EX-99 2 exhibit99.htm EXHIBIT 99 exhibit99.htm



Exhibit 99


FPL Group, Inc. Logo

FPL Group, Inc.
Media Line: (305) 552-3888
October 27, 2009

 
FOR IMMEDIATE RELEASE
 

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 Group announces 2009 third quarter earnings
 
·  
NextEra Energy Resources on track to add 1,170 megawatts of wind in 2009 including its recently announced acquisition, which is pending
·  
Economic downturn continues to affect Florida Power & Light Company
·  
FPL Group revises adjusted earnings expectations from a range of $4.20 to $4.40 per share to a range of $4.10 to $4.20 per share for 2009 and from a range of $4.65 to $5.05 per share to a range of $4.25 to $4.85 per share for 2010

JUNO BEACH, Fla. – FPL Group, Inc. (NYSE: FPL) today reported 2009 third quarter net income on a GAAP basis of $533 million, or $1.31 per share, compared with $774 million, or $1.92 per share, in the third quarter of 2008. On an adjusted basis, FPL Group’s earnings per share were $562 million, or $1.38 per share, compared with $506 million, or $1.25 per share, in the third quarter of 2008. Adjusted earnings exclude the mark-to-market effects of non-qualifying hedges and net other than temporary impairments (OTTI) on certain investments, both of which relate to NextEra Energy Resources.

FPL Group’s management uses adjusted earnings, which is a non-GAAP financial measure, internally for financial planning, for analysis of performance, for reporting of results to the Board of Directors and as input 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. The attachments to this news release include a reconciliation of historical adjusted earnings to net income, which is the most directly comparable GAAP measure.

“Despite challenges at FPL and in the Florida economy, FPL Group had another solid quarter. Our basic earnings story has remained fairly constant over the past two years: NextEra Energy Resources continues to grow adjusted earnings and earnings per share, while Florida Power & Light remains challenged by the economic downturn in Florida,” said FPL Group Chairman and CEO Lew Hay.

 

 


Florida Power & Light Company
FPL Group's rate-regulated utility subsidiary, Florida Power & Light Company, reported third quarter net income of $306 million, or $0.75 per share, down from $314 million, or $0.78 per share, in the prior-year quarter.

Florida’s economy continued to have a negative impact on FPL’s results. The total number of customers continued to decline in the third quarter, although at a slower pace.
FPL had approximately 9,000 fewer customers on average during the third quarter of 2009 than it did during the third quarter of 2008. The number of inactive accounts rose by 4,000 since the end of the second quarter of 2009.

Overall, retail kilowatt-hour sales were up by 0.4 percent on a quarter-over-quarter basis primarily as a result of warmer weather. Operations and maintenance (O&M) expenses rose by $36 million over the prior-year quarter. The largest contributor to the increase was clause-related O&M, which has no effect on earnings.

Today, FPL is putting into service the 25 megawatt DeSoto Next Generation Solar Energy Center, the largest solar photovoltaic power plant in the country. President Barack Obama is scheduled to attend the commissioning. The DeSoto plant will produce enough electricity to serve approximately 3,000 homes, or nearly 20 percent of DeSoto County. Along with solar energy plants that FPL is building in other parts of the state, the company expects to have 110 megawatts of installed solar capacity by late 2010.

The company also completed construction of West County Energy Center Unit 1 during the quarter, a 1,220 megawatt combined cycle natural gas unit in Palm Beach County.

FPL’s rate proceeding before the Florida Public Service Commission (PSC) remains ongoing.

NextEra Energy Resources
NextEra Energy Resources, the competitive energy subsidiary of FPL Group with generating facilities in 25 states and Canada, reported third quarter net income on a GAAP basis of $233 million, or $0.57 per share, compared with $483 million, or $1.20 per share, in the prior-year quarter. On an adjusted basis, NextEra Energy Resources’ earnings were $262 million, or $0.64 per share, compared with $215 million, or $0.53 per share, in the third quarter of 2008.

NextEra Energy Resources’ third quarter adjusted earnings per share rose by 21 percent over the prior-year quarter. The principal driver was the company’s investment in new wind energy projects. This includes the positive effects of the American Recovery and Reinvestment Act, which allows the company to take the value of federal wind production tax credits in the form of cash grants. Other positive drivers were strong performance from retail operations and the wholesale marketing and trading business. These were offset by unfavorable market conditions for the company’s fossil power plants in Texas. In addition, while the wind resource was above prior-year quarter, the wind resource across the fleet this quarter was well below normal.

NextEra Energy Resources continued to make progress on its wind development program during the quarter. The company has 985 megawatts of wind projects either completed or under construction and has agreed to acquire an additional 185 megawatts of existing wind projects. Including the pending acquisition, the company now expects to add 1,170 megawatts of wind power in 2009.

 
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“Going forward, we believe it is clear that the United States is moving inexorably toward a carbon-constrained world. As a result of the investments we are continuing to make in clean energy, we believe we are well positioned for a future where carbon carries a cost,” said Lew Hay.

Corporate and Other
The loss in Corporate and Other was $6 million in the third quarter of 2009 compared with $23 million in the third quarter of 2008.

Outlook
Due to a number of factors, including continued disappointment with the contributions from its Texas gas generation assets and another quarter of wind resource below expectations, FPL Group is revising its 2009 adjusted earnings expectations from $4.20 to $4.40 per share for 2009 to $4.10 to $4.20 per share. In addition, in light of the challenging market environment for the company’s Texas merchant assets and the continued uncertainty about economic conditions in Florida, FPL Group is revising adjusted earnings expectations for 2010 from a range of $4.65 to $5.05 per share to a range of $4.25 to $4.85 per share.

FPL Group’s adjusted earnings exclude the cumulative effect of adopting new accounting standards, the unrealized mark-to-market effect of non-qualifying hedges and net other than temporary impairment losses on securities held in NextEra Energy Resources’ nuclear decommissioning funds, none of which can be determined at this time. In addition, these expectations assume, among other things: normal weather and operating conditions; no further significant decline in the national or the Florida economy; supportive commodity markets; continued public policy support for renewable power project development; selective transmission expansion to support renewable power projects; continued wind supply chain expansion; continued expansion of NextEra Energy Resources’ non-wind activities; access to reasonable capital and credit markets; no acquisitions; and a constructive regulatory framework in Florida. Please see the accompanying cautionary statements for a list of the risk factors that may affect future earnings.


As previously announced, FPL Group’s third quarter earnings conference call is scheduled for 9 a.m. ET on Tuesday, Oct. 27, 2009. The webcast is available on FPL Group’s Web site by accessing the following link, http://www.FPLGroup.com/investor/contents/investor_index.shtml. The slides and earnings release 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 webcast, a replay will be available for 90 days by accessing the same link as listed above.



 
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This press release should be read in conjunction with the attached unaudited financial information.

FPL Group: Energy Solutions for the Next Era 
FPL Group, Inc. (NYSE: FPL) is a leading clean energy company with 2008 revenues of more than $16 billion, approximately 39,000 megawatts of generating capacity, and more than 15,000 employees in 27 states and Canada. Headquartered in Juno Beach, Fla., FPL Group’s principal subsidiaries are NextEra Energy Resources, LLC, the largest generator in North America of renewable energy from the wind and sun, and Florida Power & Light Company, which serves 4.5 million customer accounts in Florida and is one of the largest rate-regulated electric utilities in the country. Through its subsidiaries, FPL Group collectively operates the third largest U.S. nuclear power generation fleet. For more information about FPL Group companies, visit these Web sites: www.FPLGroup.com, www.NextEraEnergyResources.com, www.FPL.com.





