------------
Other Income (Deductions)
Interest charges (49) (52) (37) (138)
Equity in earnings of equity
method investees - 19 - 19
Gains (losses) on disposal of
equity method investees and
leveraged leases - net - 8 7 15
Allowance for equity funds
used during construction 10 - - 10
Interest Income 2 6 7 15
Other - net - 7 (3) 4
---------------------------------------
Total other income
(deductions) - net (37) (12) (26) (75)
---------------------------------------
Income (Loss) Before Income
Tax Expense (Benefit) 164 21 (26) 159
Income Tax Expense (Benefit) 53 (16) (15) 22
---------------------------------------
Net Income (Loss) $ 111 $ 37 $ (11) $ 137
---------------------------------------
Reconciliation of Net Income
(Loss) to Adjusted Earnings (Loss):
Net Income (Loss) $ 111 $ 37 $ (11) $ 137
Adjustments, net of income taxes:
Net unrealized mark-to-market
(gains) losses associated
with non-qualifying hedges - 31 - 31
---------------------------------------
Adjusted Earnings (Loss) $ 111 $ 68 $ (11) $ 168
---------------------------------------
Earnings (Loss) Per Share
(assuming dilution) $ 0.30 $ 0.10 $ (0.04) $ 0.36
Adjusted Earnings (Loss) Per
Share $ 0.30 $ 0.18 $ (0.04) $ 0.44
Weighted-average shares
outstanding (assuming dilution) 377
FPL Energy's interest charges are based on a deemed capital structure
of 50% debt for operating projects and 100% debt for projects under
construction. Residual non-utility interest charges are included in
Corporate & Other. Corporate & Other represents other business
activities, other segments that are not separately reportable,
eliminating entries, and may include the net effect of rounding.
FPL Group, Inc.
Preliminary Condensed Consolidated Balance Sheets
(millions)
(unaudited)
Florida FPL
Power FPL Corporate Group,
March 31, 2006 & Light Energy & Other Inc.
----------------------------------------------------------------------
Property, Plant and Equipment
Electric utility plant in
service and other property $ 24,762 $ 9,319 $ 337 $ 34,418
Less accumulated depreciation
and amortization (9,664) (1,358) (111) (11,133)
---------------------------------------
Total property, plant and
equipment - net 15,098 7,961 226 23,285
---------------------------------------
Current Assets
Cash and cash equivalents 51 56 41 148
Other 2,506 1,160 208 3,874
---------------------------------------
Total current assets 2,557 1,216 249 4,022
---------------------------------------
Other Assets 4,178 1,135 216 5,529
---------------------------------------
-
Total Assets $ 21,833 $ 10,312 $ 691 $ 32,836
---------------------------------------
Capitalization
Common stock $ 1,373 $ - $ (1,369) $ 4
Additional paid-in capital 4,318 4,889 (4,746) 4,461
Retained earnings 1,168 731 2,707 4,606
Accumulated other
comprehensive income (loss) - (128) (2) (130)
---------------------------------------
Total common shareholders'
equity 6,859 5,492 (3,410) 8,941
Long-term debt 3,665 2,225 1,938 7,828
---------------------------------------
Total capitalization 10,524 7,717 (1,472) 16,769
---------------------------------------
Current Liabilities
Debt due within one year 1,464 178 1,977 3,619
Other 1,984 846 41 2,871
---------------------------------------
Total current liabilities 3,448 1,024 2,018 6,490
---------------------------------------
Other Liabilities and Deferred
Credits
Asset retirement obligations 1,493 377 - 1,870
Accumulated deferred income
taxes 2,610 700 (45) 3,265
Regulatory liabilities 2,972 - - 2,972
Other 786 494 190 1,470
---------------------------------------
Total other liabilities
and deferred credits 7,861 1,571 145 9,577
---------------------------------------
Commitments and Contingencies
Total Capitalization and
Liabilities $ 21,833 $ 10,312 $ 691 $ 32,836
---------------------------------------
Corporate & Other represents other business activities, other segments
that are not separately reportable, eliminating entries, and may
include the net effect of rounding.
FPL Group, Inc.
Condensed Consolidated Balance Sheets
(millions)
(unaudited)
Florida FPL
Power FPL Corporate Group,
December 31, 2005 & Light Energy & Other Inc.
