| | 
| | 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q





[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934





|Commission
File
Number |                                                                                                              | Exact name of registrants as specified in their
charters, address of principal executive offices and
registrants' telephone number |  | IRS Employer
Identification
Number
|---------------------- | ------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------
|                       |                                                                                                              |                                                                                                                                    |  |                                   
|1-8841
2-27612         | FPL GROUP, INC.
FLORIDA POWER & LIGHT COMPANY700 Universe Boulevard
Juno Beach, Florida 33408
(561) 694-4000 | 59-2449419
59-0247775                                                                                                             

State or other jurisdiction of incorporation or organization:  Florida

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) have been subject to such filing requirements for the past 90 days.    Yes  XNo ___

Indicate by check mark whether FPL Group, Inc. is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).     Yes  XNo ___

Indicate by check mark whether Florida Power & Light Company is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes           No  X

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of FPL Group, Inc. common stock, as of the latest practicable date:  Common Stock, $0.01 par value, outstanding at September 30, 2004:  185,588,626 shares.

As of September 30, 2004, there were issued and outstanding 1,000 shares of Florida Power & Light Company's common stock, without par value, all of which were held, beneficially and of record, by FPL Group, Inc.



| |  | 
| |  | 
| |  | 
|

This combined Form 10-Q represents separate filings by FPL Group, Inc. and Florida Power & Light Company.  Information contained herein relating to an individual registrant is filed by that registrant on its own behalf.  Florida Power & Light Company makes no representations as to the information relating to FPL Group, Inc.'s other operations.



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 combined Form 10-Q, in presentations, 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:









































































































|PART I-FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 1.  Financial Statements                                                                                                                                                                                                                                                                                     
|FPL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(millions, except per share amounts)
(unaudited)                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                  
|OPERATING REVENUES                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                  
|OPERATING EXPENSES                                                                                                                                                                                                                                                                                                
|Fuel, purchased power and interchange                                                                                                                                                                                                                                                                             
|Other operations and maintenance                                                                                                                                                                                                                                                                                  
|Depreciation and amortization                                                                                                                                                                                                                                                                                     
|Taxes other than income taxes                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                  
|Total operating expenses                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                  
|OPERATING INCOME                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                  
|OTHER INCOME (DEDUCTIONS)                                                                                                                                                                                                                                                                                         
|Interest charges                                                                                                                                                                                                                                                                                                  
|Preferred stock dividends - FPL                                                                                                                                                                                                                                                                                   
|Equity in earnings of equity method investees                                                                                                                                                                                                                                                                     
|Allowance for equity funds used during construction                                                                                                                                                                                                                                                               
|Other - net                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                  
|Total other deductions - net                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                  
|INCOME FROM OPERATIONS BEFORE INCOME TAXES AND CUMULATIVE                                                                                                                                                                                                                                                         
|EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                  
|INCOME TAXES                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                  
|INCOME BEFORE CUMULATIVE EFFECT OF CHANGE                                                                                                                                                                                                                                                                         
|IN ACCOUNTING PRINCIPLE                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                  
|CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                  
|FASB Interpretation No. 46, "Consolidation of Variable Interest Entities,"                                                                                                                                                                                                                                        
|net of income taxes of $2                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                  
|NET INCOME                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                  
|Earnings per share of common stock:                                                                                                                                                                                                                                                                               
|Earnings per share before cumulative effect of change in accounting                                                                                                                                                                                                                                               
|principle                                                                                                                                                                                                                                                                                                         
|Cumulative effect of change in accounting principle                                                                                                                                                                                                                                                               
|Earnings per share                                                                                                                                                                                                                                                                                                
|Earnings per share of common stock - assuming dilution:                                                                                                                                                                                                                                                           
|Earnings per share before cumulative effect of change in accounting                                                                                                                                                                                                                                               
|principle                                                                                                                                                                                                                                                                                                         
|Cumulative effect of change in accounting principle                                                                                                                                                                                                                                                               
|Earnings per share                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                  
|Dividends per share of common stock                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                  
|Weighted-average number of common shares outstanding:                                                                                                                                                                                                                                                             
|Basic                                                                                                                                                                                                                                                                                                             
|Assuming dilution                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                  
|This report should be read in conjunction with the Notes to Condensed Consolidated Financial Statements (Notes) herein and the Notes to Consolidated Financial Statements appearing in the combined Annual Report on Form 10-K for the fiscal year ended December 31, 2003 (2003 Form 10-K) for FPL Group and FPL.





|FPL GROUP, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(millions)(unaudited)                                                                                                
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                         
|                                                                                                                                                                         
|PROPERTY, PLANT AND EQUIPMENT                                                                                                                                            
|Electric utility plant in service and other property                                                                                                                     
|Nuclear fuel                                                                                                                                                             
|Construction work in progress                                                                                                                                            
|Less accumulated depreciation and amortization                                                                                                                           
|                                                                                                                                                                         
|Total property, plant and equipment - net                                                                                                                                
|                                                                                                                                                                         
|                                                                                                                                                                         
|CURRENT ASSETS                                                                                                                                                           
|Cash and cash equivalents                                                                                                                                                
|Customer receivables, net of allowances of $33 and $25, respectively                                                                                                     
|Other receivables                                                                                                                                                        
|Materials, supplies and fossil fuel inventory - at average cost                                                                                                          
|Deferred clause and franchise expenses                                                                                                                                   
|Derivative assets                                                                                                                                                        
|Storm fund                                                                                                                                                               
|Other                                                                                                                                                                    
|                                                                                                                                                                         
|Total current assets                                                                                                                                                     
|                                                                                                                                                                         
|                                                                                                                                                                         
|OTHER ASSETS                                                                                                                                                             
|Special use funds                                                                                                                                                        
|Other investments                                                                                                                                                        
|Regulatory assets:                                                                                                                                                       
|Storm reserve deficiency                                                                                                                                                 
|Unamortized loss on reacquired debt                                                                                                                                      
|Litigation settlement                                                                                                                                                    
|Other                                                                                                                                                                    
|Other                                                                                                                                                                    
|                                                                                                                                                                         
|Total other assets                                                                                                                                                       
|                                                                                                                                                                         
|                                                                                                                                                                         
|TOTAL ASSETS                                                                                                                                                             
|                                                                                                                                                                         
|                                                                                                                                                                         
|CAPITALIZATION                                                                                                                                                           
|Common stock                                                                                                                                                             
|Additional paid-in capital                                                                                                                                               
|Retained earnings                                                                                                                                                        
|Accumulated other comprehensive income (loss)                                                                                                                            
|                                                                                                                                                                         
|Total common shareholders' equity                                                                                                                                        
|Preferred stock of FPL without sinking fund requirements                                                                                                                 
|Long-term debt                                                                                                                                                           
|                                                                                                                                                                         
|Total capitalization                                                                                                                                                     
|                                                                                                                                                                         
|                                                                                                                                                                         
|CURRENT LIABILITIES                                                                                                                                                      
|Commercial paper                                                                                                                                                         
|Notes payable                                                                                                                                                            
|Current maturities of long-term debt                                                                                                                                     
|Accounts payable                                                                                                                                                         
|Customers' deposits                                                                                                                                                      
|Accrued interest and taxes                                                                                                                                               
|Deferred clause and franchise revenues                                                                                                                                   
|Derivative regulatory liability                                                                                                                                          
|Other                                                                                                                                                                    
|                                                                                                                                                                         
|Total current liabilities                                                                                                                                                
|                                                                                                                                                                         
|                                                                                                                                                                         
|OTHER LIABILITIES AND DEFERRED CREDITS                                                                                                                                   
|Asset retirement obligations                                                                                                                                             
|Accumulated deferred income taxes                                                                                                                                        
|Regulatory liabilities:                                                                                                                                                  
|Accrued asset removal costs                                                                                                                                              
|Storm and property insurance reserve                                                                                                                                     
|Asset retirement obligation regulatory expense difference                                                                                                                
|Unamortized investment tax credits                                                                                                                                       
|Other                                                                                                                                                                    
|Other                                                                                                                                                                    
|                                                                                                                                                                         
|Total other liabilities and deferred credits                                                                                                                             
|                                                                                                                                                                         
|                                                                                                                                                                         
|COMMITMENTS AND CONTINGENCIES                                                                                                                                            
|                                                                                                                                                                         
|TOTAL CAPITALIZATION AND LIABILITIES                                                                                                                                     
|                                                                                                                                                                         
|This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2003 Form 10-K for FPL Group and FPL.







|FPL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(millions)
(unaudited)                                                                                   
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                                                     
|Net income                                                                                                                                                               
|Adjustments to reconcile net income to net cash provided by operating activities:                                                                                        
|Depreciation and amortization                                                                                                                                            
|Nuclear fuel amortization                                                                                                                                                
|Cumulative effect of change in accounting principle                                                                                                                      
|Storm-related costs of FPL, net of insurance reimbursements                                                                                                              
|Deferred income taxes and related regulatory credit                                                                                                                      
|Cost recovery clauses and franchise fees                                                                                                                                 
|Equity in earnings of equity method investees                                                                                                                            
|Distribution of earnings from equity method investees                                                                                                                    
|Changes in operating assets and liabilities:                                                                                                                             
|Restricted cash                                                                                                                                                          
|Customer receivables                                                                                                                                                     
|Other receivables                                                                                                                                                        
|Material, supplies and fossil fuel inventory                                                                                                                             
|Other current assets                                                                                                                                                     
|Deferred pension cost                                                                                                                                                    
|Accounts payable                                                                                                                                                         
|Customers' deposits                                                                                                                                                      
|Interest, income taxes and other taxes                                                                                                                                   
|Other current liabilities                                                                                                                                                
|Other liabilities                                                                                                                                                        
|Other - net                                                                                                                                                              
|                                                                                                                                                                         
|Net cash provided by operating activities                                                                                                                                
|                                                                                                                                                                         
|                                                                                                                                                                         
|CASH FLOWS FROM INVESTING ACTIVITIES                                                                                                                                     
|Capital expenditures of FPL                                                                                                                                              
|Nuclear fuel purchases                                                                                                                                                   
|Independent power investments                                                                                                                                            
|Sale of independent power investments                                                                                                                                    
|Capital expenditures of FPL FiberNet, LLC                                                                                                                                
|Contributions to special use funds                                                                                                                                       
|Sale of Olympus note receivable                                                                                                                                          
|Funding of secured loan                                                                                                                                                  
|Other - net                                                                                                                                                              
|                                                                                                                                                                         
|Net cash used in investing activities                                                                                                                                    
|                                                                                                                                                                         
|                                                                                                                                                                         
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                                                     
|Issuances of long-term debt                                                                                                                                              
|Retirements of long-term debt                                                                                                                                            
|Net change in short-term debt                                                                                                                                            
|Issuances of common stock                                                                                                                                                
|Dividends on common stock                                                                                                                                                
|Other - net                                                                                                                                                              
|                                                                                                                                                                         
|Net cash provided by (used in) financing activities                                                                                                                      
|                                                                                                                                                                         
|                                                                                                                                                                         
|Net increase in cash and cash equivalents                                                                                                                                
|Cash and cash equivalents at beginning of period                                                                                                                         
|                                                                                                                                                                         
|Cash and cash equivalents at end of period                                                                                                                               
|                                                                                                                                                                         
|                                                                                                                                                                         
|Supplemental schedule of noncash investing and financing activities                                                                                                      
|Additions to capital lease obligations                                                                                                                                   
|Additions to debt through adoption of FIN 46                                                                                                                             
|Additions to property, plant and equipment - net through the adoption of FIN 46                                                                                          
|This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2003 Form 10-K for FPL Group and FPL.





|FLORIDA POWER & LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(millions)
(unaudited)                                                                         
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|OPERATING REVENUES                                                                                                                                                       
|                                                                                                                                                                         
|                                                                                                                                                                         
|OPERATING EXPENSES                                                                                                                                                       
|Fuel, purchased power and interchange                                                                                                                                    
|Other operations and maintenance                                                                                                                                         
|Depreciation and amortization                                                                                                                                            
|Taxes other than income taxes                                                                                                                                            
|                                                                                                                                                                         
|Total operating expenses                                                                                                                                                 
|                                                                                                                                                                         
|                                                                                                                                                                         
|OPERATING INCOME                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|OTHER INCOME (DEDUCTIONS)                                                                                                                                                
|Interest charges                                                                                                                                                         
|Allowance for equity funds used during construction                                                                                                                      
|Other - net                                                                                                                                                              
|                                                                                                                                                                         
|Total other deductions - net                                                                                                                                             
|                                                                                                                                                                         
|                                                                                                                                                                         
|INCOME BEFORE INCOME TAXES                                                                                                                                               
|                                                                                                                                                                         
|INCOME TAXES                                                                                                                                                             
|                                                                                                                                                                         
|                                                                                                                                                                         
|NET INCOME                                                                                                                                                               
|                                                                                                                                                                         
|PREFERRED STOCK DIVIDENDS                                                                                                                                                
|                                                                                                                                                                         
|                                                                                                                                                                         
|NET INCOME AVAILABLE TO FPL GROUP                                                                                                                                        
|                                                                                                                                                                         
|This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2003 Form 10-K for FPL Group and FPL.







