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July 19, 2002

FPL Group announces second quarter earnings growth of 16 percent

Florida Power & Light | FPL Energy | Corporate and Other | Outlook for 2002 | Profile

JUNO BEACH, Fla. -- FPL Group, Inc. (NYSE: FPL) today reported net income for the 2002 second quarter of $249 million, a 16 percent increase compared to $214 million a year ago. Earnings per share rose 14 percent to $1.45 from $1.27 in the same quarter in 2001. The results exclude the mark-to-market effect of non-managed hedges which was a $1 million after-tax gain in this year's quarter and a $5 million after-tax gain in the 2001 quarter.

"We are pleased with the performance of our businesses, particularly in this difficult energy market. Our increased earnings were largely driven by our integrated utility, Florida Power & Light Company, which had increased revenues due to warmer than normal weather in Florida and stronger than forecasted customer growth," said Lew Hay, chairman and chief executive officer. "FPL Energy contributed increased earnings from additions to its wholesale generation portfolio, offset somewhat by mild weather and difficult market conditions."

Despite the strong quarter, Mr. Hay reaffirmed that the company continues to expect earnings in 2002 to be $4.70 to $4.75, excluding non-recurring items, citing recent declines in wholesale energy markets and uncertainty of the impact of weather for the remainder of the year.

Florida Power & Light

Net income for FPL Group's principal subsidiary, Florida Power & Light Company, rose to $205 million from $182 million last year, while contributions to earnings per share rose to $1.20 from $1.08 a year ago.

A 7.9 percent increase in retail kilowatt-hour sales, primarily due to weather, more than offset a $250 million annual rate reduction that became effective mid-April. FPL customers experienced warmer than normal weather in April and May, compared with relatively mild weather in last year's second quarter, and the higher temperatures significantly contributed to a 5.8 percent usage per customer increase. During the quarter, FPL added 82,000 new customers, accounting for an additional 2.1 percent increase in kilowatt-hour sales. Also affecting the quarter results were higher operations and maintenance costs which were more than offset by lower depreciation expense.

During the quarter, the Nuclear Regulatory Commission issued operating licenses for FPL's two units at its Turkey Point Nuclear Power Plant which will add 20 years to the original license period. The original 40-year operating licenses were scheduled to expire in 2012 and 2013.

FPL Energy

Excluding the mark-to-market effect of non-managed hedges, FPL Energy reported second quarter net income of $37 million compared to $33 million in the same quarter of 2001. Contributions to earnings per share rose to 21 cents from 19 cents.

Additions to its power plant portfolio, improved plant performance and a favorable insurance settlement contributed to FPL Energy's earnings increase. During the quarter, FPL Energy had more than 1,000 additional megawatts in its portfolio compared to the beginning of the prior year quarter, including 843 megawatts of new generation from wind-powered turbines and a 171-megawatt gas-fired peaking unit in Virginia. Earnings were negatively impacted by lower contributions from FPL Energy's Maine assets, mild weather in Texas, as well as net unrealized losses from trading and managed hedge activities.

Earlier this month, FPL Energy also announced it will build, own and operate the largest wind energy project in the eastern United States, the Mountaineer Wind Energy Center, in West Virginia. The output of the 66-megawatt wind facility is covered by a long-term contract. Construction is expected to be complete by the end of the year. FPL Energy currently owns and operates more than 1,500 megawatts of wind-powered electric generation facilities.

Corporate and Other

Corporate and Other reported $7 million in net income or 4 cents per share in the second quarter compared to a negative $1 million the prior year. Higher interest expense at Corporate was more than offset by higher earnings at FPL FiberNet, an FPL Group subsidiary that provides fiber-optic networks and related services in Florida. The higher earnings at FPL FiberNet were primarily from a sale of dark fiber to an existing customer.

Outlook for 2002

"FPL Group continues to expect earnings per share for the full year 2002 to be in the $4.70 to $4.75 range," said Hay.

"We are encouraged by continued strong customer growth at Florida Power & Light. Year-to-date the utility is ahead of its forecasted earnings growth, primarily due to weather. If weather conditions were normal in Florida for the remainder of the year, we should see earnings up slightly rather than flat as we earlier anticipated."

"We currently expect FPL Energy's 2002 earnings growth to be 10 to 15 percent, down from our previous guidance of 15 to 20 percent. This modified outlook is due to recent declines in the wholesale energy market, including reduced liquidity and declining forward prices. In addition, although we have a good start on the development of new wind assets, it is a challenge to make up for the lost time when the production tax credit remained in limbo earlier this year," he said.

"In addition, despite a tumultuous telecommunications market, we expect FPL FiberNet to be profitable this year," said Hay.

Profile

FPL Group, with annual revenues of more than $8 billion, is nationally known as a high quality, efficient, and customer-driven organization focused on energy-related products and services. With a growing presence in 21 states, it is widely recognized as one of the country's premier power companies. Its principal subsidiary, Florida Power & Light Company, serves approximately 4 million customer accounts in Florida. FPL Energy, LLC, an FPL Group energy-generating subsidiary, is a leader in producing electricity from clean and renewable fuels. Additional information is available on the Internet at www.fplgroup.com, www.fpl.com and www.fplenergy.com.

Safe Harbor Statement: 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 substantially from such forward-looking statements. A discussion of factors that could cause actual results or events to vary is contained in FPL Group's 2001 SEC Form 10-K.