 
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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, adjusted earnings or other expectations, beliefs, plans, objectives, assumptions, future events or performance, climate change strategy or growth strategies (often, but not always, through the use of words or phrases such as will, will likely result, are expected to, will continue, is anticipated, aim, believe, could, should, would, estimated, may, plan, potential, projection, target, outlook, predict and intend or words of similar meaning) 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 or implied 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, unless otherwise required by law.  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 or implied 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 or implied 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.  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, with respect to, among other things, allowed rates of return, industry and rate structure, operation of nuclear power facilities, construction and operation of generation facilities, construction and operation of transmission and distribution 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, transmission reliability and present or prospective wholesale and retail competition.  This substantial and complex framework exposes FPL Group and FPL to increased compliance costs and potentially significant monetary penalties for non-compliance.  The Florida Public Service Commission (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 also are subject to extensive federal, state and local environmental statutes, rules and regulations, as well as the effect of changes in or additions to applicable statutes, rules and regulations that relate to, or in the future may relate to, for example, air quality, water quality, climate change, greenhouse gas emissions, carbon dioxide emissions, waste management, marine and wildlife mortality, natural resources, health, safety and renewable portfolio standards 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 regulation, deregulation or restructuring of the energy industry, including, for example, deregulation or restructuring of the production and sale of electricity, as well as increased focus on renewable and clean energy sources and reduction of carbon emissions.  FPL Group and its subsidiaries will need to adapt to these changes and may face increasing costs and competitive pressure in doing so.

·  
FPL Group's and FPL's results of operations could be affected by FPL's ability to negotiate or renegotiate franchise agreements with municipalities and counties in Florida.

The operation and maintenance of power generation, transmission and distribution 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, transmission and distribution facilities involve many risks, including, for example, start up risks, breakdown or failure of equipment, transmission and distribution lines or pipelines, the inability to properly manage or mitigate known equipment defects throughout FPL Group's and FPL's generation fleets and transmission and distribution systems, use of new or unproven technology, the dependence on a specific fuel source, failures in the supply or transportation of fuel, the impact of unusual or adverse weather conditions (including natural disasters such as hurricanes, floods and droughts), and performance below expected or contracted levels of output or efficiency.  This could result in lost revenues and/or increased expenses, including, for example, lost revenues due to prolonged outages and increased expenses due to monetary penalties or fines, replacement equipment costs or an obligation to purchase or generate replacement power 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.  Breakdown or failure of an operating facility of NextEra Energy Resources, LLC (NextEra Energy Resources) may, for example, prevent the facility from performing under applicable power sales agreements which, in certain situations, could result in termination of the agreement or subject NextEra Energy Resources to incurring a liability for liquidated damages.

The operation and maintenance of nuclear facilities involves inherent risks, including environmental, health, regulatory, terrorism and financial risks, that could result in fines or the closure of nuclear units owned by FPL or NextEra Energy Resources, and which may present potential exposures in excess of insurance coverage.

·  
FPL and NextEra Energy Resources own, or hold undivided interests in, nuclear generation facilities in four states.  These nuclear facilities are subject to environmental, health and financial risks such as on-site storage of spent nuclear fuel, the ability to dispose of spent nuclear fuel, the ability to maintain adequate reserves for decommissioning, potential liabilities arising out of the operation of these facilities, and the threat of a possible terrorist attack.  Although FPL and NextEra Energy Resources maintain decommissioning trusts and external insurance coverage to minimize the financial exposure to these risks, it is possible that the cost of decommissioning the facilities could exceed the amount available in the decommissioning trusts, and that liability and property damages could exceed the amount of insurance coverage.

·  
The U.S. Nuclear Regulatory Commission (NRC) has broad authority to impose licensing and safety-related requirements for the construction and operation and maintenance of nuclear generation facilities.  In the event of non-compliance, the NRC has the authority to impose fines or shut down a unit, or both, depending upon its assessment of the severity of the situation, until compliance is achieved.  NRC orders or new regulations related to increased security measures and any future safety requirements promulgated by the NRC could require FPL and NextEra Energy Resources to incur substantial operating and capital expenditures at their nuclear plants.  In addition, if a serious nuclear incident were to occur at an FPL or NextEra Energy Resources plant, it could result in substantial costs.  A major incident at a nuclear facility anywhere in the world could cause the NRC to limit or prohibit the operation or licensing of any domestic nuclear unit.

·  
In addition, potential terrorist threats and increased public scrutiny of utilities could result in increased nuclear licensing or compliance costs which are difficult or impossible to predict.

The construction of, and capital improvements to, power generation and transmission facilities involve substantial risks.  Should construction or capital improvement efforts be unsuccessful or delayed, the results of operations and financial condition of FPL Group and FPL could be adversely affected.

 
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·  
The ability of FPL Group and FPL to complete construction of, and capital improvement projects for, their power generation and transmission facilities on schedule and within budget are contingent upon many variables that could delay completion, increase costs or otherwise adversely affect operational and financial results, including, for example, limitations related to transmission interconnection issues, escalating costs for materials and labor and environmental compliance, delays with respect to permits and other approvals, and disputes involving third parties, and are subject to substantial risks.  Should any such efforts be unsuccessful or delayed, FPL Group and FPL could be subject to additional costs, termination payments under committed contracts, loss of tax credits 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 or the payment of margin cash collateral that adversely impact the results of operations or cash flows of FPL Group and FPL.

·  
FPL Group and FPL use derivative instruments, such as swaps, options, futures and forwards, some of which are traded in the over-the-counter markets or on exchanges, to manage their commodity and financial market risks, and for FPL Group to engage in trading and marketing activities.  FPL Group could recognize financial losses as a result of volatility in the market values of these derivative instruments, or if a counterparty fails to perform or make payments under these derivative instruments and could suffer a reduction in operating cash flows as a result of the requirement to post margin cash collateral.  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 derivative instruments.  In addition, FPL's use of such instruments could be subject to prudence challenges and, if found imprudent, cost recovery could be disallowed by the FPSC.

·  
FPL Group provides full energy and capacity requirement services, which include load-following services and various ancillary services, primarily to distribution utilities to satisfy all or a portion of such utilities’ power supply obligations to their customers.  The supply costs for these transactions may be affected by a number of factors, such as weather conditions, fluctuating prices for energy and ancillary services, and the ability of the distribution utilities’ customers to elect to receive service from competing suppliers, which could negatively affect FPL Group’s results of operations from these transactions.

FPL Group's competitive energy business is subject to risks, many of which are beyond the control of FPL Group, including, but not limited to, the efficient development and operation of generating assets, the successful and timely completion of project restructuring activities, the price and supply of fuel and equipment, transmission constraints, competition from other generators, including those using new sources of generation, excess generation capacity and demand for power, that may reduce the revenues and adversely impact the results of operations and financial condition of FPL Group.

·  
There are various risks associated with FPL Group's competitive energy business.  In addition to risks discussed elsewhere, risk factors specifically affecting NextEra Energy Resources' success in competitive wholesale markets include, for example, 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) and equipment, transmission constraints, the ability to utilize production tax credits, competition from other and new sources of generation, excess generation capacity and shifting demand for power.  There can be significant volatility in market prices for fuel, electricity and renewable and other energy commodities, and there are other financial, counterparty and market risks that are beyond the control of NextEra Energy Resources.  NextEra Energy Resources' 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 NextEra Energy Resources' 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 increase the volatility of FPL Group's financial results.  In addition, NextEra Energy Resources' business depends upon power transmission and natural gas transportation facilities owned and operated by others; if transmission or transportation is disrupted or capacity is inadequate or unavailable, NextEra Energy Resources' ability to sell and deliver its wholesale power or natural gas may be limited.