----------------------------------------------------------------------
Property, Plant and Equipment
Electric utility plant in
service and other property $ 24,407 $ 8,611 $ 333 $ 33,351
Less accumulated depreciation
and amortization (9,530) (1,253) (105) (10,888)
---------------------------------------
Total property, plant and
equipment - net 14,877 7,358 228 22,463
---------------------------------------
Current Assets
Cash and cash equivalents 56 83 391 530
Other 3,413 999 45 4,457
---------------------------------------
Total current assets 3,469 1,082 436 4,987
---------------------------------------
Other Assets 4,380 968 206 5,554
---------------------------------------
Total Assets $ 22,726 $ 9,408 $ 870 $ 33,004
---------------------------------------
Capitalization
Common stock $ 1,373 $ - $ (1,369) $ 4
Additional paid-in capital 4,318 4,308 (4,444) 4,182
Retained earnings 1,046 580 2,880 4,506
Accumulated other
comprehensive income (loss) - (192) (1) (193)
---------------------------------------
Total common shareholders'
equity 6,737 4,696 (2,934) 8,499
Long-term debt 3,271 2,264 2,504 8,039
---------------------------------------
Total capitalization 10,008 6,960 (430) 16,538
---------------------------------------
Current Liabilities
Debt due within one year 1,294 176 1,093 2,563
Other 3,560 1,065 79 4,704
---------------------------------------
Total current liabilities 4,854 1,241 1,172 7,267
---------------------------------------
Other Liabilities and Deferred
Credits
Asset retirement obligations 1,474 211 - 1,685
Accumulated deferred income
taxes 2,647 419 (51) 3,015
Regulatory liabilities 2,971 - - 2,971
Other 772 577 179 1,528
---------------------------------------
Total other liabilities
and deferred credits 7,864 1,207 128 9,199
---------------------------------------
Commitments and Contingencies
Total Capitalization and
Liabilities $ 22,726 $ 9,408 $ 870 $ 33,004
---------------------------------------
Corporate & Other represents other business activities, other segments
that are not separately reportable, eliminating entries, and may
include the net effect of rounding.
FPL Group, Inc.
Condensed Consolidated Statements of Cash Flows
(millions)
(unaudited)
Florida FPL
Three Months Ended Power FPL Corporate Group,
March 31, 2006 & Light Energy & Other Inc.
----------------------------------------------------------------------
Cash Flows From Operating
Activities
Net income (loss) $ 122 $ 151 $ (25) $ 248
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Depreciation and amortization 184 87 5 276
Nuclear fuel amortization 24 10 - 34
Storm-related costs (282) - - (282)
Amortization of storm reserve
deficiency 32 - - 32
Unrealized (gains) losses on
marked to market energy
contracts - (60) (1) (61)
Deferred income taxes and
related regulatory credit 62 63 7 132
Cost recovery clauses and
franchise fees 312 - - 312
Change in accrued income taxes 139 (35) (187) (83)
Change in margin cash deposits (382) (2) - (384)
Other - net (238) (147) 44 (341)
---------------------------------------
Net cash provided by (used in)
operating activities (27) 67 (157) (117)
---------------------------------------
Cash Flows From Investing
Activities
Capital expenditures of FPL (487) - - (487)
Independent power investments - (639) - (639)
Nuclear fuel purchases (34) (26) (1) (61)
Sale of independent power
investments - - - -
Proceeds from sale of
securities in nuclear
decommissioning funds 634 17 - 651
Purchase of securities in
nuclear decommissioning and
storm funds (652) (18) - (670)
Proceeds from sale of other
securities - - 20 20
Purchases of other securities - - (31) (31)
Funding of secured loan - - - -
Proceeds from termination and
sale of leveraged leases - - - -
Other - net (1) (1) (14) (16)
---------------------------------------
Net cash provided by (used in)
investing activities (540) (667) (26) (1,233)
---------------------------------------
Cash Flows From Financing
Activities
Issuances of long-term debt 392 - - 392
Retirements of long-term debt - (37) - (37)
Retirements of preferred stock - - - -
Net change in short-term debt 170 - 314 484
Proceeds from purchased
Corporate Units - - 210 210
Payment to terminate Corporate
Units - - (258) (258)
Issuances of common stock - - 299 299
Dividends on common stock - - (148) (148)
Dividends & capital
distributions from (to) FPL
Group - net - 581 (581) -
Other - net - 29 (3) 26
---------------------------------------
Net cash provided by (used in)
financing activities 562 573 (167) 968
---------------------------------------
Net increase (decrease) in
cash and cash equivalents (5) (27) (350) (382)
Cash and cash equivalents at
beginning of period 56 83 391 530
---------------------------------------
Cash and cash equivalents at
end of period $ 51 $ 56 $ 41 $ 148
---------------------------------------
Corporate & Other represents other business activities, other segments
that are not separately reportable, eliminating entries, and may
include the net effect of rounding.
