FPL Group Delivers Strong Second-Quarter Performance

FPL Group, Inc. (NYSE:FPL) today reported 2008 second quarter net income on a GAAP basis of $209 million, or $0.52 per share, compared with $405 million, or $1.01 per share, in the second quarter of 2007. FPL Group’s net income for the second quarter of 2008 included a net unrealized after-tax loss of $157 million associated with the mark-to-market effect of non-qualifying hedges and a $9 million after-tax loss related to other than temporary impairments on investments, or OTTI. The results for last year’s second quarter included a net unrealized after-tax gain of $58 million primarily associated with the mark-to-market effect of non-qualifying hedges and a $1 million after tax loss related to OTTI. Excluding the mark-to-market effect of non-qualifying hedges and OTTI, FPL Group’s adjusted earnings were $375 million, or $0.93 per share, for the second quarter of 2008, compared with $348 million, or $0.86 per share, in the second quarter of 2007. The difference between 2008 second quarter adjusted results and GAAP results is primarily the losses on a GAAP basis from marking to market non-qualifying hedges. The negative mark in the second quarter is the result of higher forward prices for natural gas and power during the quarter. FPL Group’s management uses adjusted earnings internally for financial planning, for analysis of performance, for reporting of results to the Board of Directors and as inputs in determining whether certain performance targets are met for performance-based compensation under 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 performed very well in the second quarter of 2008. Adjusted earnings per share increased about 8 percent year over year. Florida Power & Light Company produced solid results despite very challenging marketplace conditions, and FPL Energy had another outstanding quarter. Together, these businesses perform in a very complementary fashion. We have a great utility franchise favored by great long-term demographic trends, and FPL Energy is well positioned for a world increasingly focused on the urgent need to address climate change,” said Lew Hay, chairman and chief executive officer of FPL Group. Florida Power & Light Company FPL Group's regulated utility subsidiary, Florida Power & Light Company, reported second quarter net income of $217 million, or $0.54 per share, compared with $211 million, or $0.53 per share, for the prior-year quarter. Retail sales of electricity increased 3.2 percent during the second quarter, largely due to weather. Year-over-year growth in customer accounts slowed, but remained positive at 21,000, or about 0.5 percent. For the 2008 second quarter, FPL’s operations and maintenance (O&M) expense was $379 million, an increase of $13 million from the prior-year figures. The primary drivers of the increase for the quarter were fossil generation owing to the timing of outage work and structural maintenance, and transmission and distribution. For the full year, FPL expects to experience cost pressures in nuclear, fossil generation (primarily due to the full-year impact of Turkey Point Unit 5), and bad debt expense. During the quarter, Florida Gov. Charlie Crist signed energy legislation that focuses on reducing carbon dioxide emissions and promoting renewable energy sources. Although FPL has one of the cleanest emissions profiles in the nation, the company continues its emphasis on developing a cleaner, more efficient generation fleet. In April, the company petitioned the Florida Public Service Commission for approval to build a third combined-cycle natural gas-fired power plant at the West County Energy Center. West County Unit 3 will be identical to Units 1 and 2, which are now under construction and scheduled to be completed in 2009. If approved, Unit 3 would be in operation by 2011. It is anticipated that all three units will provide customers with net savings, driven by the greater fuel efficiency of these plants. At the end of April, FPL announced plans to modernize its Riviera and Cape Canaveral facilities. This effort will replace 1,357 megawatts of older, inefficient generation with more than 2,400 megawatts of new, highly efficient combined-cycle plants, which are also expected to provide net benefits to customers. The PSC is expected to rule on the third West County unit and the plant modernizations together in August. In July, the PSC approved cost recovery for FPL’s proposed 110 megawatts of solar generation to be placed into service at three locations throughout the state by year end 2010. This initiative includes what will be the nation’s largest solar photovoltaic array and the nation’s first hybrid energy center combining solar thermal energy with a combined-cycle natural gas unit. FPL Energy FPL Energy, the competitive energy subsidiary of FPL Group, reported second quarter net income on a GAAP basis of $3 million, or $0.01 per share, compared to $203 million, or $0.51 per share, in the prior-year quarter. FPL Energy’s net income for the second quarter of 2008 included a net unrealized after-tax loss of $157 million associated with the mark-to-market effect of non-qualifying hedges, and a $9 million loss associated with OTTI. The results for last year’s second quarter included a net unrealized after-tax gain of $58 million associated with the mark-to-market effect of non-qualifying hedges, and $1 million loss for OTTI. Excluding the mark-to-market effect of non-qualifying hedges and OTTI, adjusted net income for FPL Energy in the second quarter of 2008 was $169 million, or $0.42 per share, compared to $146 million, or $0.36 per share, in 2007. FPL Energy’s growth in adjusted earnings in the second quarter was driven principally by the addition of new projects, including new wind projects and the Point Beach nuclear facility acquired in 2007, as well as by the strength of existing asset operations. FPL Energy’s hedged gross margin positions for 2008 and 2009 