FPL Group Announces Strong Third Quarter Earnings

FPL Group, Inc. (NYSE:FPL): 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. FPL Energy reports continued outstanding performance Florida Power & Light Company customer growth remains strong despite the slowdown in new home construction FPL Group reaffirms 2007 adjusted earnings per share expectation; increases 2008 adjusted EPS expectation range to $3.83 to $3.93; sets 2009 adjusted EPS expectations of $4.15 to $4.35 FPL Group expects average annual adjusted EPS growth of at least 10 percent for 2006-2012 FPL Group, Inc. (NYSE:FPL) today reported 2007 third quarter net income on a GAAP basis of $533 million, or $1.33 per share, compared to $527 million, or $1.32 per share, in the third quarter of 2006. FPL Group’s net income for the third quarter of 2007 includes a net unrealized after-tax gain of $40 million associated with the mark-to-market effect of non-qualifying hedges. The results for last year’s third quarter included a net unrealized after-tax gain of $74 million associated with the mark-to-market effect of non-qualifying hedges and $7 million of after-tax merger related costs. Excluding the mark-to-market effect of non-qualifying hedges (and merger-related costs in 2006), FPL Group’s adjusted earnings were $493 million, or $1.23 per share, for the third quarter of 2007, compared with $460 million, or $1.15 per share, for the third quarter of 2006. 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 performance targets are met for performance-based compensation under the company’s employee incentive compensation plans. 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 well in the third quarter delivering very good results overall, driven again by the strength of our competitive energy subsidiary FPL Energy,” said Lew Hay, chairman and chief executive officer of FPL Group. "FPL Group’s adjusted per share results grew approximately 7 percent over last year’s comparable period, while FPL Energy’s contributions to our adjusted earnings per share grew 25 percent. The earnings growth at FPL Energy reflects growth from the existing portfolio and new asset additions, as well as strong results from wholesale marketing activities. Earnings from our electric utility, Florida Power & Light, were essentially flat, although customer growth rates continued in line with historic averages. "With three quarters of the year now behind us, FPL Group remains well positioned to deliver another very good year financially. We expect 2007 results to be at or near the top end of our previously announced earnings expectation range, which equates to approximately $3.45 per share. While Florida Power & Light will be challenged to meet its original expectations, this will be more than compensated for by the very strong performance at FPL Energy. FPL Group’s growth profile for 2008 and beyond is extremely bright, and we believe average adjusted EPS growth of at least 10 percent per year from 2006 to 2012 is achievable with our existing growth plans.” Florida Power & Light Company Florida Power & Light reported third quarter net income of $326 million or $0.81 per share, compared to $328 million, or $0.82 per share, for the prior-year quarter. Customer growth continued at a strong pace despite the slowdown in new home construction. In the last 12 months, the average number of Florida Power & Light accounts increased by 90,000 or 2.0 percent, which is in line with Florida Power & Light’s long-term historical growth rate. Retail sales of electricity increased 3.5 percent during the third quarter, with average customer usage up 1.5 percent. The impact of weather in the quarter was more complex than usual: higher than normal temperatures increased average usage, but this was roughly offset by the impact of precipitation. Frequent afternoon rain in South Florida in all three months of the quarter reduced peak loads and energy consumption. With these offsetting impacts, no clear trend in weather-adjusted customer usage growth was apparent. For the third quarter, Florida Power & Light’s 2007 O&M expenses were $378 million, up $43 million from the prior year figures. Higher distribution, nuclear, fossil generation, and employee benefits costs all contributed to the higher O&M levels. These same areas are expected to drive annual O&M comparisons, as well. Florida Power & Light continues to expect its Storm Secure® program to be an important driver of both O&M and capital spending in 2007 and beyond. For the next few years, the company expects to spend about $50 million in O&M per year and about $100 million to $150 million per year in capital for this long-term program to harden infrastructure and increase resilience to hurricane impacts. Depreciation in the third quarter fell $3 million to $194 million as higher transmission and distribution and generation depreciation, which includes the impact from the recent addition of the Turkey Point Unit 5 were more than offset by reductions in certain amounts recovered through the capacity clause. Underlying base depreciation increased by $7 million. During the quarter, Florida Power & Light filed a petition for determination of need with the Florida Public Service Commission (PSC), proposing the addition of approximately 400 megawatts of capacity to its existing Turkey Point and St. Lucie nuclear power plants. Subject to a number of factors, including timely regulatory approvals, this added capacity is expected to be in place by the end of 2012. In