|FLORIDA POWER & LIGHT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(millions)
(unaudited)                                                                               
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                         
|                                                                                                                                                                         
|ELECTRIC UTILITY PLANT                                                                                                                                                   
|Plant in service                                                                                                                                                         
|Nuclear fuel                                                                                                                                                             
|Construction work in progress                                                                                                                                            
|Less accumulated depreciation and amortization                                                                                                                           
|                                                                                                                                                                         
|Electric utility plant - net                                                                                                                                             
|                                                                                                                                                                         
|                                                                                                                                                                         
|CURRENT ASSETS                                                                                                                                                           
|Cash and cash equivalents                                                                                                                                                
|Customer receivables, net of allowances of $20 and $11, respectively                                                                                                     
|Other receivables                                                                                                                                                        
|Materials, supplies and fossil fuel inventory - at average cost                                                                                                          
|Deferred clause and franchise expenses                                                                                                                                   
|Derivative assets                                                                                                                                                        
|Storm fund                                                                                                                                                               
|Other                                                                                                                                                                    
|                                                                                                                                                                         
|Total current assets                                                                                                                                                     
|                                                                                                                                                                         
|                                                                                                                                                                         
|OTHER ASSETS                                                                                                                                                             
|Special use funds                                                                                                                                                        
|Other investments                                                                                                                                                        
|Regulatory assets:                                                                                                                                                       
|Storm reserve deficiency                                                                                                                                                 
|Unamortized loss on reacquired debt                                                                                                                                      
|Litigation settlement                                                                                                                                                    
|Other                                                                                                                                                                    
|Other                                                                                                                                                                    
|                                                                                                                                                                         
|Total other assets                                                                                                                                                       
|                                                                                                                                                                         
|                                                                                                                                                                         
|TOTAL ASSETS                                                                                                                                                             
|                                                                                                                                                                         
|                                                                                                                                                                         
|CAPITALIZATION                                                                                                                                                           
|Common stock                                                                                                                                                             
|Additional paid-in capital                                                                                                                                               
|Retained earnings                                                                                                                                                        
|                                                                                                                                                                         
|Total common shareholder's equity                                                                                                                                        
|Preferred stock without sinking fund requirements                                                                                                                        
|Long-term debt                                                                                                                                                           
|                                                                                                                                                                         
|Total capitalization                                                                                                                                                     
|                                                                                                                                                                         
|                                                                                                                                                                         
|CURRENT LIABILITIES                                                                                                                                                      
|Commercial paper                                                                                                                                                         
|Accounts payable                                                                                                                                                         
|Customers' deposits                                                                                                                                                      
|Accrued interest and taxes                                                                                                                                               
|Deferred clause and franchise revenues                                                                                                                                   
|Derivative regulatory liability                                                                                                                                          
|Other                                                                                                                                                                    
|                                                                                                                                                                         
|Total current liabilities                                                                                                                                                
|                                                                                                                                                                         
|                                                                                                                                                                         
|OTHER LIABILITIES AND DEFERRED CREDITS                                                                                                                                   
|Asset retirement obligations                                                                                                                                             
|Accumulated deferred income taxes                                                                                                                                        
|Regulatory liabilities:                                                                                                                                                  
|Accrued asset removal costs                                                                                                                                              
|Storm and property insurance reserve                                                                                                                                     
|Asset retirement obligation regulatory expense difference                                                                                                                
|Unamortized investment tax credits                                                                                                                                       
|Other                                                                                                                                                                    
|Other                                                                                                                                                                    
|                                                                                                                                                                         
|Total other liabilities and deferred credits                                                                                                                             
|                                                                                                                                                                         
|                                                                                                                                                                         
|COMMITMENTS AND CONTINGENCIES                                                                                                                                            
|                                                                                                                                                                         
|TOTAL CAPITALIZATION AND LIABILITIES                                                                                                                                     
|                                                                                                                                                                         
|This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2003 Form 10-K for FPL Group and FPL.







|FLORIDA POWER & LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(millions)
(unaudited)                                                                     
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|                                                                                                                                                                         
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                                                     
|Net income                                                                                                                                                               
|Adjustments to reconcile net income to net cash provided by operating activities:                                                                                        
|Depreciation and amortization                                                                                                                                            
|Nuclear fuel amortization                                                                                                                                                
|Storm-related costs, net of insurance reimbursements                                                                                                                     
|Deferred income taxes and related regulatory credit                                                                                                                      
|Cost recovery clauses and franchise fees                                                                                                                                 
|Changes in operating assets and liabilities:                                                                                                                             
|Customer receivables                                                                                                                                                     
|Other receivables                                                                                                                                                        
|Material, supplies and fossil fuel inventory                                                                                                                             
|Other current assets                                                                                                                                                     
|Deferred pension cost                                                                                                                                                    
|Accounts payable                                                                                                                                                         
|Customers' deposits                                                                                                                                                      
|Interest, income taxes and other taxes                                                                                                                                   
|Other current liabilities                                                                                                                                                
|Other liabilities                                                                                                                                                        
|Other - net                                                                                                                                                              
|                                                                                                                                                                         
|Net cash provided by operating activities                                                                                                                                
|                                                                                                                                                                         
|                                                                                                                                                                         
|CASH FLOWS FROM INVESTING ACTIVITIES                                                                                                                                     
|Capital expenditures                                                                                                                                                     
|Nuclear fuel purchases                                                                                                                                                   
|Contributions to special use funds                                                                                                                                       
|Other - net                                                                                                                                                              
|                                                                                                                                                                         
|Net cash used in investing activities                                                                                                                                    
|                                                                                                                                                                         
|                                                                                                                                                                         
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                                                     
|Issuances of preferred stock                                                                                                                                             
|Issuances of long-term debt                                                                                                                                              
|Retirements of long-term debt                                                                                                                                            
|Net change in short-term debt                                                                                                                                            
|Capital contributions from FPL Group, Inc.                                                                                                                               
|Dividends                                                                                                                                                                
|                                                                                                                                                                         
|Net cash provided by (used in) financing activities                                                                                                                      
|                                                                                                                                                                         
|                                                                                                                                                                         
|Net increase in cash and cash equivalents                                                                                                                                
|Cash and cash equivalents at beginning of period                                                                                                                         
|                                                                                                                                                                         
|Cash and cash equivalents at end of period                                                                                                                               
|                                                                                                                                                                         
|                                                                                                                                                                         
|Supplemental schedule of noncash investing and financing activities                                                                                                      
|Additions to capital lease obligations                                                                                                                                   
|Additions to debt through adoption of FIN 46                                                                                                                             
|This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2003 Form 10-K for FPL Group and FPL.





FPL GROUP, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)









|                                                | Pension Benefits                 |     | Other Benefits                   |   | Pension Benefits                |   | Other Benefits                   |   
|----------------------------------------------- | -------------------------------- | --- | -------------------------------- | - | ------------------------------- | - | -------------------------------- | --
|                                                |                                  |     |                                  |   |                                 |   |                                  |   
|                                                | Three Months Ended
September 30, |     | Three Months Ended
September 30, |   | Nine Months Ended
September 30, |   | Nine Months Ended
 September 30, |   
|                                                |                                  |     |                                  |   |                                 |   |                                  |   
|                                                | 2004                             |     | 2003                             |   | 2004                            |   | 2003                             |   
|                                                |                                  |     |                                  |   |                                 |   |                                  |   
|                                                | (millions)                       |    
|                                                |                                  |     |                                  |   |                                 |   |                                  |   
|Service cost                                    | $                                | 13  |                                  | $ | 13                              |   | $                                | 2 
|Interest cost                                   |                                  | 21  |                                  |   | 21                              |   |                                  | 7 
|Expected return on plan assets                  |                                  | (52 | )                                |   | (50                             | ) |                                  | (1
|Amortization of transition (asset) obligation   |                                  | (6  | )                                |   | (6                              | ) |                                  | 1 
|Amortization of prior service benefit           |                                  | (1  | )                                |   | (1                              | ) |                                  | - 
|Amortization of (gains) losses                  |                                  | (6  | )                                |   | (8                              | ) |                                  | 1 
|                                                |                                  |     |                                  |   |                                 |   |                                  |   
|Net periodic benefit (income) cost at FPL Group | $                                | (31 | )                                | $ | (31                             | ) | $                                | 10
|                                                |                                  |     |                                  |   |                                 |   |                                  |   
|Net periodic benefit (income) cost at FPL       | $                                | (25 | )                                | $ | (25                             | ) | $                                | 9 
|                                                |                                  |     |                                  |   |                                 |   |                                  |   













|                          | Three Months Ended 
September 30, |     | Nine Months Ended 
September 30, |  
|------------------------- | --------------------------------- | --- | -------------------------------- | -
|                          |                                   |    
|                          | 2004                              |     | 2003                             |  
|                          |                                   |     |                                  |  
|                          | (millions)                        |    
|                          |                                   |     |                                  |  
|Consolidated subsidiaries | $                                 | (26 | )                                | $
|Equity method investees   | $                                 | 4   |                                  | $





|                                                                 |  |            | Three Months Ended
September 30, | 
|---------------------------------------------------------------- |  | ---------- | -------------------------------- | 
|                                                                 | 
|                                                                 |  |            |                                  | 
|                                                                 |  |           
|                                                                 |  | (millions) |                                 
|                                                                 |  |            |                                  | 
|Net income of FPL Group                                          |  |            |                                  | 
|Net unrealized gains (losses) on commodity hedges:               |  |            |                                  | 
|Effective portion of net unrealized losses                       |  |            |                                  | 
|(net of $14 and $10 tax benefit, respectively)                   |  |            |                                  | 
|Reclassification from OCI to net income (net of $0.4 tax expense |  |            |                                  | 
|and $8 tax benefit, respectively)                                |  |            |                                  | 
|Net unrealized gains on available for sale securities            |  |            |                                  | 
|(net of $0.4 tax expense)                                        |  |            |                                  | 
|Net unrealized losses on interest rate hedges (net of $3         |  |            |                                  | 
|and $4 tax benefit, respectively)                                |  |            |                                  | 
|                                                                 |  |            |                                 
|Comprehensive income of FPL Group                                |  |            |                                  | 
|                                                                 |  |            |                                 



|                                                                 |  |            | Nine Months Ended
September 30, | 
|---------------------------------------------------------------- |  | ---------- | ------------------------------- | 
|                                                                 | 
|                                                                 |  |            |                                 | 
|                                                                 |  |           
|                                                                 |  | (millions) |                                
|                                                                 |  |            |                                 | 
|Net income of FPL Group                                          |  |            |                                 | 
|Net unrealized gains (losses) on commodity hedges:               |  |            |                                 | 
|Effective portion of net unrealized gains (losses)               |  |            |                                 | 
|(net of $35 tax benefit and $17 tax expense, respectively)       |  |            |                                 | 
|Reclassification from OCI to net income (net of $0.5 and         |  |            |                                 | 
|$23 tax benefit, respectively)                                   |  |            |                                 | 
|Net unrealized gains (losses) on available for sale securities   |  |            |                                 | 
|(net of $0.4 tax benefit and $6 tax expense, respectively)       |  |            |                                 | 
|Net unrealized gains (losses) on interest rate hedges (net of $1 |  |            |                                 | 
|tax expense and $3 tax benefit, respectively)                    |  |            |                                 | 
|                                                                 |  |            |                                
|Comprehensive income of FPL Group                                |  |            |                                 | 
|                                                                 |  |            |                                









|                                              | Three Months Ended 
September 30,    |      | Nine Months Ended 
September 30, |  
|--------------------------------------------- | ------------------------------------ | ---- | -------------------------------- | -
|                                              |                                     
|                                              | 2004                                 |      | 2003                             |  
|                                              |                                      |      |                                 
|                                              | (millions, except per share amounts) |     
|                                              |                                      |      |                                  |  
|Net income, as reported                       | $                                    | 320  |                                  | $
|                                              |                                      |      |                                  |  
|Add:  total stock-based employee compensation |                                      |      |                                  |  
|expense included in reported net income,      |                                      |      |                                  |  
|net of related income tax effects             |                                      | 5    |                                  |  
|                                              |                                      |      |                                  |  
|Deduct:  total stock-based employee           |                                      |      |                                  |  
|compensation expense determined under         |                                      |      |                                  |  
|fair value based method, net of               |                                      |      |                                  |  
|related income tax effects                    |                                      | (5   | )                                |  
|                                              |                                      |      |                                  |  
|                                              |                                      |      |                                  |  
|Pro forma net income                          | $                                    | 320  |                                  | $
|                                              |                                      |      |                                  |  
|                                              |                                      |      |                                  |  
|Earnings per share of common stock:           |                                      |      |                                  |  
|Basic - as reported                           | $                                    | 1.78 |                                  | $
|Basic - pro forma                             | $                                    | 1.78 |                                  | $
|                                              |                                      |      |                                  |  
|Assuming dilution - as reported               | $                                    | 1.76 |                                  | $
|Assuming dilution - pro forma                 | $                                    | 1.76 |                                  | $