FPL Group, Inc.
Condensed Consolidated Statements of Cash Flows
(millions)
(unaudited)
Florida FPL
Three Months Ended Power FPL Corporate Group,
March 31, 2005 & Light Energy & Other Inc.
----------------------------------------------------------------------
Cash Flows From Operating
Activities
Net income (loss) $ 111 $ 37 $ (11) $ 137
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Depreciation and amortization 219 72 6 297
Nuclear fuel amortization 17 6 - 23
Storm-related costs (177) - - (177)
Amortization of storm reserve
deficiency 19 - - 19
Unrealized (gains) losses on
marked to market energy
contracts - 47 - 47
Deferred income taxes and
related regulatory credit 97 120 (27) 190
Cost recovery clauses and
franchise fees 67 - - 67
Change in accrued income taxes 3 (136) (25) (158)
Change in margin cash deposits - 5 - 5
Other - net (92) (122) (22) (236)
---------------------------------------
Net cash provided by (used in)
operating activities 264 29 (79) 214
---------------------------------------
Cash Flows From Investing
Activities
Capital expenditures of FPL (378) - - (378)
Independent power investments - (296) - (296)
Nuclear fuel purchases (21) (1) - (22)
Sale of independent power
investments - 8 - 8
Proceeds from sale of
securities in nuclear
decommissioning funds 659 8 - 667
Purchase of securities in
nuclear decommissioning and
storm funds (690) (12) - (702)
Proceeds from sale of other
securities - - 24 24
Purchases of other securities - - (34) (34)
Funding of secured loan - - (27) (27)
Proceeds from termination of
leveraged lease - - 43 43
Other - net (3) - - (3)
---------------------------------------
Net cash provided by (used in)
investing activities (433) (293) 6 (720)
---------------------------------------
Cash Flows From Financing
Activities
Issuances of long-term debt - 506 - 506
Retirements of long-term debt - (7) (600) (607)
Retirements of preferred stock (25) - 20 (5)
Net change in short-term debt 200 - - 200
Proceeds from purchased
Corporate Units - - - -
Payment to terminate Corporate
Units - - - -
Issuances of common stock - - 603 603
Dividends on common stock - - (135) (135)
Dividends & capital
distributions from (to) FPL
Group - net - (198) 198 -
Other - net - (37) (3) (40)
---------------------------------------
Net cash provided by (used in)
financing activities 175 264 83 522
---------------------------------------
Net increase (decrease) in
cash and cash equivalents 6 - 10 16
Cash and cash equivalents at
beginning of period 65 92 68 225
---------------------------------------
Cash and cash equivalents at
end of period $ 71 $ 92 $ 78 $ 241
---------------------------------------
Corporate & Other represents other business activities, other segments
that are not separately reportable, eliminating entries, and may
include the net effect of rounding.
FPL Group, Inc.
Earnings Per Share Summary
(assuming dilution)
(unaudited)
Three Months Ended
March 31,
-------------------
2006 2005
-------------------
Florida Power & Light Company $ 0.31 $ 0.30
FPL Energy, LLC 0.38 0.10
Corporate and Other (0.06) (0.04)
-------------------
Earnings Per Share $ 0.63 $ 0.36
Reconciliation of Earnings Per Share to Adjusted
Earnings Per Share:
Earnings Per Share $ 0.63 $ 0.36
Adjustments:
Merger-related costs 0.01 -
Net unrealized mark-to-market (gains) losses
associated with non-qualifying hedges,
primarily FPL Energy (0.06) 0.08
-------------------
Adjusted Earnings Per Share $ 0.58 $ 0.44
-------------------
FPL Group, Inc.
