This summary is based on the second quarter fiscal 2006 earnings call conducted by FPL Group, Inc (FPL: chart) on July 28, 2006.

Key Investors Issues:

- Earnings per share were 60 cents in comparison to 52 cents a year ago.
- Adjusted net income was $262 million compared to $255 million in 2005.
- For fiscal 2006, the group adjusted earning is expected to be in the range of $2.80 to $2.90.

Second Quarter Fiscal 2006 Highlights

FPL Group reported 2006 second quarter net income on a GAAP basis of $238 million, or 60 cents per share compared to $203 million or 52 cents per share in the second quarter of 2005.

The net income for the second quarter included a net unrealized after-tax loss of $20 million associated with the mark-to-market effect of non-qualifying hedges and $4 million of after-tax merger related costs. The results for last year’s second quarter included a net unrealized after-tax loss of $52 million associated with the mark-to-market effect of non-qualifying hedges.

Excluding the mark-to-market effect of non-qualifying hedges and merger- related costs, FPL Group’s earnings would have been $262 million or 66 cents per share for the second quarter of 2006, compared with $255 million, or 66 cents per share, in the second quarter of 2005.

Florida Power & Light, FPL Group’s principal subsidiary, reported GAAP and adjusted earnings of $182 million or 46 cents per share compared to $201 million or 52 cents per share during the 2005 second quarter.

The average number of FPL customer accounts has increased by 85,000 or 2% over last year''s comparable period. The growth remains close to the previously announced customer growth expectations.

Retail kilowatt hour sales grew 6.8% during the quarter.

Cooling degree days, common metric used to determine weather impact from energy usage, were up more than 29% above last year’s second quarter and were about 10% above normal for the quarter. As a result, usage growth associated with weather increased 4.2% quarter-over-quarter, underlying usage growth was 0.6% and customer growth accounted to 2%.

Operations and maintenance (O&M) expense was $359 million compared to $316 million.

This was caused by two major factors: the Storm Secure initiative and higher regular distribution costs. The Storm Secure initiative, which the company announced in January of this year, hurt the comparative results by approximately $12 million. Other distribution costs increases were driven by additional restoration expenses in higher contract cost.

Deprecation and amortization expense decreased $35 million to $197 million to the second quarter of 2006.

The decline was due to the expansion of the useful live on the generation fleet and the elimination of the nuclear de-commissioning accrual, both of which were implemented as a result of the August 2005 stipulation and settlement agreement. The lower overall deprecation was partly offset by the addition of the Martin and Manatee generating facilities which the company brought on line in late June 2005.

The Florida Public Service Commission (PSC) held three days of hearings on the prudency of FPL’s 2005 storm costs as well as the considerations that should lead to choosing securitization or surcharge for storm cost recovery and the level of the reserve that should be targeted.

The PSC approved storm cost recovery of $736 million, a storm reserve of $200 million and the use of securitization for storm cost recovery. They also voted to deny FPL recovery of approximately $54 million in storm restoration costs.

Florida Power & Light''s second quarter earnings per share were affected by:

customer growth - positive 3 cents; usage due to weather - positive 6 cents; underlying usage growth and mix - zero; total cost disallowance - negative 7 cents; ""Storm Secure"" - negative 2 cents; O&M - negative 3 cents; depreciation - positive 6 cents; AFUDC and interest expense - negative 5 cents; all other including share dilution and rounding - negative 4 cents; for total 6 cents decline for the quarter.

FPL Energy reported 47% increase in earnings per share on an adjusted basis.

This was driven by contributions for new assets and the performance of the merchant portfolio including the lack of a refueling outage Seabrook offset some what by poor wind resource. The combination of new wind projects and the expected increase in the contribution from the merchant assets has all the hedges roll of and are replaced by sales at higher prices continue to be the two major drivers that expect to power to grow the FPL Energy''s earnings for the next few years.