 
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FPL Group's ability to successfully identify, complete and integrate acquisitions is subject to significant risks, including, but not limited to, 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.  In addition, FPL Group may be unable to identify attractive acquisition opportunities at favorable prices and to complete and integrate them successfully and in a timely manner.

FPL Group and FPL participate in markets that are often subject to uncertain economic conditions, which makes it difficult to estimate growth, future income and expenditures.

·  
FPL Group and FPL participate in markets that are susceptible to uncertain economic conditions, which complicate estimates of revenue growth.  Because components of budgeting and forecasting are dependent upon estimates of revenue growth in the markets FPL Group and FPL serve, the uncertainty makes estimates of future income and expenditures more difficult.  As a result, FPL Group and FPL may make significant investments and expenditures but never realize the anticipated benefits, which could adversely affect results of operations.  The future direction of the overall economy also may have a significant effect on the overall performance and financial condition of FPL Group and FPL.

Customer growth and customer usage in FPL's service area affect 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 and by customer usage.  Customer growth can be affected by population growth.  Customer growth and customer usage can be affected by economic factors in Florida and elsewhere, including, for example, job and income growth, housing starts and new home prices.  Customer growth and customer usage directly influence 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, as can the impact of severe weather.  Weather conditions directly influence the demand for electricity and natural gas, affect the price of energy commodities, and can affect the production of electricity at power generating facilities.

·  
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, affect the price of energy commodities, and can affect the production of electricity at power generating facilities, including, but not limited to, wind, solar 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.

Adverse capital and credit market conditions may adversely affect FPL Group's and FPL's ability to meet liquidity needs, access capital and operate and grow their businesses, and increase the cost of capital.  Disruptions, uncertainty or volatility in the financial markets can also adversely impact the results of operations and financial condition of FPL Group and FPL, as well as exert downward pressure on the market price of FPL Group's common stock.

·  
Having access to the credit and capital markets, at a reasonable cost, is necessary for FPL Group and FPL to fund their operations, including their capital requirements. Those markets have provided FPL Group and FPL with the liquidity to operate and grow their businesses that is not otherwise provided from operating cash flows.  Disruptions, uncertainty or volatility in those markets can increase FPL Group's and FPL's cost of capital.  If FPL Group and FPL are unable to access the credit and capital markets on terms that are reasonable, they may have to delay raising capital, issue shorter-term securities and/or bear an unfavorable cost of capital, which, in turn, could adversely impact their ability to grow their businesses, decrease earnings, significantly reduce financial flexibility and/or limit FPL Group's ability to sustain its current common stock dividend level.

·  
The market price and trading volume of FPL Group's common stock could be subject to significant fluctuations due to, among other things, general stock market conditions and changes in market sentiment regarding FPL Group and its subsidiaries' operations, business, growth prospects and financing strategies.

 
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FPL Group’s, FPL Group Capital’s and FPL’s inability to maintain their current credit ratings may adversely affect FPL Group’s and FPL’s liquidity, 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 and credit markets as significant sources 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 or obtain credit on favorable terms, which, in turn, could impact FPL Group's and FPL's ability to grow their businesses and would likely increase their interest costs.

FPL Group and FPL are subject to credit and performance risk from third parties under supply and service contracts.

·  
FPL Group and FPL rely on contracts with vendors for the supply of equipment, materials, fuel and other goods and services required for the construction and operation of, and for capital improvements to, their facilities, as well as for business operations.  If vendors fail to fulfill their contractual obligations, FPL Group and FPL may need to make arrangements with other suppliers, which could result in higher costs, untimely completion of power generation facilities and other projects, and/or a disruption to their operations.

FPL Group and FPL are subject to costs and other potentially adverse effects of legal and regulatory proceedings, as well as regulatory compliance and changes in or additions to applicable tax laws, rates or policies, rates of inflation, accounting standards, securities laws, corporate governance requirements and labor and employment laws.

·  
FPL Group and FPL are subject to costs and other potentially adverse effects of legal and regulatory proceedings, settlements, investigations and claims, as well as regulatory compliance and the effect of new, or changes in, tax laws, rates or policies, rates of inflation, accounting standards, securities laws, corporate governance requirements and labor and employment laws.

·  
FPL and NextEra Energy Resources, as owners and operators of bulk power transmission systems and/or critical assets within various regions throughout the United States, are subject to mandatory reliability standards promulgated by the North American Electric Reliability Corporation and enforced by the Federal Energy Regulatory Commission.  These standards, which previously were being applied on a voluntary basis, became mandatory in June 2007.  Noncompliance with these mandatory reliability standards could result in sanctions, including substantial monetary penalties, which likely would not be recoverable from customers.

Threats of terrorism and catastrophic events that could result from terrorism, cyber attacks, or individuals and/or groups attempting to disrupt FPL Group's and FPL's business 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, as well as cyber attacks and disruptive activities of individuals and/or groups.  Infrastructure facilities and systems, including, for example, generation, transmission and distribution facilities, physical assets and information systems, in general, have been identified as potential targets.  The effects of these threats and activities include, but are not limited to, the inability to generate, purchase or transmit power, the delay in development and construction of new generating facilities, 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.

The ability of FPL Group and FPL to obtain insurance and the terms of any available insurance coverage could be adversely affected by international, 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 adversely affected by international, national, state or local events as well as company-specific events.

 
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FPL Group and FPL are subject to employee workforce factors that could adversely affect the businesses and financial condition of FPL Group and FPL.

·  
FPL Group and FPL are subject to employee workforce factors, including, for example, loss or retirement of key executives, availability of qualified personnel, inflationary pressures on payroll and benefits costs and collective bargaining agreements with union employees and work stoppage that could adversely 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 also may materially adversely affect FPL Group's or FPL's business, financial condition and/or future operating results.



 
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Preliminary Condensed Consolidated Statements of Income
(millions, except per share amounts)
(unaudited)

Three Months Ended September 30, 2009
 
Florida Power
& Light
   
NextEra Energy Resources
   
Corporate &
Other
   
FPL Group,
Inc.
 
                         
Operating Revenues
  $ 3,301     $ 1,136     $ 36     $ 4,473  
                                 
Operating Expenses
                               
Fuel, purchased power and interchange
    1,786       367       11       2,164  
Other operations and maintenance
    392       269       21       682  
Storm cost amortization
    3       -       -       3  
Depreciation and amortization
    260       166       4       430  
Taxes other than income taxes
    306       38       1       345  
Total operating expenses
    2,747       840       37       3,624  
                                 
Operating Income (Loss)
    554       296       (1 )     849  
                                 
Other Income (Deductions)
                               
Interest expense
    (78 )     (86 )     (40 )     (204 )
Equity in earnings of equity method investees
    -       29       -       29  
Allowance for equity funds used during construction
    15       -       -       15  
Interest income
    -       5       10       15  
Other than temporary impairment losses on securities held in nuclear decommissioning funds
    -       -       -       -  
Other - net
    (5 )     13       3       11  
Total other income (deductions) - net
    (68 )     (39 )     (27 )     (134 )
                                 
Income (Loss) Before Income Taxes
    486       257       (28 )     715  
Income Tax Expense (Benefit)
    180       24       (22 )     182  
                                 
Net Income (Loss)
  $ 306     $ 233     $ (6 )   $ 533  
                                 
Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss):
                               
Net Income (Loss)
  $ 306     $ 233     $ (6 )   $ 533  
Adjustments, net of income taxes:
                               
Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges
    -       32       -       32  
Other than temporary impairment losses - net
    -       (3 )     -       (3 )
                                 
Adjusted Earnings (Loss)
  $ 306     $ 262     $ (6 )   $ 562  
                                 
Earnings (Loss) Per Share (assuming dilution)
  $ 0.75     $ 0.57     $ (0.01 )   $ 1.31  
Adjustments:
                               
Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges
    -       0.08       -       0.08  
Other than temporary impairment losses - net
    -       (0.01 )     -       (0.01 )
                                 
Adjusted Earnings (Loss) Per Share
  $ 0.75     $ 0.64     $ (0.01 )   $ 1.38  
                                 
Weighted-average shares outstanding (assuming dilution)
                            408  

NextEra Energy Resources' interest expense is based on a deemed capital structure of 50% debt for operating projects and 100% debt for projects under construction.  For these purposes, the deferred credit associated with differential membership interests sold by a NextEra Energy Resources subsidiary in 2007 is included with debt.  Residual non-utility interest expense is 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.