Earnings Per Share Contributions
(assuming dilution)
(unaudited)
First
Quarter
---------
FPL Group - 2005 Earnings Per Share $ 0.36
Florida Power & Light - 2005 Earnings Per Share 0.30
Customer growth 0.03
Usage due to weather (0.01)
Underlying usage growth, mix and other -
Depreciation expense 0.06
O&M expenses (0.02)
AFUDC (0.02)
Interest expense (0.03)
Share dilution (0.01)
Other 0.01
---------
Florida Power & Light - 2006 Earnings Per Share 0.31
FPL Energy - 2005 Earnings Per Share 0.10
New investments 0.05
Existing assets 0.16
Asset optimization and trading -
Restructurings activities (0.03)
Non-qualifying hedges impact 0.14
Share dilution -
Other, including interest expense (0.04)
---------
FPL Energy - 2006 Earnings Per Share 0.38
Corporate and Other - 2005 Earnings Per Share (0.04)
FPL FiberNet operations 0.01
Merger-related costs (0.01)
Share dilution -
Other, including interest expense (0.02)
---------
Corporate and Other - 2006 Earnings Per Share (0.06)
---------
FPL Group - 2006 Earnings Per Share $ 0.63
---------
The sum of the quarterly amounts may not equal the total for the year
due to rounding.
FPL Group, Inc.
Schedule of Total Debt and Equity
(millions)
(unaudited)
March 31, 2006 Per Books Adjusted (1)
----------------------------------------------------------------------
Long-term debt, including current
maturities, commercial paper, and notes
payable:
Junior Subordinated Debentures(2) $ 309
Project debt:
Natural gas-fired assets 376
Wind assets 1,303
Debt with partial corporate support:
Natural gas-fired assets 357
Other long-term debt, including current
maturities, commercial paper, and notes
payable 9,102 $ 9,102
-------------------------
Total debt 11,447 9,102
Junior Subordinated Debentures(2) 309
Common shareholders' equity 8,941 8,941
-------------------------
Total capitalization, including debt due
within one year $ 20,388 $ 18,352
-------------------------
Debt ratio 56% 50%
December 31, 2005 Per Books Adjusted (1)
----------------------------------------------------------------------
Long-term debt and preferred stock,
including current maturities, commercial
paper, and notes payable:
Equity-linked debt securities $ 506
Junior Subordinated Debentures(2) 309
Project debt:
Natural gas-fired assets 393
Wind assets 1,320
Debt with partial corporate support:
Natural gas-fired assets 358
Other long-term debt and preferred stock,
including current maturities, commercial
paper, and notes payable 7,716 $ 7,716
-------------------------
Total debt and preferred stock 10,602 7,716
Junior Subordinated Debentures(2) 309
Common shareholders' equity 8,499 8,499
Equity-linked debt securities 506
-------------------------
Total capitalization, including debt due
within one year $ 19,101 $ 17,030
-------------------------
Debt ratio 56% 45%
(1) Ratios exclude impact of imputed debt for purchase power
obligations
(2) Adjusted to reflect preferred stock characteristics of these
securities (preferred trust securities)
FPL Group, Inc.
Commercial Paper, Notes Payable and Current Maturities
of Long-term Debt Schedule as of 3/31/06
(unaudited)
Interest Payment Amount
Type of Debt Rate (%) Date (millions)
----------------------------------------------------------------------
Florida Power & Light
Commercial Paper VAR VAR $ 1,029
Notes Payable VAR VAR 300
FPL Fuels Senior Secured Notes 2.340 06/11/06 135
------------
TOTAL FLORIDA POWER & LIGHT 1,464
------------
FPL Group Capital
Commercial paper VAR VAR 314
Debentures 3.250 04/11/06 500
Debentures 7.625 09/15/06 600
Debentures 4.086 02/16/07 575
Fair value swap (13)
FPL Energy
Principal Payments 6.876 06/27/06 10
Principal Payments 6.639 06/30/06 25
Principal Payments 7.520 06/30/06 18
Principal Payments 5.608 09/10/06 11
Principal Payments 6.125 09/25/06 3
Principal Payments 7.520 01/03/07 18
Principal Payments 5.608 03/10/07 9
Principal Payments 6.125 03/25/07 3
------------
Total Senior Secured Bonds 97
------------
Senior Secured Notes
Principal Payments 7.110 06/30/06 5
------------
Total Senior Secured Notes 5
------------
Construction Term Facility
Principal Payments VAR 06/30/06 8
Principal Payments VAR 12/31/06 19
------------
Total Construction Term
Facility 27
------------
Other Debt
Principal Payments VAR Quarterly 6
Principal Payments VAR Quarterly 1
Principal Payments VAR 05/31/06 22
Principal Payments VAR 07/31/06 6
Principal Payments VAR 11/30/06 11
Principal Payments VAR 01/31/07 4
------------
Total Other Debt 50
------------
TOTAL FPL ENERGY 179
------------
TOTAL FPL GROUP CAPITAL 2,155
------------
TOTAL FPL GROUP, INC. $ 3,619
------------
May not agree to financial statements due to rounding.
