Earnings Conference Call

Second Quarter 2005

2

Cautionary statements and risk factors that may affect future results

Any statements made herein about future operating results or other future events are forward-looking statements under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from such forward-looking statements. A discussion of factors that could cause actual results or events to vary is contained in the Appendix herein and in the Company’s SEC filings.

3

Overview of second quarter 2005• Florida Power & Light Company

– Continuation of mild weather – Strong customer growth– Martin and Manatee generation expansions brought in

service on schedule and under budget• FPL Energy

– Strong adjusted earnings growth despite Seabrook outage– Continued improvement in merchant portfolio – Negative mark on non-qualifying hedges reflects improving

forward markets – Portfolio additions (Gexa acquisition, new wind investments)

• FPL Group– Reaffirm 2005 earnings expectation of $2.45 to $2.551 per

share

1 Assuming normal weather for the balance of the year, excluding the cumulative effect of adopting new accounting standards as well as the mark-to-market effect of non-qualifying hedges, neither of which can be determined at this time

4

0504

$0.52

EPS

See Appendix for reconciliation of GAAP to adjusted amounts

$0.71$203

$257

GAAP Adjusted

0504

$251

0504 0504

Net Income($ millions)

EPSNet Income($ millions)

FPL Group resultsSecond quarter

$255$0.69 $0.66

5

Florida Power & Light overview Second quarter

• Weather impact negative, driven by weaker weather in April and May

• Some unanticipated weakness due to underlying usage growth

• Customer growth remains strong • Martin and Manatee plant generation expansions completed

on schedule and under budget• Decision on storm cost recovery • Base rate case proceeding on schedule

6

Net Income Contribution($ millions)

EPS

0504

$205 $201

05 04

$0.52$0.57

Florida Power & Light earnings Second quarter

7

FPL historical growth in customer accounts

62 65 6576

92 87 8597

10795

67

95 96 97 98 99 00 01 02 03 04 05

(thousands)

1 Change in average customer accounts from prior year’s second quarter

1

8

Retail sales at FPLSecond quarter

2.3% customer growth

(3.5)% usage growth due to weather

(0.1)% underlying usage growth and mix

(1.3)% kWh sales growth

9

Weather Index

2005 April May June2nd

Quarter

Production (GWh): Actual 8,278 9,239 10,397 27,914 Normal 8,727 9,456 10,439 28,623

vs. normal -5.1% -2.3% -0.4% -2.5% vs. year ago 2.6% 1.0% -5.3% -1.0%

Degree Days: Actual 31 140 245 416 Normal 74 161 251 486

vs. normal -58.1% -13.0% -2.4% -14.4% vs. year ago -35.4% -9.1% -23.9% -20.6%

2004 April May June2nd

Quarter

Production (GWh): Actual 8,071 9,146 10,979 28,195 Normal 8,452 9,236 10,152 27,840

vs. normal -4.5% -1.0% 8.1% 1.3%

Degree Days: Actual 48 154 322 524 Normal 75 161 249 485

vs. normal -36.0% -4.3% 29.3% 8.0%

Degree days shown are cooling degree day (CDDs). CDDs are based on average temperature of 72oF; negative values set to zero. Normal weather based on 56 year average. Production figures shown above are based on net energy for load. Energy sales statistics shown in the July 22, 2005 earnings press release are net of line losses and company usage.

10

FPL O&M and DepreciationSecond quarter($ millions)

$319 $316

0504

Figures include amounts that are recovered through cost recovery clauses which have no impact on net income

O&M Depreciation

$227 $232

0504

11

FPL Earnings contribution driversSecond quarter

($/share) FPL – 2004 EPS $0.57 Drivers:

Customer growth 0.03 Usage due to weather (0.05) Underlying usage growth and mix

(0.01)

Depreciation (0.01) O&M 0.01 Other 1 (0.02) FPL – 2005 EPS $0.52

1 Including AFUDC, other revenues and share dilution

12

Storm reserve deficiency recovery update

• Florida PSC voted to approve Staff recommendation– ~$442 million to be collected through monthly surcharge