|                                                    | Three Months Ended 
September 30,                                                                                                                                                                                                                                                                                                                                                                                                                                                          |       | Nine Months Ended 
September 30, |  
|--------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----- | -------------------------------- | -
|                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |      
|                                                    | 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |       | 2003                             |  
|                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |                                  |  
|                                                    | (millions, except per share amounts)                                                                                                                                                                                                                                                                                                                                                                                                                                                       |      
|                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |                                  |  
|Numerator - net income                              | $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 320   |                                  | $
|                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |                                  |  
|                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |                                  |  
|Denominator:                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |                                  |  
|Weighted-average number of common shares            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |                                  |  
|outstanding - basic                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 179.6 |                                  |  
|Restricted stock, performance share and shareholder |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |                                  |  
|value awards, options and equity units(a)           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 1.5   |                                  |  
|                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |                                  |  
|Weighted-average number of common shares            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |                                  |  
|outstanding - assuming dilution                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 181.1 |                                  |  
|                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |                                  |  
|                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |                                  |  
|Earnings per share of common stock:                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |       |                                  |  
|Basic                                               | $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 1.78  |                                  | $
|Assuming dilution                                   | $                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 1.76  |                                  | $
|_____________________                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(a)                                                 | Performance share awards and shareholder value awards are included in diluted weighted-average number of common shares outstanding based upon what would be issued if the end of the reporting period was the end of the term of the award.  Restricted stock, performance share awards, shareholder value awards, options and equity units (known as Corporate Units) are included in diluted weighted-average number of common shares outstanding by applying the treasury stock method.

Common shares issuable upon the exercise of stock options, which were not included in the denominator above due to their antidilutive effect, were approximately 0.4 million and 0.7 million for the three months ended September 30, 2004 and 2003, respectively, and approximately 0.4 million and none for the nine months ended September 30, 2004 and 2003, respectively.



Effective March 31, 2004, FPL Group and FPL completed the adoption of FASB Interpretation No. (FIN) 46, as revised (FIN 46R).  FIN 46R requires the consolidation of entities which are determined to be variable interest entities (VIEs) when the reporting company determines that it will absorb a majority of the VIE's expected losses, receive a majority of the VIE's residual returns, or both.  The company that is required to consolidate the VIE is called the primary beneficiary.  Conversely, the reporting company would be required to deconsolidate VIEs that are currently consolidated when the company is not considered to be the primary beneficiary.  Variable interests are contractual, ownership or other monetary interests in an entity that change as the fair value of the entity's net assets, excluding variable interests, change.  An entity is considered to be a VIE when its capital is insufficient to permit it to finance its activities without additional subordinated financial support or its equity investors, as a group, lack the characteristics of having a controlling financial interest.

FPL has identified two potential VIEs (Projects), both of which are considered qualifying facilities (QFs) as defined by PURPA.  PURPA requires FPL to purchase the electricity output of the Projects.  As a result, FPL has entered into purchased power agreements (PPAs) with these QFs to purchase substantially all of the Projects' electrical output over a substantial portion of their estimated useful lives.

In March 2004, a trust created by FPL Group sold 12 million shares of 5 7/8% preferred trust securities to the public and common trust securities to FPL Group.  The trust is considered a VIE because FPL Group's investment through the common trust securities is not considered equity at risk in accordance with FIN 46R.  The proceeds from the sale of the preferred and common trust securities were used to buy 5 7/8% junior subordinated debentures maturing in March 2044, from FPL Group Capital Inc (FPL Group Capital).  The trust exists only to issue its preferred trust securities and common trust securities and to hold the junior subordinated debentures of FPL Group Capital as trust assets.  Since FPL Group, as the common security holder, is not considered to have equity at risk and will therefore not absorb any variability of the trust, FPL Group is not the primary beneficiary and does not consolidate the trust in accordance with FIN 46R.  FPL Group includes the junior subordinated debentures issued by FPL Group Capital on its condensed consolidated balance sheets.  See Note 9.

FPL Group and FPL expect additional implementation guidance to be issued regarding FIN 46R and are unable to determine what effect, if any, this additional guidance might have on FPL Group's and FPL's financial statements.



Partnerships and Joint Ventures - During the first quarter of 2004, FPL Energy recorded a net gain of approximately $52 million ($31 million after tax) related to the termination of a gas supply contract and a steam agreement at one of its investments in joint ventures.  These agreements were terminated in connection with an amended power purchase agreement that allows the investee to source power from the wholesale market.

Also during the first quarter of 2004, FPL Energy recorded an impairment loss of approximately $50 million ($30 million after tax) to write down its investment in a combined-cycle power plant in Texas to its fair value as a result of agreeing to sell its interest in the project.  The sale was completed in the second quarter of 2004.

The results of the above transactions are reflected in equity in earnings of equity method investees in FPL Group's condensed consolidated statements of income for the nine months ended September 30, 2004.

Other- In June 2004, an indirect subsidiary of FPL Group sold a note receivable from a limited partnership of which Olympus Communications, L.P. (Olympus) is a general partner.  Olympus is an indirect subsidiary of Adelphia Communications Corporation (Adelphia).  In June 2002, Adelphia, Olympus and the limited partnership filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code (Chapter 11), and the note, which was due July 1, 2002, is in default.  The note receivable, which was previously recorded in other investments in FPL Group's condensed consolidated balance sheet, was sold for its net book value of approximately $127 million, including accrued interest through the date of the commencement of the Chapter 11 proceedings, less related transactions costs which were not significant.



Storm Reserve Deficiency - During the third quarter of 2004, FPL was impacted by Hurricanes Charley, Frances and Jeanne, each of which did major damage in parts of FPL's service territory and collectively resulted in over 5.4 million power outages with approximately three-quarters of FPL's customers losing power during at least one hurricane.  Damage to FPL property was primarily to the transmission and distribution systems.  Although FPL has not completed the final accounting of all restoration costs, FPL accrued restoration costs during the quarter ended September 30, 2004 of approximately $710 million, which are expected to be recoverable from the storm and property insurance reserve (storm reserve).  The unpaid portion of these accrued costs is included in other current liabilities on FPL Group's and FPL's condensed consolidated balance sheets.  In addition, based on assessments as of September 30, 2004, FPL estimated it had sustained other property losses totaling approximately $108 million, which has been or is expected to be recovered from insurance carriers.  The costs recoverable from the storm reserve exceeded the balance of the storm reserve by approximately $361 million at September 30, 2004.  This deficiency has been deferred pursuant to an FPSC order and recorded as a regulatory asset on FPL Group's and FPL's condensed consolidated balance sheets.  FPL intends to seek recovery of the $361 million regulatory asset.  FPL is in the process of reviewing and finalizing its cost estimates associated with the three hurricanes.  The exact timing and manner of recovery have yet to be determined.  The FPSC has the right to review FPL's storm charges for reasonableness and prudence.  The funds set aside to cover the cost of FPL's storm damage were reclassified to a current asset on FPL Group's and FPL's condensed consolidated balance sheets.

2002-2005 Rate Agreement- In October 2004, the Florida Supreme Court affirmed the FPSC's approval of the 2002-2005 rate agreement, which had been appealed by the South Florida Hospital and Healthcare Association and certain hospitals in April 2002.  The appellants have until November 5, 2004 to request a rehearing.



Long-term Debt - In January 2004, FPL issued $240 million principal amount of 5.65% first mortgage bonds maturing in February 2035.  The proceeds were used to repay a portion of its short-term borrowings and for other corporate purposes.

In March 2004, FPL Group Capital sold $309 million of 5 7/8% junior subordinated debentures maturing in March 2044, which are included in long-term debt on FPL Group's condensed consolidated balance sheets.  The proceeds were used to repay a portion of commercial paper issued to fund investments by FPL Group Capital in independent power projects.  The junior subordinated debentures were purchased by an unconsolidated 100%-owned finance subsidiary of FPL Group using proceeds from the March 2004 sale by that finance subsidiary of $300 million of preferred trust securities to the public and $9 million of common trust securities to FPL Group.  FPL Group has fully and unconditionally guaranteed the junior subordinated debentures and the preferred trust securities.

In January 2004, FPL Group Capital entered into a variable interest rate swap agreement, which expires in March 2005, to protect $200 million of its 1.875% debentures maturing in March 2005 against changes in fair value due to changes in interest rates.  In April and May 2004, FPL entered into two $250 million variable interest rate swap agreements to protect $500 million of its 6.875% first mortgage bonds maturing in December 2005 against changes in fair value due to changes in interest rates.  Both of the swap agreements expire in December 2005.  Also in April 2004, a subsidiary of FPL Energy entered into an interest rate swap agreement, which expires in December 2017, whereby the FPL Energy subsidiary receives the London InterBank Offered Rate (LIBOR) and pays a fixed rate of 3.845% on $32 million of its variable rate debt maturing in December 2017.  In October 2004, FPL Group Capital entered into several variable interest rate swap agreements, which expire in April 2006, to protect $500 million of its 3 1/4% debentures maturing in April 2006 against changes in fair value due to changes in interest rates.

Preferred Stock - In January 2004, FPL sold 200,000 shares of 4 1/2% Series V preferred stock with an aggregate par value of $20 million to FPL Group.



Commitments - FPL Group and its subsidiaries have made commitments in connection with a portion of their projected capital expenditures.  Capital expenditures at FPL consist of the cost for construction or acquisition of additional facilities and equipment to meet customer demand, as well as capital improvements to and maintenance of existing facilities.  At FPL Energy, capital expenditures include, among other things, the construction of a gas-fired power plant and wind projects, and the procurement of nuclear fuel (including capitalized interest).  FPL FiberNet, LLC's (FPL FiberNet) capital expenditures primarily include costs to meet customer specific requirements and sustain its fiber-optic network.



At September 30, 2004, planned capital expenditures for the remainder of 2004 through 2008 are estimated to be as follows:

|                              | 2004                                                                                                                                                                                                                                              |     | 2005 |   | 2006  |  | 2007 |       | 2008 |   | Total | 
|----------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- | ---- | - | ----- |  | ---- | ----- | ---- | - | ----- | 
|                              |                                                                                                                                                                                                                                                   |     |      |   |       |  |      |       |      |   |       | 
|FPL:                          | (millions)                                                                                                                                                                                                                                        |    
|Generation:(a)                |                                                                                                                                                                                                                                                   |     |      |   |       |  |      |       |      |   |       | 
|New(b)                        | $                                                                                                                                                                                                                                                 | 70  |      | $ | 300   |  | $    | 265   |      | $ | 105   | 
|Existing                      |                                                                                                                                                                                                                                                   | 215 |      |   | 480   |  |      | 360   |      |   | 450   | 
|Transmission and distribution |                                                                                                                                                                                                                                                   | 180 |      |   | 700   |  |      | 690   |      |   | 700   | 
|Nuclear fuel                  |                                                                                                                                                                                                                                                   | 5   |      |   | 75    |  |      | 80    |      |   | 100   | 
|General and other             |                                                                                                                                                                                                                                                   | 60  |      |   | 150   |  |      | 175   |      |   | 180   | 
|                              |                                                                                                                                                                                                                                                   |     |      |   |       |  |      |       |      |   |       | 
|Total                         | $                                                                                                                                                                                                                                                 | 530 |      | $ | 1,705 |  | $    | 1,570 |      | $ | 1,535 | 
|                              |                                                                                                                                                                                                                                                   |     |      |   |       |  |      |       |      |   |       | 
|                              |                                                                                                                                                                                                                                                   |     |      |   |       |  |      |       |      |   |       | 
|FPL Energy:                   |                                                                                                                                                                                                                                                   |     |      |   |       |  |      |       |      |   |       | 
|Wind(c)                       | $                                                                                                                                                                                                                                                 | 85  |      | $ | 170   |  | $    | 5     |      | $ | 5     | 
|Gas                           |                                                                                                                                                                                                                                                   | 40  |      |   | 15    |  |      | 5     |      |   | -     | 
|Nuclear fuel and other        |                                                                                                                                                                                                                                                   | 50  |      |   | 50    |  |      | 115   |      |   | 95    | 
|                              |                                                                                                                                                                                                                                                   |     |      |   |       |  |      |       |      |   |       | 
|Total                         | $                                                                                                                                                                                                                                                 | 175 |      | $ | 235   |  | $    | 125   |      | $ | 100   | 
|                              |                                                                                                                                                                                                                                                   |     |      |   |       |  |      |       |      |   |       | 
|                              |                                                                                                                                                                                                                                                   |     |      |   |       |  |      |       |      |   |       | 
|FPL FiberNet                  | $                                                                                                                                                                                                                                                 | -   |      | $ | 10    |  | $    | 10    |      | $ | 10    | 
|                              |                                                                                                                                                                                                                                                   |     |      |   |       |  |      |       |      |   |       | 
|_____________________         |                                                                                                                                                                                                                                                  
|(a)                           | Includes allowance for funds used during construction (AFUDC) of approximately $20 million, $53 million, $36 million and $39 million in 2004, 2005, 2006 and 2007, respectively.                                                                 
|(b)                           | Includes generating structures, transmission interconnection and integration, licensing and AFUDC.                                                                                                                                               
|(c)                           | FPL Energy's capital expenditures for new wind projects are estimated through 2005, when the production tax credits are scheduled to expire, and assume the addition of 241 mw which are currently under construction.  See Part II - Item 5 (v).