remain essentially unchanged from the previous quarter. Commodity price fluctuations for 2008 will have little impact on FPL Energy’s gross margins for the year. Nearly 87 percent of FPL Energy’s expected gross margin for existing assets for 2009 is protected against price movements. This approximation does not include other factors such as power or fuel basis; weather, including wind, hydro and solar availability; and operational performance. FPL Energy’s industry-leading wind program continues to make excellent progress. Thus far in 2008, the company has added nearly 400 megawatts of new wind projects. For fiscal 2008, FPL Energy expects to add 1,200 to 1,300 megawatts of wind capacity. Corporate and Other The loss in Corporate and Other increased $2 million to $11 million for the second quarter of 2008 compared to the second quarter of 2007. Outlook FPL Group is reaffirming its 2008 and 2009 adjusted earnings per share expectations as well as its goal of at least 10 percent annual earnings growth through 2012 using our 2006 adjusted earnings per share as the base. For 2008, the company continues to see a reasonable range of $3.83 to $3.93 of adjusted earnings per share given normal weather and no further material decline in the Florida economy. For 2009, the company continues to see adjusted earnings per share of $4.15 to $4.35 as a reasonable range. As always, FPL Group’s earnings expectations assume normal weather and operating conditions and exclude the effect of adopting new accounting standards, if any, and the mark-to-market effect of non-qualifying hedges, and OTTI, none of which can be determined at this time. As previously announced, FPL Group’s second quarter earnings conference call is scheduled for 9 a.m. ET on Thursday, July 31, 2008. 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 the presentation may be downloaded at www.FPLGroup.com beginning at 7:30 a.m. ET today. For those unable to listen to the live webcast, a replay will be available for 30 days by accessing the same link as listed above. NOTE TO EDITORS: This news release reflects the earnings report of FPL Group, Inc. Reference to the corporation and its earnings or financial results should be to "FPL Group” and not abbreviated using the name "FPL” as the latter is the name/acronym of the corporation’s electric utility subsidiary. 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 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 (as such term is defined in the Reform Act) made by or on behalf of FPL Group and FPL in this press release, on their respective websites, in response to questions or otherwise. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, future events or performance, climate change strategy or growth strategies (often, but not always, through the use of words or phrases such as will likely result, are expected to, will continue, is anticipated, aim, believe, could, estimated, may, plan, potential, projection, target, outlook, predict, intend) 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, 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 regulations and to changes in laws and regulations as well as changing governmental policies and regulatory actions, including, but not limited to, initiatives regarding deregulation and restructuring of the energy industry and environmental matters, including, but not limited to, matters related to the effects of climate change. FPL holds franchise agreements with local municipalities and counties, and must renegotiate expiring agreements. These factors may have a negative impact on the business and results of operations of FPL Group and FPL. FPL Group and FPL are subject to complex laws and regulations, and to changes in laws or regulations, including, but not limited to, the PURPA, the Holding Company Act, the Federal Power Act, the Atomic Energy Act of 1954, as amended, the 2005 Energy Act and certain sections of the Florida statutes relating to public utilities, changing governmental policies and regulatory actions, including, but not limited to, those of the FERC, the FPSC and the legislatures and utility commissions of other states in which FPL Group has operations, and the NRC, with respect to, among other things, allowed rates of return, industry and rate structure, operation of nuclear power facilities, construction and operation of plant facilities, construction and operation of transmission and distribution facilities, acquisition, disposal, depreciation and amortization of assets and facilities, recovery of fuel and purchased power costs, decommissioning costs, 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 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, climate change, waste management, marine and 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. 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, but not limited to, deregulation or restructuring of the production and sale of electricity, as well as increased focus on renewable energy sources. 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 and maintenance of transmission, distribution and power generation facilities, including nuclear facilities, involve significant risks that could adversely affect the results of operations and financial condition of FPL Group and FPL. The operation and maintenance of transmission, distribution and power generation facilities involve many risks, including, but not limited to, start up risks, breakdown or failure of equipment, transmission and distribution lines or pipelines, the inability to properly manage or mitigate known equipment defects throughout FPL Group's and FPL's generation fleets and transmission and distribution systems unless and until such defects are remediated, 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, but not limited to, natural disasters such as hurricanes and droughts), 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, but not limited to, the requirement to purchase