– $70 million to be capitalized

– ~$22 million deferred until accounting treatment determined

• Reinforces prior orders governing recovery of prudently incurred storm-related costs

• Leaves open some issues around future accounting methodology for recording restoration costs

13

June - JulyJune 27July 8July 28August 22

– Sept. 2Sept. 20Oct. 28

Nov. 10Nov. 14Nov. 21Nov. 30

Service hearingsIntervenor testimonyStaff testimonyRebuttal testimonyHearings

Briefs dueStaff rec. rev req. and ratesSpecial agenda rev. req. and ratesStaff rec. revised ratesSpecial agenda revised ratesStandard order

2006 rate case key dates

Dates are subject to change

14

FPL Energy Overview Second quarter

• Adjusted net earnings1 grew by more than 13% during the quarter

• Excellent overall performance – New wind assets– 1st phase of Seabrook uprate completed, 52 net mw added – Continued strengthening in forward markets– Partially offset by lower wind resource and Seabrook refueling

outage– Ongoing positive impact of restructurings

• Losses on non-qualifying hedges reflect improving spark spreads– Substantial increase in value of physical assets

• Good progress in hedging 2006• Strengthening outlook for 2006 and 2007

1 See Appendix for reconciliation of GAAP to adjusted amounts

15

0504

$0.05

EPS

$0.19

$20

$69

GAAP Adjusted

0504

$0.17$63

0504 0504

Net Income($ millions)

EPSNet Income($ millions)

FPL Energy results Second quarter

$72$0.19

See Appendix for reconciliation of GAAP to adjusted amounts

161 Including share dilution and rounding See appendix for reconciliation of GAAP to adjusted amounts

FPL Energy earnings contribution driversSecond quarter

($/share) FPL Energy – 2004 Adjusted EPS $0.17 Drivers:

New investment 0.01 Existing assets 0.03 Asset optimization and trading (0.01) Development and asset restructuring 0.01 Interest expense (0.02) FPL Energy – 2005 Adjusted EPS $0.19

17

Wind resource fundamentals Second quarter

94 103 9598 98103106 102 10098

96 97 98 99 00 01 02 03 04 05

Wind Speed Index 1

1 Average wind speed for the period from those reference towers chosen to represent FPL Energy’s portfolio - weighted index based on FPL Energy’s portfolio as of 6/30/05

100 = long-term historic second quarter weighted average mean

18

FPL Energy monthly wind index1

Current portfolio

82

98909492 94 93 93103 969692

104 9997

Apr-04

May-04

Jun-04

Jul-04

Aug-04

Sep-04

Oct-04

Nov-04

Dec-04

Jan-05

Feb-05

Mar-05

Apr-05

May-05

Jun-05

1 Average wind speed for the period from those reference towers chosen to represent FPL Energy’s portfolio - weighted index based on FPL Energy’s portfolio as of 6/30/05

100 = long-term historic monthly weighted average mean

19

Significantly improved market conditionsMarket update

Change in Change in Cal 06Cal 06 ForwardCal 06 Forward

6/30/053/31/05 – 6/30/051/3/05 – 3/31/05

Natural Gas ($/MMBTU) 1 7.99$ 0.30$ 1.61$

NEPOOL 7x24 Power 2 71.24$ 2.34$ 12.18$

NEPOOL Spark Spreads 3 19.41$ 1.32$ 0.96$

ERCOT Spark Spreads 4 19.57$ 3.84$ 3.42$

WECC Spark Spreads 5 24.76$ (2.49)$ 5.36$

Forward

1 NYMEX2 Mass Hub3 Mass Hub, Tetco M3 and 7,000 heat rate4 ERCOT N, Houston Ship Channel and 7,000 heat rate5 SP15, NGI SoCal and 7,000 heat rate

20

Non-qualifying hedges 1

Summary of activity ($ millions, after-tax)

Asset/(Liability) Balance as of 3/31/05 $( 9.1)

Amounts Realized During 2nd Quarter ( 5.8)

Change in Forward Prices (all positions) (46.4)

Subtotal (52.2)