In addition to estimated capital expenditures listed above, FPL and FPL Energy have long-term contracts related to purchased power and/or fuel (see Contracts below).  At September 30, 2004, FPL Energy had approximately $1.1 billion in firm commitments primarily for natural gas transportation and storage, firm transmission service, nuclear fuel and a portion of its capital expenditures.  Additionally, during 2003, a subsidiary of FPL Group Capital committed to lend up to $250 million under a secured loan to a third party, which matures no later than June 30, 2006.  At September 30, 2004, $126 million had been drawn on under the loan.  FPL Group has guaranteed certain payment obligations of FPL Group Capital, including most payment obligations under FPL Group Capital's debt.

FPL Group and FPL each account for payment guarantees and related contracts, for which it or a subsidiary is the guarantor, under FIN 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees Including Indirect Guarantees of Indebtedness of Others," which requires that the fair value of guarantees provided to unconsolidated entities entered into after December 31, 2002, be recorded on the balance sheet.  At September 30, 2004, subsidiaries of FPL Group, other than FPL, have guaranteed debt service payments relating to agreements that existed at December 31, 2002.  The term of the guarantees is equal to the term of the related debt, with remaining terms ranging from 1 year to 14 years.  The maximum potential amount of future payments that could be required under these guarantees at September 30, 2004 was approximately $14 million.  At September 30, 2004, FPL Group did not have any liabilities recorded for these guarantees.  In certain instances, FPL Group can seek recourse from third parties for 50% of any amount paid under the guarantees.  Guarantees entered into subsequent to December 31, 2002, and the related fair value, were not material as of September 30, 2004.

FPL Energy has guaranteed certain performance obligations of a power plant owned by a wholly-owned subsidiary as part of a power purchase agreement that expires in 2027.  Under this agreement, the subsidiary could incur market-based liquidated damages for failure to meet contractual minimum outputs.  In addition, certain subsidiaries of FPL Energy have contracts that require certain projects to meet annual minimum generation amounts.  Failure to meet the annual minimum generation amounts would result in the FPL Energy subsidiary incurring specified liquidated damages.  Based on past performance of these and similar projects and current forward prices, management believes that the exposure associated with these guarantees is not material.

An FPL Energy subsidiary is committed to purchase oil and gas inventory remaining in certain storage facilities at December 31, 2005 at its weighted-average cost.  At September 30, 2004, the subsidiary's commitment is estimated to be from $0 to approximately $78 million, based on a potential range of zero to full storage volume at the current average forward price of oil and gas.

Contracts - FPL has entered into long-term purchased power and fuel contracts.  FPL is obligated under take-or-pay purchased power contracts with JEA and with subsidiaries of The Southern Company (Southern subsidiaries) to pay for approximately 1,300 mw of power through mid-2010 and 381 mw thereafter through 2021.  FPL also has various firm pay-for-performance contracts to purchase approximately 900 mw from certain cogenerators and small power producers (qualifying facilities) with expiration dates ranging from 2005 through 2026.  The purchased power contracts provide for capacity and energy payments.  Energy payments are based on the actual power taken under these contracts, and the Southern subsidiaries' contract is subject to minimum quantities.  Capacity payments for the pay-for-performance contracts are subject to the qualifying facilities meeting certain contract conditions.  FPL has various agreements with several electricity suppliers to purchase an aggregate of up to approximately 1,500 mw of power with expiration dates ranging from 2004 through 2007.  In general, the agreements require FPL to make capacity payments and supply the fuel consumed by the plants under the contracts.  FPL has contracts for natural gas storage, and the transportation and supply of natural gas, coal and oil with various expiration dates through 2028.

FPL Energy has contracts primarily for the supply, transportation and storage of natural gas and firm transmission service with expiration dates ranging from 2004 through 2033.  FPL Energy also has several contracts for the supply, conversion, enrichment and fabrication of Seabrook Station's (Seabrook) nuclear fuel with expiration dates ranging from 2004 to 2014.

The remaining required capacity and minimum payments under these contracts as of September 30, 2004 are estimated to be as follows:

|                                                     | 2004                                                                                                                                                                                                                                                                                                                          |     | 2005 |   | 2006  |  | 2007 |     | 2008 |   | Thereafter
|---------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- | ---- | - | ----- |  | ---- | --- | ---- | - | ----------
|                                                     |                                                                                                                                                                                                                                                                                                                               |     |      |   |       |  |      |     |      |   |           
|FPL:                                                 | (millions)                                                                                                                                                                                                                                                                                                                   
|Capacity payments:(a)                                |                                                                                                                                                                                                                                                                                                                               |     |      |   |       |  |      |     |      |   |           
|JEA and Southern subsidiaries(b)                     | $                                                                                                                                                                                                                                                                                                                             | 50  |      | $ | 190   |  | $    | 200 |      | $ | 200       
|Qualifying facilities(b)                             | $                                                                                                                                                                                                                                                                                                                             | 90  |      | $ | 360   |  | $    | 310 |      | $ | 320       
|Other electricity suppliers(b)                       | $                                                                                                                                                                                                                                                                                                                             | 20  |      | $ | 80    |  | $    | 70  |      | $ | 10        
|Minimum payments, at projected prices:               |                                                                                                                                                                                                                                                                                                                               |     |      |   |       |  |      |     |      |   |           
|Southern subsidiaries-energy(b)                      | $                                                                                                                                                                                                                                                                                                                             | 15  |      | $ | 60    |  | $    | 60  |      | $ | 60        
|Natural gas, including transportation and storage(c) | $                                                                                                                                                                                                                                                                                                                             | 465 |      | $ | 1,800 |  | $    | 820 |      | $ | 280       
|Coal(c)                                              | $                                                                                                                                                                                                                                                                                                                             | 10  |      | $ | 45    |  | $    | 35  |      | $ | 30        
|Oil(c)                                               | $                                                                                                                                                                                                                                                                                                                             | 160 |      | $ | -     |  | $    | -   |      | $ | -         
|                                                     |                                                                                                                                                                                                                                                                                                                              
|FPL Energy                                           | $                                                                                                                                                                                                                                                                                                                             | 35  |      | $ | 65    |  | $    | 50  |      | $ | 50        
|_____________________                               
|(a)                                                  | Capacity payments under these contracts, the majority of which is recoverable through the capacity clause, totaled $182 million and $174 million for the three months ended September 30, 2004 and 2003, respectively, and $509 million and $490 million for the nine months ended September 30, 2004 and 2003, respectively.
|(b)                                                  | Energy payments under these contracts, which are recoverable through the fuel clause, totaled $99 million for both the three months ended September 30, 2004 and 2003 and $271 million and $263 million for the nine months ended September 30, 2004 and 2003, respectively.                                                 
|(c)                                                  | Recoverable through the fuel clause.                                                                                                                                                                                                                                                                                         

In addition, in August 2004, FPL entered into long-term purchased power agreements with the Southern subsidiaries for approximately 955 mw of power from mid-2010 through 2015.  The firm purchased power agreements provide for fixed capacity and variable energy payments.  Energy payments will be based on actual power taken under the agreements.  In addition, FPL will be obligated to pay the Southern subsidiaries for firm gas transportation.  These agreements are contingent upon certain events, including approval by the FPSC.  If approved, the fixed capacity payments and firm gas transportation commitments under these agreements, which are estimated to be approximately $100 million per year, will be recoverable through the capacity and fuel clauses.

Insurance - Liability for accidents at nuclear power plants is governed by the Price-Anderson Act, which limits the liability of nuclear reactor owners to the amount of insurance available from both private sources and an industry retrospective payment plan.  In accordance with this act, FPL Group maintains $300 million of private liability insurance per site, which is the maximum obtainable, and participates in a secondary financial protection system under which it is subject to retrospective assessments of up to $518 million ($414 million for FPL) per incident at any nuclear reactor in the United States, payable at a rate not to exceed $52 million ($41 million for FPL) per incident per year.  FPL Group and FPL are contractually entitled to recover a proportionate share of such assessments from the owners of minority interests in Seabrook and St. Lucie Unit No. 2, which approximates $12 million and $15 million per incident, respectively.  The Price-Anderson Act expired on August 1, 2002 but the liability limitations did not change for plants, including FPL's four nuclear units and Seabrook, with operating licenses issued by the NRC prior to August 1, 2002.

FPL Group participates in nuclear insurance mutual companies that provide $2.75 billion of limited insurance coverage per occurrence per site for property damage, decontamination and premature decommissioning risks at its nuclear plants.  The proceeds from such insurance, however, must first be used for reactor stabilization and site decontamination before they can be used for plant repair.  FPL Group also participates in an insurance program that provides limited coverage for replacement power costs if a nuclear plant is out of service for an extended period of time because of an accident.  In the event of an accident at one of FPL Group's or another participating insured's nuclear plants, FPL Group could be assessed up to $107 million ($84 million for FPL) in retrospective premiums.  FPL Group and FPL are contractually entitled to recover a proportionate share of such assessments from the owners of minority interests in Seabrook and St. Lucie Unit No. 2, which approximates $2 million and $3 million, respectively.

In the event of a catastrophic loss at one of FPL Group's nuclear plants, the amount of insurance available might not be adequate to cover property damage and other expenses incurred.  Uninsured losses, to the extent not recovered through rates in the case of FPL, would be borne by FPL Group and FPL and could have a material adverse effect on FPL Group's and FPL's financial condition and results of operations.

FPL self-insures transmission and distribution property due to the high cost and limited coverage available from third-party insurers.  As approved by the FPSC, FPL maintains a storm reserve for uninsured property storm damage or assessments under the nuclear insurance program.  However, at September 30, 2004, FPL had a $361 million storm reserve deficiency as a result of restoration costs associated with the three hurricanes that struck FPL's service territory during the third quarter of 2004.  See Note 8 - Storm Reserve Deficiency.  FPL Group is also self-insured for FPL FiberNet's fiber-optic cable located throughout Florida.









In January 2004, FMPA requested a "conditional rehearing on the Commission's failure to order rate credits solely in the event that Commission does not adequately reduce FPL's rate base to achieve comparability," and challenging FERC's determination not to revisit the issue of behind-the-meter generation and load ratio pricing for network integration transmission service.  In March 2004, FERC issued an order denying FMPA's rehearing request.  In April 2004, FMPA petitioned the DC Circuit for review of FERC's December 2003 order and March 2004 order.  FMPA filed its initial brief in that proceeding on October 1, 2004.  FMPA's arguments are limited to the issue of behind-the-meter generation and load ratio pricing for network integration transmission service

In May 2004, FPL made a compliance filing of a proposed rate schedule that does not include those facilities of FPL that fail to meet the same integration test that was applied to the FMPA facilities.  Pursuant to this filing, 1.63% of FPL's transmission facilities do not satisfy the integration standard and FPL's current network transmission rate would be reduced by $0.02 per kilowatt (kw) per month, resulting in a refund obligation to FMPA of approximately $1 million at September 30, 2004.  In June 2004, FMPA filed a protest to FPL's compliance filing, which protest would exclude approximately 30% of FPL's transmission facilities and reduce FPL's current network transmission rate by approximately $0.41 per kw per month, potentially resulting in a refund obligation to FMPA of approximately $25 million at September 30, 2004.  Any reduction in FPL's network service rate would also apply effective January 1, 2004 to Seminole Electric Cooperative Inc. (Seminole), FPL's other network customer.  The refund obligation to Seminole at September 30, 2004 would be approximately $0.2 million under FPL's filing and approximately $3 million based on FMPA's position.  Possible next steps by the FERC include ruling on the matter based on the record, setting the matter for hearing before an administrative law judge (ALJ), or referring the matter to an ALJ for settlement discussions.

