EEI%20International%20Financial%20Conference

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EEI International Financial Conference

• February 20 23, 2005

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Cautionary Statements And Risk Factors That May
Affect Future Results
Any statements made herein about future
operating results or other future events are
forward-looking statements under the Safe Harbor
Provisions of the Private Securities Litigation
Reform Act of 1995. Actual results may differ
materially from such forward-looking statements.
A discussion of factors that could cause actual
results or events to vary is contained in the
Appendix herein.
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FPL Group A Premier U.S. Electric Company

• Proven ability to operate effectively in
  regulated and de-regulated markets
• Track record of operational excellence and
  continuous improvement
• Among the leaders in environmental excellence
• Strong financial position
• Commitment to creating shareholder value

5-year Total Shareholder Return (12/31/99
12/31/04)
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With Two Strong Businesses

• One of the largest U.S. electric utilities
• Vertically integrated, retail rate-
• regulated utility
• 18,940 mw in operation
• 4.2 million customers
• 8.7 billion operating revenue

• Successful wholesale generator
• U.S. market leader in wind-generation
• 11,520 mw in operation
• 1.7 billion operating revenue

Financial data as of 12/31/04
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FPL One of the Best Electric Utilities in the
U.S.
Historically In 2005 1 Beyond 2005 1
Among strongest customer growth rates in the nation Slowdown possible due to 2004 hurricanes Expect growth to continue at historic pace
Investing to meet the demands of customer growth Addition of 1,900 gas-fired mw at Martin and Manatee Addition of 1,150 gas-fired mw at Turkey Point in 2007
Focus on operational excellence and productivity Top quartile reliability Managing continued cost pressures Continued cost management
One of the lowest emitting utilities in the U.S. Increasing natural gas usage Plans to introduce LNG into our fuel mix
Constructive regulatory environment Regulatory issues storm cost recovery and rate base case Evaluating the addition of solid fuel generation
5-yr Adjusted EPS CAGR of 2.8 2 EPS estimates of 3.95 to 4.10 Long-term EPS growth potential of 3 to 4
See appendix for reference notes
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Strong Customer Growth

• Average Customer Accounts(millions)

CAGR 2.1
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Requires Significant Investment

• Capital Expenditures(billions)

2001-2005 cumulativeCapEx of 7.0 bn
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Florida has a Constructive Regulatory Environment

• Appointed public service commission
• 5 commissioners with staggered terms
• Fuel, purchased power directly passed through
• History of progressive and innovative regulatory
  solutions
• Rate certainty through end of 2005
• incentive-based agreement allowing shareholders
  to benefit from productivity improvements
• win-win revenue sharing provision instead of
  ROE measure
• No current activity on wholesale or retail
  restructuring

10
First Base Rate Increase Request in More Than 20
years

• Major investment in infrastructure due to strong
  customer growth and higher operating expenses
  prompted the request
• Base rate request between 400 and 450 million
  likely
• If approved, new rates would go into effect on
  Jan 1, 2006 when the current agreement expires
• Additional increase of 65 million (130 million
  on an annualized basis) necessary in mid-2007 to
  cover costs of Turkey Point expansion

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Estimated Base Rate Case Timeline
Month Event
January Notified FPSC of upcoming request
Now March Prepare Minimum Filing Requirements (MFRs) and testimony
March File formal rate request
May June Quality of service hearings
June August Intervenor, staff, and FPL rebuttal testimony
August Rate hearings
November Final decision by FPSC expected
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FPL Base Rate Case History
Nature of Case Amount (mm)
1983 FPL Request 238 3
1984 FPL Request 84 3
1985 FPL Request 120 3
1990 Tax Savings - Settlement (42) 3
1999 Negotiated Settlement (350) 3
2000 Yr 1 Refund (22) 4
2001 Yr 2 Refund (105) 4
2002 Yr 3 Refund (85) 4
2002 Negotiated Settlement (250) 3
2002 Yr 1 Refund (11) 4
2003 Yr 2 Refund (3) 4
See appendix for reference notes
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Beginning Base Rate Review with One of the Best
Track Records in the Industry
Outage Time per Customer (minutes) 5

• Excellent operational performance
• Superior cost management
• Among leaders in environmental performance
• Outstanding hurricane restoration efforts
• Meeting FPSC-required 20 reserve margin