 
11

 
FPL Group, Inc.
Preliminary Condensed Consolidated Statements of Income
(millions, except per share amounts)
(unaudited)

Three Months Ended September 30, 2008
 
Florida Power
& Light
   
NextEra Energy Resources
   
Corporate &
Other
   
FPL Group,
Inc.
 
                         
Operating Revenues
  $ 3,423     $ 1,916     $ 48     $ 5,387  
                                 
Operating Expenses
                               
Fuel, purchased power and interchange
    1,992       711       25       2,728  
Other operations and maintenance
    356       259       18       633  
Storm cost amortization
    20       -       -       20  
Depreciation and amortization
    200       144       4       348  
Taxes other than income taxes
    306       36       -       342  
Total operating expenses
    2,874       1,150       47       4,071  
                                 
Operating Income (Loss)
    549       766       1       1,316  
                                 
Other Income (Deductions)
                               
Interest expense
    (83 )     (81 )     (39 )     (203 )
Equity in earnings of equity method investees
    -       46       -       46  
Allowance for equity funds used during construction
    9       -       -       9  
Interest income
    2       9       2       13  
Other than temporary impairment losses on securities held in nuclear decommissioning funds
    -       (40 )     -       (40 )
Other - net
    (2 )     -       (4 )     (6 )
Total other income (deductions) - net
    (74 )     (66 )     (41 )     (181 )
                                 
Income (Loss) Before Income Taxes
    475       700       (40 )     1,135  
Income Tax Expense (Benefit)
    161       217       (17 )     361  
                                 
Net Income (Loss)
  $ 314     $ 483     $ (23 )   $ 774  
                                 
Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss):
                               
Net Income (Loss)
  $ 314     $ 483     $ (23 )   $ 774  
Adjustments, net of income taxes:
                               
Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges
    -       (285 )     -       (285 )
Other than temporary impairment losses - net
    -       17       -       17  
                                 
Adjusted Earnings (Loss)
  $ 314     $ 215     $ (23 )   $ 506  
                                 
Earnings (Loss) Per Share (assuming dilution)
  $ 0.78     $ 1.20     $ (0.06 )   $ 1.92  
Adjustments:
                               
Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges
    -       (0.71 )     -       (0.71 )
Other than temporary impairment losses - net
    -       0.04       -       0.04  
                                 
Adjusted Earnings (Loss) Per Share
  $ 0.78     $ 0.53     $ (0.06 )   $ 1.25  
                                 
Weighted-average shares outstanding (assuming dilution)
                            403  

NextEra Energy Resources' interest expense is based on a deemed capital structure of 50% debt for operating projects and 100% debt for projects under construction.  For these purposes, the deferred credit associated with differential membership interests sold by a NextEra Energy Resources subsidiary in 2007 is included with debt.  Residual non-utility interest expense is 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.


 
12

 
FPL Group, Inc.
Preliminary Condensed Consolidated Statements of Income
(millions, except per share amounts)
(unaudited)

Nine Months Ended September 30, 2009
 
Florida Power
& Light
   
NextEra Energy Resources
   
Corporate &
Other
   
FPL Group,
Inc.
 
                         
Operating Revenues
  $ 8,738     $ 3,136     $ 114     $ 11,988  
                                 
Operating Expenses
                               
Fuel, purchased power and interchange
    4,810       923       40       5,773  
Other operations and maintenance
    1,108       801       63       1,972  
Storm cost amortization
    29       -       -       29  
Depreciation and amortization
    757       479       12       1,248  
Taxes other than income taxes
    821       104       4       929  
Total operating expenses
    7,525       2,307       119       9,951  
                                 
Operating Income (Loss)
    1,213       829       (5 )     2,037  
                                 
Other Income (Deductions)
                               
Interest expense
    (235 )     (264 )     (132 )     (631 )
Equity in earnings of equity method investees
    -       49       -       49  
Allowance for equity funds used during construction
    46       -       -       46  
Interest income
    1       16       41       58  
Other than temporary impairment losses on securities held in nuclear decommissioning funds
    -       (54 )     -       (54 )
Other - net
    (10 )     29       15       34  
Total other income (deductions) - net
    (198 )     (224 )     (76 )     (498 )
                                 
Income (Loss) Before Income Taxes
    1,015       605       (81 )     1,539  
Income Tax Expense (Benefit)
    369       (66 )     (31 )     272  
                                 
Net Income (Loss)
  $ 646     $ 671     $ (50 )   $ 1,267  
                                 
Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss):
                               
Net Income (Loss)
  $ 646     $ 671     $ (50 )   $ 1,267  
Adjustments, net of income taxes:
                               
                                 
Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges
    -       33       -       33  
Other than temporary impairment losses - net
    -       26       -       26  
                                 
Adjusted Earnings (Loss)
  $ 646     $ 730     $ (50 )   $ 1,326  
                                 
Earnings (Loss) Per Share (assuming dilution)
  $ 1.59     $ 1.65     $ (0.12 )   $ 3.12  
Adjustments:
                               
Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges
    -       0.08       -       0.08  
Other than temporary impairment losses - net
    -       0.06       -       0.06  
                                 
Adjusted Earnings (Loss) Per Share
  $ 1.59     $ 1.79     $ (0.12 )   $ 3.26  
                                 
Weighted-average shares outstanding (assuming dilution)
                            406  

NextEra Energy Resources' interest expense is based on a deemed capital structure of 50% debt for operating projects and 100% debt for projects under construction.  For these purposes, the deferred credit associated with differential membership interests sold by a NextEra Energy Resources subsidiary in 2007 is included with debt.  Residual non-utility interest expense is 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.


 
13

 

FPL Group, Inc.
Preliminary Condensed Consolidated Statements of Income
(millions, except per share amounts)
(unaudited)

Nine Months Ended September 30, 2008
 
Florida Power
& Light
   
NextEra Energy Resources
   
Corporate &
Other
   
FPL Group,
Inc.
 