power in the market at potentially higher prices to meet contractual obligations. Insurance, warranties or performance guarantees may not cover any or all of the lost revenues or increased expenses, including, but not limited to, 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, but not limited to, the ability to store and/or dispose of spent nuclear fuel and the potential payment of significant retrospective insurance premiums, as well as additional regulatory actions up to and including shutdown of the units stemming 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 operating facility of FPL Energy 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. The construction of, and capital improvements to, power generation facilities, including nuclear facilities, involve substantial risks. Should construction or capital improvement efforts be unsuccessful, the results of operations and financial condition of FPL Group and FPL could be adversely affected. 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 many variables, including, but not limited to, transmission interconnection issues and escalating costs for materials, labor and environmental compliance, 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 of their investment in the project or improvement. The use of derivative contracts by FPL Group and FPL in the normal course of business could result in financial losses that negatively impact the results of operations of FPL Group and FPL. FPL Group and FPL use derivative instruments, such as swaps, options and forwards to manage their commodity and financial market risks. FPL Group provides full energy and capacity requirements services primarily to distribution utilities and engages in energy trading activities. FPL Group could recognize financial losses as a result of volatility in the market values of these derivative instruments, 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 derivative instruments. 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. FPL Group's competitive energy business is subject to risks, many of which are beyond the control of FPL Group, that may reduce the revenues and adversely impact the results of operations and financial condition of FPL Group. There are other risks associated with FPL Group's competitive energy business. In addition to risks discussed elsewhere, risk factors specifically affecting FPL Energy's success in competitive wholesale markets include, but are not limited to, 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, 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. FPL Group's ability to successfully identify, complete and integrate acquisitions is subject to significant risks, including, but not limited to, the effect of increased competition for acquisitions resulting from the consolidation of the power industry. 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 2005 Energy Act. In addition, FPL Group may be unable to identify attractive acquisition opportunities at favorable prices and to complete and integrate them successfully and in a timely manner. Because FPL Group and FPL rely on access to capital markets, the inability to maintain current credit ratings and to access capital markets on favorable terms may limit the ability of FPL Group and FPL to grow their businesses and would likely increase interest costs. 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 and FPL to maintain their current credit ratings, as well as significant volatility in the financial markets, could affect their ability to raise capital on favorable terms, which, in turn, could impact FPL Group's and FPL's ability to grow their businesses and would likely increase their interest costs. Customer growth in FPL's service area affects FPL Group's and FPL's results of operations. 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, but not limited, to 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. Weather affects FPL Group's and FPL's results of operations. 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, affect the price of energy commodities, and can affect the production of electricity at power generating facilities, including, but not limited to, wind, solar 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, 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 proceedings as well as changes in or additions to applicable tax laws, rates or policies, rates of inflation, accounting standards, securities laws and corporate governance requirements. FPL Group 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 and corporate governance requirements. Threats of terrorism and catastrophic events that could result from terrorism, cyber attacks, or individuals and/or groups attempting to disrupt FPL Group's and FPL's business may impact the operations of FPL Group and FPL in unpredictable ways. FPL Group and FPL are subject to direct and indirect effects of terrorist threats and activities, as well as cyber attacks and disruptive activities of individuals and/or groups. Infrastructure facilities and systems, including, but not limited to, generation, transmission and distribution facilities, physical assets and information systems, in general, have been identified as potential targets. The effects of these threats and activities include, but are not limited to, the inability to generate, purchase or transmit power, the delay in development and construction of new generating facilities, the risk of a significant slowdown in growth or a decline in the U.S. economy, delay in economic recovery in the U.S., and the increased cost and adequacy of security and insurance. The ability of FPL Group and FPL to obtain insurance and the terms of any available insurance coverage could be affected by national, state or local events and company-specific events. 