6
OM per Retail kwh(cents)
Industry
FPL
See appendix for reference notes
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Overview of Storm Reserve Fund

• Established in 1946 as an unfunded reserve and
  first funded in 1958
• Designed to cover non-insured storm losses and
  insurance deductibles
• Became more significant after 1992
• due to lack of affordable insurance after
  Hurricane Andrew
• FPL maintains commercial insurance for its power
  plants
• Lost revenues are not recoverable
• Regulated by the FPSC
• sets ratemaking and accounting treatment
• establishes estimated reserve, annual accrual and
  contributions
• has no specific investment restrictions
• FPL currently accrues 20 million per year for
  the storm reserve
• rate case requests substantial increase
• Current rate agreement contemplated possibility
  of restoration costs above reserve and recovery
  of deficit

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Restoration Cost Recovery Update

• Accrued restoration costs to date of 890 million
• Costs exceed the storm reserve by 536 million
• they have been deferred
• FPSC granted approval to begin recovery of the
  excess through a customer surcharge starting in
  mid-February, subject to refund
• All amounts subject to prudency hearing in April
• Final decision to be rendered in July

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Solid Earnings and Good Growth Prospects at FPL

• 2005 Drivers
• Good revenue growth but with some uncertainty
• Addition of 1,900 mw at Martin and Manatee
  mid-year
• Managing continued cost pressures
• Long-term Growth Drivers
• Strong customer growth
• Track record of good cost management
• Continued consistent and fair regulation

Historical Adjusted EPS 2
4.10
1, 7
See appendix for reference notes
17
FPL 2005 Earnings Contribution DriversRelative
to 2004

Weather-normalized 2005 EPS contribution range of
3.95 to 4.10 1, 9
See appendix for reference notes
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FPL Energy PortfolioBy Asset Type
11,520 Net mw in Operation
As of 12/31/04
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FPL Energy A Growing, Profitable Wholesale
Generator
Historically In 2005 1 Beyond 2005
U.S. leader in wind energy Addition of 250 750 mw, with 220 mw under construction Potential to add 200 500 mw annually over 5 yrs, dependant on PTCs
Seabrook nuclear plant great performer in a good market Uprate of 71 mw during Spring outage 2nd phase of uprate (13 mw) in Fall 2006 outage Continued solid earnings, due to new contracts at higher prices
Contracted assets favorable QF contracts with stable earnings Improving income due to prior restructurings Expect steady income and further potential contract restructurings
Gas merchant portfolio well positioned, but in depressed markets Drag on EPS of 0.30 to 0.40, but cash flow positive Upside leverage could be worth up to 1.00/share when equilibrium returns
Disciplined risk management and training 78 of mw under contract and over 85 margin hedged Expect to continue our practice of hedging 75. New hedges placed at higher prices
5-yr Adjusted EPS CAGR of 23.3 2 EPS estimates of 1.30 to 1.45
Free cash flow positive Positioned for strong earnings and cash flow in the future
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U.S. Leader in Wind Energy
Wind Generation Market Share

• Public policy support required
• Long-term contracts
• 15-25 years
• Superior returns
• ROEs in high teens/low 20s
• accretive in first full year
• Capital market financing
• validates business model

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Contracted Portfolio Profile
2,236 Net mw in Operation
Fuel Diversity
Contract Maturity
As of 2/4/05
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Merchant Portfolio Profile
Regional Diversity

• Premier nuclear asset in the Northeast
• Seabrook 1,095 net mw
• Low cost, efficient base load combined cycle
  units
• Gas assets well positioned in liquid,
  gas-on-margin markets
• Long-term upside potential

6,663 net mw
Financial data as of 2/4/05 projected year-end
2005
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Contract Coverage in 2005
More than 85 percent of expected 2005 gross
margin hedged
As of 12/31/04. See appendix for reference notes
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Excellent Growth Prospect atFPL Energy

• 2005 Drivers
• Build-out of new wind generation
• Uprate and refueling outage at Seabrook
• Modest drag from Marcus Hook
• Increased interest expense
• Long-term Growth Drivers
• Wind projects
• Acquisitions
• Contract restructurings
• Improving merchant markets