                         
Operating Revenues
  $ 8,829     $ 3,432     $ 146     $ 12,407  
                                 
Operating Expenses
                               
Fuel, purchased power and interchange
    5,047       1,296       75       6,418  
Other operations and maintenance
    1,114       759       53       1,926  
Storm cost amortization
    46       -       -       46  
Depreciation and amortization
    596       417       12       1,025  
Taxes other than income taxes
    817       100       2       919  
Total operating expenses
    7,620       2,572       142       10,334  
                                 
Operating Income (Loss)
    1,209       860       4       2,073  
                                 
Other Income (Deductions)
                               
Interest expense
    (252 )     (228 )     (117 )     (597 )
Equity in earnings of equity method investees
    -       85       -       85  
Allowance for equity funds used during construction
    22       -       -       22  
Interest income
    10       28       11       49  
Other than temporary impairment losses on securities held in nuclear decommissioning funds
    -       (60 )     -       (60 )
Other - net
    (9 )     15       (4 )     2  
Total other income (deductions) - net
    (229 )     (160 )     (110 )     (499 )
                                 
Income (Loss) Before Income Taxes
    980       700       (106 )     1,574  
Income Tax Expense (Benefit)
    342       50       (50 )     342  
                                 
Net Income (Loss)
  $ 638     $ 650     $ (56 )   $ 1,232  
                                 
Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss):
                               
Net Income (Loss)
  $ 638     $ 650     $ (56 )   $ 1,232  
Adjustments, net of income taxes:
                               
Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges
    -       (76 )     -       (76 )
Other than temporary impairment losses - net
    -       29       -       29  
                                 
Adjusted Earnings (Loss)
  $ 638     $ 603     $ (56 )   $ 1,185  
                                 
Earnings (Loss) Per Share (assuming dilution)
  $ 1.59     $ 1.62     $ (0.15 )   $ 3.06  
Adjustments:
                               
Net unrealized mark-to-market (gains) losses associated with non-qualifying hedges
    -       (0.19 )     -       (0.19 )
Other than temporary impairment losses - net
    -       0.07       -       0.07  
                                 
Adjusted Earnings (Loss) Per Share
  $ 1.59     $ 1.50     $ (0.15 )   $ 2.94  
                                 
Weighted-average shares outstanding (assuming dilution)
                            403  

NextEra Energy Resources' interest expense is based on a deemed capital structure of 50% debt for operating projects and 100% debt for projects under construction.  For these purposes, the deferred credit associated with differential membership interests sold by a NextEra Energy Resources subsidiary in 2007 is included with debt.  Residual non-utility interest expense is 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.


 
14

 
FPL Group, Inc.
Preliminary Condensed Consolidated Balance Sheets
(millions)
(unaudited)

September 30, 2009
 
Florida Power
& Light
   
NextEra Energy Resources
   
Corporate &
Other
   
FPL Group,
Inc.
 
                         
Property, Plant and Equipment
                       
Electric utility plant in service and other property
  $ 27,767     $ 15,394     $ 295     $ 43,456  
Nuclear fuel
    726       773       -       1,499  
Construction work in progress
    1,949       2,286       35       4,270  
Less accumulated depreciation and amortization
    (10,538 )     (3,302 )     (169 )     (14,009 )
Total property, plant and equipment - net
    19,904       15,151       161       35,216  
                                 
Current Assets
                               
Cash and cash equivalents
    34       94       36       164  
Customer receivables, net of allowances
    1,022       559       13       1,594  
Other receivables, net of allowances
    117       206       (19 )     304  
Materials, supplies and fossil fuel inventory – at avg. cost
    550       329       5       884  
Regulatory assets:
                               
Deferred clause and franchise expenses
    68       -       -       68  
Securitized storm-recovery costs
    68       -       -       68  
Derivatives
    344       -       -       344  
Pension
    -       -       19       19  
Other
    -       -       4       4  
Derivatives
    13       423       (1 )     435  
Other
    129       158       5       292  
Total current assets
    2,345       1,769       62       4,176  
                                 
Other Assets
                               
Special use funds
    2,375       946       1       3,322  
Other investments
    5       265       709       979  
Prepaid benefit costs
    1,024       -       (49 )     975  
Regulatory assets:
                               
Securitized storm-recovery costs
    669       -       -       669  
Deferred clause expenses
    -       -       -       -  
Pension
    -       -       114       114  
Unamortized loss on reacquired debt
    30       -       -       30  
Other
    162       -       3       165  
Other
    247       842       420       1,509  
Total other assets
    4,512       2,053       1,198       7,763  
                                 
Total Assets
  $ 26,761     $ 18,973     $ 1,421     $ 47,155  
                                 
Capitalization
                               
Common stock
  $ 1,373     $ -     $ (1,369 )   $ 4  
Additional paid-in capital
    4,393       6,648       (6,028 )     5,013  
Retained earnings
    2,484       3,383       1,716       7,583  
Accumulated other comprehensive income (loss)
    -       161       (29 )     132  
Total common shareholders' equity
    8,250       10,192       (5,710 )     12,732  
Long-term debt
    5,782       3,927       5,892       15,601  
Total capitalization
    14,032       14,119       182       28,333  
                                 
Current Liabilities
                               
Commercial paper
    827       -       754       1,581  
Notes payable
    -       -       -       -  
Current maturities of long-term debt
    42       320       300       662  
Accounts payable
    612       439       6       1,057  
Customer deposits
    596       5       -       601  
Accrued interest and taxes
    466       243       (104 )     605  
Regulatory liabilities - deferred clause and franchise revenues
    168       -       -       168  
Derivatives
    357       161       1       519  
Other
    548       782       34       1,364  
Total current liabilities
    3,616       1,950       991       6,557  
                                 
Other Liabilities and Deferred Credits
                               
Asset retirement obligations
    1,813       571       -       2,384  
Accumulated deferred income taxes
    3,509       963       21       4,493  
Regulatory liabilities:
                               
Accrued asset removal costs
    2,231       -       -       2,231  
Asset retirement obligation regulatory expense difference
    655       -       -       655  
Other
    251       -       -       251  
Derivatives
    1       203       2       206  
Other
    653       1,167       225       2,045  
Total other liabilities and deferred credits
    9,113       2,904       248       12,265  
                                 
Commitments and Contingencies
                               
                                 
Total Capitalization and Liabilities
  $ 26,761     $ 18,973     $ 1,421     $ 47,155  

Corporate & Other represents other business activities, other segments that are not separately reportable, eliminating entries, and may include the net effect of rounding.


 
15

 
Preliminary Condensed Consolidated Balance Sheets
(millions)
(unaudited)

December 31, 2008
 
Florida Power
& Light
   
NextEra Energy Resources
   
Corporate &
Other
   
FPL Group,
Inc.
 
                         
Property, Plant and Equipment
                       
Electric utility plant in service and other property
  $ 26,497     $ 14,874     $ 267     $ 41,638  
Nuclear fuel
    613       646       1       1,260  
Construction work in progress
    1,862       748       20       2,630  
Less accumulated depreciation and amortization
    (10,189 )     (2,771 )     (157 )     (13,117 )
Total property, plant and equipment - net
    18,783       13,497       131       32,411  
                                 
Current Assets
                               
Cash and cash equivalents
    120       145       270       535  
Customer receivables, net of allowances
    796       630       17       1,443  
Other receivables, net of allowances
    143       183       (62 )     264  
Materials, supplies and fossil fuel inventory - at avg. cost
    563       401       4       968  
Regulatory assets:
                               
Deferred clause and franchise expenses
    248       -       -       248  
Securitized storm-recovery costs
    64       -       -       64  
Derivatives
    1,109       -       -       1,109  
Pension
    -       -       19       19  
Other
    1       -       3       4  
Derivatives
    4       432       (3 )     433  
Other
    124       156       25       305  
Total current assets
    3,172       1,947       273       5,392  
                                 
Other Assets
                               
Special use funds
    2,158       789       -       2,947  
Other investments
    6       245       672       923  
Prepaid benefit costs
    968       -       (54 )     914  
Regulatory assets:
                               
Securitized storm-recovery costs
    697       -       -       697  
Deferred clause expenses
    79       -       -       79  
Pension
    -       -       100       100  
Unamortized loss on reacquired debt
    32       -       -       32  
Other
    133       -       5       138  
Other
    147       679       362       1,188  
Total other assets
    4,220       1,713       1,085       7,018  
                                 