Asset/(Liability) Balance as of 6/30/05 $ (61.3)

1 Includes contracts of FPL Energy’s consolidated projects plus its share of the contracts of equity method investees

Primary Drivers:

Increase in ERCOT spark spreads $(30.5)

All other (primarily net short gas positions) (15.9)

$(46.4)

21

FPL Energy contract coverage2006

1 Weighted to reflect in-service dates, planned maintenance and Seabrook’s refueling outage and power uprate and expected production from renewable resource assets2 Reflects Round-the-Clock MW3 Includes all projects with mid- to long-term purchase power contracts for substantially all of their output4 Includes only those facilities that require active hedging5 Reflects on-peak MWTotals may not add due to rounding and exclude pending Duane Arnold acquisition

As of 3/31/05 As of 7/15/05

Asset Class Available

MW 1

% MW under

Contract

Available

MW 1

% MW under

Contract

Wind 2 3,199 91 3,049 97 Contracted 3 2,044 99 2,044 99 Merchant 4

NEPOOL 5 2,343 42 2,298 49 ERCOT 5 2,644 48 2,580 82 All other 5 1,446 17 1,426 24

Total portfolio 5 11,675 64 11,397 75

22

• Acquired Gexa Corp.• Wind additions 500-750 mw by year-end ’05

–Weatherford Wind brought into service with ~107 mw of wind, total year-to-date to ~221 mw

–Additional ~250 mw announced• On July 5, announced intent to purchase

Duane Arnold Energy Center

Portfolio transactions

23

Gexa Corp. acquisitionClosed acquisition of fast-growing Texas retail energy

provider on June 17:– Serves approximately 1,000 mw’s of peak load

associated with over 125,000 small commercial and residential customers throughout Texas

– Financially attractive:• EPS: 2 to 3 cents/year over next 5 years expected

– Significant synergies with FPL Energy Texas portfolio:• Hedge for Texas assets• Green product marketing outlet for renewable energy• Expands FPL Energy commercial and operational

capabilities– Provides balance to FPL Energy’s naturally long power

position in ERCOT

24

Acquisition of Duane ArnoldEnergy Center

Acquisition announced July 5 for $387 million:– Attractive economics

• Expect immediate earnings accretion • Long-term power contract provides predictable and growing

cash flow through contract period– Low-cost baseload producer in Midwest market

• Complements FPL Energy wind portfolio in region– Leverages FPL’s nuclear expertise

• Opportunity to enhance operations from current levels • Leverages successful Seabrook integration• Builds nuclear scale

– Improves FPL Energy portfolio diversification

25

FPL Energy outlook strong

2005– Likely to come in towards the high end of net income

range of $245 to $275 million1,2

2006– Initial net income range of $320 to $360 million

2007– Updated net income range of $420 to $460 million

2006 and 2007 ranges reflect the anticipated addition of Duane Arnold

Ranges are supported by current forward curves1 See Appendix for reconciliation of GAAP to adjusted amounts2 2005 estimate is based upon FPL Energy EPS guidance given on July 22, 2005, and excludes the cumulative

effect of adopting new accounting standards as well as the mark-to-market effect of non-qualifying hedges, neither of which can be determined at this time. It is FPL Group's policy not to comment on guidance during the quarter.

FPL Energy’s 2006 and 2007 figures are indicative ranges and are appropriate for this point in time but are not based on detailed budgeting analysis. As a result, they should only be taken into account in conjunction with the Company’s standard earnings guidance

26

Earnings Per Share contributionsSecond quarter

GAAP 04 05 Change FPL $0.57 $0.52 $(0.05) FPL Energy 0.19 0.05 (0.14) Corporate and Other (0.05) (0.05) 0.00 Total $0.71 $0.52 $(0.19)

Adjusted 04 05 Change FPL $0.57 $0.52 $(0.05) FPL Energy 0.17 0.19 0.02 Corporate and Other (0.05) (0.05) 0.00 Total $0.69 $0.66 $(0.03)