addition, Florida Power & Light filed a petition for determination of need with the PSC for the addition of two new nuclear power units at its existing Turkey Point site. If approved and developed, this project will add between 2,200 and 3,000 megawatts of emission-free capacity to the company’s generating fleet by 2020 and will produce enough energy each year to power the needs of over 1 million residential customers. In addition to expanding its nuclear generation capacity, Florida Power & Light also announced plans in the third quarter to build new solar thermal generation and to deploy a smart network. Florida Power & Light’s solar plans call for building a 10-megawatt solar thermal demonstration facility in Florida. Subject to meeting agreed-upon cost and technical specifications, as well as gaining regulatory and related approvals, Florida Power & Light’s solar thermal capacity will then be expanded to 300 megawatts. Also as part of its efforts to increase renewable energy capacity, Florida Power & Light will soon open the state’s largest photovoltaic solar power facility in Sarasota County and is planning to test wind turbines next year at another site along the Atlantic coast. Florida Power & Light also announced plans to install a smart network throughout its service territory utilizing state-of-the-art technology. This new smart network will allow customers to view their energy consumption online and provide two-way communication between the company and customer. In addition, this network will enhance power outage identification and enhance energy management capabilities and time of use pricing. FPL Energy FPL Energy, the competitive energy subsidiary of FPL Group, reported third quarter net income on a GAAP basis of $220 million or $0.55 per share, compared to $218 million, or $0.55 per share, in the prior year quarter. FPL Energy’s net income for the third quarter of 2007 included a net unrealized after-tax gain of $40 million associated with the mark-to-market effect of non-qualifying hedges. The results for last year’s third quarter included a net unrealized after-tax gain of $74 million associated with the mark-to-market effect of non-qualifying hedges. Excluding the mark-to-market effect of non-qualifying hedges, adjusted earnings for FPL Energy were $180 million, or $0.45 per share, compared to $144 million, or $0.36 per share, in 2006. FPL Energy’s growth in adjusted earnings in the third quarter was driven by several factors: increases in pricing at some of its existing merchant assets, as older below-market hedges rolled off; contributions from new assets added in the last twelve months; strong performance from the merchant portfolio overall; and very strong results from power marketing activities. These favorable drivers were partially offset by increases in overhead costs to support the growth of the business and increased interest expense. FPL Energy’s industry-leading wind development and construction program continues to make excellent progress. During the third quarter, FPL Energy brought online more than 550 megawatts of new wind projects in Texas, Colorado and Iowa and expects to add in total more than 1,000 megawatts to its wind portfolio by the end of the year, well above the expectations set out at this time last year. Looking ahead, FPL Energy is well-positioned for future sustained growth. With a strong pipeline of projects already in place, a proven project development, construction and operations organization and the ability to increase the scale and scope of its activities, FPL Energy expects to add 8,000 to 10,000 megawatts of new wind projects to its portfolio within the 2007 to 2012 timeframe. Also contributing to future growth will be expansion of the company’s nuclear portfolio. In September, FPL Energy completed its previously announced acquisition of the 1,023-megawatt Point Beach nuclear power plant in Wisconsin. All of the power from Point Beach is being sold under a long-term power purchase contract to We Energies through the current license terms of 2030 for Unit 1 and 2033 for Unit 2. The power from Point Beach is competitively priced and escalates each year of the contract. In addition, FPL Energy expects to implement a power uprate at both units in the 2010/2011 timeframe that is expected to add approximately 134 megawatts to the existing plant output. FPL Energy is also pursuing additional growth opportunities, such as new solar generation and targeted transmission projects, and is exploring greenfield natural gas generation in its core markets. The company continues to screen for possible additions to the portfolio through asset acquisitions. The company is well positioned relative to commodity price fundamentals, with long-term upside exposure to increases in natural gas prices. FPL Energy’s portfolio is also well positioned to address the increasing focus on global climate change and renewable energy, both at the national and state levels. Corporate and Other Corporate and Other reduced net income by $13 million or $0.03 per share for the third quarter of 2007, primarily driven by interest expense. Outlook "At FPL Group we have put into place the foundation to deliver a sustained period of above-average growth, with a very moderate risk profile, supported by one of the strongest financial positions in the industry. As such, we expect average annual adjusted earnings per share growth of at least 10 percent for the period 2006 through 2012,” said Hay. "Our growth prospects for 2008 are excellent and are heavily driven by the wind assets being placed into service in 2007, around which we have a high degree of visibility, as well as by the introduction to the FPL Energy fleet of Point Beach. The prospect of continued strong growth at FPL Energy as well as moderate growth at Florida Power & Light leads to a revised expectation for FPL Group 2008 adjusted EPS of $3.83 to $3.93. Prospects for 2009 are equally bright, and we believe a range of $4.15 to $4.35 for 2009 adjusted EPS is reasonable, based on the drivers we can see today.” 