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 that could affect the businesses and financial condition of FPL Group and FPL. FPL Group and FPL are subject to employee workforce factors, including, but not limited to, loss or retirement of key executives, availability of qualified personnel, inflationary pressures on payroll and benefits costs, collective bargaining agreements with union employees and work stoppage that could affect the businesses and financial condition of FPL Group and FPL. The risks described herein are not the only risks facing FPL Group and FPL. Additional risks and uncertainties not currently known to FPL Group or FPL, or that are currently deemed to be immaterial, also may materially adversely affect FPL Group's or FPL's business, financial condition and/or future operating results. FPL Group, Inc. Condensed Consolidated Statements of Income (millions, except per share amounts) (unaudited)   Three Months Ended June 30, 2008   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc. Operating Revenues   $ 2,871   $ 663   $ 51   $ 3,585     Operating Expenses Fuel, purchased power and interchange 1,598 339 27 1,964 Other operations and maintenance 379 252 20 651 Storm cost amortization 15 - - 15 Depreciation and amortization 199 141 4 344 Taxes other than income taxes   264       33       1       298   Total operating expenses 2,455 765 52 3,272   Operating Income (Loss)   416       (102 )     (1 )     313     Other Income (Deductions) Interest expense (83 ) (73 ) (39 ) (195 ) Equity in earnings of equity method investees - 26 - 26 Gains (losses) on disposal of assets - 3 - 3 Allowance for equity funds used during construction 8 - - 8 Interest income 4 9 8 21 Other – net   (3 )     (14 )     1       (16 ) Total other income (deductions) – net   (74 )     (49 )     (30 )     (153 )   Income (Loss) Before Income Taxes 342 (151 ) (31 ) 160 Income Tax Expense (Benefit) 125 (154 ) (20 ) (49 ) Net Income (Loss) $ 217     $ 3     $ (11 )   $ 209     Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss): Net Income (Loss) $ 217 $ 3 $ (11 ) $ 209 Adjustments, net of income taxes: Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges - 157 - 157 Other than temporary impairment losses - net - 9 - 9 Adjusted Earnings (Loss) $ 217     $ 169     $ (11 )   $ 375     Earnings (Loss) Per Share (assuming dilution) $ 0.54 $ 0.01 $ (0.03 ) $ 0.52 Adjustments: Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges - 0.39 - 0.39 Other than temporary impairment losses - net - 0.02 - 0.02 Adjusted Earnings (Loss) Per Share $ 0.54     $ 0.42     $ (0.03 )   $ 0.93   Weighted-average shares outstanding (assuming dilution) 403   FPL Energy's interest expense is based on a deemed capital structure of 50% debt for operating projects and 100% debt for projects under construction. For these purposes, the deferred credit associated with differential membership interests sold by an FPL Energy subsidiary in December 2007 is included with debt. Residual non-utility interest expense is 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)   Three Months Ended June 30, 2007   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc. Operating Revenues   $ 2,905   $ 983   $ 41   $ 3,929     Operating Expenses Fuel, purchased power and interchange 1,698 390 18 2,106 Other operations and maintenance 366 178 17 561 Storm cost amortization 19 - - 19 Depreciation and amortization 194 110 4 308 Taxes other than income taxes   245       25       1       271   Total operating expenses   2,522       703       40       3,265     Operating Income (Loss)   383       280       1       664     Other Income (Deductions) Interest expense (73 ) (72 ) (33 ) (178 ) Equity in earnings of equity method investees - 22 - 22 Gains (losses) on disposal of assets - - (1 ) (1 ) Allowance for equity funds used during construction 5 - - 5 Interest income 4 10 9 23 Other – net   (3 )     (2 )     2       (3 ) Total other income (deductions) – net   (67 )     (42 )     (23 )     (132 )   Income (Loss) Before Income Taxes 316 238 (22 ) 532 Income Tax Expense (Benefit)   105       35       (13 )     127   Net Income (Loss) $ 211     $ 203     $ (9 )   $ 405     Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss): Net Income (Loss) $ 211 $ 203 $ (9 ) $ 405 Adjustments, net of income taxes: Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges - (58 ) - (58 ) Other than temporary impairment losses - net   -       1       -       1   Adjusted Earnings (Loss) $ 211     $ 146     $ (9 )   $ 348     Earnings (Loss) Per Share (assuming dilution) $ 0.53 $ 0.51 $ (0.03 ) $ 1.01 Adjustments: Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges - (0.15 ) - (0.15 ) Other than temporary impairment losses - net   -       -       -       -   Adjusted Earnings (Loss) Per Share $ 0.53     $ 0.36     $ (0.03 )   $ 0.86   Weighted-average shares outstanding (assuming dilution) 400   FPL Energy's interest expense is based on a deemed capital structure of 50% debt for operating projects and 100% debt for projects under construction. For these purposes, the deferred credit associated with differential membership interests sold by an FPL Energy subsidiary in December 2007 is included with debt. Residual non-utility interest expense is 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)   Six Months Ended June 30, 2008   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc. Operating Revenues   $ 5,406   $ 1,517   $ 97   $ 7,020     Operating Expenses Fuel, purchased power and interchange 3,055 584 51 3,690 Other operations and maintenance 757 500 36 1,293 Storm cost amoritization 25 - - 25 Depreciation and amortization 395 274 8 677 Taxes other than income taxes   514       65       (1 )     578   Total operating expenses   4,746       1,423       94       6,263     Operating Income (Loss)   660       94       3       757     Other Income (Deductions) Interest expense (169 ) (147 ) (77 ) (393 ) Equity in earnings of equity method investees - 40 - 40 Gains (losses) on disposal of assets - 7 - 7 Allowance for equity funds used during construction 13 - - 13 Interest income 8 19 9 36 Other – net   (6 )     (14 )     -       (20 ) Total other income (deductions) – net   (154 )     (95 )     (68 )     (317 )   Income (Loss) Before Income Taxes 506 (1 ) (65 ) 440 Income Tax Expense (Benefit)   181       (168 )     (31 )     (18 ) Net Income (Loss) $ 325     $ 167     $ (34 )   $ 458     Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss): Net Income (Loss) $ 325 $ 167 $ (34 ) $ 458 Adjustments, net of income taxes: Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges - 209 - 209 Other than temporary impairment losses - net   -       12       -       12   Adjusted Earnings (Loss) $ 325     $ 388     $ (34 )   $ 679     Earnings (Loss) Per Share (assuming dilution) $ 0.81 $ 0.42 $ (0.09 ) $ 1.14 Adjustments: Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges - 0.52 - 0.52 Other than temporary impairment losses - net   -       0.03       -       0.03   Adjusted Earnings (Loss) Per Share $ 0.81     $ 0.97     $ (0.09 )   $ 1.69   Weighted-average shares outstanding (assuming dilution) 402   FPL Energy's interest expense is based on a deemed capital structure of 50% debt for operating projects and 100% debt for projects under construction. For these purposes, the deferred credit associated with differential membership interests sold by an FPL Energy subsidiary in December 2007 is included with debt. Residual non-utility interest expense is 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)   Six Months Ended June 30, 2007   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc. Operating Revenues $ 5,353   $ 1,567   $ 84   $ 7,004     Operating Expenses Fuel, purchased power and interchange 3,112 627 39 3,778 Other operations and maintenance 696 350 31 1,077 Storm cost amortization 42 - - 42 Depreciation and amortization 382 214 8 604 Taxes other than income taxes   491       49       1       541   Total operating expenses   4,723       1,240       79       6,042     Operating Income (Loss)   630       327       5       962     Other Income (Deductions) Interest expense (141 ) (145 ) (72 ) (358 ) Equity in earnings of equity method investees - 31 - 31 Gains (losses) on disposal of assets - 1 (1 ) - Allowance for equity funds used during construction 13 - - 13 Interest income 13 17 16 46 Other – net   (5 )     (3 )     2       (6 ) Total other income (deductions) – net   (120 )     (99 )     (55 )     (274 )   Income (Loss) Before Income Taxes 510 228 (50 ) 688 Income Tax Expense (Benefit)   173       (20 )     (20 )     133   Net Income (Loss) $ 337     $ 248     $ (30 )   $ 555     Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss): Net Income (Loss) $ 337 $ 248 $ (30 ) $ 555 Adjustments, net of income taxes: Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges - 68 - 68 Other than temporary impairment losses - net   -       2       -       2   Adjusted Earnings (Loss) $ 337     $ 318     $ (30 )   $ 625     Earnings (Loss) Per Share (assuming dilution) $ 0.84 $ 0.62 $ (0.07 ) $ 1.39 Adjustments: Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges - 0.17 - 0.17 Other than temporary impairment losses - net   -       0.01       -       0.01   Adjusted Earnings (Loss) Per Share $ 0.84     $ 0.80     $ (0.07 )   $ 1.57   Weighted-average shares outstanding (assuming dilution) 400   FPL Energy's interest expense is based on a deemed capital structure of 50% debt for operating projects and 100% debt for projects under construction. For these purposes, the deferred credit associated with differential membership interests sold by an FPL Energy subsidiary in December 2007 is included with debt. Residual non-utility interest expense is 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 Balance Sheets (millions) (unaudited)           June 30, 2008   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc.   Property, Plant and Equipment Electric utility plant in service and other property $ 26,102 $ 13,275 $ 260 $ 39,637 Nuclear fuel 591 555 (1 ) 1,145 Construction work in progress 1,299 1,092 9 2,400 Less accumulated depreciation and amortization   (10,081 )     (2,453 )     (149 )     (12,683 ) Total property, plant and equipment – net   17,911       12,469       119       30,499     Current Assets Cash and cash equivalents 287 122 15 424 Customer receivables, net of allowances 881 778 21 1,680 Other receivables, net of allowances 277 90 (19 ) 348 Materials, supplies and fossil fuel inventory – at avg. cost 695 396 5 1,096 Regulatory assets: Deferred clause and franchise expenses 518 - - 518 Securitized storm-recovery costs 61 - - 61 Derivatives - - - - Other 1 - 3 4 Derivatives 605 460 1 1,066 Other   172       237       (118 )     291   Total current assets   3,497       2,083       (92 )     5,488     Other Assets Special use funds 2,393 932 - 3,325 Prepaid benefit costs 950 - 1,025 1,975 Other investments 7 270 165 442 Regulatory assets: Securitized storm-recovery costs 730 - - 730 Deferred clause expenses - - - - Unamortized loss on reacquired debt 34 - - 34 Other 76 - 21 97 Other   284       634       245       1,163   Total other assets   4,474       1,836       1,456       7,766     Total Assets $ 25,882     $ 16,388     $ 1,483     $ 43,753     Capitalization Common stock $ 1,373 $ - $ (1,369 ) $ 4 Additional paid-in capital 4,318 6,203 (5,784 ) 4,737 Retained earnings 1,859 1,959 2,242 6,060 Accumulated other comprehensive income (loss)   -       (327 )     140       (187 ) Total common shareholders' equity 7,550 7,835 (4,771 ) 10,614 Long-term debt   5,328       2,920       3,809       12,057   Total capitalization   12,878       10,755       (962 )     22,671     Current Liabilities Commercial paper 323 - 1,103 1,426 Current maturities of long-term debt 262 290 625 1,177 Accounts payable 1,247 658 7 1,912 Customer deposits 552 7 - 559 Accrued interest and taxes 346 180 (52 ) 474 Regulatory liabilities: Deferred clause and franchise revenues 10 - - 10 Derivatives 977 - - 977 Pension - - 24 24 Derivatives 12 876 - 888 Other   659       397       (156 )     900   Total current liabilities   4,388       2,408       1,551       8,347     Other Liabilities and Deferred Credits Asset retirement obligations 1,697 523 - 2,220 Accumulated deferred income taxes 2,952 659 171 3,782 Regulatory liabilities: Accrued asset removal costs 2,114 - - 2,114 Asset retirement obligation regulatory expense difference 770 - - 770 Pension - - 678 678 Other 271 - - 271 Derivatives 1 836 1 838 Other   811       1,207       44       2,062   Total other liabilities and deferred credits   8,616       3,225       894       12,735     Commitments and Contingencies   Total Capitalization and Liabilities $ 25,882     $ 16,388     $ 1,483     $ 43,753     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)           December 31, 2007   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc.   