See Appendix for reconciliation of GAAP to adjusted amounts

27

2005 Outlook

• FPL– Expect earnings contribution of $1.93 to $2.00 per

share assuming normal weather• FPL Energy

– Expect earnings contribution of $0.65 to $0.73 per share

• Corporate and Other– Modestly negative results at FPL FiberNet– Higher interest expense– Net drag of $0.15 to $0.18 per share

EPS of $2.45 to $2.55 1

1 Assuming normal weather for the balance of the year, excluding the cumulative effect of adopting new accounting standards as well as the mark-to-market effect of non-qualifying hedges, neither of which can be determined at this time

Q&A Session

Appendix

30

FPL: potential drivers of 2005 earnings variability

Issue Variability Potential 2005 Impact

Balance of Year Weather variability at 80% probability ± 9¢

Customer growth ± 1 to 2¢

Usage growth ± 1 to 2¢

O&M expenses sensitivity

2% variation ± 4¢

See Safe Harbor Statement and SEC filings for full discussion of risks

31

Florida ranks 1st in growth among most populous states

1 Estimated population by state as a percentage of total U.S. population; 2030 are based on estimated population

Source: U.S. Census Bureau

1.1%United States

6.5%0.3%New York

4.3%0.6%Illinois

12.2%1.5%California

7.7%1.9%Texas

5.9%2.1%Florida

2000-2004 in 20041 CAGR % of Population

State

0.9%

0.1%

0.3%

1.1%

1.6%

2.0%

2000-2030CAGR

5.4%

3.7%

12.8%

9.2%

7.9%

in 2030

% of Population

32

Issue Sensitivity Variability

Potential Impact Balance

of 2005 Market risk

commodity prices

-1¢ + 3¢

Weather Wind portfolio wind resource ± 1 wind index ± 1-2¢

Maine hydro rainfall, snow pack

± 20% 1 ± 2¢

Oper. performance EFOR ? New growth Wind New development 500 – 750 MW ± 1-2¢ Other Asset acquisitions

? +?

Asset restructuring

0+% of FPLE

earnings

1 From historic mean

FPL Energy: potential drivers of 2005 earnings variability

33

Non-qualifying hedges 1

Summary of activity ($ thousands, after-tax)

1 Includes contracts of FPL Energy’s consolidated projects plus its share of the contracts of equity method investees

2 12/31/04 balance has been decreased $201 for the impact of changing tax rate from 39.23% to FPL Energy Project specific tax rates

3 Amount represents the change in value of deals executed during the quarter from the execution date through quarter end

1st QuarterAsset / Deals Asset /

(Liability) Change in Executed Total (Liability)Balance Amounts Forward During Unrealized Balance

Description 12/31/04 (2) Realized Prices Period (3) MTM 3/31/05Gas Supply Contract 16,205$ (1,611) 6,747 - 5,136 21,341$ Other - net 5,416$ (6,417) (17,321) (12,155) (35,893) (30,477)$ Total 21,621$ (8,028)$ (10,574)$ (12,155)$ (30,757)$ (9,136)$

2nd QuarterAsset / Deals Asset /

(Liability) Change in Executed Total (Liability)Balance Amounts Forward During Unrealized Balance

Description 3/31/05 Realized Prices Period (3) MTM 6/30/05Gas Supply Contract 21,341$ (2,263) 1,615 - (648) 20,693$ Other - net (30,477)$ (3,542) (39,120) (8,856) (51,518) (81,995)$ Total (9,136)$ (5,805)$ (37,505)$ (8,856)$ (52,166)$ (61,302)$

34

Non-qualifying hedges 1

Summary of forward maturity ($ thousands, after-tax)

1 Includes contracts of FPL Energy’s consolidated projects plus its share of the contracts of equity method investees

2 Gain/(loss) based on existing contracts and forward prices as of 12/31/05

Asset /

(Liability) Gain / (Loss) 2

Balance 2009 - TotalDescription 6/30/05 2005 2006 2007 2008 2014 2005 - 2014

Gas Supply Contract 20,693$ (4,342) (9,631) (6,990) - - (20,693) Other - net (81,995)$ 29,520 26,314 8,925 1,851 15,385 81,995 Total (61,302)$ 25,178$ 16,953$ 1,935$ 1,851$ 15,385$ 61,302$

