JUNO BEACH, Fla. – FPL Group, Inc. (NYSE: FPL) enjoyed another great year in 2003 because the company continued to pursue a strategy focused on its core business, its core strengths and its commitment to building shareholder value, Lew Hay, chairman and CEO, told shareholders at the company's annual meeting today.
"Our industry was presented with numerous challenges in 2003, including a sluggish economy and continued pressure on credit ratings. Nevertheless, it was a year of significant accomplishment for FPL Group,” Mr. Hay said.
"There are many reasons for our strong performance, but the three key attributes that define our company and differentiate us from many of our peers are financial strength, financial discipline and operational excellence within a culture that focuses on quality and continuous improvement. As a result, FPL Group achieved a total shareholder return of 13 percent, which enabled the company to outperform its peers as well as the S&P 500 index when viewed over the last two-year and five-year periods. We expect to continue to deliver solid returns in 2004,” Mr. Hay added.
"Our financial position remains a key competitive advantage. We have always maintained strong credit ratings, and, in fact, have some of the strongest ratings in our industry. We have a prudent dividend policy, are well capitalized and have a strong balance sheet. In addition, we have successfully managed the risk inherent in certain portions of the energy business,” he said.
"Today, we have a balanced portfolio comprised of a regulated electric company that provides a high level of certainty in earnings and a wholesale generating subsidiary with a majority of its capacity under contract," he added.
Mr. Hay illustrated the strong performance of the company in 2003 by highlighting some key accomplishments including:
Mr. Hay highlighted several noteworthy commendations received in 2003 in his address to shareholders. The honors included the Edison Award from the Edison Electric Institute, the power industry’s highest honor, for successfully implementing a clean energy strategy while delivering strong financial performance. In addition, for the third straight time, FPL Group was recognized as the best in the industry in environmental management by Innovest, a Wall Street research firm.
Florida Power & Light’s storm restoration team earned national recognition for its response to the call for help by other electric companies after Hurricane Isabel, and FPL Energy was named the “Renewable Company of the Year” by Platts, the energy information unit of The McGraw-Hill Companies, for the company’s leadership in wind energy and other renewable energy sources.
Continued Customer Growth and Investment at Florida Power & Light
Armando Olivera, president of Florida Power & Light Company, remarked that FPL continues to be one of the premier electric companies in the industry due to strong customer growth, the company’s focus on operational excellence, proven cost management, a constructive regulatory environment and superior environmental performance.
"Florida Power & Light continues to enjoy some of the strongest customer growth in the industry. We are making significant investments in both power generation and our delivery systems to meet the needs of this growing customer base,” said Mr. Olivera. “We added 97,000 new accounts in 2003, the most we’ve added since the late 1980s, and far more than any other investor-owned electric company in the nation.”
Mr. Olivera pointed out that the consequence of FPL’s growth has been and will continue to be significant investment in new plants and infrastructure.
"In 2003, we added 850 megawatts with the repowering of our Sanford power plant and added peaking units at our Fort Myers power plant. Expansions at our Martin and Manatee power plant sites will add 1,900 megawatts in 2005, and subject to approvals, a new natural gas-fired unit at our Turkey Point plant site will provide an additional 1,100 megawatts in 2007,” Mr. Olivera added.
"In addition to new power plants, we are also making significant investments to expand and enhance our power delivery systems. In the last five years we spent $3 billion to enhance the reliability of our system for our customers and we anticipate spending nearly $3.4 billion in the next five years. All told, our investment in new plants and infrastructure from 1999 through 2008 is expected to be approximately $13.6 billion - or 60 percent higher than the previous decade,” he said.
Maximizing Value of FPL Energy Assets
Jim Robo, president of FPL Energy, reviewed the subsidiary's growth opportunities and business strategy.
"We will continue our focus on maximizing the value we derive from our existing assets and building on our industry-leading wind portfolio. In addition, we are enhancing the products and services offered to customers, and we are continuing to look for acquisition opportunities that are accretive, strategically attractive and financeable and that enhance shareholder value,” said Mr. Robo. "As always, we are focused on being a low-cost provider committed to operational excellence. We will continue to minimize the risk inherent in our business through high performing plant operations and the execution of our disciplined hedging strategy,” he added.
FPL Energy has a diversified portfolio of more than 11,000 megawatts in operation in 24 states. More than 90 percent of FPL Energy’s capacity comes from clean or renewable sources such as natural gas, wind, solar, hydro and nuclear. The company grew its portfolio by nearly 3,800 megawatts during 2003.
Outlook for 2004 Reaffirmed
Moray Dewhurst, FPL Group’s chief financial officer, reconfirmed at the meeting that the company expects in 2004 to achieve earnings per share of $4.95 to $5.20 excluding the cumulative effect of adopting new accounting standards as well as the mark-to-market effect of non-qualifying hedges which cannot be determined at this time. He said, “Our financial condition remains strong, supported by our operating cash flows, which amounted to $1.8 billion in 2003, net of dividends to shareholders.
“Our financial strength and discipline provide us with the opportunity to continue to pursue attractive investment opportunities that can help us achieve future growth,” Mr. Dewhurst added.
Committed to Strong Corporate Governance
During his address to shareholders, Mr. Hay discussed the importance of corporate governance and the commitment of the company and leadership team to unquestioned integrity.
Mr. Hay said, “Corporate governance is about all of us at FPL Group being accountable and taking the right actions day-in and day-out to sustain the company’s success - satisfying customers, shareholders and other key stakeholders over the long term. In essence, it’s doing the right thing. Acting with integrity is a critical element of FPL Group’s philosophy and ultimate success, and we are committed to doing just that.”
Shareholders Approve All Proposals
During the meeting, shareholders elected the following slate of directors to a one-year term: H. Jesse Arnelle, Sherry S. Barrat, Robert M. Beall, II, J. Hyatt Brown, James L. Camaren, Lewis Hay III, Frederic V. Malek, Michael Thaman, Paul R. Tregurtha and Frank G. Zarb.
Alexander W. Dreyfoos, Jr., a director since 1997, had reached the mandatory retirement age and did not stand for re-election. Mr. Hay thanked Mr. Dreyfoos for his many years of service and contributions to the company.
Shareholders also ratified the appointment of Deloitte & Touche LLP as the independent public accountants to audit the accounts of FPL Group and its subsidiaries for the fiscal year ending December 31, 2004.
In addition, shareholders approved the amended and restated long-term incentive plan and the annual incentive plan. Shareholders also gave their approval to increase the number of shares of common stock the company is authorized to issue.
Also today, the board of directors declared a regular quarterly common stock dividend of 62 cents a share, payable June 15 to stockholders of record June 4. The declaration marks the 234th consecutive quarterly dividend paid to common stockholders over the past 58 years.
FPL Group, with annual revenues of more than $9 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 4.2 million customer accounts in Florida. FPL Energy, LLC, an FPL Group wholesale electricity generating subsidiary, is a leader in producing electricity from clean and renewable fuels. Additional information is available on the Internet 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 provisions of the Private Securities Litigation Reform Act of 1995 (Reform Act), FPL Group, Inc. (FPL Group) and Florida Power & Light Company (FPL) are hereby filing 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 (as such term is defined in the Reform Act) made by or on behalf of FPL Group and FPL in this press release, 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, target, outlook) are not statements of historical facts and may be forward-looking. Forward-looking statements involve estimates, assumptions and uncertainties. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied 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 after the date on which such statement is made or to reflect the occurrence of unanticipated events. 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:
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 in the future.