Property, Plant and Equipment Electric utility plant in service and other property $ 25,585 $ 12,398 $ 248 $ 38,231 Nuclear fuel 565 531 - 1,096 Construction work in progress 1,101 605 7 1,713 Less accumulated depreciation and amortization   (10,081 )     (2,167 )     (140 )     (12,388 ) Total property, plant and equipment – net   17,170       11,367       115       28,652     Current Assets Cash and cash equivalents 63 157 70 290 Customer receivables, net of allowances 807 673 16 1,496 Other receivables, net of allowances 178 99 (52 ) 225 Materials, supplies and fossil fuel inventory – at avg. cost 583 268 6 857 Regulatory assets: Deferred clause and franchise expenses 103 - - 103 Securitized storm-recovery costs 59 - - 59 Derivatives 117 - - 117 Other - - 2 2 Derivatives 83 99 - 182 Other   260       150       38       448   Total current assets   2,253       1,446       80       3,779     Other Assets Special use funds 2,499 982 1 3,482 Prepaid benefit costs 907 - 1,004 1,911 Other investments 7 227 157 391 Regulatory assets: Securitized storm-recovery costs 756 - - 756 Deferred clause expenses 121 - - 121 Unamortized loss on reacquired debt 36 - - 36 Other 72 - 23 95 Other   223       483       194       900   Total other assets   4,621       1,692       1,379       7,692     Total Assets $ 24,044     $ 14,505     $ 1,574     $ 40,123     Capitalization Common stock $ 1,373 $ - $ (1,369 ) $ 4 Additional paid-in capital 4,318 5,139 (4,787 ) 4,670 Retained earnings 1,584 1,792 2,569 5,945 Accumulated other comprehensive income (loss)   -       (28 )     144       116   Total common shareholders' equity 7,275 6,903 (3,443 ) 10,735 Long-term debt   4,976       2,873       3,431       11,280   Total capitalization   12,251       9,776       (12 )     22,015     Current Liabilities Commerical paper 842 - 175 1,017 Current maturities of long-term debt 241 654 506 1,401 Accounts payable 706 493 5 1,204 Customer deposits 531 7 1 539 Accrued interest and taxes 225 128 (2 ) 351 Regulatory liabilities: Deferred clause and franchise revenues 18 - - 18 Derivatives - - - - Pension - - 24 24 Derivatives 182 107 - 289 Other   531       380       4       915   Total current liabilities   3,276       1,769       713       5,758     Other Liabilities and Deferred Credits Asset retirement obligations 1,653 504 - 2,157 Accumulated deferred income taxes 2,716 935 170 3,821 Regulatory liabilities: Accrued asset removal costs 2,098 - - 2,098 Asset retirement obligation regulatory expense difference 921 - - 921 Pension - - 696 696 Other 235 - 1 236 Derivatives 5 346 - 351 Other   889       1,175       6       2,070   Total other liabilities and deferred credits   8,517       2,960       873       12,350     Commitments and Contingencies   Total Capitalization and Liabilities $ 24,044     $ 14,505     $ 1,574     $ 40,123     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)           Six Months Ended June 30, 2008   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc.   Cash Flows From Operating Activities Net income (loss) $ 325 $ 167 $ (34 ) $ 458 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 395 274 8 677 Nuclear fuel amortization 50 41 - 91 Recoverable storm-related costs of FPL 72 - - 72 Storm cost amortization 25 - - 25 Unrealized (gains) losses on marked to market energy contracts - 334 - 334 Deferred income taxes 339 (237 ) (16 ) 86 Cost recovery clauses and franchise fees (302 ) - - (302 ) Change in prepaid option premiums and derivative settlements 6 (10 ) 1 (3 ) Equity in earnings of equity method investees - (40 ) - (40 ) Distributions of earnings from equity method investees - 34 - 34 Changes in operating assets and liabilities: Customer receivables (74 ) (104 ) (5 ) (183 ) Other receivables (6 ) 13 (20 ) (13 ) Materials, supplies and fossil fuel inventory (112 ) (121 ) - (233 ) Other current assets (77 ) (12 ) 8 (81 ) Other assets (48 ) (34 ) (23 ) (105 ) Accounts payable 545 113 2 660 Customer deposits 21 - (1 ) 20 Margin cash collateral 442 85 - 527 Income taxes (101 ) 42 (56 ) (115 ) Interest and other taxes 127 9 (7 ) 129 Other current liabilities 16 (33 ) (14 ) (31 ) Other liabilities (8 ) (20 ) 7 (21 ) Other – net   45       (3 )     40       82   Net cash provided by (used in) operating activities   1,680       498       (110 )     2,068     Cash Flows From Investing Activities Capital expenditures of FPL (1,161 ) - - (1,161 ) Independent power investments - (1,222 ) - (1,222 ) Nuclear fuel purchases (56 ) (22 ) - (78 ) Other capital expenditures - - (13 ) (13 ) Proceeds from sale of securities in special use funds 760 387 - 1,147 Purchases of securities in special use funds (806 ) (395 ) - (1,201 ) Proceeds from sale of other securities - - 57 57 Purchases of other securities - (35 ) (63 ) (98 ) Other – net   -       39       -       39   Net cash provided by (used in) investing activities   (1,263 )     (1,248 )     (19 )     (2,530 )   Cash Flows From Financing Activities Issuances of long-term debt 589 161 997 1,747 Retirements of long-term debt (224 ) (510 ) (506 ) (1,240 ) Net change in short-term debt (519 ) - 928 409 Issuances of common stock - - 23 23 Dividends on common stock - - (356 ) (356 ) Dividends & capital distributions from (to) FPL Group – net (50 ) 1,064 (1,014 ) - Change in funds held for storm-recovery bond payments 12 - - 12 Other – net   (1 )     -       2       1   Net cash provided by (used in) financing activities   (193 )     715       74       596     Net increase (decrease) in cash and cash equivalents 224 (35 ) (55 ) 134 Cash and cash equivalents at beginning of period   63       157       70       290     Cash and cash equivalents at end of period $ 287     $ 122     $ 15     $ 424     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)           Six Months Ended June 30, 2007   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc.   