In 1995 and 1996, FPL Group, through an indirect subsidiary, purchased from Adelphia 1,091,524 shares of Adelphia common stock and 20,000 shares of Adelphia preferred stock (convertible into 2,358,490 shares of Adelphia common stock) for an aggregate price of approximately $35,900,000.  On January 29, 1999, Adelphia repurchased all of these shares for $149,213,130 in cash.  On June 24, 2004, Adelphia, Adelphia Cablevision, L.L.C. and the Official Committee of Unsecured Creditors of Adelphia filed a complaint against FPL Group and its indirect subsidiary in the U.S. Bankruptcy Court, Southern District of New York.  The complaint alleges that the repurchase of these shares by Adelphia was a fraudulent transfer, in that at the time of the transaction Adelphia (i) was insolvent or was rendered insolvent, (ii) did not receive reasonably equivalent value in exchange for the cash it paid, and (iii) was engaged or about to engage in a business or transaction for which any property remaining with Adelphia was an unreasonably small capital.  The complaint seeks the recovery for the benefit of Adelphia's bankruptcy estate of the cash paid for the repurchased shares, plus interest.  FPL Group believes that the complaint is invalid because, among other reasons, Adelphia will be unable to demonstrate that (i) Adelphia's repurchase of shares from FPL Group, which repurchase was at the market value for those shares, was not for reasonably equivalent value, (ii) Adelphia was insolvent at the time of the repurchase, or (iii) the repurchase left Adelphia with unreasonably small capital.

In February 2003, Scott and Rebecca Finestone brought an action on behalf of themselves and their son Zachary Finestone in the U.S. District Court for the Southern District of Florida alleging that their son has developed cancer (neuroblastoma) as a result of the release and/or dissipation into the air, water, soil and underground areas of radioactive and non-radioactive hazardous materials, including strontium 90, and the release of other toxic materials from FPL's St. Lucie nuclear power plant.  The complaint includes counts against FPL for strict liability for allegedly engaging in an ultra-hazardous activity and for alleged negligence in operating the plant in a manner that allowed emissions of the foregoing materials and failing to limit its release of nuclear fission products as prescribed by federal and state laws and regulations.  The plaintiffs seek damages in excess of $1 million.  After initially denying FPL's motion to dismiss, the court granted it with respect to plaintiffs' count for strict liability.  The court has also granted FPL's motion for a ruling that the only duty owed by FPL to the plaintiffs is established exclusively by federal regulations and not general negligence standards.  The plaintiffs subsequently filed an amended complaint on the same factual grounds, including a count against FPL for strict liability, which appears identical in all material elements to the strict liability claim in plaintiffs' initial complaint, and counts against FPL for alleged negligence based on duties allegedly established by federal and state laws and regulations.  FPL has again moved to dismiss the strict liability claim.  FPL has further moved to dismiss all negligence claims that are not based on the duty that the court has recognized governs this action.  FPL has answered the one count in the amended complaint that is based on that duty, denying any liability.  Plaintiffs have also moved to vacate or modify the court's order establishing the duty owed.  FPL has opposed that motion, which remains pending.  Discovery is proceeding.

























In August 2004, the plaintiffs, the individuals named as defendants, and FPL Group entered into a Stipulation and Agreement of Settlement that would resolve all matters raised in the lawsuits.  Under the terms of the settlement, which is subject to approval by the court, eight current and former senior executive officers of FPL Group and an insurance carrier will pay to FPL Group a total of $22.25 million, representing a portion of the compensation that the executives received in December 2000 in connection with the shareholder-approved, but unconsummated, merger with Entergy.  In addition, FPL Group agreed to implement several changes to its corporate governance policies and procedures, including limiting the number of boards of directors on which a director of FPL Group may serve; affirming the right of the non-management directors of FPL Group to retain, at the company's expense, legal and other advisors of their choice; requiring the replacement every five years of at least a majority of the members of the Audit, Compensation, and Governance & Nominating Committees of the Board; and prohibiting the payment by FPL Group in any fiscal year of more than $200,000 for property, goods or services to any company of which an independent director is an executive officer or employee unless such payment is reviewed by a majority of the other independent directors.  Notice of the proposed settlement was mailed to all shareholders of record as of September 25, 2004; the court hearing on the proposed settlement has been set for November 12, 2004.  If the settlement is approved, a portion of the net amount of the payment received by FPL Group would be allocated to FPL.

In addition to those legal proceedings discussed herein, FPL Group and its subsidiaries, including FPL, are involved in a number of other legal proceedings and claims in the ordinary course of their businesses.  In addition, generating plants in which FPL Group or FPL have an ownership interest are involved in legal proceedings and claims, the liabilities from which, if any, would be shared by FPL Group or FPL.  While management is unable to predict with certainty the outcome of these other legal proceedings and claims, it is not expected that their ultimate resolution, individually or collectively, will have a material adverse effect on the financial statements.



FPL Group's reportable segments include FPL, a rate-regulated utility, and FPL Energy, a non-rate regulated energy generating subsidiary.  Corporate and Other represents other business activities, other segments that are not separately reportable and eliminating entries.  FPL Group's segment information is as follows:

|                                          | Three Months Ended September 30,                                                                                                                                                                                                   
|----------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                         
|                                          | 2004                                                                                                                                                                                                                               
|                                          |                                                                                                                                                                                                                                    
|                                          | FPL                                                                                                                                                                                                                                
|                                          |                                                                                                                                                                                                                                    
|                                          | (millions)                                                                                                                                                                                                                         
|                                          |                                                                                                                                                                                                                                    
|Operating revenues                        | $                                                                                                                                                                                                                                  
|Operating expenses                        | $                                                                                                                                                                                                                                  
|Income (loss) before cumulative effect of |                                                                                                                                                                                                                                    
|change in accounting principle            | $                                                                                                                                                                                                                                  
|Cumulative effect of change in accounting |                                                                                                                                                                                                                                    
|principle, net of income taxes            | $                                                                                                                                                                                                                                  
|Net income (loss)                         | $                                                                                                                                                                                                                                  
|                                          |                                                                                                                                                                                                                                    
|                                          | Nine Months Ended September 30,                                                                                                                                                                                                    
|                                         
|                                          | 2004                                                                                                                                                                                                                               
|                                          |                                                                                                                                                                                                                                    
|                                          | FPL                                                                                                                                                                                                                                
|                                          |                                                                                                                                                                                                                                    
|                                          | (millions)                                                                                                                                                                                                                         
|                                          |                                                                                                                                                                                                                                    
|Operating revenues                        | $                                                                                                                                                                                                                                  
|Operating expenses                        | $                                                                                                                                                                                                                                  
|Income (loss) before cumulative effect of |                                                                                                                                                                                                                                    
|change in accounting principle            | $                                                                                                                                                                                                                                  
|Cumulative effect of change in accounting |                                                                                                                                                                                                                                    
|principle, net of income taxes            | $                                                                                                                                                                                                                                  
|Net income (loss)                         | $                                                                                                                                                                                                                                  
|                                          |                                                                                                                                                                                                                                    
|                                          | September 30, 2004                                                                                                                                                                                                                 
|                                          |                                                                                                                                                                                                                                    
|                                          | FPL                                                                                                                                                                                                                                
|                                          |                                                                                                                                                                                                                                    
|                                          | (millions)                                                                                                                                                                                                                         
|                                          |                                                                                                                                                                                                                                    
|Total assets                              | $                                                                                                                                                                                                                                  
|_____________________                     |                                                                                                                                                                                                                                    
|(a)                                       | FPL Energy's interest charges are based on a deemed capital structure of 50% debt for operating projects and 100% debt for projects under construction.  Residual non-utility interest charges are included in Corporate and Other.
|(b)                                       | Reflects the adoption of FIN 46 in July 2003.  See Note 6.                                                                                                                                                                         



FPL Group Capital, a 100% owned subsidiary of FPL Group, provides funding for and holds ownership interest in FPL Group's operating subsidiaries other than FPL.  Most of FPL Group Capital's debt and payment guarantees, including its debentures, are fully and unconditionally guaranteed by FPL Group.  Condensed consolidating financial information is as follows:

Condensed Consolidating Statements of Income

|                                                     | Three Months Ended September 30,                          
|---------------------------------------------------- | ----------------------------------------------------------
|                                                    
|                                                     | 2004                                                      
|                                                     |                                                           
|                                                     | FPL
Group                                                 
|                                                     |                                                           
|                                                     | (millions)                                                
|                                                     |                                                           
|Operating revenues                                   | $                                                         
|Operating expenses                                   |                                                           
|Interest charges                                     |                                                           
|Other income (deductions) - net                      |                                                           
|                                                     |                                                           
|Income from operations before income taxes and       |                                                           
|cumulative effect of change in accounting principle  |                                                           
|Income tax expense (benefit)                         |                                                           
|                                                     |                                                           
|Income (loss) before cumulative effect of            |                                                           
|change in accounting principle                       |                                                           
|Cumulative effect of change in accounting principle, |                                                           
|net of income taxes                                  |                                                           
|                                                     |                                                           
|Net income (loss)                                    | $                                                         
|                                                     |                                                           
|                                                     |                                                           
|                                                     |                                                           
|                                                     | Nine Months Ended September 30,                           
|                                                    
|                                                     | 2004                                                      
|                                                     |                                                           
|                                                     | FPL
Group                                                 
|                                                     |                                                           
|                                                     | (millions)                                                
|                                                     |                                                           
|Operating revenues                                   | $                                                         
|Operating expenses                                   |                                                           
|Interest charges                                     |                                                           
|Other income (deductions) -net                       |                                                           
|                                                     |                                                           
|Income from operations before income taxes and       |                                                           
|cumulative effect of change in accounting principle  |                                                           
|Income tax expense (benefit)                         |                                                           
|                                                     |                                                           
|Income (loss) before cumulative effect of            |                                                           
|change in accounting principle                       |                                                           
|Cumulative effect of change in accounting principle, |                                                           
|net of income taxes                                  |                                                           
|                                                     |                                                           
|Net income (loss)                                    | $                                                         
|                                                     |                                                           
|_____________________                                |                                                           
|(a)                                                  | Represents FPL and consolidating adjustments.             
|(b)                                                  | Reflects the adoption of FIN 46 in July 2003.  See Note 6.

Condensed Consolidating Balance Sheets

|                                                     | September 30, 2004 |       | December 31, 2003
|---------------------------------------------------- | ------------------ | ----- | -----------------
|                                                     |                   
|                                                     | FPL
Group          |       | FPL
Group
Capital
|                                                     |                    |       |                  
|                                                     | (millions)        
|PROPERTY, PLANT AND EQUIPMENT                        |                    |       |                  
|Electric utility plant in service and other property | $                  | -     |                  
|Less accumulated depreciation and amortization       |                    | -     |                  
|                                                     |                    |       |                  
|Total property, plant and equipment - net            |                    | -     |                  
|                                                     |                    |       |                  
|CURRENT ASSETS                                       |                    |       |                  
|Cash and cash equivalents                            |                    | 6     |                  
|Receivables                                          |                    | 7     |                  
|Other                                                |                    | -     |                  
|                                                     |                    |       |                  
|Total current assets                                 |                    | 13    |                  
|                                                     |                    |       |                  
|OTHER ASSETS                                         |                    |       |                  
|Investment in subsidiaries                           |                    | 7,643 |                  
|Other                                                |                    | 94    |                  
|                                                     |                    |       |                  
|Total other assets                                   |                    | 7,737 |                  
|                                                     |                    |       |                  
|TOTAL ASSETS                                         | $                  | 7,750 |                  
|                                                     |                    |       |                  
|                                                     |                    |       |                  
|CAPITALIZATION                                       |                    |       |                  
|Common shareholders' equity                          | $                  | 7,428 |                  
|Preferred stock of FPL without sinking fund          |                    |       |                  
|requirements                                         |                    | -     |                  
|Long-term debt                                       |                    | -     |                  
|                                                     |                    |       |                  
|Total capitalization                                 |                    | 7,428 |                  
|                                                     |                    |       |                  
|CURRENT LIABILITIES                                  |                    |       |                  
|Accounts payable and short-term debt                 |                    | -     |                  
|Other                                                |                    | 27    |                  
|                                                     |                    |       |                  
|Total current liabilities                            |                    | 27    |                  
|                                                     |                    |       |                  
|OTHER LIABILITIES AND DEFERRED CREDITS               |                    |       |                  
|Asset retirement obligations                         |                    | -     |                  
|Accumulated deferred income taxes                    |                    | (5    | )                
|Regulatory liabilities                               |                    | -     |                  
|Other                                                |                    | 300   |                  
|                                                     |                    |       |                  
|Total other liabilities and deferred credits         |                    | 295   |                  
|                                                     |                    |       |                  
|COMMITMENTS AND CONTINGENCIES                        |                    |       |                  
|TOTAL CAPITALIZATION AND LIABILITIES                 | $                  | 7,750 |                  
|                                                     |                    |       |                  
|_____________________                                |                   
|(a)  Represents FPL and consolidating adjustments.  