1, 14
13

See appendix for reference notes
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FPL Energy 2005Earnings Contribution
DriversRelative to 2004
Potential 2005 EPS contribution range of 1.30 to
1.45 1
See appendix for reference notes
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FPL Group Financially Strong and Positioned for
Long-term Growth
Historically In 2005 1 Beyond 2005 1
Conservative balance sheet warrants strong credit rating Moodys upgraded outlook on Capital to Stable Fitch reaffirmed all ratings Maintain a conservative balance sheet
Build-out of merchant meant CapEx exceeded cash generation Gas merchant build-out complete. Free cash flow positive Expect to remain cash flow positive subject to investment opportunities
Dividend raised every year since 1995 Strong financial position can support continued competitive dividend payout Dividend payout comparable to that of our peers
5-yr EPS CAGR of 4.4 2 EPS estimates of 5.00 to 5.20 Potential 5-yr EPS growth rate of 5 to 9
See appendix for reference notes
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Sound Credit Profile Reflected on Balance Sheet
and Credit Ratings
Total Debt toTotal Capitalization
SP Moodys Fitch
FPL Group, Inc. Issuer FPL Group, Inc. Issuer FPL Group, Inc. Issuer A/Negative A2/Stable A/Stable
FPL First Mortgage Bonds FPL First Mortgage Bonds A/Negative Aa3/Stable AA-/Stable
FPL Group Capital Senior Unsecured FPL Group Capital Senior Unsecured FPL Group Capital Senior Unsecured A-/ Negative A2/ Stable A/Stable
Total Debt to Total Capitalization as of 12/31/04
for FPL Group and 9/30/04 for the Industry
Average. See appendix for reference notes
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Growing, Stable Dividend
Raised dividend by 13
Historical Dividend
Dividend Payout 16
See appendix for reference notes
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Growth Prospects at FPL Group

• 2005 Drivers
• Challenging year at FPL
• Expect strong growth at FPL Energy
• Free cash flow positive
• Dilution due to conversion of equity units
• Share repurchase
• Long-term Growth Drivers
• Continued strong growth at FPL and FPL Energy
• Continued strong cash flow
• Disciplined approach to transactions that create
  shareholder value

1, 17
See appendix for reference notes
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A Powerful Investment

• Sound fundamentals, disciplined approach
• attractive Florida service territory
• culture of operational excellence
• financial discipline
• strong corporate governance policies
• Proven track record
• meeting commitments
• creating shareholder value
• Attractive, realistic growth prospects
• Clean energy strategy
• Moderate risk profile

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Appendix
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Although the Damage Was Extensive
Jeanne
Frances
Hurricane Hurricane Hurricane
Charley Frances Jeanne
Landfall on 08/13 09/05 09/26
Category 4 2 3
Affected
Customers 874,000 2,786,300 1,737,400
Counties 22 35 35
Replaced
Poles 7,226 3,890 2,390
Transformers 5,159 3,011 3,037
Miles of conductor 925 575 254
Personnel 13,500 16,738 16,566
Days of restoration 13 12 8
Charley
Data as of 12/03/04
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Progress Was Quickly Made During Restoration
Efforts
Jeanne
Frances
Charley
Data as of 12/03/04
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FPL Group Schedule ofTotal Debt and Equity
As of 01/21/05. See appendix for reference notes
38
Selected Cash Flow Items 20
See appendix for reference notes
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FPL - Reconciliation GAAP to Adjusted EPS
There were no adjustments to GAAP earnings in
2002, 2003, and 2004
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FPL Energy - Reconciliation GAAP to Adjusted EPS
41
FPL Group - Reconciliation GAAP to Adjusted EPS
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Reference Notes

• Estimates include share dilution of 3-4.
  Excluding the cumulative effect of adopting new
  accounting standards as well as the
  mark-to-market effect of non-qualifying hedges
  neither of which can be determined at this time
• See pages 39 - 41 for reconciliation of GAAP to
  adjusted amounts
• Represents a permanent change in base rates
• Represents a 1-year refund to customers
• Preliminary 2004 for FPL 2003 for the industry
• Excluding the impact of the three hurricanes that
  hit FPLs service territory
• EPS estimates of 3.95 to 4.10 in 2005
• Includes impact on depreciation, interest and
  AFUDC
• Normalizes for 2004 weather, including the impact
  of 2004 hurricanes. Typical weather variability
  around 2005 expectations would be approximately
  15 with 80 probability
• Weighted to reflect in-service dates, planned
  maintenance, and a refueling outage at Seabrook
• Reflects Round-the-Clock mw
• Reflects on-peak mw
• Includes the impact of the Marcus Hook contract
  restructuring, (0.26)/share and the receipt of a
  portion of the Karaha Bodas claim, 0.03/share
• EPS estimates of 1.30 to 1.45 in 2005
• See page 37 for more detailed credit statistics
• Annualized latest quarterly dividend divided by
  2005 First Call EPS estimate
• EPS estimates of 5.00 to 5.20 in 2005
• Ratios exclude impact of imputed debt for
  purchase power obligations
• Adjusted to reflect preferred stock
  characteristics of these securities (preferred
  trust securities)