NOTE: A Webcast of FPL Group's second quarter earnings conference call, scheduled at 9 a.m. ET on Friday, July 19, 2002, is available on FPL Group's Web site, www.fplgroup.com, by following the link provided.

FPL Group, Inc.
Financial Summary
(in millions, except per share amounts)

	Three Months Ended June 30,
	2002	2001
Operating Revenues	$2,248	$2,166
Operating Expenses
Fuel, purchased power and interchange	1,089	1,054
Other operations and maintenance	335	313
Depreciation and amortization	230	245
Taxes other than income taxes	185	174
Total operating expenses	1,839	1,786
Other Income (Deductions)
Interest charges and preferred stock dividends	(83)	(86)
Other - net	45	26
Total other deductions - net	(38)	(60)
Income Taxes	122	106
Net Income excluding after-tax effect of net unrealized mark-to-market gains associated with non-managed hedges	$249	$214
Net unrealized mark-to-market gains associated with non-managed hedges	1	5
Net Income	$250	$219
Earnings Per Share excluding net unrealized mark-to-market gains associated with non-managed hedges	$1.45	$1.27
Earnings per share (assuming dilution)	$1.46	$1.30
Weighted-average shares outstanding (assuming dilution)	171	169
	Six Months Ended June 30,
	2002	2001
Operating Revenues	$4,092	$4,107
Operating Expenses
Fuel, purchased power and interchange	1,894	2,005
Other operations and maintenance	681	623
Depreciation and amortization	494	485
Taxes other than income taxes	358	344
Total operating expenses	3,427	3,457
Other Income (Deductions)
Interest charges and preferred stock dividends	(167)	(174)
Other - net	57	41
Total other deductions - net	(110)	(133)
Income Taxes	171	174
Net Income excluding after-tax effect of nonrecurring items and net unrealized mark-to-market gains associated with non-managed hedges	$384	$343
Goodwill impairment	(222)	--
Gain on settlement of IRS litigation	30	--
Net unrealized mark-to-market gains associated with non-managed hedges	2	5
Merger-related expenses	--	(19)
Net Income	$194	$329
Earnings Per Share excluding nonrecurring items and net unrealized mark-to-market gains associated with non-managed hedges	$2.26	$2.04
Earnings per share (assuming dilution)	$1.14	$1.95
Weighted-average shares outstanding (assuming dilution)	170	169
	Twelve Months Ended June 30,
	2002	2001
Operating Revenues	$8,460	$8,051
Operating Expenses
Fuel, purchased power and interchange	3,919	3,727
Other operations and maintenance	1,384	1,287
Depreciation and amortization	992	992
Taxes other than income taxes	723	671
Total operating expenses	7,018	6,677
Other Income (Deductions)
Interest charges and preferred stock dividends	(332)	(333)
Other - net	105	99
Total other deductions - net	(227)	(234)
Income Taxes	382	377
Net Income excluding after-tax effect of non-recurring items and net unrealized mark-to-market gains associated with non-managed hedges	$833	$763
Goodwill impairment	(222)	--
Gain on settlement of IRS litigation	30	--
Net unrealized mark-to-market gains associated with non-managed hedges	5	5
Merger-related expenses	--	(60)
Net Income	$646	$708
Earnings Per Share excluding nonrecurring items and net unrealized mark-to-market gains associated with non-managed hedges	$4.91	$4.51
Earnings per share (assuming dilution)	$3.81	$4.18
Weighted-average shares outstanding (assuming dilution)	170	169
FPL Group, Inc. Earnings Per Share Summary (assuming dilution)
	Three Months Ended June 30,
	2002	2001
Florida Power & Light Company	$1.20	$1.08
FPL Energy, LLC	0.21	0.19
Corporate and other	0.04	--
Earnings Per Share excluding net unrealized mark-to-market gains associated with non-managed hedges	$1.45	$1.27
Net unrealized mark-to-market gains associated with non-managed hedges	0.01	0.03
Earnings Per Share	$1.46	$1.30
	Six Months Ended June 30,
	2002	2001
Florida Power & Light Company	$1.90	$1.75
FPL Energy, LLC	0.35	0.31
Corporate and other	0.01	(0.02)
Earnings Per Share excluding nonrecurring items and net unrealized mark-to-market gains associated with non-managed hedges	$2.26	$2.04
Goodwill impairment	(1.31)	--
Gain on settlement of IRS litigation	0.18	--
Net unrealized mark-to-market gains associated with non-managed hedges	0.01	0.02
Merger-related expenses	--	(0.11)
	(1.12)	(0.09)
Earnings Per Share	$1.14	$1.95
	Twelve Months Ended June 30,
	2002	2001
Florida Power & Light Company	$4.26	$3.91
FPL Energy, LLC	0.67	0.55
Corporate and other	(0.02)	0.05
Earnings Per Share excluding nonrecurring items and net unrealized mark-to-market gains associated with non-managed hedges	$4.91	$4.51
Goodwill impairment	(1.31)	--
Gain on settlement of IRS litigation	0.18	--
Net unrealized mark-to-market gains associated with non-managed hedges	0.03	0.02
Merger-related expenses	--	(0.35)
	(1.10)	(0.33)
Earnings Per Share	$3.81	$4.18