Condensed Consolidating Statements of Cash Flows

|                                                     | Nine Months Ended September 30,              
|---------------------------------------------------- | ---------------------------------------------
|                                                    
|                                                     | 2004                                         
|                                                     |                                              
|                                                     | FPL
Group                                    
|                                                     |                                              
|                                                     | (millions)                                   
|NET CASH PROVIDED BY (USED IN)                       |                                              
|OPERATING ACTIVITIES                                 | $                                            
|                                                     |                                              
|                                                     |                                              
|CASH FLOWS FROM INVESTING ACTIVITIES                 |                                              
|Capital expenditures and independent power           |                                              
|investments                                          |                                              
|Sale of independent power investments                |                                              
|Sale of Olympus note receivable                      |                                              
|Other -net                                           |                                              
|                                                     |                                              
|Net cash used in investing activities                |                                              
|                                                     |                                              
|                                                     |                                              
|CASH FLOWS FROM FINANCING ACTIVITIES                 |                                              
|Issuances of long-term debt                          |                                              
|Retirements of long-term debt                        |                                              
|Net change in short-term debt                        |                                              
|Issuances of common stock                            |                                              
|Dividends on common stock                            |                                              
|Other -net                                           |                                              
|                                                     |                                              
|Net cash provided by (used in) financing activities  |                                              
|                                                     |                                              
|                                                     |                                              
|Net increase (decrease) in cash and cash equivalents |                                              
|Cash and cash equivalents at beginning of period     |                                              
|                                                     |                                              
|Cash and cash equivalents at end of period           | $                                            
|                                                     |                                              
|_____________________                               
|(a)                                                  | Represents FPL and consolidating adjustments.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

This discussion should be read in conjunction with the Notes contained herein and Management's Discussion and Analysis of Financial Condition and Results of Operations (Management's Discussion) appearing in the 2003 Form 10-K for FPL Group and FPL.  The results of operations for an interim period generally will not give a true indication of results for the year.  In the following discussion, all comparisons are with the corresponding items in the prior year.



Overview - FPL Group's net income for the third quarter of 2004 was $320 million compared to $331 million for the same period in 2003.  FPL Group's net income for the three months ended September 30, 2004 reflects reduced earnings at FPL and FPL Energy and higher interest expense at Corporate and Other.  For the nine months ended September 30, 2004, FPL Group's net income was $715 million compared to $745 million for the same period in 2003.  FPL Group's net income for the nine months ended September 30, 2004 reflects reduced earnings at FPL and higher interest expense at Corporate and Other partially offset by increased earnings at FPL Energy.  FPL Group's and FPL's results for the three and nine months ended September 30, 2004 reflect the impacts of three hurricanes that struck FPL's service territory during the third quarter of 2004.  These storms resulted in lost revenues and an increase to the reserve for uncollectible accounts for FPL Group and FPL, and reduced FPL Group's earnings per share by 14 cents for the three and nine months ended September 30, 2004.  The impact of these storms is estimated to reduce FPL Group's earnings per share by an additional 1 cent during the fourth quarter of 2004.  See Note 8 - Storm Reserve Deficiency.

FPL Group's net income for the three and nine months ended September 30, 2004 include net unrealized mark-to-market losses of $6 million and $2 million, respectively, from non-qualifying hedge activity compared to net unrealized gains of $8 million and $9 million for the corresponding periods in 2003.  All periods presented have been reclassified to reflect the guidance of Emerging Issues Task Force Issue No. 03-11 and the SEC staff which was issued in 2003.  FPL Group and its subsidiaries segregate unrealized mark-to-market gains and losses on derivative transactions into two categories.  The first category, referred to as trading and managed hedge activities, represents the net unrealized effect of actively traded positions entered into to take advantage of market price movements and to optimize the value of generation assets and related contracts.  The second category, referred to as non-qualifying hedges, represents the net unrealized effect of derivative transactions entered into as economic hedges (but which do not qualify for hedge accounting under FAS 133) and the ineffective portion of transactions accounted for as cash flow hedges.  Any position that is moved between non-qualifying hedge activity and trading and managed hedge activity is transferred at its fair value on the date of reclassification.  These transactions have been entered into to reduce FPL Group's aggregate commodity price risk inherent in fuel and electricity transactions.

In addition, FPL Group's net income for the three and nine months ended September 30, 2003 reflect a $3 million charge due to a change in accounting principle.  See Note 11 for segment information.  FPL Group's effective tax rate for all periods presented reflect production tax credits for wind projects at FPL Energy.

FPL Group's management uses earnings excluding non-qualifying hedge activity (adjusted earnings) internally for financial planning, for analysis of performance, for reporting of results to the Board of Directors and for FPL Group's employee incentive compensation plans.  FPL Group also uses adjusted earnings when communicating its earnings outlook to analysts and investors.  FPL Group's management believes adjusted earnings provide a more meaningful representation of the company's fundamental earnings power.  Although the excluded amounts are properly included in the determination of net income in accordance with generally accepted accounting principles, both the size and nature of such items can make period to period comparisons of operations difficult and potentially confusing.

FPL - FPL's net income available to FPL Group for the three months ended September 30, 2004 was $275 million compared to $277 million for the same period in 2003.  The results of the third quarter of 2004 reflect the impacts of three hurricanes that struck FPL's service territory between mid-August and late September 2004.  These storms resulted in lost revenues of approximately $36 million during the three months ended September 30, 2004 and have made 2005 results at FPL more difficult to estimate due to the uncertainty of the impact of the storms on revenue growth in the near future.  The negative impact of the hurricanes was partially offset by strong customer growth during the quarter.  Other operations and maintenance (O&M) expenses and depreciation expense increased for the third quarter of 2004 negatively impacting FPL's earnings for that period.  For the nine months ended September 30, 2004, FPL's net income available to FPL Group was $585 million compared to $611 million for the same period in 2003.  The effect of three hurricanes and otherwise milder weather were strong contributors to the decrease in FPL's net income during the nine months ended September 30, 2004, partly offset by strong customer growth.  Increased depreciation and O&M expenses further reduced net income for the nine months ended September 30, 2004.





|                                                   | Three Months Ended 
September 30, |       | Nine Months Ended 
September 30, |  
|-------------------------------------------------- | --------------------------------- | ----- | -------------------------------- | -
|                                                   |                                   |      
|                                                   | 2004                              |       | 2003                             |  
|                                                   |                                   |       |                                  |  
|                                                   | (millions)                        |      
|                                                   |                                   |       |                                  |  
|Retail base operations                             | $                                 | 1,057 |                                  | $
|Cost recovery clauses and other pass-through costs |                                   | 1,412 |                                  |  
|Other                                              |                                   | 16    |                                  |  
|                                                   |                                   |       |                                  |  
|Total                                              | $                                 | 2,485 |                                  | $
|                                                   |                                   |       |                                  |  































|                           |                                                                                                                            | Remainder of 2004 |        | 2005               
|-------------------------- | -------------------------------------------------------------------------------------------------------------------------- | ----------------- | ------ | -------------------
|                           |                                                                                                                           
|Project Portfolio Category |                                                                                                                            | Available
MW(a)   |        | % MW
Under Contract
|                           |                                                                                                                            |                   |        |                    
|                           |                                                                                                                            |                   |        |                    
|Wind                       |                                                                                                                            |                   | 2,746  |                    
|Contracted                 |                                                                                                                            |                   | 2,170  |                    
|Merchant:                  |                                                                                                                            |                   |        |                    
|NEPOOL                     |                                                                                                                            |                   | 2,309  |                    
|ERCOT                      |                                                                                                                            |                   | 2,790  |                    
|All Other                  |                                                                                                                            |                   | 557    |                    
|                           |                                                                                                                            |                   |        |                    
|Total portfolio            |                                                                                                                            |                   | 10,572 |                    
|                           |                                                                                                                            |                   |        |                    
|_____________________     
|(a)                        | Weighted to reflect in-service dates, planned maintenance and a refueling outage at Seabrook in 2005.                     
|(b)                        | Reflects round-the-clock mw under contract.                                                                               
|(c)                        | Excludes 241 mw of new wind generation announced in October 2004 and 71 mw for a planned power uprate at Seabrook in 2005.
|(d)                        | Represents on-peak mw under contract.                                                                                     



Corporate and Other- Corporate and Other is primarily comprised of FPL FiberNet and other corporate income and expenses, such as interest income and interest expense.  Corporate and Other's net loss for the three and nine months ended September 30, 2004 was $16 million and $53 million, respectively, compared to a net loss of $9 million and $22 million for the respective periods in 2003, primarily reflecting increased interest expense.  FPL FiberNet's results declined for the nine months ended September 30, 2004 due to the absence of gains associated with restructuring two transactions which were reflected in the first quarter of 2003.  Corporate and Other allocates interest charges to FPL Energy based on a deemed capital structure at FPL Energy of 50% debt for operating projects and 100% debt for projects under construction.  Interest expense at Corporate and Other increased for all periods presented due to allocating less interest expense to FPL Energy as a result of the completion of a number of projects during 2003 that were previously under construction.



FPL Group and its subsidiaries, including FPL, require funds to support and grow their businesses.  These funds are used for working capital, capital expenditures, investments in or acquisitions of assets and businesses, to pay maturing debt obligations and, from time to time, to redeem outstanding debt and preferred stock.  It is anticipated that these requirements will be satisfied through a combination of internally generated funds and the issuance, from time to time, of debt and equity securities, consistent with FPL Group's and FPL's objective of maintaining, on a long-term basis, a capital structure that will support a strong investment grade credit rating.  Credit ratings can affect FPL Group's and FPL's ability to obtain short- and long-term financing, the cost of such financing and the execution of their financing strategies.  In July 2004, FPL Group increased its quarterly dividend on its common stock from $0.62 to $0.68 per share.  In May 2004, the authorized common stock of FPL Group was increased 100,000,000 shares from 300,000,000 to 400,000,000 shares.

In October 2004, FPL and FPL Group Capital refinanced their short-term credit facilities by entering into new five-year revolving credit facilities and amending their respective three-year credit facilities.  Bank lines of credit currently available to FPL Group and its subsidiaries, including FPL, are as follows:



|                      | FPL                                                                                                                                                                                                                                                          |       | FPL Group Capital |  | Total |       | Maturity Date
|--------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----- | ----------------- |  | ----- | ----- | -------------
|                      |                                                                                                                                                                                                                                                              |       |                   |  |      
|                      | (millions)                                                                                                                                                                                                                                                   |       |                  
|                      |                                                                                                                                                                                                                                                              |       |                   |  |       |       |              
|                      | $                                                                                                                                                                                                                                                            | 500   |                   |  | $     | 1,000 |              
|                      |                                                                                                                                                                                                                                                              | 1,000 |                   |  |       | 1,000 |              
|                      |                                                                                                                                                                                                                                                              |       |                   |  |       |       |              
|                      | $                                                                                                                                                                                                                                                            | 1,500 |                   |  | $     | 2,000 |              
|                      |                                                                                                                                                                                                                                                              |       |                   |  |       |       |              
|_____________________ |                                                                                                                                                                                                                                                              |       |                   |  |       |       |              
|(a)                   | These facilities provide for the issuance of letters of credit of up to $1.5 billion ($750 million for FPL and $750 million for FPL Group Capital).  The issuance of letters of credit is subject to the aggregate commitment under the applicable facility.

These credit facilities are available to support the companies' commercial paper programs and to provide additional liquidity in the event of a transmission and distribution property loss (in the case of FPL), as well as for general corporate purposes.  At September 30, 2004, letters of credit totaling $166 million were outstanding under FPL Group Capital's credit facilities and no amounts were outstanding under FPL's credit facilities.  FPL Group (which guarantees payment of FPL Group Capital credit facilities) is required to maintain a minimum ratio of funded debt to capitalization under the terms of FPL Group Capital's credit facilities and FPL is required to maintain a minimum ratio of funded debt to capitalization under the terms of FPL's credit facilities.  At September 30, 2004, FPL Group and FPL were in compliance with their respective ratio.