Cash Flows From Operating Activities Net income (loss) $ 337 $ 248 $ (30 ) $ 555 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 382 214 8 604 Nuclear fuel amortization 42 24 - 66 Recoverable storm-related costs of FPL (7 ) - - (7 ) Storm cost amortization 42 - - 42 Unrealized (gains) losses on marked to market energy contracts - 117 - 117 Deferred income taxes 130 159 13 302 Cost recovery clauses and franchise fees 50 - - 50 Change in prepaid option premiums and derivative settlements 67 21 (1 ) 87 Equity in earnings of equity method investees - (31 ) - (31 ) Distribution of earnings from equity method investees - 112 - 112 Changes in operating assets and liabilities: Customer receivables 5 (162 ) 3 (154 ) Other receivables (22 ) 15 8 1 Materials, supplies and fossil fuel inventory (50 ) 22 (1 ) (29 ) Other current assets (75 ) (2 ) 9 (68 ) Other assets (46 ) (6 ) (30 ) (82 ) Accounts payable 100 81 2 183 Customer deposits 17 - - 17 Margin cash collateral 79 43 - 122 Income taxes 82 (24 ) (246 ) (188 ) Interest and other taxes 112 11 (8 ) 115 Other current liabilities (1 ) (27 ) (11 ) (39 ) Other liabilities (11 ) (37 ) 29 (19 ) Other – net   51       27       16       94   Net cash provided by (used in) operating activities   1,284       805       (239 )     1,850     Cash Flows From Investing Activities Capital expenditures of FPL (878 ) - - (878 ) Independent power investments - (707 ) - (707 ) Nuclear fuel purchases (56 ) (43 ) - (99 ) Other capital expenditures - - (20 ) (20 ) Proceeds from sale of securities in special use funds 1,182 107 - 1,289 Purchases of securities in special use funds (1,346 ) (116 ) - (1,462 ) Proceeds from sale of other securities - - 38 38 Purchases of other securities - - (26 ) (26 ) Other – net   1       12       13       26   Net cash provided by (used in) investing activities   (1,097 )     (747 )     5       (1,839 )   Cash Flows From Financing Activities Issuances of long-term debt 935 691 441 2,067 Retirements of long-term debt (250 ) (109 ) (1,075 ) (1,434 ) Net change in short-term debt 239 - (467 ) (228 ) Issuances of common stock - - 27 27 Dividends on common stock - - (326 ) (326 ) Dividends & capital distributions from (to) FPL Group – net (1,100 ) (566 ) 1,666 - Change in funds held for storm-recovery bond payments (4 ) - - (4 ) Other – net   -       (16 )     6       (10 ) Net cash provided by (used in) financing activities   (180 )     -       272       92     Net increase (decrease) in cash and cash equivalents 7 58 38 103 Cash and cash equivalents at beginning of period   64       92       464       620     Cash and cash equivalents at end of period $ 71     $ 150     $ 502     $ 723     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 Contributions (assuming dilution) (unaudited)           First Quarter   Second Quarter   Third Quarter   Fourth Quarter   Year-To-Date FPL Group – 2007 Earnings Per Share $ 0.38 $ 1.01 $ 1.39   Florida Power & Light – 2007 Earnings Per Share 0.32 0.53 0.84 Customer growth 0.01 0.01 0.02 Usage due to weather - 0.06 0.06 Underlying usage growth and price mix - (0.02 )   (0.02 ) Base rate adjustment for Turkey Point Unit No. 5 0.04 -   0.04 O&M expense (0.06 ) (0.01 )   (0.08 ) Depreciation expense (0.01 ) (0.01 )   (0.02 ) AFUDC (0.01 ) 0.01   - Interest expense (gross) (0.01 ) (0.01 )   (0.02 ) Share dilution - -   - Other   (0.01 )     (0.02 )             (0.01 ) Florida Power & Light – 2008 Earnings Per Share 0.27 0.54 0.81   FPL Energy – 2007 Earnings Per Share 0.11 0.51 0.62 New investments 0.08 0.11 0.19 Existing assets 0.03 - 0.03 Asset optimization and trading 0.03 (0.04 ) (0.01 ) Non-qualifying hedges impact 0.19 (0.54 ) (0.35 ) Change in other than temporary impairment losses - net (0.01 ) (0.02 ) (0.02 ) Share dilution - - - Other, including interest expense   (0.02 )     (0.01 )             (0.04 ) FPL Energy – 2008 Earnings Per Share 0.41 0.01 0.42   Corporate and Other – 2007 Earnings Per Share (0.05 ) (0.03 ) (0.07 ) FPL FiberNet - - - Share dilution - (0.01 ) (0.01 ) Other, including interest expense   (0.01 )     0.01               (0.01 ) Corporate and Other – 2008 Earnings Per Share   (0.06 )     (0.03 )             (0.09 )   FPL Group – 2008 Earnings Per Share $ 0.62     $ 0.52             $ 1.14       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)       June 30, 2008   Per Books   Adjusted1 Long-term debt, including current maturities, and commercial paper Junior Subordinated Debentures2 $ 2,009 $ 850 Project debt: Natural gas-fired assets 298 Wind assets 2,012 Hydro assets 700 Storm Securitization Debt 628 Debt with partial corporate support: Natural gas-fired assets - Other long-term debt, including current maturities, and commercial paper3   9,013       9,013   Total debt 14,660 9,863 Junior Subordinated Debentures2 1,159 Common shareholders' equity   10,614       10,614   Total capitalization, including debt due within one year $ 25,274     $ 21,636     Debt ratio 58 % 46 %     December 31, 2007   Per Books   Adjusted 1 Long-term debt, including current maturities, and commercial paper Junior Subordinated Debentures2 $ 2,009 $ 850 Project debt: Natural gas-fired assets 320 Wind assets 1,903 Hydro assets 700 Storm Securitization Debt 652 Debt with partial