35

Non-Qualifying hedge exampleForward spark spread sale

Non-cash"M-T-M" gains & losses

$3.94 $1.43 $4.66 ($2.15) GAAP Earnings (Pre-Tax)

0.00 (0.54)2.69 (2.15) (see calculation in boxes below)

Gain/(Loss)

Non-Qualifying Unrealized $3.94 $1.97 $1.97 $0.00 Adjusted Earnings (Pre-Tax)

3Q '052Q '051Q '05 Total

Extensive Earnings Volatility179,200 x (17-11) = $1.08

179,200 x (17-8) = $1.61 $2.69

358,400 x (11-17) = $(2.15) 179,200 x (8-11) = $(.54)

FPL Energy enters into a forward sale in January 2005 to "lock-in" gross margin

Assumptions:• Volume 175 MW On Peak (358,400 MWh's)

• Term April - Sep '05

• Spark Spread $11 per MWh ($3.94 million total value)

At the end of each quarter, assume the market value of the spark spread changes to:– 1Q05 $17 per MWh

– 2Q05 $8 per MWh

As the power is sold, FPLE will recognize the $11.00 / MWh in contract spark spread and the unrealized mark-to-market will reverse.

The table below illustrates the impact on Adjusted Earnings and GAAP Earnings in each period ($ millions): Cash

revenues

36

FPL Energy 2007 outlookCommon assumptions for 2006 and 2007

WIND RESOURCEAssumes normal wind resource

NEW WIND INVESTMENTS1,250 - 1,750 mw by end of 2007

ANNOUNCED AND ANTICIPATED ACQUISITIONSIncludes previously announced acquisitions and potential acquisitions (Gexa effective June 17, 2005 and Duane Arnold effective January 1, 2006)Assumes no additional unidentified acquisitions

MARKET PRICESReflects forward prices as of June 30, 2005

See Safe Harbor Statement and SEC filings for full discussion of risks

37

Wind resource fundamentalsAnnual

104 105 103 101 9797 9998 96100

95 96 97 98 99 00 01 02 03 04

Wind Speed Index 1

1 Average wind speed for the period from those reference towers chosen to represent FPL Energy’s portfolio -weighted index based on FPL Energy’s portfolio as of 6/30/05

100 = long-term historic annual weighted mean

38

Bridging reference tower wind speed to earnings impact

Correlation factor effect (tower to site)Wind shear derivation (convert lower

level measured wind to predicted)

Air density assumptionTurbine specific performance (power curve)

AvailabilityReliabilityCurtailments

Price paid by buyer

Reference Tower Wind Speed

Wind Turbine Hub HeightWind Speed

Theoretical Wind Turbine Output

Actual Wind Turbine Output

Earnings Per Share Contribution

±1 in the annual portfolio wind index for2005 equates to ± $0.02 to $0.03/share 1

1 Sets aside uncertainties that can cause actual performance to deviate from that predicted solely by using the wind data from the selected reference towers. This reflects the impact on projects that were fully in operation on 6/30/05

39

Regional Long Term Wind Reference Location

FPL Energy plant operations

Evanston

Walla Walla

Livermore*

Lancaster

Midland

Clovis

Gage

Garden City

Red Oak

Mason City

Pipestone

Lone Rock

Jamestown

Pierre

Johnstown

Scranton

Palm Springs*

Bakersfield*

Concord*

Clinton

Abilene*

* Denotes new references included to better describe FPLE Wind Portfolio

Winkler*

40

FPL Energy MWs and Regional Reference Towers Second Quarter

Reference towers were selected for their proximity to FPL Energy’s wind assets.FPL Energy wind portfolio as of 6/30/05

Long Term 2004 2004 Long Term 2Q 2Q2004 2Q2004 2Q2005 2Q2005

Associated Avg. Wind Avg. Wind Wind Speed Avg. Wind Avg. Wind Wind Speed Avg. Wind Wind Speed