In addition, FPL Group Capital and FPL have each established an uncommitted credit facility with a bank to be used for general corporate purposes.  The bank may at its discretion, upon the request of FPL Group Capital or FPL, make a short-term loan or loans to FPL Group Capital or FPL in an aggregate amount determined by the bank, which is subject to change at any time.  The terms of the specific borrowings under the uncommitted credit facilities, including maturity, are set at the time borrowing requests are made by FPL Group Capital or FPL.  At September 30, 2004, there were no amounts outstanding for either FPL Group Capital or FPL under the uncommitted credit facilities.

In June 2004, a consolidated FPL VIE that leases nuclear fuel to FPL increased its senior secured revolving credit facility, which provides backup support for its commercial paper program, from $65 million to $100 million and extended the expiration date from June 2004 until June 2009.  FPL has provided an unconditional guarantee of the payment obligations of the VIE under the credit facility, which are included in the guarantee discussion below.  At September 30, 2004, the VIE had no outstanding borrowings under the revolving credit facility and approximately $52 million under the commercial paper program.  FPL also provides an unconditional payment guarantee of the VIE's $135 million of 2.34% senior secured notes, issued in June 2003 and maturing in June 2006, which is included in the guarantee discussion below.

At September 30, 2004, FPL Group and FPL Group Capital had approximately $2.0 billion (issuable by either or both of them up to such aggregate amount) of available capacity under shelf registration statements.  Securities that may be issued under the FPL Group and FPL Group Capital shelf registration statements, depending on the registrant, include common stock, stock purchase contracts, stock purchase units, preferred stock, senior debt securities, preferred trust securities and related subordinated debt securities, and guarantees relating to certain of those securities.  This capacity is available for, among other things, new investment opportunities.  At September 30, 2004, FPL had approximately $1.0 billion of available capacity under its shelf registration statement.  Securities that may be issued under FPL's shelf registration statement include preferred stock, first mortgage bonds, preferred trust securities and related subordinated debt securities and guarantees.

During the nine months ended September 30, 2004, FPL sold 200,000 shares of $100 par value 4 1/2% Series V preferred stock to FPL Group and issued $240 million of 5.65% first mortgage bonds maturing in 2035, FPL Group Capital sold $309 million of 5 7/8% junior subordinated debentures maturing in 2044 and FPL Energy drew $22 million from a construction term credit facility.  The junior subordinated debentures were purchased by an unconsolidated 100%-owned finance subsidiary of FPL Group using proceeds from the March 2004 sale by that finance subsidiary of $300 million of preferred trust securities to the public and $9 million of common trust securities to FPL Group.  FPL Group has fully and unconditionally guaranteed the junior subordinated debentures and the preferred trust securities.  The junior subordinated debentures are included in long-term debt on FPL Group's condensed consolidated balance sheets.  See Note 9.  During the nine months ended September 30, 2004, FPL Group Capital also repaid two variable rate term loans totaling $175 million and had $175 million of 6.875% debentures mature.

Subsidiaries of FPL Group also entered into four interest rate swap agreements during the nine months ended September 30, 2004.  The swaps consisted of two variable interest rate swap agreements at FPL to protect $500 million of its outstanding 6.875% first mortgage bonds maturing in 2005 against changes in fair value due to changes in interest rates, a variable interest rate swap agreement at FPL Group Capital to protect $200 million of its outstanding 1 7/8% debentures against changes in fair value due to changes in interest rates and an interest rate swap agreement whereby an FPL Energy subsidiary receives LIBOR and pays a fixed rate of 3.845% on approximately $30 million of its variable rate debt in order to limit cash flow exposure.  In October 2004, FPL Group Capital entered into several variable interest rate swap agreements to protect $500 million of its outstanding 3 1/4% debentures maturing in 2006 against changes in fair value due to changes in interest rates.

The following provides various metrics regarding FPL Group's (including FPL's) and FPL's outstanding debt:



|                                                            | FPL Group                                         |   | FPL         
|----------------------------------------------------------- | ------------------------------------------------- | - | ------------
|                                                            |                                                   |  
|                                                            | September 30,                                     |   | December 31,
|                                                            | 2004                                              |   | 2003        
|                                                            |                                                   |   |             
|                                                            |                                                   |   |             
|Weighted-average year-to-date interest rate(a)              | 5.0                                               | % |             
|Weighted-average life (years)                               | 9.0                                               |   |             
|Year-to-date average of floating rate debt to total debt(a) | 28                                                | % |             
|_____________________                                       |                                                   |   |             
|(a)                                                         | Calculations include interest rate swaps, if any.

In June 2004, an indirect subsidiary of FPL Group sold a note receivable from a limited partnership of which Olympus is a general partner.  Olympus is an indirect subsidiary of Adelphia.  In June 2002, Adelphia, Olympus and the limited partnership filed for bankruptcy protection under Chapter 11, and the note, which was due July 1, 2002, is in default.  The note receivable, which was previously recorded in other investments on FPL Group's condensed consolidated balance sheet, was sold for its net book value of approximately $127 million, including accrued interest through the date of the commencement of the Chapter 11 proceedings, less related transactions costs which were not significant.  Proceeds from the sale of the note were used to reduce FPL Group Capital's debt.

FPL Group's commitments at September 30, 2004 were as follows:



|                                       | 2004                                                                                                                                                                                                                                                                                                                                                                                                                        |       | 2005 |   | 2006  |  | 2007 |       | 2008 |   | Thereafter |  | Total
|-------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | ---- | - | ----- |  | ---- | ----- | ---- | - | ---------- |  | -----
|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                             |       |      |   |       |  |     
|                                       | (millions)                                                                                                                                                                                                                                                                                                                                                                                                                 
|Long-term debt, including interest:(a) |                                                                                                                                                                                                                                                                                                                                                                                                                             |       |      |   |       |  |      |       |      |   |            |  |      
|FPL                                    | $                                                                                                                                                                                                                                                                                                                                                                                                                           | 55    |      | $ | 659   |  | $    | 263   |      | $ | 127        |  | $    
|FPL Energy                             |                                                                                                                                                                                                                                                                                                                                                                                                                             | 59    |      |   | 217   |  |      | 206   |      |   | 501        |  |      
|Corporate and Other                    |                                                                                                                                                                                                                                                                                                                                                                                                                             | 59    |      |   | 812   |  |      | 1,300 |      |   | 1,187      |  |      
|Corporate Units                        |                                                                                                                                                                                                                                                                                                                                                                                                                             | 9     |      |   | 18    |  |      | 2     |      |   | -          |  |      
|Purchase obligations:                  |                                                                                                                                                                                                                                                                                                                                                                                                                             |       |      |   |       |  |      |       |      |   |            |  |      
|FPL(b)                                 |                                                                                                                                                                                                                                                                                                                                                                                                                             | 1,340 |      |   | 4,240 |  |      | 3,065 |      |   | 2,435      |  |      
|FPL Energy(c)                          |                                                                                                                                                                                                                                                                                                                                                                                                                             | 61    |      |   | 67    |  |      | 54    |      |   | 69         |  |      
|Asset retirement activities:(d)        |                                                                                                                                                                                                                                                                                                                                                                                                                             |       |      |   |       |  |      |       |      |   |            |  |      
|FPL(e)                                 |                                                                                                                                                                                                                                                                                                                                                                                                                             | -     |      |   | -     |  |      | -     |      |   | -          |  |      
|FPL Energy(f)                          |                                                                                                                                                                                                                                                                                                                                                                                                                             | -     |      |   | 4     |  |      | -     |      |   | -          |  |      
|Other commitments:                     |                                                                                                                                                                                                                                                                                                                                                                                                                             |       |      |   |       |  |      |       |      |   |            |  |      
|Corporate and Other                    |                                                                                                                                                                                                                                                                                                                                                                                                                             | 61    |      |   | 63    |  |      | -     |      |   | -          |  |      
|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                             |       |      |   |       |  |      |       |      |   |            |  |      
|Total                                  | $                                                                                                                                                                                                                                                                                                                                                                                                                           | 1,644 |      | $ | 6,080 |  | $    | 4,890 |      | $ | 4,319      |  | $    
|                                       |                                                                                                                                                                                                                                                                                                                                                                                                                             |       |      |   |       |  |      |       |      |   |            |  |      
|_____________________                 
|(a)                                    | Includes principal, interest and interest rate swaps.  Variable rate interest was computed using September 30, 2004 rates.                                                                                                                                                                                                                                                                                                 
|(b)                                    | Represents required capacity and minimum payments under long-term purchased power and fuel contracts, the majority of which is recoverable through various cost recovery clauses (see Note 10 - Contracts), and projected capital expenditures through 2008 to meet increased electricity usage and customer growth, as well as capital improvements to and maintenance of existing facilities (see Note 10 - Commitments).
|(c)                                    | Represents firm commitments primarily in connection with natural gas supply, transportation and storage, firm transmission service, nuclear fuel and a portion of its capital expenditures.  See Note 10 - Contracts.  In addition, in October 2004, FPL Energy entered into a contract to purchase wind turbines in 2004 and 2005 totaling $182 million.                                                                  
|(d)                                    | Represents expected cash payments adjusted for inflation for estimated costs to perform asset retirement activities.                                                                                                                                                                                                                                                                                                       
|(e)                                    | At September 30, 2004, FPL had $1,872 million in restricted trust funds for the payment of future expenditures to decommission FPL's nuclear units, which are included in special use funds.                                                                                                                                                                                                                               
|(f)                                    | At September 30, 2004, FPL Energy's 88.23% portion of Seabrook's restricted trust fund for the payment of future expenditures to decommission Seabrook was $284 million and is included in FPL Group's special use funds.                                                                                                                                                                                                  



In addition to the above, FPL Energy has guaranteed certain performance obligations of a power plant owned by a wholly-owned subsidiary as part of a power purchase agreement that expires in 2027.  Under this agreement, the subsidiary could incur market-based liquidated damages for failure to meet contractual minimum outputs.  In addition, certain subsidiaries of FPL Energy have contracts that require certain projects to meet annual minimum generation amounts.  Failure to meet the annual minimum generation amounts would result in the FPL Energy subsidiary incurring specified liquidated damages.  Based on past performance of these and similar projects and current forward prices, management believes that the exposure associated with these guarantees is not material.

An FPL Energy subsidiary is committed to purchase oil and gas inventory remaining in certain storage facilities at December 31, 2005 at its weighted-average cost.  At September 30, 2004, the subsidiary's commitment is estimated to be from $0 to approximately $78 million, based on a potential range of zero to full storage volume at the current average forward price of oil and gas.

During the third quarter of 2004, FPL was impacted by Hurricanes Charley, Frances and Jeanne, each of which did major damage in parts of FPL's service territory and collectively resulted in over 5.4 million power outages with approximately three-quarters of FPL's customers losing power during at least one hurricane.  Damage to FPL property was primarily to the transmission and distribution systems.  Although FPL has not completed the final accounting of all restoration costs, FPL accrued restoration costs during the quarter ended September 30, 2004 of approximately $710 million, which are expected to be recoverable from the storm reserve.  The unpaid portion of these accrued costs is included in other current liabilities on FPL Group's and FPL's condensed consolidated balance sheets.  In addition, based on assessments as of September 30, 2004, FPL estimated it had sustained other property losses totaling approximately $108 million, which has been or is expected to be recovered from insurance carriers.  The costs recoverable from the storm reserve exceeded the balance of the storm reserve by approximately $361 million at September 30, 2004.  This deficiency has been deferred pursuant to an FPSC order and recorded as a regulatory asset on FPL Group's and FPL's condensed consolidated balance sheets.  FPL intends to seek recovery of the $361 million regulatory asset.  FPL is in the process of reviewing and finalizing its cost estimates associated with the three hurricanes.  The exact timing and manner of recovery have yet to be determined.  The FPSC has the right to review FPL's storm charges for reasonableness and prudence.  The funds set aside to cover the cost of FPL's storm damage were reclassified to a current asset on FPL Group's and FPL's condensed consolidated balance sheets.  FPL Group expects to receive a $73 million federal tax refund in the fourth quarter of 2004 as a result of casualty losses associated with the hurricanes.  In addition, costs associated with the hurricanes will also reduce FPL Group's 2004 and 2005 tax liabilities.  FPL's bank lines of credit discussed above are also available if needed to provide additional liquidity for storm restoration costs.



Variable Interest Entities - In

Pensions and Other Postretirement Benefits - In May 2004, the FASB issued Staff Position FAS 106-2, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003."  See Note 1.