corporate support: Natural gas-fired assets 335 Other long-term debt, including current maturities, and commercial paper3   7,779       7,779   Total debt 13,698 8,629 Junior Subordinated Debentures2 1,159 Common shareholders' equity 10,735 10,735 Total capitalization, including debt due within one year $ 24,433     $ 20,523     Debt ratio 56 % 42 %   1 Ratios exclude impact of imputed debt for purchase power obligations 2 Adjusted to reflect preferred stock characteristics of these securities (preferred trust securities and junior subordinated debentures) 3 Includes premium and discount on all debt issuances FPL Group, Inc. Long-Term Debt and Commercial Paper Schedule as of June 30, 2008 (millions) (unaudited)   Type of Debt Interest Rate(%)   Maturity Date   Total Debt   Current Portion   Long-Term Portion Long-Term:           Florida Power & Light   First Mortgage Bonds: First Mortgage Bonds 5.875 04/01/09 225 225 - First Mortgage Bonds 4.850 02/01/13 400 - 400 First Mortgage Bonds 5.850 02/01/33 200 - 200 First Mortgage Bonds 5.950 10/01/33 300 - 300 First Mortgage Bonds 5.625 04/01/34 500 - 500 First Mortgage Bonds 5.650 02/01/35 240 - 240 First Mortgage Bonds 4.950 06/01/35 300 - 300 First Mortgage Bonds 5.400 09/01/35 300 - 300 First Mortgage Bonds 6.200 06/01/36 300 - 300 First Mortgage Bonds 5.650 02/01/37 400 - 400 First Mortgage Bonds 5.850 05/01/37 300 - 300 First Mortgage Bonds 5.550 11/01/17 300 - 300 First Mortgage Bonds 5.950 02/01/38 600   -   600   Total First Mortgage Bonds 4,365   225   4,140   Revenue Refunding Bonds: Miami-Dade Solid Waste Disposal VAR 02/01/23 15 - 15 St. Lucie Solid Waste Disposal VAR 05/01/24 79   -   79 Total Revenue Refunding Bonds 94 - 94   Pollution Control Bonds: Dade VAR 04/01/20 9 - 9 Martin VAR 07/15/22 96 - 96 Jacksonville VAR 09/01/24 46 - 46 Manatee VAR 09/01/24 16 - 16 Putnam VAR 09/01/24 4 - 4 Jacksonville VAR 05/01/27 28 - 28 St. Lucie VAR 09/01/28 242 - 242 Jacksonville VAR 05/01/29 52   -   52 Total Pollution Control Bonds 493 - 493 Industrial Bonds - Dade VAR 06/01/21 46 - 46 Storm Securitization Bonds: - Storm Securitization Bonds 5.053 02/01/11 100 37 63 Storm Securitization Bonds 5.044 08/01/13 140 - 140 Storm Securitization Bonds 5.127 08/01/15 100 - 100 Storm Securitization Bonds 5.256 08/01/19 288   -   288 Total Storm Securitization Bonds 628 37 591   Unamortized discount (36) - (36)   TOTAL FLORIDA POWER & LIGHT 5,590 262 5,328   FPL Group Capital Debentures: Debentures 7.375 06/01/09 225 225 - Debentures 7.375 06/01/09 400 400 - Debentures 5.625 09/01/11 600 - 600 Debentures (Junior Subordinated) 5.875 03/15/44 309 - 309 Debentures (Junior Subordinated) 6.600 10/01/66 350 - 350 Debentures (Junior Subordinated) 6.350 10/01/66 350 - 350 Debentures (Junior Subordinated) 6.650 06/15/67 400 - 400 Debentures (Junior Subordinated) 7.300 09/01/67 250 - 250 Debentures (Junior Subordinated) 7.450 09/01/67 350 - 350 Debentures 5.350 06/01/13 250 - 250 Floating Debenture VAR 06/01/11 250   -   250 Total Debentures 3,734 625 3,109 Term Loans: Term Loans VAR 06/09/09 200 - 200 Term Loans VAR 03/25/11 100 - 100 Term Loans VAR 03/27/11 100 - 100 Term Loans VAR 04/25/09 100 - 100 Term Loans VAR 03/25/11 200   -   200 Total Term Loans 700 - 700   Fair value swaps 3 - 3 Unamortized discount (2) - (2) FPL Energy Senior Secured Bonds: Senior Secured Bonds 6.876 06/27/17 77 11 66 Senior Secured Bonds 6.125 03/25/19 80 9 71 Senior Secured Bonds 6.639 06/20/23 258 30 228 Senior Secured Bonds 5.608 03/10/24 306 23 283 Senior Secured Bonds 7.260 07/20/15 125 - 125 Senior Secured Bonds 6.310 07/10/17 290 - 290 Senior Secured Bonds 6.610 07/10/27 35 - 35 Senior Secured Bonds 6.960 07/10/37 250   -   250 Total Senior Secured Bonds 1,421 73 1,348   Senior Secured Notes 7.520 06/30/19 204 15 189 Senior Secured Notes 7.110 06/28/20 94 6 88 Limited-recourse Senior Secured Notes 7.510 07/20/21 18 1 17 Senior Secured Notes 6.665 01/10/31 172 10 162 Credit Facility VAR 06/26/11 153 - 153 Other Debt: Other Debt 8.450 11/30/12 44 9 35 Other Debt VAR 12/31/17 88 11 77 Other Debt 8.010 12/31/18 2 - 2 Other Debt Part fixed & VAR 11/30/19 226 22 204 Other Debt VAR 01/31/22 560 101 459 Other Debt VAR 12/31/12 226   42   184 Total Other Debt 1,146   185   961   Unamortized discount 1 - 1   TOTAL FPL ENERGY 3,209   290   2,919   Commercial Paper: FPL 323 323 - Capital 1,103 1,103 - TOTAL FPL GROUP CAPITAL 8,747 2,018 6,729 TOTAL FPL GROUP, INC. $ 14,660   $ 2,603   $ 12,057   May not agree to financial statements due to rounding. Florida Power & Light Company Statistics (unaudited)   Quarter   Year to Date Periods Ended June 30 2008   2007 2008   2007 Energy sales (million kwh) Residential 13,345 12,719 24,782 24,374 Commercial 11,335 11,013 22,053 21,627 Industrial 912 939 1,845 1,920 Public authorities 133 146 271 292 Electric utilities 261 382 478 722 Increase (decrease) in unbilled sales 1,491 1,552 946 759 Interchange power sales 289   366   1,017   1,193 Total 27,766   27,117   51,392   50,887   Average price (cents/kwh)1 Residential 11.31 11.34 11.28 11.34 Commercial 9.94 10.01 9.94 10.03 Industrial 8.35 8.46 8.32 8.58 Total 10.60 10.59 10.57 10.60   Average customer accounts (000's) Residential 3,999 3,980 3,999 3,973 Commercial 500 492 500 490 Industrial 14 20 14 20 Other 3   3   3   3 Total 4,516   4,495   4,516   4,486   End of period customer accounts (000's) Residential 3,997 3,981 N/A N/A Commercial 501 494 N/A N/A Industrial 13 19 N/A N/A Other 3   3   N/A   N/A Total 4,514   4,497   N/A   N/A   1Excludes interchange power sales, net change in unbilled revenues, deferrals under cost recovery clauses and any provision for refund.     2008 Normal 2007 Three Months Ended June 30 Cooling degree-days 580 487 468 Heating degree-days 7 5 8 Six Months Ended June 30 Cooling degree-days 666 539 544 Heating degree-days 103 208 142   Cooling degree days for the periods above use a 72 degree base temperature and heating degree days use a 66 degree base temperature.