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Paul J. Evanson President Florida Power & Light Company

Paul J. Evanson President Florida Power & Light Company. Gabelli Asset Management Company 18 th Annual Conference May 17, 2003. 2002 Recap. Power margins collapsed Power market liquidity disappeared Credit dried up Almost everyone downgraded, many multiple times

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Paul J. Evanson President Florida Power & Light Company

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  1. Paul J. EvansonPresidentFlorida Power & Light Company Gabelli Asset Management Company 18th Annual Conference May 17, 2003

  2. 2002 Recap • Power margins collapsed • Power market liquidity disappeared • Credit dried up • Almost everyone downgraded, many multiple times • Multiple restructurings/layoffs • More scandals - wash trades, etc. • Lots of lawsuits - California, Enron, etc.

  3. 2003 • Turmoil continues • Merchant model out of favor • Integrated utilities faring better • Investors favoring demonstrated earnings clarity and performance • P/E ratio and B/S strength increasingly correlated

  4. Merchant Generation Companies Take Beating 1.2 1.0 0.8 0.6 Stock Price Indexed to 3/30/2001 0.4 0.2 0.0 Jul-02 Jul-01 Jan-02 Mar-02 Mar-03 Jan-03 Jun-02 Apr-02 Jun-01 Apr-01 May-02 Feb-02 Feb-03 May-01 Nov-01 Dec-01 Nov-02 Sep-02 Oct-01 Oct-02 Dec-02 Sep-01 Aug-02 Aug-01 Merchants (index of closing stock prices on last trading day of mo.)

  5. DJ Utility Index Outperforms 1.2 1.0 0.8 0.6 Stock Price Indexed to 3/30/2001 0.4 0.2 0.0 Jul-02 Jul-01 Jan-02 Jan-03 Mar-02 Mar-03 Jun-02 Apr-02 Jun-01 Apr-01 May-02 Feb-02 Feb-03 May-01 Nov-01 Dec-01 Nov-02 Oct-01 Oct-02 Sep-02 Dec-02 Sep-01 Aug-02 Aug-01 Merchants Dow Jones Utilities Index (index of closing stock prices on last trading day of mo.)

  6. Integrated Energy Firms Do Better 1.2 1.0 0.8 0.6 Stock Price Indexed to 3/30/2001 0.4 0.2 0.0 Jul-02 Jul-01 Jan-02 Mar-02 Mar-03 Jan-03 Jun-02 Apr-02 Jun-01 Apr-01 May-02 Feb-02 Feb-03 May-01 Nov-01 Dec-01 Nov-02 Sep-02 Oct-01 Oct-02 Dec-02 Sep-01 Aug-02 Aug-01 Integrateds Merchants Dow Jones Utilities Index (index of closing stock prices on last trading day of mo.)

  7. FPL Group - An Industry Leader 1.2 1.0 0.8 0.6 Stock Price Indexed to 3/30/2001 0.4 0.2 0.0 Jul-02 Jul-01 Jan-02 Mar-02 Mar-03 Jan-03 Jun-02 Apr-02 Jun-01 Apr-01 May-02 Feb-02 Feb-03 May-01 Nov-01 Dec-01 Nov-02 Sep-02 Oct-01 Oct-02 Dec-02 Sep-01 Aug-02 Aug-01 Integrateds FPL Group Merchants Dow Jones Utilities Index (index of closing stock prices on last trading day of mo.)

  8. FPL Group • Premier integrated utility (FPL) • Successful wholesale generation business (FPL Energy) • Strong balance sheet • Substantial cash flow

  9. Financial discipline Strong credit ratings A2 / A - = FPL Gp Capital Aa3 / A = Florida Power & Light Company Prudent dividend policy Strong Financial Position 55 1 1 FPL Group Debt to Cap Ratio = 49% with 80% equity credit for equity-linked securities

  10. Vast Majority of Earnings Comes from Florida Power & Light 2003 Estimated Earnings Contribution % FPLEnergy Corp. & Other Florida Power & Light

  11. FPL Service Territory Jacksonville St. Augustine Daytona Tampa West Palm Beach Ft. Lauderdale Miami

  12. Strong Customer Growth# of customer accounts(millions)

  13. Favorable Customer Mix 3% 3% 3% 32% 38% 32% Other 56% Industrial 33% Commercial Residential IndustryAverage FPL

  14. Successful Cost Management at FPLOperating expenses ($ per customer) Good Industry Average FPL

  15. High Performing Fossil Fleet Equivalent Availability Factor (%) FPL Good Industry Average

  16. FPL Outperforms U.S. Fossil Utilities Equivalent Availability Factor (%) 2001 FPL 2002 94% FPL 95% Good

  17. OSHA Incident Rate DownFPL Power Generation Business Unit Good

  18. OSHA Rate Best Among Peers2001 EEI Safety Survey Good FPL FPL 2002

  19. Service Unavailability Just HalfIndustry Average (minutes per customer)

  20. FPL Residential Rates Low Comparisons of a 1,000 kWh residential bill.

  21. Substantial Regulated Generation Fleet Energy Sources (by kWh produced) • Nearly 21,000 MW of generating capability in Florida • Diverse fuel mix Nuclear Purchased Power Natural Gas Oil Coal

  22. Constructive Regulatory Environment • Vertically integrated model • Rate of return regulation • Fuel, capacity and certain environmental charges directly passed through to customers • Progressive regulatory agreement • accelerated depreciation program • revenue sharing agreement

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  24. Disciplined Wholesale Power Generation Business • Low risk approach • Low cost provider • Industry leader in wind • Asset optimization function • 7,2741 net MW in operation Note: 1 Includes 550 MW of leased capacity in RI

  25. A Clean Energy Provider

  26. Wind Energy: Unique Advantage • U.S. market leader (40% share) • Supported by policy trends • federal (production tax credits) • state (renewable mandates) • Attractive financial characteristics

  27. FPL Group: A Solid Investment • Premier integrated utility serving a vibrant territory • Growing wholesale generation business with lower risk profile • Operational and environmental excellence • Financial strength and discipline • Proven track record

  28. Florida Power & Light Co.($ millions) 2002 Revenues $ 7,378 Fuel and purchased power ( 3,306) Operating expenses ( 1,225) EBITDA 2,847 Depreciation (831) Interest & Other (874) Income Taxes (425) Net Income $ 717

  29. A Valuation of Florida Power & Light(in millions, except multiple and per share valuation) EBITDA $ 2,847 Industry Multiple 5 Enterprise Value $14,235 Less Debt and Preferred $ 3,312 Value of Equity $10,923 Valuation Per Share $ 60

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