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, neither of which can be determined at this time. As previously announced, FPL Group’s third quarter earnings conference call is scheduled for 9 a.m. ET on Tuesday, Oct. 30, 2007. The web cast 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 persons unable to listen to the live web cast, a replay will be available for 30 days by accessing the same link as listed above. This press release should be read in conjunction with the attached unaudited financial information. Profile FPL Group, with annual revenues of nearly $16 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 27 states, it is widely recognized as one of the country's premier power companies. Its principal subsidiary, Florida Power & Light Company, serves 4.5 million customer accounts in Florida. FPL Energy, LLC, an FPL Group competitive energy subsidiary, is a leader in producing electricity from clean and renewable fuels. Additional information is available on the Internet at www.FPLGroup.com, www.FPL.com and www.FPLEnergy.com. Cautionary Statements And Risk Factors That May Affect Future Results In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Reform Act), FPL Group, Inc. (FPL Group) and Florida Power & Light Company (FPL) are hereby 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 or future events or performance (often, but not always, through the use of words or phrases such as will likely result, are expected to, will continue, is anticipated, believe, could, estimated, may, plan, potential, projection, target, outlook) are not statements of historical facts and may be forward-looking. Forward-looking statements involve estimates, assumptions and uncertainties. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors (in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements) that could cause FPL Group's or FPL's actual results to differ materially from those contained in forward-looking statements made by or on behalf of FPL Group and FPL. Any forward-looking statement speaks only as of the date on which such statement is made, and FPL Group and FPL undertake no obligation to update any forward-looking statement to reflect events or circumstances, 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 initiatives regarding deregulation and restructuring of the energy industry and environmental matters. 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 the Public Utility Regulatory Policies Act of 1978, as amended, the Public Utility Holding Company Act of 2005, the Federal Power Act, the Atomic Energy Act of 1954, as amended, the Energy Policy Act of 2005 (2005 Energy Act) 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 legislatures and utility commissions of other states in which FPL Group has operations, and the 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 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 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, 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 deregulation or restructuring 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 and maintenance of 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 power generation facilities involve many risks, including, but not limited to, start up risks, breakdown or failure of equipment, transmission lines or pipelines, the inability to properly manage or mitigate known equipment defects throughout our generation fleets 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 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, 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 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 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 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 and engages in 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. 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 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 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 successfully and timely complete and integrate them. Because FPL Group and FPL rely on access to capital markets, the inability to maintain current credit ratings and 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 Inc. 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 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 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 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, 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 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. 