FPL Group, Inc.
Long-term Debt, Net of Current Maturities
Schedule as of 3/31/06
(unaudited)
Interest Maturity Amount
Type of Debt Rate (%) Date (millions)
----------------------------------------------------------------------
Florida Power & Light
First Mortgage Bonds
First Mortgage Bonds 6.000 06/01/08 $ 200
First Mortgage Bonds 5.875 04/01/09 225
First Mortgage Bonds 4.850 02/01/13 400
First Mortgage Bonds 5.850 02/01/33 200
First Mortgage Bonds 5.950 10/01/33 300
First Mortgage Bonds 5.625 04/01/34 500
First Mortgage Bonds 5.650 02/01/35 240
First Mortgage Bonds 4.950 06/01/35 300
First Mortgage Bonds 5.400 09/01/35 300
First Mortgage Bonds 5.650 02/01/37 400
------------
Total First Mortgage Bonds 3,065
------------
Revenue Refunding Bonds
Miami-Dade Solid Waste Disposal VAR 02/01/23 15
St. Lucie Solid Waste Disposal VAR 05/01/24 79
------------
Total Revenue Refunding
Bonds 94
------------
Pollution Control Bonds
Dade VAR 04/01/20 9
Martin VAR 07/15/22 96
Jacksonville VAR 09/01/24 46
Manatee VAR 09/01/24 17
Putnam VAR 09/01/24 4
Jacksonville VAR 05/01/27 28
St. Lucie VAR 09/01/28 242
Jacksonville VAR 05/01/29 52
------------
Total Pollution Control
Bonds 494
------------
Industrial Bonds
Dade VAR 06/01/21 46
------------
Total Industrial Bonds 46
------------
Unamortized discount (33)
------------
TOTAL FLORIDA POWER & LIGHT 3,666
------------
FPL Group Capital
Debentures 6.125 05/15/07 500
Debentures (B Equity Units) 5.551 02/16/08 506
Debentures 7.375 06/01/09 225
Debentures 7.375 06/01/09 400
Debentures (Junior
Subordinated) 5.875 03/15/44 309
------------
Total Debentures 1,940
------------
Unamortized discount (3)
FPL Energy
Senior Secured Bonds
Senior Secured Bonds 6.876 06/27/17 99
Senior Secured Bonds 6.125 03/25/19 88
Senior Secured Bonds 6.639 06/20/23 314
Senior Secured Bonds 5.608 03/10/24 326
------------
Total Senior Secured Bonds 827
------------
Senior Secured Notes 7.520 06/30/19 233
Senior Secured Notes 7.110 06/28/20 102
Construction Term Facility VAR 06/30/08 355
Other Debt
Other Debt VAR 12/27/07 326
Other Debt VAR 12/19/17 99
Other Debt 8.010 12/31/18 3
Other Debt Part fixed & VAR 11/30/19 273
Other Debt 10.630 & 6.650 09/30/20 8
------------
Total Other Debt 709
------------
TOTAL FPL ENERGY 2,226
------------
TOTAL FPL GROUP CAPITAL 4,163
------------
TOTAL FPL GROUP, INC. $ 7,829
------------
May not agree to financial statements due to rounding.
Florida Power & Light Company
Statistics
(unaudited)
Quarter
-------------------------
Periods Ended March 31 2006 2005
----------------------------------------------------------------------
Energy sales (million kwh)
Residential 11,374 11,397
Commercial 9,994 9,813
Industrial 985 984
Public authorities 148 145
Electric utilities 372 350
Increase (decrease) in unbilled sales (568) (758)
Interchange power sales 996 706
-------------------------
Total 23,301 22,637
Average price (cents/kwh) (1)
Residential 11.76 9.54
Commercial 10.55 8.19
Industrial 8.73 6.65
Total 11.03 8.78
Average customer accounts (000's)
Residential 3,881 3,799
Commercial 475 465
Industrial 21 20
Other 2 3
-------------------------
Total 4,379 4,287
-------------------------
(1) Excludes interchange power sales, net change in unbilled revenues,
deferrals under cost recovery clauses and any provision for
refund.
2006 Normal 2005
--------------------------------------
Three months ended March 31
Heating degree-days 191 214 198
Cooling degree-days 35 49 36
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