Reference Tower Net MWs Speed (m/s) Speed (m/s) Index Speed (m/s) Speed (m/s) Index Speed (m/s) Index

Midland.TX 598.60 4.94 4.92 99.59 5.62 5.63 100.20 5.21 92.61

WallaWalla.WA 324.90 3.76 3.39 90.01 3.96 3.56 89.96 3.70 93.39

Clovis.NM 204.00 5.21 5.25 100.74 5.72 5.60 97.94 5.32 93.07

Concord.CA 162.00 3.75 3.46 92.32 4.62 4.60 99.63 4.04 87.51

Abilene.TX 114.00 4.99 4.78 95.65 5.61 5.44 96.98 5.31 94.65

Clinton.OK 0.00 5.69 5.86 102.84 6.07 6.23 102.64 5.82 95.85

Lancaster.CA 165.10 4.94 4.90 99.19 6.57 6.65 101.18 6.28 95.50

Evanston.WY 144.00 4.66 4.33 92.89 5.07 4.93 97.31 4.64 91.62

GardenCity.KS 112.20 5.53 5.40 97.65 6.09 6.00 98.61 6.06 99.61

Johnstown.PA 130.40 4.24 4.14 97.77 4.02 4.01 99.75 3.83 95.14

Pipestone.MN 116.50 4.20 4.37 104.09 4.50 4.52 100.35 4.85 107.80

Livermore.CA 151.00 3.50 3.03 86.65 4.13 3.90 94.58 3.40 82.30

Gage.OK 102.00 5.14 5.13 99.73 5.86 6.04 103.18 5.75 98.15

RedOak.IA 97.70 3.68 3.50 95.26 4.28 4.03 94.07 3.93 91.63

PalmSprings.CA 77.30 3.58 2.92 81.64 4.46 3.72 83.29 3.86 86.46

Bakersfield.CA 77.00 2.74 2.65 96.70 3.26 3.19 98.09 3.17 97.44

Jamestown.ND 61.50 5.05 5.05 100.04 5.29 5.14 97.10 5.79 109.55

Scranton.PA 64.50 3.09 3.06 99.30 3.07 2.91 94.67 2.78 90.40

Pierre.SD 40.50 4.94 5.15 104.17 5.23 5.24 100.16 5.65 108.00

Winkler.TX 56.80 4.25 4.30 101.29 4.86 4.81 98.88 4.74 97.58

MasonCity.IA 41.30 5.04 5.09 101.07 5.43 5.35 98.51 5.35 98.36

LoneRock.WI 30.00 3.46 3.20 92.32 3.71 3.38 91.09 3.38 90.95

Total Net MWs 2871.30

Av Index 96.81 97.49 94.35

41

Reconciliation of GAAP to Adjusted amountsThree months ended June 30, 2004

Florida Power Corporate &

(millions, except per share amounts) & Light FPL Energy Other FPL Group, Inc.Reconciliation of Net Income (Loss) to Earnings

Excluding After-tax Effect of Certain Items:

Net Income (Loss) 205$ 69$ (17)$ 257$

Adjustments:

Net unrealized mark-to-market gains associated

w ith non-qualifying hedges - (6) - (6)

Earnings (Loss) excluding after-tax effect of certain items 205$ 63$ (17)$ 251$

Earnings (Loss) Per Share (assuming dilution) 0.57$ 0.19$ (0.05)$ 0.71$

Net unrealized mark-to-market gains associated

w ith non-qualifying hedges - (0.02) - (0.02) Earnings (Loss) Per Share excluding certain items 0.57$ 0.17$ (0.05)$ 0.69$

42

Reconciliation of GAAP to Adjusted amountsThree months ended June 30, 2005

Florida Power Corporate &

(millions, except per share amounts) & Light FPL Energy Other FPL Group, Inc.Reconciliation of Net Income (Loss) to Earnings

Excluding After-tax Effect of Certain Items:

Net Income (Loss) 201$ 20$ (18)$ 203$

Adjustments:

Net unrealized mark-to-market losses associated

w ith non-qualifying hedges - 52 - 52

Earnings (Loss) excluding after-tax effect of certain items 201$ 72$ (18)$ 255$

Earnings (Loss) Per Share (assuming dilution) 0.52$ 0.05$ (0.05)$ 0.52$

Net unrealized mark-to-market losses associated

w ith non-qualifying hedges - 0.14 - 0.14 Earnings (Loss) Per Share excluding certain items 0.52$ 0.19$ (0.05)$ 0.66$

43

In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Reform Act), FPL Group, Inc. (FPL Group) is hereby providing cautionary statements identifying important factors that could cause FPL Group'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 in this press release, in presentations, 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 actual results to differ materially from those contained in forward-looking statements made by or on behalf of FPL Group.

Any forward-looking statement speaks only as of the date on which such statement is made, and FPL Group undertakes 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 operations and financial results, and could cause FPL Group's actual results or outcomes to differ materially from those discussed in the forward-looking statements:

• FPL Group and its subsidiaries, Florida Power & Light Company (FPL) and FPL Energy, LLC (FPL Energy) are subject to changes in laws or regulations, including the Public Utility Regulatory Policies Act of 1978, as amended (PURPA), the Public Utility Holding Company Act of 1935, as amended (Holding Company Act), the Federal Power Act, the Atomic Energy Act of 1954, as amended and certain sections of the Florida statutes relating to public utilities, changing governmental policies and regulatory actions, including those of the Federal Energy Regulatory Commission (FERC), the Florida Public Service Commission (FPSC) and the utility commissions of other states in which FPL Group has operations, and the U.S. Nuclear Regulatory Commission (NRC), 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) 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 recovery by FPL of any and all costs that it considers excessive or imprudently 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, FPL Energy and FPL are subject to extensive federal, state and local environmental 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 or limit the output of certain facilities or the use of certain fuels required for the production of electricity and/or 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.

Cautionary Statements And Risk Factors That May Affect Future

Results

44

• FPL Group and FPL operate in a changing market environment influenced by various legislative and regulatory initiatives regarding deregulation, 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 franchise agreements with municipalities and counties in Florida.

• The operation of power generation facilities involves many risks, including start up risks, breakdown or failure of equipment, transmission lines or pipelines, use of new technology, the dependence on a specific fuel source 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.  Insurance, warranties 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, FPL Energy’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 spent nuclear fuel, as well as additional regulatory actions up to and including shutdown of the units stemming from public safety concerns, whether at FPL Group's, FPL Energy’s and FPL's plants, or at the plants of other nuclear operators.  Breakdown or failure of an FPL Energy operating facility may prevent the facility from performing under applicable power sales agreements which, in certain situations, could result in termination of the agreement or incurring a liability for liquidated damages.

• FPL Group's, FPL Energy’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 is contingent upon many variables and subject to substantial risks.  Should any such efforts be unsuccessful, FPL Group could be subject to additional costs, termination payments under committed contracts, and/or the write-off of their investment in the project or improvement.

• FPL Group and FPL use derivative instruments, 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 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, cost recovery could be disallowed by the FPSC.

• There are other risks associated with 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, transmission constraints, 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 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 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 or capacity is inadequate or unavailable, FPL Energy's ability to sell and deliver its wholesale power may be limited.

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• 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 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 not satisfied by operating cash flows.  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, FPL Energy’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/or property damage, and could require additional costs to be incurred. At FPL, recovery of these costs is subject to FPSC approval.

• FPL Group, FPL Energy and FPL are subject to costs and other effects of legal and administrative proceedings, 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 or corporate governance requirements.

• FPL Group, FPL Energy 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 power, the risk of a significant slowdown in growth or a decline in the U.S. economy, delay in economic recovery in the United States, and the increased cost and adequacy of security and insurance.

• FPL Group's, FPL Energy’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, FPL Energy and FPL are subject to employee workforce factors, including loss or retirement of key executives, availability of qualified personnel, collective bargaining agreements with union employees or work stoppage.

The issues and associated risks and uncertainties described above are not the only ones FPL Group 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 businesses in the future.

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