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Cautionary Statements And Risk Factors That May
Affect Future Results

• In connection with the safe harbor provisions of
  the Reform Act, FPL Group and FPL are hereby
  filing cautionary statements identifying
  important factors that could cause FPL Group's or
  FPL's actual results to differ materially from
  those projected in forward-looking statements (as
  such term is defined in the Reform Act) made by
  or on behalf of FPL Group and FPL in this
  combined Form 10-K, in presentations, in response
  to questions or otherwise.  Any statements that
  express, or involve discussions as to
  expectations, beliefs, plans, objectives,
  assumptions or future events or performance
  (often, but not always, through the use of words
  or phrases such as will likely result, are
  expected to, will continue, is anticipated,
  believe, could, estimated, may, plan, potential,
  projection, target, outlook) are not statements
  of historical facts and may be forward-looking.  F
  orward-looking statements involve estimates,
  assumptions and uncertainties.  Accordingly, any
  such statements are qualified in their entirety
  by reference to, and are accompanied by, the
  following important factors (in addition to any
  assumptions and other factors referred to
  specifically in connection with such
  forward-looking statements) that could cause FPL
  Group's or FPL's actual results to differ
  materially from those contained in
  forward-looking statements made by or on behalf
  of FPL Group and FPL.
• Any forward-looking statement speaks only as of
  the date on which such statement is made, and FPL
  Group and FPL undertake no obligation to update
  any forward-looking statement to reflect events
  or circumstances after the date on which such
  statement is made or to reflect the occurrence of
  unanticipated events.  New factors emerge from
  time to time and it is not possible for
  management to predict all of such factors, nor
  can it assess the impact of each such factor on
  the business or the extent to which any factor,
  or combination of factors, may cause actual
  results to differ materially from those contained
  in any forward-looking statement.
• The following are some important factors that
  could have a significant impact on FPL Group's
  and FPL's operations and financial results, and
  could cause FPL Group's and FPL's actual results
  or outcomes to differ materially from those
  discussed in the forward-looking statements
• FPL Group and FPL are subject to changes in laws
  or regulations, including the PURPA, and the
  Holding Company Act, changing governmental
  policies and regulatory actions, including those
  of the FERC, the FPSC and the 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, 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 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 relating to air quality,
  water quality, waste management, wildlife
  mortality, natural resources and health and
  safety that could, among other things, restrict
  or limit the output of certain facilities or the
  use of certain fuels required for the production
  of electricity and/or require additional
  pollution control equipment and otherwise
  increase costs.  There are significant capital,
  operating and other costs associated with
  compliance with these environmental statutes,
  rules and regulations, and those costs could be
  even more significant in the future.