Total Assets
  $ 26,175     $ 17,157     $ 1,489     $ 44,821  
                                 
Capitalization
                               
Common stock
  $ 1,373     $ -     $ (1,369 )   $ 4  
Additional paid-in capital
    4,393       5,984       (5,572 )     4,805  
Retained earnings
    2,323       2,707       1,855       6,885  
Accumulated other comprehensive income (loss)
    -       13       (26 )     (13 )
Total common shareholders' equity
    8,089       8,704       (5,112 )     11,681  
Long-term debt
    5,311       3,893       4,629       13,833  
Total capitalization
    13,400       12,597       (483 )     25,514  
                                 
Current Liabilities
                               
Commercial paper
    773       -       1,062       1,835  
Notes payable
    -       -       30       30  
Current maturities of long-term debt
    263       289       836       1,388  
Accounts payable
    645       416       1       1,062  
Customer deposits
    570       5       -       575  
Accrued interest and taxes
    449       99       (174 )     374  
Regulatory liabilities - deferred clause and franchise revenues
    11       -       -       11  
Derivatives
    1,114       187       (1 )     1,300  
Other
    598       513       3       1,114  
Total current liabilities
    4,423       1,509       1,757       7,689  
                                 
Other Liabilities and Deferred Credits
                               
Asset retirement obligations
    1,743       539       1       2,283  
Accumulated deferred income taxes
    3,105       1,106       20       4,231  
Regulatory liabilities:
                               
Accrued asset removal costs
    2,142       -       -       2,142  
Asset retirement obligation regulatory expense difference
    520       -       -       520  
Other
    218       -       -       218  
Derivatives
    1       214       3       218  
Other
    623       1,192       191       2,006  
Total other liabilities and deferred credits
    8,352       3,051       215       11,618  
                                 
Commitments and Contingencies
                               
                                 
Total Capitalization and Liabilities
  $ 26,175     $ 17,157     $ 1,489     $ 44,821  

Corporate & Other represents other business activities, other segments that are not separately reportable, eliminating entries, and may include the net effect of rounding.


 
16

 
FPL Group, Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(millions)
(unaudited)

Nine Months Ended September 30, 2009
 
Florida Power
& Light
   
NextEra Energy Resources
   
Corporate &
Other
   
FPL Group,
Inc.
 
                         
Cash Flows From Operating Activities
                       
Net income (loss)
  $ 646     $ 671     $ (50 )   $ 1,267  
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
                               
Depreciation and amortization
    757       479       12       1,248  
Nuclear fuel amortization
    93       93       -       186  
Recoverable storm-related costs of FPL
    (16 )     -       -       (16 )
Storm cost amortization
    29       -       -       29  
Unrealized (gains) losses on marked to market energy contracts
    -       63       -       63  
Deferred income taxes
    383       (204 )     3       182  
Cost recovery clauses and franchise fees
    417       -       -       417  
Change in prepaid option premiums and derivative settlements
    (1 )     12       -       11  
Equity in earnings of equity method investees
    -       (49 )     -       (49 )
Distributions of earnings from equity method investees
    -       33       -       33  
Changes in operating assets and liabilities:
                               
Customer receivables
    (226 )     71       9       (146 )
Other receivables
    54       (28 )     (12 )     14  
Materials, supplies and fossil fuel inventory
    13       62       (1 )     74  
Other current assets
    (31 )     (7 )     6       (32 )
Other assets
    (82 )     42       (4 )     (44 )
Accounts payable
    (44 )     (61 )     6       (99 )
Customer deposits
    26       -       -       26  
Margin cash collateral
    6       (198 )     1       (191 )
Income taxes
    (228 )     249       18       39  
Interest and other taxes
    224       2       3       229  
Other current liabilities
    (24 )     (24 )     (13 )     (61 )
Other liabilities
    32       (25 )     1       8  
Other - net
    3       90       45       138  
                                 
Net cash provided by (used in) operating activities
    2,031       1,271       24       3,326  
                                 
Cash Flows From Investing Activities
                               
Capital expenditures of FPL
    (1,841 )     -       -       (1,841 )
Independent power investments
    -       (1,884 )     -       (1,884 )
Funds received from the spent fuel settlement agreement
    71       15       -       86  
Nuclear fuel purchases
    (132 )     (146 )     -       (278 )
Other capital expenditures
    -       -       (37 )     (37 )
Sale of independent power investments
    -       15       -       15  
Proceeds from sale of securities in special use funds
    1,940       772       1       2,713  
Purchases of securities in special use funds
    (1,982 )     (801 )     -       (2,783 )
Proceeds from sale of other securities
    -       -       542       542  
Purchases of other securities
    -       (7 )     (549 )     (556 )
Other - net
    (1 )     13       (7 )     5  
                                 
Net cash provided by (used in) investing activities
    (1,945 )     (2,023 )     (50 )     (4,018 )
                                 
Cash Flows From Financing Activities
                               
Issuances of long-term debt
    505       419       1,465       2,389  
Retirements of long-term debt
    (263 )     (383 )     (766 )     (1,412 )
Net change in short-term debt
    54       -       (338 )     (284 )
Issuances of common stock
    -       -       186       186  
Dividends on common stock
    -       -       (574 )     (574 )
Dividends & capital distributions from (to) FPL Group – net
    (485 )     664       (179 )     -  
Change in funds held for storm-recovery bond payments
    18       -       -       18  
Other - net
    (1 )     1       (2 )     (2 )
                                 
Net cash provided by (used in) financing activities
    (172 )     701       (208 )     321  
                                 
Net increase (decrease) in cash and cash equivalents
    (86 )     (51 )     (234 )     (371 )
Cash and cash equivalents at beginning of period
    120       145       270       535  
                                 
Cash and cash equivalents at end of period
  $ 34     $ 94     $ 36     $ 164  

Corporate & Other represents other business activities, other segments that are not separately reportable, eliminating entries, and may include the net effect of rounding.


 
17

 
FPL Group, Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(millions)
(unaudited)

Nine Months Ended September 30, 2008
 
Florida Power
& Light
   
NextEra Energy Resources
   
Corporate &
Other
   
FPL Group,
Inc.
 
                         
Cash Flows From Operating Activities
                       
Net income (loss)
  $ 638     $ 650     $ (56 )   $ 1,232  
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
                               
Depreciation and amortization
    596       417       12       1,025  
Nuclear fuel amortization
    78       68       -       146  
Recoverable storm-related costs of FPL
    47       -       -       47  
Storm cost amortization
    46       -       -       46  
Unrealized (gains) losses on marked to market energy contracts
    -       (171 )     1       (170 )
Deferred income taxes
    317       187       4       508  
Cost recovery clauses and franchise fees
    (465 )     -       -       (465 )
Change in prepaid option premiums and derivative settlements
    -       (7 )     1       (6 )
Equity in earnings of equity method investees
    -       (85 )     -       (85 )
Distribution of earnings from equity method investees
    -       50       -       50  
Changes in operating assets and liabilities:
                               
Customer receivables
    (257 )     27       (5 )     (235 )
Other receivables
    (6 )     19       (19 )     (6 )
Materials, supplies and fossil fuel inventory
    (42 )     (115 )     1       (156 )
Other current assets
    (46 )     (3 )     2       (47 )
Other assets
    (66 )     (18 )     (24 )     (108 )
Accounts payable
    228       13       (7 )     234  
Customer deposits
    28       (2 )     1       27  
Margin cash collateral
    18       10       -       28  
Income taxes
    88       (157 )     (104 )     (173 )
Interest and other taxes
    221       14       7       242  
Other current liabilities
    81       (8 )     -       73  
Other liabilities
    14       (34 )     5       (15 )
Other - net
    23       79       65       167  
                                 
