JUNO BEACH, Fla. - FPL Group, Inc. (NYSE: FPL) today reported 2004 third quarter net income on a GAAP basis of $320 million, or $1.76 per share, compared with $331 million, or $1.86 per share, in the third quarter of 2003. FPL Group’s net income for the third quarter of 2004 included a net unrealized loss of $6 million after-tax associated with the mark-to-market effect of non-qualifying hedges. Results in the prior-year quarter included an after-tax charge of $3 million due to a change in accounting principle (FIN 46 – Consolidation of Variable Interest Entities) and a net unrealized gain of $8 million after-tax associated with the mark-to-market effect of non-qualifying hedges.

Excluding these items, FPL Group’s earnings would have been $326 million, or $1.79 per share for the third quarter of 2004, compared with $326 million, or $1.83 per share, in the third quarter of 2003. 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 for the company’s employee incentive compensation plan. 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.

"Despite the challenges brought on by an unprecedented hurricane season in Florida, FPL Group and its employees performed remarkably well during the third quarter under extraordinary personal and professional circumstances,” said Lew Hay, chairman and chief executive officer. “In the span of six weeks, Florida Power & Light’s service territory took direct hits from three major hurricanes, creating a total of approximately 5.4 million customer outages. We estimate the lost revenues and other impacts from the hurricanes totaled approximately $0.15 per share. Otherwise, FPL performed well with continued strong customer growth and excellent operational performance.

"FPL Energy again delivered double-digit adjusted earnings growth despite milder than normal summer weather throughout much of the nation. Outstanding operational performance, increased contract coverage and a larger wind portfolio contributed to its increased earnings contribution.

"Excluding the impact of what was an unprecedented hurricane season for FPL, we are on track to achieve the level of performance earlier forecasted,” said Hay. “Considering that the hurricanes caused lost revenues and other impacts estimated to total approximately $0.15 per share, we have reduced our full-year earnings forecast accordingly to a range of $4.90 to $5.00.” Hay said the full-year earnings expectation assumes normal weather for the balance of the year and excludes the 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.

Florida Power & Light

Third quarter 2004 net income for Florida Power & Light, FPL Group's principal subsidiary, was $275 million or $1.52 per share, down slightly from $277 million or $1.55 per share from the prior-year quarter. Since the 2003 third quarter, FPL has added 116,000 customer accounts over the last twelve months, an increase of 2.8 percent.

"FPL’s third quarter was dominated by the impact of an extraordinary series of direct hits by three hurricanes, each of which did major damage in parts of our service territory and caused extensive power outages,” said Hay.

"Employees and customers alike suffered damage to homes and personal property, and businesses were closed or disrupted for extended periods. In spite of the devastation, we restored power to our customers in record time. We are proud of the achievements of all our people and grateful for the support we have received from our contractors and from the many other utilities who came to our aid,” he said.

The company said it estimates the three storms will reduce FPL’s earnings for the year by approximately $0.15 per share. Of this, $0.14 is recognized in the third quarter, with the balance in the fourth quarter.

Since 1993, FPL has been collecting monthly a small fee from its customers and applying that amount to a storm fund to be used for restoration efforts after tropical storms or hurricanes damage the electrical system. FPL had accumulated approximately $349 million in its storm reserve.

"While we have not completed the final accounting of all restoration costs for the three hurricanes, to date we have accrued a total of approximately $650 million recoverable from the storm reserve. This exceeds the value of the reserve by approximately $300 million,” said Hay. “After finalizing and auditing these numbers, we intend to seek recovery of the excess costs in a manner consistent with Florida Public Service Commission directives. The PSC order of October 8 reiterated that prudently incurred restoration costs are recoverable. The exact timing and manner of recovery have yet to be determined.”

Excluding the impact of the hurricanes, operations and maintenance expenses were up compared to the prior-year quarter. The major drivers of O&M continued to be nuclear maintenance and insurance costs. Depreciation increased slightly in the quarter, reflecting investment in new power plants and delivery systems to help meet the continued growth in Florida .

"Although, due to the hurricanes, our earnings for the quarter are not what we had expected, I am very proud of the performance of the FPL team during a very difficult period,” said Hay.

FPL Energy

FPL Energy, the wholesale energy subsidiary of FPL Group, reported 2004 third quarter net income on a GAAP basis of $61 million or $0.34 per share, compared to $63 million or $0.35 per share in the prior-year quarter.