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 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 loss or retirement of key executives, availability of qualified personnel, 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. Note to Editors: High-resolution logos and executive head shots are available for download at http://www.fpl.com/news/logos.shtml. FPL Group, Inc. Condensed Consolidated Statements of Income (millions, except per share amounts) (unaudited)   Three Months Ended September 30, 2007   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc. Operating Revenues $ 3,445   $ 1,090   $ 40   $ 4,575   Operating Expenses Fuel, purchased power and interchange 1,969 457 17 2,443 Other operations and maintenance 378 187 17 582 Disallowed storm costs - - - - Storm cost amortization 19 - - 19 Merger-related - - - - Depreciation and amortization 194 112 4 310 Taxes other than income taxes   294       25       2       321   Total operating expenses   2,854       781       40       3,675     Operating Income (Loss)   591       309       -       900     Other Income (Deductions) Interest charges (83 ) (76 ) (35 ) (194 ) Equity in earnings of equity method investees - 36 - 36 Allowance for equity funds used during construction 4 - - 4 Other – net   (1 )     9       6       14   Total other income (deductions) – net   (80 )     (31 )     (29 )     (140 )   Income (Loss) Before Income Taxes 511 278 (29 ) 760   Income Tax Expense (Benefit)   185       58       (16 )     227     Net Income (Loss) $ 326     $ 220     $ (13 )   $ 533       Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss):   Net Income (Loss) $ 326 $ 220 $ (13 ) $ 533   Adjustments, net of income taxes: Merger - related costs - - - - Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges   -       (40 )     -       (40 )   Adjusted Earnings (Loss) $ 326     $ 180     $ (13 )   $ 493     Earnings (Loss) Per Share (assuming dilution) $ 0.81 $ 0.55 $ (0.03 ) $ 1.33 Adjusted Earnings (Loss) Per Share $ 0.81 $ 0.45 $ (0.03 ) $ 1.23 Weighted-average shares outstanding (assuming dilution) 401   FPL Energy's interest charges are based on a deemed capital structure of 50% debt for operating projects and 100% debt for projects under construction. Residual non-utility interest charges are 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 September 30, 2006   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc. Operating Revenues $ 3,513   $ 1,143   $ 38   $ 4,694   Operating Expenses Fuel, purchased power and interchange 2,080 559 17 2,656 Other operations and maintenance 335 152 14 501 Disallowed storm costs - - - - Storm cost amortization 44 - - 44 Merger-related - - 11 11 Depreciation and amortization 197 94 6 297 Taxes other than income taxes   292       20       1       313   Total operating expenses   2,948       825       49       3,822     Operating Income (Loss)   565       318       (11 )     872     Other Income (Deductions) Interest charges (69 ) (69 ) (41 ) (179 ) Equity in earnings of equity method investees - 42 - 42 Allowance for equity funds used during construction 6 - - 6 Other – net   5       9       3       17   Total other income (deductions) – net   (58 )     (18 )     (38 )     (114 )   Income (Loss) Before Income Taxes 507 300 (49 ) 758   Income Tax Expense (Benefit)   179       82       (30 )     231     Net Income (Loss) $ 328     $ 218     $ (19 )   $ 527       Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss):   Net Income (Loss) $ 328 $ 218 $ (19 ) $ 527   Adjustments, net of income taxes: Merger - related costs - - 7 7 Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges   -       (74 )     -       (74 )   Adjusted Earnings (Loss) $ 328     $ 144     $ (12 )   $ 460     Earnings (Loss) Per Share (assuming dilution) $ 0.82 $ 0.55 $ (0.05 ) $ 1.32 Adjusted Earnings (Loss) Per Share $ 0.82 $ 0.36 $ (0.03 ) $ 1.15 Weighted-average shares outstanding (assuming dilution) 398   FPL Energy's interest charges are based on a deemed capital structure of 50% debt for operating projects and 100% debt for projects under construction. Residual non-utility interest charges are 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.   Amounts have been adjusted to reflect the retrospective application of an accounting standard change related to planned major maintenance activities. FPL Group, Inc. Condensed Consolidated Statements of Income (millions, except per share amounts) (unaudited)         Nine Months Ended September 30, 2007   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc. Operating Revenues $ 8,798 $ 2,658 $ 123 $ 11,579   Operating Expenses Fuel, purchased power and interchange 5,081 1,084 56 6,221 Other operations and maintenance 1,074 537 48 1,659 Disallowed storm costs - - - - Storm cost amortization 60 - - 60 Merger-related - - - - Depreciation and amortization 576 326 12 914 Taxes other than income taxes   786       75       2       863   Total operating expenses   7,577       2,022       118       9,717     Operating Income (Loss)   1,221       636       5       1,862     Other Income (Deductions) Interest charges (224 ) (221 ) (107 ) (552 ) Equity in earnings of equity method investees - 67 - 67 Allowance for equity funds used during construction 17 - - 17 Other – net   7       24       23       54   Total other income (deductions) – net   (200 )     (130 )     (84 )     (414 )   Income (Loss) Before Income Taxes 1,021 506 (79 ) 1,448   Income Tax Expense (Benefit)   358       38       (36 )     360     Net Income (Loss) $ 663     $ 468     $ (43 )   $ 1,088       Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss):   Net Income (Loss) $ 663 $ 468 $ (43 ) $ 1,088   Adjustments, net of income taxes: Merger - related costs - - - - Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges   -       28       -       28     Adjusted Earnings (Loss) $ 663     $ 496     $ (43 )   $ 