FPL Energy reported earnings of $92 million or 23 cents per share compared to $20 million or 5 cents per share at last years second quarter.

Adjusted earnings, which exclude the effect of non-qualifying hedges, were $112 million or 28 cents per share compared to $72 million or 19 cents per share last year. The impact of non-qualifying hedge category was the loss of $20 million primarily as a result of higher account spots spreads. The overall effect of forward price movements during the quarter was modestly favorable to the FPL Energy''s prospects.

FPL Energy''s adjusted earnings new investment contributed 7 cents per share over the last 12 months and the company has added 722 megawatts new wind capacity and acquired 415 megawatts of nuclear capacity.

Contributions from the existing assets increased 3 cents per share as the absence Seabrook refueling outage and favorable market conditions primarily in ERCOT and NEPOOL which added 8 cents incrementally more than offset a roughly 1 cent drag resulting from lower wind resource and 4 cents of all other items. Asset optimization in trading activities rose 2 cents quarter-over-quarter while restructuring activities where down a penny. All other items including share dilution were down 2 cents primarily driven by higher interest expense associated with higher borrowings as a result of an expanding asset base as well as the higher rates.

The company welcomes the forthcoming merger with Constellation.

The second quarter witnessed significant developments in Maryland which bear on the proposed merger with Constellation Energy. The combined company will be a Fortune 100 company. Constellation brings highest customer placing competitive supply market share and that risks management platform in the business that has limited generation capacity in NEPOOL and ERCOT. FPL Group has meaningful de-regulated generation in these markets but the smaller load service business relative to the size of its generation. FPL Group continues to be confident that it will be able to deliver at least $200 to $250 million per year pre-tax synergies by year 3 following the close of the transaction.

Fiscal 2006 Outlook

- For 2006, FPL Group expects adjusted earnings of $2.80 to $2.90 per share. This includes the adverse impact of 7 cents from the PSC''s storm decision absent which the company would have expected to be well above that upper end of the range.
- Customer growth rates of 2% are expected to continue and little or no growth usage per customer is expected for the full year 2006, owing primarily to price elasticity effects.
- The company hopes to add between 1250 to 1500 megawatts to the portfolio in 2006.

Fiscal 2007 Outlook

- For 2007, FPL Group expects adjusted earning per share in the range of $3.15 to $3.35.
- Assuming no further major increases in fuel prices and with continued steady economic growth, the company expects usage growth to pick up in 2007.

Key questions from the second quarter fiscal 2006 earnings call conducted by FPL Group on July 28, 2006.

Do you save the areas either in FPNL or FPL Energy that are indirectly making up the difference?

To a great extent it is due to FPL Energy. With those 7 cents from the PSC decision, the company expects to come in line with its original expectations. The difference is coming on the FPL Energy. But the existing portfolio has performed even better than it had been anticipated and that has been true both from a commercial perspective and an operating perspective. FPL is doing well on the wind developer to getting things into service.

Do you expect the capital expenditure budget to rise due to the higher number of projects?

The CapEx gets driven both by the volume and the rate effect. Now offsetting that is the basic market environment for wind projects which has improved at the same time. Hence, the net is positive for the business.

How long would the merger with Constellation take from start to finish to pick up where you left off and get to where you would be in a position to close?

The company made progress in the first quarter. The deal can be closed in a short time, in weeks. FPL feels confident that on relatively short notice the company can turn the thing back on and get done what is needed to be done to close and start delivering at least some synergies right away.

Is it easy to find new turbines or source them before the end of the 2007 production tax credit end?

The turbine supply goes well. The company believes that it will go beyond the expectations for 2007. It is not a big issue for FPL.

Have you seen any degradation in the quality of wind resource that you are building up?