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Moray Dewhurst

Moray Dewhurst. Chief Financial Officer.

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Moray Dewhurst

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  1. Moray Dewhurst Chief Financial Officer

  2. Safe Harbor Statement: Any statements made herein about future operating results or other future events are forward-looking statements under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ substantially from such forward-looking statements. A discussion of factors that could cause actual results or events to vary is contained in FPL Group's 2001 SEC Form 10-K. 2

  3. Capitalizing on Our Strengths • Premier integrated utility • high growth, stable customer base • Successful wholesale generation business • well hedged portfolio with predictable earnings growth • Strong balance sheet • 51% Debt to Capital1, A2 / A credit rating2 • Substantial cash flow to fund expansion • $1.4 billion operating cash flow in 2001, net of dividends • High degree of earnings visibility 1 Pro forma for offerings 2 Corporate credit rating

  4. Premier Electric Utility • Favorable customer mix • Strong customer and usage growth • Operational excellence • Proven cost management • Constructive regulatory environment Attractive financial returns

  5. Residential Commercial Other Industrial High Growth Utility With Favorable Customer Mix 4% 3% 3% • Strong demand growth 1 • 2.1% annual increase in customer accounts • 1.1% annual increase in usage per customer 32% 37% 32% • Generation • 16,619 MW • 2,700 MW added in 2001-2003 • 1,900 MW more by 2006 56% 33% FPL IndustryAverage 1 Over last 10 years

  6. FPL = 36% better than average Industry Average FPL FPL Operational Excellence Service Reliability 2001 Outage Time Per Customer (Min.) Plant Availability 107 69 Industry Average Over a Decade of O&M Reductions(Cents per Kilowatt Hour) Superior Cost Management(O&M $ per customer) Down 40% since 1990

  7. FPL Rates Lower Than National, Florida Averages $86.45 $81.93 $76.22 FPL NationalAverage FPC andTECOAverage Comparisons of a 1,000 kWh residential bill

  8. Constructive Regulatory Environment • Vertically integrated utility model • Fuel, capacity charges directly passed through to customers • “Rate certainty” through end of 2005 • incentive-based agreement • “win-win” revenue sharing provision • no ROE limits • shareholders benefit from productivity improvements • No current activity on wholesale restructuring “I just don’t think there’s a sense of urgency to this.” - Governor Jeb Bush

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  10. 5,063 MW in operation • presence in 18 states Major U.S.Wholesale Generator • Attractive, visible growth • average earnings growth >20% from identified projects through 2005 • Low-risk approach • diversified by region, fuel source • well-hedged portfolio • emphasis on base-load assets • Low cost provider • modern, efficient, clean plants • operational excellence • Conservative, integrated asset optimization function

  11. Diversified Portfolio 11,588 Net MW in Operation Year-end 2004 Regional Diversity Fuel Diversity Gas 59% Northeast Central 26% 37% Wind 21% Other Mid-Atlantic 2% 21% Hydro Nuclear Oil West 3% 9% 7% 16% Assumes addition of 1,000 mw of wind. Percentages may not add to 100% due to rounding.

  12. Disciplined Growth Strategy • Grow generation portfolio in prudent way • aggressive wind development • focused fossil development • pursuit of M&A opportunities • Optimize asset value • integrated operations, business management and marketing and trading capabilities • Hedge position via substantial contract coverage • Moderate risk by regional and fuel diversity • Manage portfolio actively

  13. +11,500 MW 5,063 MW Disciplined Growth(Projected Operating Net-MW) Marcus Hook New Wind Calhoun Forney Seabrook New Wind Blythe RISEP Bayswater Bastrop ExistingPlants 2001 97 98 99 00 01 02 03 04

  14. Seabrook Acquisition • A premier nuclear plant • Attractive price • Plays to our strengths • superior operating skills • northeast trading expertise • Immediately accretive • 1 - 4 cents in 2003 • 10 - 12 cents avg. ‘03 - ‘06 • accelerating thereafter • Attractive financial returns • strong cash flow • substantial NPV • 18% - 20% ROE Based on current forward price curves

  15. Wind Energy: Unique Advantage • Nearly 1,500 net MW in operation • U.S. market leader with 1/3 market share • Supported by policy trends (RPS, PTCs) and economics • Attractive financial characteristics • long-term power contracts (15 – 25 years) • ROEs in the high teens/low 20s • accretive in first full year • Additional 1,000 – 2,000 MW by 2002 - 2003

  16. Conservative Risk Management Marketing & Trading Risk Reduction Asset Optimization Risk Control

  17. Well-Hedged Position 2002 = 79% 1 2003 = 51% Merchant MW Committed MW 1 For the remaining months in 2002

  18. ERCOT Spot Spark Spreads on Peak($ per MWh) Current ForwardContract% under Spark Spread Spark Spread Contract 2002$9.33 $14.83 81% 2003 $6.38$15.83 50%

  19. Enhancing Profitability in ERCOT 1.00+ 15.75 - 18.75 0.25 0.50 - 1.50 8.00 - 9.00 6.00 - 7.00

  20. Financial discipline Strong credit ratings A2 / A = FPL Group Capital Aa3 / A = Florida Power & Light Company 13.5% ROE in 2001 2001 net income of nearly $800 million 1 Prudent dividend policy Strong Financial Position 2 1 Excluding non-recurring items 2 Pro forma for recent offerings

  21. Financial StrengthEPS Growth 7.1% average annual EPS growth rate Excluding non-recurring items and effects of FAS 133

  22. Capital Plan Supports Disciplined Growth StrategyProjected Capital Sources & Uses 2002 - 2005($ billion) 8.0 – 10.0 8.0 – 10.0 Future debt issuance 0.5 – 1.5 Wind 1.0 – 2.0 Current and completed equity/equity-linked issuance, benefit plans 1.5 - 2.0 FPL Energy Seabrook 0.8 Gas 1.6 Operating cash flow less dividends 6.0 - 6.5 Regulated utility 4.6 - 5.6 Sources Uses

  23. Strong Rating Valuable, but not a Fixed Target Long-term goal: ‘A’ or equivalent… …subject to fluctuating agency standards CreditRating InvestmentGrade • Absolute goal - strong investment grade • Relative goal - upper band of peer group

  24. Financial Outlook • Underlying average EPS growth of 6-8% per year • FPL earnings growth 4-5% average • FPL Energy earnings growth 20-30% average • 2002 EPS guidance: $4.70 - $4.75 • FPL approximately flat, assuming normal weather • FPL Energy up 15-20%, assuming no major change to market prices • 2003 EPS guidance: $5.10 - $5.20

  25. Relative Low Risk, High Return FPL Group represents one of best combinations of risk, return and earningsgrowth among major electric companies High FPL Group Earnings Growth/Return Low High Risk

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