1,116     Earnings (Loss) Per Share (assuming dilution) $ 1.66 $ 1.17 $ (0.11 ) $ 2.72 Adjusted Earnings (Loss) Per Share $ 1.66 $ 1.24 $ (0.11 ) $ 2.79 Weighted-average shares outstanding (assuming dilution) 400   FPL Energy's interest charges are based on a deemed capital structure of 50% debt for operating projects and 100% debt for projects under construction. Residual non-utility interest charges are 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)         Nine Months Ended September 30, 2006   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc. Operating Revenues $ 9,096 $ 2,866 $ 125 $ 12,087   Operating Expenses Fuel, purchased power and interchange 5,369 1,451 63 6,883 Other operations and maintenance 1,024 426 44 1,494 Disallowed storm costs 54 - - 54 Storm cost amortization 114 - - 114 Merger-related - - 21 21 Depreciation and amortization 589 272 17 878 Taxes other than income taxes   796       63       4       863   Total operating expenses   7,946       2,212       149       10,307     Operating Income (Loss)   1,150       654       (24 )     1,780     Other Income (Deductions) Interest charges (212 ) (197 ) (117 ) (526 ) Equity in earnings of equity method investees - 83 - 83 Allowance for equity funds used during construction 15 - - 15 Other – net   12       25       7       44   Total other income (deductions) – net   (185 )     (89 )     (110 )     (384 )     Income (Loss) Before Income Taxes 965 565 (134 ) 1,396   Income Tax Expense (Benefit)   333       103       (53 )     383     Net Income (Loss) $ 632     $ 462     $ (81 )   $ 1,013       Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss):   Net Income (Loss) $ 632 $ 462 $ (81 ) $ 1,013   Adjustments, net of income taxes: Merger - related costs - - 13 13 Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges   -       (77 )     -       (77 )   Adjusted Earnings (Loss) $ 632     $ 385     $ (68 )   $ 949     Earnings (Loss) Per Share (assuming dilution) $ 1.60 $ 1.17 $ (0.21 ) $ 2.56 Adjusted Earnings (Loss) Per Share $ 1.60 $ 0.98 $ (0.18 ) $ 2.40 Weighted-average shares outstanding (assuming dilution) 396   FPL Energy's interest charges are based on a deemed capital structure of 50% debt for operating projects and 100% debt for projects under construction. Residual non-utility interest charges are 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.   Amounts have been adjusted to reflect the retrospective application of an accounting standard change related to planned major maintenance activities. FPL Group, Inc. Condensed Consolidated Balance Sheets (millions) (unaudited)           September 30, 2007   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc. Property, Plant and Equipment Electric utility plant in service and other property $ 25,297 $ 11,641 $ 250 $ 37,188 Nuclear fuel 560 458 - 1,018 Construction work in progress 931 761 7 1,699 Less accumulated depreciation and amortization   (10,056 )     (1,998 )     (137 )     (12,191 ) Total property, plant and equipment – net   16,732       10,862       120       27,714       Current Assets Cash and cash equivalents 56 151 143 350 Customer receivables, net of allowances 1,098 598 15 1,711 Other receivables, net of allowances 118 192 (160 ) 150 Materials, supplies and fossil fuel inventory – at avg. cost 584 278 6 868 Regulatory assets: Deferred clause and franchise expenses 108 - - 108 Securitized storm-recovery costs/storm reserve deficiency 85 - - 85 Derivatives 346 - - 346 Other - - 4 4 Derivatives 17 220 1 238 Other   286       231       7       524   Total current assets   2,698       1,670       16       4,384       Other Assets Special use funds 2,510 989 1 3,500 Pension plan assets - net 914 - 752 1,666 Other investments 7 304 155 466 Regulatory assets: Securitized storm-recovery costs/storm reserve deficiency 740 - - 740 Unamortized loss on reacquired debt 36 - - 36 Derivatives 26 - - 26 Deferred clause expenses 143 - - 143 Other 54 - 40 94 Other   241       459       102       802   Total other assets   4,671       1,752       1,050       7,473     Total Assets $ 24,101     $ 14,284     $ 1,186     $ 39,571       Capitalization Common stock $ 1,373 $ - $ (1,369 ) $ 4 Additional paid-in capital 4,319 5,420 (5,109 ) 4,630 Retained earnings 1,411 1,720 2,735 5,866 Accumulated other comprehensive income   -       18       97       115   Total common shareholders' equity 7,103 7,158 (3,646 ) 10,615 Long-term debt   4,671       2,741       3,432       10,844   Total capitalization   11,774       9,899       (214 )     21,459       Current Liabilities Commercial paper 810 - 507 1,317 Current maturities of long-term debt 241 904 506 1,651 Accounts payable 831 442 6 1,279 Customer deposits 525 8 1 534 Accrued interest and taxes 722 99 (237 ) 584 Regulatory liabilities: Deferred clause and franchise revenues 28 - - 28 Pension - - 17 17 Derivatives 336 211 - 547 Other   471       444       -       915   Total current liabilities   3,964       2,108       800       6,872       Other Liabilities and Deferred Credits Asset retirement obligations 1,636 487 - 2,123 Accumulated deferred income taxes 2,503 1,066 58 3,627 Regulatory liabilities: Accrued asset removal costs 2,113 - - 2,113 Asset retirement obligation regulatory expense difference 922 - - 922 Pension - - 518 518 Other 236 - - 236 Derivatives 27 188 - 215 Other   926       536       24       1,486   Total other liabilities and deferred credits   8,363       2,277       600       11,240     Commitments and Contingencies   