FPL Energy’s results for the third quarter 2004 included a net unrealized loss of $6 million after-tax associated with the mark-to-market effect of non-qualifying hedges. Results in the prior-year quarter included an after-tax charge of $3 million due to a change in accounting principle (FIN 46 – Consolidation of Variable Interest Entities) and a net unrealized gain of $8 million after-tax associated with the mark-to-market effect of non-qualifying hedges.

Excluding these items, FPL Energy earnings would have been $67 million or $0.37 per share compared to $58 million or $0.32 per share in 2003.

New wind projects, increased contract coverage, better market conditions in Texas , and continued strong operating performance across the portfolio contributed to FPL Energy’s earnings growth in the quarter. These positives were somewhat offset by losses associated with a new natural gas-fired merchant power plant brought on-line last year and increased interest expense associated with the expansion of FPL Energy’s asset base since the third quarter of last year.

With the recent extension of the federal wind production tax credit, FPL Energy said it has begun to execute a number of projects in its wind power development pipeline. Earlier this week, the company announced it will build, own and operate the 114-megawatt (MW) Callahan Divide Wind Energy Center located southwest of Abilene, Texas. The Callahan project is in addition to the previously announced 106.5MW Weatherford Wind Energy Center located near Weatherford in western Oklahoma . The company said it now expects to add in the range of 250MW to 750MW of new wind-driven power plants to its portfolio by the end of 2005, with a small amount of that becoming operational by the end of this year.

"FPL Energy continues to perform extremely well across all facets of its business,” said Hay. “With the recent extension of the federal wind production tax credit and our strong pipeline of wind development projects, coupled with continued strong operating performance, I am more confident than ever in the future earnings growth at FPL Energy.”

Corporate and Other

Corporate and Other had a negative $16 million impact to net income or $0.10 per share for the third quarter 2004 driven primarily by interest expense. FPL FiberNet, an FPL Group subsidiary that provides fiber-optic networks and related services in Florida, had a net loss of $1 million, compared to a net loss of $2 million in the prior year’s quarter.

Outlook for 2005

The company said it expects that 2005 earnings will likely be in the range of $5.00 to $5.20 per share. The outlook is based on the expectation of Florida Power & Light contributing $3.95 to $4.10 per share, FPL Energy contributing $1.30 to $1.45 and Corporate & Other reducing earnings by $0.30 to $0.35 per share. The company said its earnings outlook is based on the assumption of normal weather and excludes 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.

"Although we expect the fundamentals of Florida Power & Light’s business to remain strong over the long-term, next year will be a challenging year for FPL due to near-term uncertainty of customer growth and usage trends in the aftermath of an unprecedented hurricane season. In addition, we will have increased interest and depreciation expense associated with 1,900 megawatts of new generating capacity coming on-line at our Martin and Manatee plant sites,” said Hay. “However, we do expect continued strong earnings growth at FPL Energy. We already have contracted a significant percentage of the overall portfolio, accounting for more than 85 percent of our anticipated 2005 gross margin. Additional wind-driven power plants also are expected to contribute to improved earnings for FPL Energy. On balance, looking at FPL Group as a whole, we are confident that we will be able to continue to grow earnings and enhance shareholder value.”

FPL Group’s third quarter earnings conference call is scheduled for 9 a.m. ET on Thursday, Oct. 21, 2004 . The webcast is available on FPL Group’s website by accessing the following link,http://www.fplgroup.com/investor/contents/investor_index.shtml

Profile

FPL Group, with annual revenues of more than $9 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 26 states, it is widely recognized as one of the country's premier power companies. Its principal subsidiary, Florida Power & Light Company, serves more than 4.2 million customer accounts in Florida . FPL Energy, LLC, an FPL Group energy-generating subsidiary, is a leader in producing electricity from clean and renewable fuels. Additional information is available on the Internet at www.fplgroup.com, www.fpl.com andwww.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 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 press release, 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 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 Public Utility Regulatory Policies Act of 1978, as amended (PURPA), and the Public Utility Holding Company Act of 1935, as amended (Holding Company Act), changing governmental policies and regulatory actions, including those of the Federal Energy Regulatory Commission (FERC), the Florida Public Service Commission (FPSC) and the utility commissions of other states in which FPL Group has operations, and the U.S. 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 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 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 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 their 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 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 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, LLC (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 its 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 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 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 can be 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 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 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.