Net cash provided by (used in) operating activities
    1,541       934       (116 )     2,359  
                                 
Cash Flows From Investing Activities
                               
Capital expenditures of FPL
    (1,665 )     -       -       (1,665 )
Independent power investments
    -       (1,854 )     -       (1,854 )
Funds received from the spent fuel settlement agreement
    -       -       -       -  
Nuclear fuel purchases
    (88 )     (76 )     -       (164 )
Other capital expenditures
    -       -       (32 )     (32 )
Sale of independent power investments
    -       -       -       -  
Proceeds from sale of securities in special use funds
    1,102       616       -       1,718  
Purchases of securities in special use funds
    (1,168 )     (630 )     1       (1,797 )
Proceeds from sale of other securities
    -       -       84       84  
Purchases of other securities
    -       (37 )     (151 )     (188 )
Other - net
    1       40       -       41  
                                 
Net cash provided by (used in) investing activities
    (1,818 )     (1,941 )     (98 )     (3,857 )
                                 
Cash Flows From Financing Activities
                               
Issuances of long-term debt
    589       681       1,317       2,587  
Retirements of long-term debt
    (241 )     (577 )     (506 )     (1,324 )
Net change in short-term debt
    708       -       1,315       2,023  
Issuances of common stock
    -       -       32       32  
Dividends on common stock
    -       -       (535 )     (535 )
Dividends & capital distributions from (to) FPL Group - net
    25       857       (882 )     -  
Change in funds held for storm-recovery bond payments
    14       -       -       14  
Other - net
    -       1       2       3  
                                 
Net cash provided by (used in) financing activities
    1,095       962       743       2,800  
                                 
Net increase (decrease) in cash and cash equivalents
    818       (45 )     529       1,302  
Cash and cash equivalents at beginning of period
    63       157       70       290  
                                 
Cash and cash equivalents at end of period
  $ 881     $ 112     $ 599     $ 1,592  

Corporate & Other represents other business activities, other segments that are not separately reportable, eliminating entries, and may include the net effect of rounding.


 
18

 
Preliminary Earnings Per Share Contributions
(assuming dilution)
(unaudited)

   
First
Quarter
   
Second
Quarter
   
Third
Quarter
   
Year-To-Date
 
                         
FPL Group - 2008 Earnings Per Share
  $ 0.62     $ 0.52     $ 1.92     $ 3.06  
                                 
Florida Power & Light - 2008 Earnings Per Share
  $ 0.27     $ 0.54     $ 0.78     $ 1.59  
Customer growth
    -       (0.01 )     -       (0.01 )
Usage due to weather
    -       -       0.04       0.04  
Base rate adjustment for West County Energy Center Unit No. 1
    -       -       0.03       0.03  
Underlying usage growth and all other revenue
    (0.04 )     (0.02 )     (0.03 )     (0.10 )
O&M expense
    0.06       -       (0.02 )     0.04  
Depreciation expense
    -       (0.01 )     (0.01 )     (0.02 )
AFUDC
    0.03       0.02       0.02       0.07  
Interest expense (gross)
    0.01       -       0.01       0.02  
Share dilution
    -       -       (0.01 )     (0.01 )
Other
    (0.02 )     -       (0.06 )     (0.06 )
                                 
Florida Power & Light - 2009 Earnings Per Share
    0.31       0.52       0.75       1.59  
                                 
NextEra Energy Resources - 2008 Earnings Per Share
    0.41       0.01       1.20       1.62  
New investments
    0.14       0.09       0.10       0.33  
Existing assets
    (0.08 )     (0.02 )     -       (0.10 )
Asset optimization and trading
    (0.02 )     0.09       0.03       0.10  
Non-qualifying hedges impact
    0.20       0.31       (0.79 )     (0.27 )
Change in other than temporary impairment losses - net
    (0.06 )     0.02       0.05       0.01  
Share dilution
    -       -       (0.01 )     (0.02 )
Other, including interest expense
    0.03       (0.04 )     (0.01 )     (0.02 )
                                 
NextEra Energy Resources - 2009 Earnings Per Share
    0.62       0.46       0.57       1.65  
                                 
Corporate and Other - 2008 Earnings Per Share
    (0.06 )     (0.03 )     (0.06 )     (0.15 )
FPL FiberNet
    -       -       0.01       0.01  
Share dilution
    -       -       -       -  
Other, including interest expense and interest income
    0.03       (0.04 )     0.04       0.02  
                                 
Corporate and Other - 2009 Earnings Per Share
    (0.03 )     (0.07 )     (0.01 )     (0.12 )
                                 
FPL Group - 2009 Earnings Per Share
  $ 0.90     $ 0.91     $ 1.31     $ 3.12  

The sum of the quarterly amounts may not equal the total for the year due to rounding.


 
19

 
FPL Group, Inc.
Preliminary Schedule of Total Debt and Equity
(millions)
(unaudited)

September 30, 2009
 
Per Books
   
Adjusted 1
 
             
Long-term debt, including current maturities, and commercial paper
           
Junior Subordinated Debentures2
  $ 2,703     $ 1,177  
Project debt:
               
Natural gas-fired assets
    803          
Wind assets
    2,707          
Hydro assets
    700          
Storm Securitization Debt
    573          
Waste Water Bonds
    12          
Debt with partial corporate support:
               
Natural gas-fired assets
    -          
Other long-term debt, including current maturities, commercial paper, and notes payable3
    10,346       10,346  
                 
Total debt
    17,844       11,523  
Junior Subordinated Debentures2
            1,527  
Common shareholders' equity
    12,732       12,732  
                 
Total capitalization, including debt due within one year
  $ 30,576     $ 25,782  
                 
Debt ratio
    58 %     45 %
 

 
December 31, 2008
 
Per Books
   
Adjusted 1
 
             
Long-term debt, including current maturities, and commercial paper
           
Junior Subordinated Debentures2
  $ 2,009     $ 1,005  
Project debt:
               
Natural gas-fired assets
    813          
Wind assets
    2,499          
Hydro assets
    700          
Storm Securitization Debt
    611          
Debt with partial corporate support:
               
Natural gas-fired assets
    -          
Other long-term debt, including current maturities, and commercial paper3
    10,454       10,454  
                 
Total debt
    17,086       11,459  
Junior Subordinated Debentures2
            1,005  
Common shareholders' equity
    11,681       11,681  
Total capitalization, including debt due within one year
  $ 28,767     $ 24,145  
                 
Debt ratio
    59 %     47 %

1
Ratios exclude impact of imputed debt for purchase power obligations.  Including the impact of imputed debt for purchase power obligations the adjusted debt ratio would be 47% and 49% for June 30, 2009 and December 31, 2008 respectively.
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.