Total Capitalization and Liabilities $ 24,101 $ 14,284 $ 1,186 $ 39,571   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, 2006   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc. Property, Plant and Equipment Electric utility plant in service and other property $ 24,150 $ 9,689 $ 232 $ 34,071 Nuclear fuel 423 265 - 688 Construction work in progress 1,113 270 10 1,393 Less accumulated depreciation and amortization   (9,848 )     (1,679 )     (126 )     (11,653 ) Total property, plant and equipment – net   15,838       8,545       116       24,499       Current Assets Cash and cash equivalents 64 92 464 620 Customer receivables, net of allowances 872 389 18 1,279 Other receivables, net of allowances 221 232 (76 ) 377 Materials, supplies and fossil fuel inventory – at avg. cost 558 219 8 785 Regulatory assets: Deferred clause and franchise expenses 167 - - 167 Securitized storm recovery-costs/storm reserve deficiency 106 - - 106 Derivatives 921 - - 921 Other - - 3 3 Derivatives 4 372 - 376 Other   202       158       5       365   Total current assets   3,115       1,462       422       4,999       Other Assets Special use funds 2,264 561 (1 ) 2,824 Pension plan assets - net 857 - 751 1,608 Other investments 8 389 136 533 Regulatory assets: Securitized storm-recovery costs/storm reserve deficiency 762 - - 762 Unamortized loss on reacquired debt 39 - - 39 Derivatives 1 - - 1 Deferred clause expenses - - - - Other 36 - 43 79 Other   153       414       80       647   Total other assets   4,120       1,364       1,009       6,493     Total Assets $ 23,073     $ 11,371     $ 1,547     $ 35,991       Capitalization Common stock $ 1,373 $ - $ (1,369 ) $ 4 Additional paid-in capital 4,318 4,695 (4,458 ) 4,555 Retained earnings 1,848 1,252 2,156 5,256 Accumulated other comprehensive income   -       17       98       115   Total common shareholders' equity 7,539 5,964 (3,573 ) 9,930 Long-term debt   4,214       2,490       2,887       9,591   Total capitalization   11,753       8,454       (686 )     19,521       Current Liabilities Commercial paper 630 - 467 1,097 Current maturities of long-term debt - 572 1,073 1,645 Accounts payable 735 322 3 1,060 Customer deposits 500 10 - 510 Accrued interest and taxes 281 54 (33 ) 302 Regulatory liabilities: Deferred clause and franchise revenues 37 - - 37 Pension - - 17 17 Derivatives 780 361 3 1,144 Other   423       237       21       681   Total current liabilities   3,386       1,556       1,551       6,493       Other Liabilities and Deferred Credits Asset retirement obligations 1,572 248 - 1,820 Accumulated deferred income taxes 2,561 907 (36 ) 3,432 Regulatory liabilities: Accrued asset removal costs 2,044 - - 2,044 Asset retirement obligation regulatory expense difference 868 - - 868 Pension - - 531 531 Other 209 - - 209 Derivatives 1 107 (1 ) 107 Other   679       99       188       966   Total other liabilities and deferred credits   7,934       1,361       682       9,977     Commitments and Contingencies   Total Capitalization and Liabilities $ 23,073     $ 11,371     $ 1,547     $ 35,991     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)           Nine Months Ended September 30, 2007   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc. Cash Flows From Operating Activities Net income (loss) $ 663 $ 468 $ (43 ) $ 1,088 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:   Depreciation and amortization 576 326 12 914 Nuclear fuel amortization 64 39 - 103 Recoverable storm-related costs of FPL (14 ) - - (14 ) Storm cost amortization 60 - - 60 Unrealized (gains) losses on marked to market energy contracts - 51 - 51 Deferred income taxes 111 145 (7 ) 249 Cost recovery clauses and franchise fees (94 ) - - (94 ) Change in prepaid option premiums 117 15 - 132 Equity in earnings of equity method investees - (67 ) - (67 ) Distributions of earnings from equity method investees - 128 - 128 Changes in operating assets and liabilities: Customer receivables (226 ) (209 ) 4 (431 ) Other receivables (18 ) 18 4 4 Materials, supplies and fossil fuel inventory (26 ) (1 ) 1 (26 ) Other current assets (53 ) (10 ) 4 (59 ) Other assets (51 ) (8 ) (27 ) (86 ) Accounts payable 108 91 4 203 Customer deposits 25 (1 ) - 24 Margin cash deposits 79 21 (1 ) 99 Income taxes 293 47 (242 ) 98 Interest and other taxes 219 24 3 246 Other current liabilities 4 (1 ) (1 ) 2 Other liabilities 10 (39 ) 29 - Other – net   45       38       39       122   Net cash provided by (used in) operating activities   1,892       1,075       (221 )     2,746       Cash Flows From Investing Activities Capital expenditures of FPL (1,285 ) - - (1,285 ) Independent power investments - (2,162 ) - (2,162 ) Nuclear fuel purchases (169 ) (54 ) - (223 ) Other capital expenditures - - (26 ) (26 ) Proceeds from sale of securities in special use funds 1,636 174 - 1,810 Purchases of securities in special use funds (1,823 ) (187 ) - (2,010 ) Proceeds from sale of other securities - - 117 117 Purchases of other securities - - (131 ) (131 ) Other – net   2       12       14       28   Net cash provided by (used in) investing activities   (1,639 )     (2,217 )     (26 )     (3,882 )     Cash Flows From Financing Activities Issuances of long-term debt 934 691 1,031 2,656 Retirements of long-term debt (250 ) (173 ) (1,075 ) (1,498 ) Proceeds from purchased Corporate Units - - - - Payments to terminate Corporate Units - - - - Net change in short-term debt 179 - 41 220 Issuances of common stock - - 36 36 Dividends on