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• FPL Group and FPL operate in a changing market
  environment influenced by various legislative and
  regulatory initiatives regarding deregulation,
  regulation or restructuring of the energy
  industry, including deregulation of the
  production and sale of electricity.  FPL Group
  and its subsidiaries will need to adapt to these
  changes and may face increasing competitive
  pressure.
• FPL Group's and FPL's results of operations could
  be affected by FPL's ability to renegotiate
  franchise agreements with municipalities and
  counties in Florida.
• The operation of power generation facilities
  involves many risks, including start up risks,
  breakdown or failure of equipment, transmission
  lines or pipelines, use of new technology, the
  dependence on a specific fuel source or the
  impact of unusual or adverse weather conditions
  (including natural disasters such as hurricanes),
  as well as the risk of performance below expected
  or contracted levels of output or
  efficiency.  This could result in lost revenues
  and/or increased expenses.  Insurance, warranties
  or performance guarantees may not cover any or
  all of the lost revenues or increased expenses,
  including the cost of replacement power.  In
  addition to these risks, FPL Group's and FPL's
  nuclear units face certain risks that are unique
  to the nuclear industry including the ability to
  store and/or dispose of spent nuclear fuel, as
  well as additional regulatory actions up to and
  including shutdown of the units stemming from
  public safety concerns, whether at FPL Group's
  and FPL's plants, or at the plants of other
  nuclear operators.  Breakdown or failure of an
  FPL Energy operating facility may prevent the
  facility from performing under applicable power
  sales agreements which, in certain situations,
  could result in termination of the agreement or
  incurring a liability for liquidated damages.
• FPL Group's and FPL's ability to successfully and
  timely complete their power generation facilities
  currently under construction, those projects yet
  to begin construction or capital improvements to
  existing facilities is contingent upon many
  variables and subject to substantial
  risks.  Should any such efforts be unsuccessful,
  FPL Group 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.
• FPL Group and FPL use derivative instruments,
  such as swaps, options, futures and forwards to
  manage their commodity and financial market
  risks, and to a lesser extent, engage in limited
  trading activities.  FPL Group could recognize
  financial losses as a result of volatility in the
  market values of these contracts, or if a
  counterparty fails to perform.  In the absence of
  actively quoted market prices and pricing
  information from external sources, the valuation
  of these derivative instruments involves
  management's judgment or use of estimates.  As a
  result, changes in the underlying assumptions or
  use of alternative valuation methods could affect
  the reported fair value of these contracts.  In
  addition, FPL's use of such instruments could be
  subject to prudency challenges and if found
  imprudent, cost recovery could be disallowed by
  the FPSC.
• There are other risks associated with FPL Group's
  non-rate regulated businesses, particularly FPL
  Energy.  In addition to risks discussed
  elsewhere, risk factors specifically affecting
  FPL Energy's success in competitive wholesale
  markets include the ability to efficiently
  develop and operate generating assets, the
  successful and timely completion of project
  restructuring activities, maintenance of the
  qualifying facility status of certain projects,
  the price and supply of fuel, transmission
  constraints, competition from new sources of
  generation, excess generation capacity and demand
  for power.  There can be significant volatility
  in market prices for fuel and electricity, and
  there are other financial, counterparty and
  market risks that are beyond the control of FPL
  Energy.  FPL Energy's inability or failure to
  effectively hedge its assets or positions against
  changes in commodity prices, interest rates,
  counterparty credit risk or other risk measures
  could significantly impair FPL Group's future
  financial results.  In keeping with industry
  trends, a portion of FPL Energy's power
  generation facilities operate wholly or partially
  without long-term power purchase agreements.  As
  a result, power from these facilities is sold on
  the spot market or on a short-term contractual
  basis, which may affect the volatility of FPL
  Group's financial results.  In addition, FPL
  Energy's business depends upon transmission
  facilities owned and operated by others if
  transmission is disrupted or capacity is
  inadequate or unavailable, FPL Energy's ability
  to sell and deliver its wholesale power may be
  limited.

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• FPL Group is likely to encounter significant
  competition for acquisition opportunities that
  may become available as a result of the
  consolidation of the power industry.  In
  addition, FPL Group may be unable to identify
  attractive acquisition opportunities at favorable
  prices and to successfully and timely complete
  and integrate them.
• FPL Group and FPL rely on access to capital
  markets as a significant source of liquidity for
  capital requirements not satisfied by operating
  cash flows.  The inability of FPL Group, FPL
  Group Capital and FPL to maintain their current
  credit ratings could affect their ability to
  raise capital on favorable terms, particularly
  during times of uncertainty in the capital
  markets, which, in turn, could impact FPL Group's
  and FPL's ability to grow their businesses and
  would likely increase interest costs.
• FPL Group's 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.  In addition, severe
  weather can be destructive, causing outages
  and/or property damage, which could require
  additional costs to be incurred.
• 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 or corporate
  governance requirements.
• 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 United States, and the increased cost and
  adequacy of security and insurance.
• 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,
  local or geographic events as well as
  company-specific events.
• 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 or work stoppage.
• The issues and associated risks and
  uncertainties described above are not the only
  ones FPL Group and FPL may face.  Additional
  issues may arise or become material as the energy
  industry evolves.  The risks and uncertainties
  associated with these additional issues could
  impair FPL Group's and FPL's businesses in the
  future.

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