 
20

 

Preliminary Long-Term Debt and Commercial Paper
September 30, 2009
(millions)
(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
    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  
First Mortgage Bonds
    5.550  
11/01/17
    300       -       300  
First Mortgage Bonds
    5.950  
02/01/38
    600       -       600  
First Mortgage Bonds
    5.960  
04/01/39
    500       -       500  
Total First Mortgage Bonds
              4,640       -       4,640  
                                   
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  
                                   
Storm Securitization Bonds:
                                 
Storm Securitization Bonds
    5.050  
02/01/11
    45       42       3  
Storm Securitization Bonds
    5.040  
08/01/13
    140       -       140  
Storm Securitization Bonds
    5.130  
08/01/15
    100       -       100  
Storm Securitization Bonds
    5.260  
08/01/19
    288       -       288  
Total Storm Securitization Bonds
              573       42       531  
Water and Sewer Revenue Bonds
    4.000 - 5.250  
10/01/40
    12       -       12  
Unamortized discount
              (34 )     -       (34 )
Total Long-Term Debt
              5,824       42       5,782  
Commercial Paper
              827       827       -  
TOTAL DEBT - FLORIDA POWER & LIGHT
              6,651       869       5,782  


 
21

 
FPL Group, Inc.
Preliminary Long-Term Debt and Commercial Paper
September 30, 2009
(millions)
(unaudited)

Type of Debt
 
Interest
Rate (%)
 
Maturity
Date
 
Total
Debt
   
Current
Portion
   
Long-Term
Portion
 
FPL Group Capital Without NextEra Energy Resources
                     
Debentures:
                         
Debentures
    5.630  
09/01/11
    600       -       600  
Debentures
    7.880  
12/15/15
    450       -       450  
Debentures
    7.880  
12/15/15
    50       -       50  
Debentures
    5.350  
06/01/13
    250       -       250  
Debentures
    6.000  
03/01/19
    500       -       500  
Debentures
    8.375  
06/01/14
    350       -       350  
Debentures (Junior Subordinated)
    5.880  
03/15/44
    309       -       309  
Debentures (Junior Subordinated)
    6.600  
10/01/66
    350       -       350  
Debentures (Junior Subordinated)
    6.350  
10/01/66
    339       -       339  
Debentures (Junior Subordinated)
    6.650  
06/15/67
    380       -       380  
Debentures (Junior Subordinated)
    7.300  
09/01/67
    250       -       250  
Debentures (Junior Subordinated)
    7.450  
09/01/67
    350       -       350  
Debentures (Junior Subordinated)
    8.750  
03/01/69
    375       -       375  
Floating Debenture
 
VAR
 
06/01/11
    250       -       250  
Total Debentures
              4,803       -       4,803  
Term Loans:
                                 
Term Loans
 
VAR
 
06/10/10
    200       200       -  
Term Loans
 
VAR
 
03/25/11
    100       -       100  
Term Loans
 
VAR
 
03/27/11
    100       -       100  
Term Loans
 
VAR
 
10/31/09
    100       100       -  
Term Loans
 
VAR
 
03/25/11
    200       -       200  
Term Loans
 
VAR
 
09/16/11
    90       -       90  
Term Loans
 
VAR
 
09/17/11
    120       -       120  
Term Loans
 
VAR
 
12/19/11
    139       -       139  
Term Loans
 
VAR
 
12/19/11
    50       -       50  
Term Loans
 
VAR
 
01/22/11
    72       -       72  
Term Loans
 
VAR
 
12/19/11
    155       -       155  
Term Loans
 
VAR
 
12/19/11
    50       -       50  
Total Term Loans
              1,376       300       1,076  
Fair value swaps
              16       -       16  
Unamortized discount
              (4 )     -       (4 )
Total Long-Term Debt
              6,191       300       5,891  
Commercial Paper
              754       754       -  
TOTAL DEBT - FPL GROUP CAPITAL, WITHOUT NEXTERA ENERGY RESOURCES
    6,945       1,054       5,891  
                                   
NextEra Energy Resources
                                 
Senior Secured Bonds:
                                 
Senior Secured Bonds
    6.876  
06/27/17
    66       11       55  
Senior Secured Bonds
    6.125  
03/25/19
    67       9       58  
Senior Secured Bonds
    6.639  
06/20/23
    228       27       201  
Senior Secured Bonds
    5.608  
03/10/24
    272       25       247  
Senior Secured Bonds
    7.520  
06/30/19
    189       15       174  
Total Senior Secured Bonds
              822       87       735  
Senior Secured Notes:
                                 
Senior Secured Notes
    7.260  
07/20/15
    125       -       125  
Senior Secured Notes
    6.310  
07/10/17
    290       -       290  
Senior Secured Notes
    6.610  
07/10/27
    35       -       35  
Senior Secured Notes
    6.960  
07/10/37
    250       -       250  
Senior Secured Notes
    7.110  
06/28/20
    88       6       82  
Senior Secured Notes
    6.665  
01/10/31
    155       12       143  
Senior Secured Notes
    7.590  
07/10/18
    525       7       518  
Senior Secured Notes
    8.450  
11/30/12
    35       10       25  
Limited-recourse Senior Secured Notes
    7.510  
07/20/21
    17       1       16  
Total Senior Secured Bonds
              1,520       36       1,484  
Credit Facility
 
VAR
 
12/31/23
    84       4       80  
Other Debt:
                                 
Other Debt
 
VAR
 
12/31/17
    70       13       57  
Other Debt
    8.010  
12/31/18
    2       -       2  
Other Debt
 
Part fixed & VAR
 
11/30/19
    204       22       182  
Other Debt
    6.800  
01/31/22
    470       50       420  
Other Debt
 
VAR
 
12/31/12
    163       38       125  
Other Debt
 
VAR
 
12/30/16
    380       28       352  
Other Debt
    7.500  
12/19/13
    191       19       172  
Other Debt
 
Part fixed & VAR
 
05/17/17
    341       23       318  
Total Other Debt
              1,821       193       1,628  
Unamortized discount
              1       -       1  
TOTAL NEXTERA ENERGY RESOURCES DEBT
              4,248       320       3,928  
TOTAL DEBT - FPL GROUP CAPITAL INCLUDING NEXTERA ENERGY RESOURCES
    11,193       1,374       9,819  
TOTAL DEBT -  FPL GROUP, INC.
            $ 17,844       2,243       15,601  

May not agree to financial statements due to rounding.


 
22

 
Statistics
(unaudited)

   
Quarter
   
Year to Date
 
                         
Periods Ended September 30
 
2009
   
2008
   
2009
   
2008
 
                         
Energy sales (million kwh)
                       
Residential
    16,592       16,265       40,507       41,048  
Commercial
    12,342       12,381       33,453       34,433  
Industrial
    800       890       2,446       2,735  
Public authorities
    138       133       404       404  
Increase (decrease) in unbilled sales
    298       391       1,381       1,310  
Total retail
    30,170       30,060       78,191       79,930  
Electric utilities
    398       278       908       783  
Interchange power sales
    182       210       1,169       1,227  
Total
    30,750       30,548       80,268       81,940  
                                 
Average price (cents/kwh) 1
                               
Residential
    11.91       11.94       11.89       11.54  
Commercial
    10.28       10.37       10.48       10.09  
Industrial
    8.79       8.84       8.87       8.49  
Total
    11.12       11.20       11.16       10.81  
                                 
Average customer accounts (000's)
                               
Residential
    3,984       3,989       3,985       3,996  
Commercial
    501       502       501       500  
Industrial
    10       13       10       14  
Other
    3       3       4       3  
                                 
Total
    4,498       4,507       4,500       4,513  


End of period customer accounts (000's)
 
September
2009
   
September
2008
 
Residential
    3,982       3,985  
Commercial
    501       502  
Industrial
    10       13  
Other
    3       3  
Total
    4,496       4,503  

1 Excludes interchange power sales, net change in unbilled revenues, deferrals under cost recovery clauses and any provision for refund.


   
2009
   
Normal
   
2008
 
Three Months Ended September 30
                 
Cooling degree-days
    983       922       917  
Heating degree-days
    -       -       -  
Nine Months Ended September 30
                       
Cooling degree-days
    1,686       1,623       1,686  
Heating degree-days
    304       241       156  

Cooling degree days for the periods above use a 72 degree base temperature and heating degree days use a 66 degree base temperature.


 
23