common stock - - (490 ) (490 ) Dividends & capital distributions from (to) FPL Group – net (1,100 ) 724 376 - Other – net   (24 )     (41 )     7       (58 ) Net cash provided by (used in) financing activities   (261 )     1,201       (74 )     866       Net increase (decrease) in cash and cash equivalents (8 ) 59 (321 ) (270 ) Cash and cash equivalents at beginning of period   64       92       464       620       Cash and cash equivalents at end of period $ 56     $ 151     $ 143     $ 350     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)         Nine Months Ended September 30, 2006   Florida Power & Light   FPL Energy   Corporate & Other   FPL Group, Inc. Cash Flows From Operating Activities Net income (loss) $ 632 $ 462 $ (81 ) $ 1,013 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:   Depreciation and amortization 557 272 17 846 Nuclear fuel amortization 68 32 - 100 Recoverable storm-related costs of FPL (326 ) - - (326 ) Storm cost amortization 114 - - 114 Unrealized (gains) losses on marked to market energy contracts - (142 ) - (142 ) Deferred income taxes 36 200 99 335 Cost recovery clauses and franchise fees 592 - - 592 Change in prepaid option premiums (87 ) (6 ) - (93 ) Equity in earnings of equity method investees - (83 ) - (83 ) Distribution of earnings from equity method investees - 57 - 57 Changes in operating assets and liabilities: Customer receivables (425 ) (55 ) 6 (474 ) Other receivables 20 53 (6 ) 67 Materials, supplies and fossil fuel inventory (106 ) (86 ) - (192 ) Other current assets (15 ) 3 5 (7 ) Other assets (68 ) (7 ) (29 ) (104 ) Accounts payable (81 ) (55 ) (15 ) (151 ) Customer deposits 44 1 (1 ) 44 Margin cash deposits (430 ) 20 (1 ) (411 ) Income taxes 447 (104 ) (332 ) 11 Interest and other taxes 234 16 7 257 Other current liabilities (19 ) (5 ) (3 ) (27 ) Other liabilities 13 10 19 42 Other – net   (8 )     (130 )     90       (48 ) Net cash provided by (used in) operating activities   1,192   -   453       (225 )     1,420       Cash Flows From Investing Activities Capital expenditures of FPL (1,303 ) - - (1,303 ) Independent power investments - (1,375 ) (1,375 ) Nuclear fuel purchases (54 ) (87 ) - (141 ) Other capital expenditures - - (20 ) (20 ) Proceeds from sale of securities in nuclear decommissioning funds 2,203 360 - 2,563 Purchases of securities in nuclear decommissioning funds (2,251 ) (370 ) - (2,621 ) Proceeds from sale of other securities - - 56 56 Purchases of other securities - - (74 ) (74 ) Other – net   -       8       1       9   Net cash provided by (used in) investing activities   (1,405 )     (1,464 )     (37 )     (2,906 )     Cash Flows From Financing Activities Issuances of long-term debt 938 204 1,680 2,822 Retirements of long-term debt (135 ) (144 ) (1,100 ) (1,379 ) Proceeds from purchased Corporate Units - - 210 210 Payments to terminate Corporate Units - - (258 ) (258 ) Net change in short-term debt (581 ) - 401 (180 ) Issuances of common stock - - 312 312 Dividends on common stock - - (445 ) (445 ) Dividends & capital distributions from (to) FPL Group – net - 900 (900 ) - Other – net   (1 )     31       3       33   Net cash provided by (used in) financing activities   221       991       (97 )     1,115       Net increase (decrease) in cash and cash equivalents 8 (20 ) (359 ) (371 ) Cash and cash equivalents at beginning of period   56       83       391       530       Cash and cash equivalents at end of period $ 64     $ 63     $ 32     $ 159     Corporate & Other represents other business activities, other segments that are not separately reportable, eliminating entries, and may include the net effect of rounding.   Amounts have been adjusted to reflect the retrospective application of an accounting standard change related to planned major maintenance activities. FPL Group, Inc. Earnings Per Share Summary (assuming dilution) (unaudited)     Three Months Ended September 30,   2007       2006   Florida Power & Light Company $ 0.81 $ 0.82 FPL Energy, LLC 0.55 0.55 Corporate and Other   (0.03 )     (0.05 )   Earnings Per Share $ 1.33     $ 1.32       Reconciliation of Earnings Per Share to Adjusted Earnings Per Share:   Earnings Per Share $ 1.33 $ 1.32     Merger - related costs - 0.02 Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges, primarily FPL Energy   (0.10 )     (0.19 )   Adjusted Earnings Per Share $ 1.23     $ 1.15         Nine Months Ended September 30,   2007       2006   Florida Power & Light Company $ 1.66 $ 1.60 FPL Energy, LLC 1.17 1.17 Corporate and Other   (0.11 )     (0.21 )   Earnings Per Share $ 2.72     $ 2.56       Reconciliation of Earnings Per Share to Adjusted Earnings Per Share:   Earnings Per Share $ 2.72 $ 2.56     Merger - related costs - 0.03 Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges, primarily FPL Energy   0.07       (0.19 )   Adjusted Earnings Per Share $ 2.79     $ 2.40       2006 amounts have been adjusted to reflect the retrospective application of an accounting standard change related to planned major maintenance activities. FPL Group, Inc. Earnings Per Share Contributions (assuming dilution) (unaudited)           First Quarter   Second Quarter   Third Quarter   Fourth Quarter   Year-To-Date FPL Group – 2006 Earnings Per Share $ 0.64 $ 0.60 $ 1.32 $ 2.56   Florida Power & Light – 2006 Earnings Per Share 0.31 0.46 0.82 1.60 Customer growth 0.03 0.03 0.03 0.09 Usage due to weather 0.01 (0.11 ) - (0.11 ) Underlying usage growth and price mix (0.01 ) 0.05 0.03 0.05 Base rate adjustment for Turkey Point Unit No. 5 - 0.04 0.06 0.09 O&M expense - (0.01 ) (0.05 ) (0.05 ) Depreciation expense (0.01 ) (0.01 ) (0.01 ) (0.03 ) Storm disallowance - 0.07 - 0.07 AFUDC 0.01 - - 0.01 Interest expense (gross) - 0.01 (0.01 ) - Share dilution (0.01 ) - (0.01 ) (0.02 ) Other   (0.01 )     -       (0.05 )         (0.04 ) Florida Power & Light – 2007 Earnings Per Share 0.32 0.53 0.81 1.66   FPL Energy – 2006 Earnings Per Share 0.39 0.23 0.55 1.17 New investments 0.06 0.04 0.02 0.13 Existing assets - 0.07 0.05 0.13 Asset optimization and trading 0.07 0.01 0.03 0.11 Non-qualifying hedges impact (0.38 ) 0.20 (0.09 ) (0.26 ) Share dilution (0.01 ) - - (0.01 ) Other, including interest expense   (0.02 )     (0.04 )     (0.01 )         (0.10 ) FPL Energy – 2007 Earnings Per Share 0.11 0.51 0.55 1.17   Corporate and Other – 2006 Earnings Per Share (0.06 ) (0.09 ) (0.05 ) (0.21 ) FPL FiberNet - - - 0.02 Merger - related costs 0.01 0.01 0.02 0.03 Share dilution 0.01 (0.01 ) - - Other, including interest expense   (0.01 )     0.06       -           0.05   Corporate and Other – 2007 Earnings Per Share   (0.05 )     (0.03 )     (0.03 )         (0.11 )   FPL Group – 2007 Earnings Per Share $ 0.38     $ 1.01     $ 1.33         $ 2.72     2006 amounts have been adjusted to reflect the retrospective application of an accounting standard change related to planned major maintenance activities.   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)       September 30, 2007   Per Books   Adjusted1 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   7,893       7,893   Total debt 13,812 8,743 Junior Subordinated Debentures2 1,159 Common shareholders' equity   10,615       10,615   Total capitalization, including debt due within one year $ 24,427     $ 20,517     Debt ratio 57 % 43 %     December 31, 2006   Per Books   Adjusted1 Long-term debt, including current maturities, and commercial paper   Junior Subordinated Debentures2 $ 1,009 $ 350 Project debt: Natural gas-fired assets 353 Wind assets 2,026 Debt with partial corporate support: Natural gas-fired assets 341 Other long-term debt, including current maturities, and commercial paper3   8,604       8,604   Total debt 12,333 8,954 Junior Subordinated Debentures2 659 Common shareholders' equity   9,930       9,930   Total capitalization, including debt due within one year $ 22,263     $ 19,543     Debt ratio 55 % 46 %     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 September 30, 2007 (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 6.000 06/01/08 $ 200 $ 200 $ - 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   Total First Mortgage Bonds   3,665       200     3,465     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   Total Industrial Bonds   46       -     46   Storm Securitization Bonds   Storm Securitization Bonds 5.053 02/01/11 124 41 83 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 652 41 611 Unamortized discount   (38 )     -     (38 ) TOTAL FLORIDA POWER & LIGHT   4,912       241     4,671     FPL Group Capital Debentures: Debentures (B Equity Units) 5.551 02/16/08 506 506 - 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   Total Debentures   3,740       506     3,234   Term Loans June 2008 200 - 200 Unamortized discount (2 ) - (2 ) FPL Energy Senior Secured Bonds: Senior Secured Bonds 6.876 06/27/17 89 12 77 Senior Secured Bonds 6.125 03/25/19 84 8 76 Senior Secured Bonds 6.639 06/20/23 287 29 258 Senior Secured Bonds 5.608 03/10/24 317 22 295 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 1,477 71 1,406 - Senior Secured Notes 7.520 06/30/19 221 18 203 Senior Secured Notes 7.110 06/28/20 99 5 94 Limited-recourse Senior Secured Notes 7.510 07/20/21 19 1 18 Senior Secured Notes 6.665 01/10/31 176 10 166 Construction Term Facility VAR 06/30/08 346 346 - Other Debt: Other Debt VAR 12/27/07 323 323 - Other Debt 8.450 11/30/12 52 8 44 Other Debt VAR 12/31/17 93 11 82 Other Debt 8.010 12/31/18 3 - 3 Other Debt Part fixed & VAR 11/30/19 256 61 195 Other Debt VAR 01/31/22   579       50     529   Total Other Debt   1,306       453     853   - TOTAL FPL ENERGY   3,644       904     2,740     Commercial Paper: FPL 810 810 - Capital 508 508 - TOTAL FPL GROUP CAPITAL   8,090       1,918     6,172   TOTAL FPL GROUP, INC. $ 13,812     $ 2,969   $ 10,843     May not agree to financial statements due to rounding. Florida Power & Light Company Statistics (unaudited)         Quarter Year to Date Periods Ended September 30 2007 2006 2007 2006 Energy sales (million kwh) Residential 17,378 16,675 41,752 41,495 Commercial 12,607 12,230 34,235 33,233 Industrial 938 1,013 2,857 3,032 Public authorities 148 133 439 414 Electric utilities 433 434 1,155 1,191 Increase (decrease) in unbilled sales 340 278 1,099 1,311 Interchange power sales 341 482 1,534 1,825 Total 32,185 31,245 83,071 82,501     Average price (cents/kwh) 1 Residential 11.49 12.00 11.40 11.90 Commercial 9.85 10.48 9.96 10.53 Industrial 8.41 8.98 8.53 8.90 Total 10.69 11.23 10.64 11.14   Average customer accounts (000's) Residential 3,989 3,911 3,978 3,897 Commercial 496 480 492 477 Industrial 18 22 20 21 Other 3 3 3 3 Total 4,506 4,416 4,493 4,398   1 Excludes interchange power sales, net change in unbilled revenues, deferrals under cost recovery clauses and any provision for refund.   2007 Normal 2006   Three Months Ended September 30 Cooling degree-days 967 923 896 Heating degree-days - - - Nine Months Ended September 30 Cooling degree-days 1,511 1,513 1,468 Heating degree-days 142 186 191