Total other comprehensive income (OCI) activity for the nine months ended September 30, 2004 is as follows:

|                                                                 | Accumulated Other Comprehensive Income (Loss) |  
|---------------------------------------------------------------- | --------------------------------------------- | -
|                                                                
|                                                                 | Net Unrealized
Losses
On Cash Flow
Hedges     |  
|                                                                 |                                               |  
|                                                                 | (millions)                                    |  
|                                                                 |                                               |  
|Balances, December 31, 2003                                      |                                               | $
|Commodity hedges                                                 |                                               |  
|Effective portion of net unrealized loss:                        |                                               |  
|Consolidated subsidiaries (net of $35 tax benefit)               |                                               |  
|Reclassification from OCI to net income:                         |                                               |  
|Consolidated subsidiaries (net of $0.5 tax benefit)              |                                               |  
|Interest rate hedges                                             |                                               |  
|Effective portion of net unrealized gain (net of $1 tax expense) |                                               |  
|Net unrealized loss on available for sale securities             |                                               |  
|(net of $0.4 tax benefit)                                        |                                               |  
|                                                                 |                                               |  
|Balances, September 30, 2004                                     |                                               | $
|                                                                 |                                               |  



|                                                                 | Accumulated Other Comprehensive Income (Loss)     |  
|---------------------------------------------------------------- | ------------------------------------------------- | -
|                                                                 |                                                   |  
|                                                                 | Net Unrealized
Gains (Losses)
On Cash Flow
Hedges |  
|                                                                 |                                                   |  
|                                                                 | (millions)                                        |  
|                                                                 |                                                   |  
|Balances, December 31, 2002                                      |                                                   | $
|Commodity hedges                                                 |                                                   |  
|Effective portion of net unrealized gain:                        |                                                   |  
|Consolidated subsidiaries (net of $11 tax expense)               |                                                   |  
|Equity investments (net of $6 tax expense)                       |                                                   |  
|Reclassification from OCI to net income:                         |                                                   |  
|Consolidated subsidiaries (net of $17 tax benefit)               |                                                   |  
|Equity investments (net of $6 tax benefit)                       |                                                   |  
|Interest rate hedges                                             |                                                   |  
|Effective portion of net unrealized loss (net of $3 tax benefit) |                                                   |  
|Net unrealized gain on available for sale securities             |                                                   |  
|(net of $6 tax expense)                                          |                                                   |  
|                                                                 |                                                   |  
|Balances, September 30, 2003                                     |                                                   | $
|                                                                 |                                                   |  



Energy Marketing and Trading - Certain of FPL Group's subsidiaries, including FPL and FPL Energy, use derivative instruments (primarily forward purchases and sales, swaps, options and futures) to manage the commodity price risk inherent in fuel and electricity transactions, as well as to optimize the value of power generation assets.  To a lesser extent, FPL Energy engages in limited energy trading activities to take advantage of expected future favorable price movements.

Derivative instruments, when required to be marked to market under FAS 133, as amended, are recorded on FPL Group's and FPL's consolidated balance sheets as either an asset or liability (in derivative assets, other assets, other current liabilities and other liabilities) measured at fair value.  At FPL, substantially all changes in fair value are deferred as a regulatory asset or liability until the contracts are settled.  Upon settlement, any gains or losses are passed through the fuel clause and the capacity clause.  For FPL Group's non-rate regulated operations, predominantly FPL Energy, essentially all changes in the derivatives' fair value for power purchases and sales and trading activities are recognized net in operating revenues; fuel purchases and sales are recognized net in fuel, purchased power and interchange expense; and the equity method investees' related activity is recognized in equity in earnings of equity method investees in FPL Group's condensed consolidated statements of income unless hedge accounting is applied.

The changes in the fair value of FPL Group's consolidated subsidiaries' energy contract derivative instruments for the three and nine months ended September 30, 2004 were as follows:

|                                                                  |                     |    | Hedges on Owned Assets |   |                
|----------------------------------------------------------------- | ------------------- | -- | ---------------------- | - | ---------------
|                                                                  |                     |    |                        |   |                
|                                                                  | Proprietary
Trading |    | Managed                |   | Non-
Qualifying
|                                                                  |                     |    |                        |   |                
|                                                                  | (millions)          |   
|Three months ended September 30, 2004                             |                     |    |                        |   |                
|Fair value of contracts outstanding at June 30, 2004              | $                   | 13 |                        | $ | -              
|Reclassification to realized at settlement of contracts           |                     | (8 | )                      |   | -              
|Effective portion of changes in fair value recorded in OCI        |                     | -  |                        |   | -              
|Ineffective portion of changes in fair value recorded in earnings |                     | -  |                        |   | -              
|Changes in fair value excluding reclassification to realized      |                     | (1 | )                      |   | (2             
|                                                                  |                     |    |                        |   |                
|Fair value of contracts outstanding at September 30, 2004         |                     | 4  |                        |   | (2             
|Net option premium payment (receipts)                             |                     | -  |                        |   | -              
|                                                                  |                     |    |                        |   |                
|Total mark-to-market energy contract net assets (liabilities)     |                     |    |                        |   |                
|at September 30, 2004                                             | $                   | 4  |                        | $ | (2             
|                                                                  |                     |    |                        |   |                



|                                                                  |                     |     | Hedges on Owned Assets |   |                
|----------------------------------------------------------------- | ------------------- | --- | ---------------------- | - | ---------------
|                                                                  |                     |     |                        |   |                
|                                                                  | Proprietary
Trading |     | Managed                |   | Non-
Qualifying
|                                                                  |                     |     |                        |   |                
|                                                                  | (millions)          |    
|Nine months ended September 30, 2004                              |                     |     |                        |   |                
|Fair value of contracts outstanding at December 31, 2003          | $                   | 7   |                        | $ | 1              
|Reclassification to realized at settlement of contracts           |                     | (14 | )                      |   | (2             
|Effective portion of changes in fair value recorded in OCI        |                     | -   |                        |   | -              
|Ineffective portion of changes in fair value recorded in earnings |                     | -   |                        |   | -              
|Changes in fair value excluding reclassification to realized      |                     | 11  |                        |   | (1             
|                                                                  |                     |     |                        |   |                
|Fair value of contracts outstanding at September 30, 2004         |                     | 4   |                        |   | (2             
|Net option premium payment (receipts)                             |                     | -   |                        |   | -              
|                                                                  |                     |     |                        |   |                
|Total mark-to-market energy contract net assets (liabilities)     |                     |     |                        |   |                
|at September 30, 2004                                             | $                   | 4   |                        | $ | (2             
|                                                                  |                     |     |                        |   |                

FPL Group's total mark-to-market energy contract net assets at September 30, 2004 shown above are included in the consolidated balance sheet as follows:

|                                                                                  |  | September 30,
2004 |  
|--------------------------------------------------------------------------------- |  | ------------------ | -
|                                                                                 
|                                                                                  |  | (millions)         |  
|                                                                                  |  |                    |  
|Derivative assets                                                                 |  |                    | $
|Other assets                                                                      |  |                    |  
|Other current liabilities                                                         |  |                    |  
|Other liabilities                                                                 |  |                    |  
|                                                                                  |  |                    |  
|FPL Group's total mark-to-market energy contract net assets at September 30, 2004 |  |                    | $
|                                                                                  | 





|                                              | Maturity   |   
|--------------------------------------------- | ---------- | --
|                                              |            |   
|                                              | 2004       |   
|                                              |            |   
|                                              | (millions)
|Proprietary Trading:                          |            |   
|Actively quoted (i.e., exchange trade) prices | $          | - 
|Prices provided by other external sources     |            | 5 
|Modeled                                       |            | (4
|                                              |            |   
|Total                                         |            | 1 
|                                              |            |   
|                                             
|Owned Assets - Managed:                       |            |   
|Actively quoted (i.e., exchange trade) prices |            | - 
|Prices provided by other external sources     |            | - 
|Modeled                                       |            | - 
|                                              |            |   
|Total                                         |            | - 
|                                              |            |   
|                                             
|Owned Assets - Non-Qualifying:                |            |   
|Actively quoted (i.e., exchange trade) prices |            | 15
|Prices provided by other external sources     |            | 4 
|Modeled                                       |            | (5
|                                              |            |   
|Total                                         |            | 14
|                                              |            |   
|                                              |            |   
|Owned Assets - OCI:                           |            |   
|Actively quoted (i.e., exchange trade) prices |            | 1 
|Prices provided by other external sources     |            | - 
|Modeled                                       |            | (2
|                                              |            |   
|Total                                         |            | (1
|                                              |            |   
|                                              |            |   
|Owned Assets - FPL Cost Recovery Clauses:     |            |   
|Actively quoted (i.e., exchange trade) prices |            | 60
|Prices provided by other external sources     |            | 20
|Modeled                                       |            | - 
|                                              |            |   
|Total                                         |            | 80
|                                              |            |   
|                                             
|Total sources of fair value                   | $          | 94
|                                              |            |   



The changes in the fair value of FPL Group's consolidated subsidiaries' energy contract derivative instruments for the three and nine months ended September 30, 2003 were as follows:

|                                                             |                     |    | Hedges on Owned Assets |   |                
|------------------------------------------------------------ | ------------------- | -- | ---------------------- | - | ---------------
|                                                             |                     |    |                        |   |                
|                                                             | Proprietary
Trading |    | Managed                |   | Non-
Qualifying
|                                                             |                     |    |                        |   |                
|                                                             | (millions)          |   
|Three months ended September 30, 2003                        |                     |    |                        |   |                
|Fair value of contracts outstanding at June 30, 2003         | $                   | 4  |                        | $ | 1              
|Reclassification to realized at settlement of contracts      |                     | (2 | )                      |   | (1             
|Effective portion of changes in fair value recorded in OCI   |                     | -  |                        |   | -              
|Changes in valuation assumptions                             |                     | -  |                        |   | -              
|Changes in fair value excluding reclassification to realized |                     | 4  |                        |   | -              
|                                                             |                     |    |                        |   |                
|Fair value of contracts outstanding at September 30, 2003    |                     | 6  |                        |   | -              
|Net option premium payment (receipts)                        |                     | -  |                        |   | -              
|                                                             |                     |    |                        |   |                
|Total mark-to-market energy contract net assets              |                     |    |                        |   |                
|at September 30, 2003                                        | $                   | 6  |                        | $ | -              
|                                                             |                     |    |                        |   |                



|                                                             |                                                                                                                                                                                  |    | Hedges on Owned Assets |   |                
|------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -- | ---------------------- | - | ---------------
|                                                             |                                                                                                                                                                                  |    |                        |   |                
|                                                             | Proprietary
Trading                                                                                                                                                              |    | Managed                |   | Non-
Qualifying
|                                                             |                                                                                                                                                                                  |    |                        |   |                
|                                                             | (millions)                                                                                                                                                                       |   
|Nine months ended September 30, 2003                         |                                                                                                                                                                                  |    |                        |   |                
|Fair value of contracts outstanding at December 31, 2002     | $                                                                                                                                                                                | 4  |                        | $ | -              
|Reclassification to realized at settlement of contracts      |                                                                                                                                                                                  | (6 | )                      |   | (1             
|Effective portion of changes in fair value recorded in OCI   |                                                                                                                                                                                  | -  |                        |   | -              
|Changes in valuation assumptions                             |                                                                                                                                                                                  | -  |                        |   | -              
|Changes in fair value excluding reclassification to realized |                                                                                                                                                                                  | 8  |                        |   | 1              
|                                                             |                                                                                                                                                                                  |    |                        |   |                
|Fair value of contracts outstanding at September 30, 2003    |                                                                                                                                                                                  | 6  |                        |   | -              
|Net option premium payment (receipts)                        |                                                                                                                                                                                  | -  |                        |   | -              
|                                                             |                                                                                                                                                                                  |    |                        |   |                
|Total mark-to-market energy contract net assets              |                                                                                                                                                                                  |    |                        |   |                
|at September 30, 2003                                        | $                                                                                                                                                                                | 6  |                        | $ | -              
|                                                             |                                                                                                                                                                                  |    |                        |   |                
|_____________________                                        |                                                                                                                                                                                  |    |                        |   |                
|(a)                                                          | Change in valuation assumption from applying volatility skewness (selection of an input assumption among alternatives based on the moneyness of the option) in option valuation.



FPL Group and its subsidiaries are also exposed to credit risk through their energy marketing and trading operations.  Credit risk is the risk that a financial loss will be incurred if a counterparty to a transaction does not fulfill its financial obligation.  FPL Group manages counterparty credit risk for its subsidiaries with energy marketing and trading operations through established policies, including counterparty credit limits, and in some cases credit enhancements, such as cash prepayments, letters of credit, cash and other collateral and guarantees.  Credit risk is also managed through the use of master netting agreements.  FPL Group's credit department monitors current and forward credit exposure to counterparties and their affiliates, both on an individual and an aggregate basis.

Commodity price risk- FPL Group uses a value-at-risk (VaR) model to measure market risk in its trading and mark-to-market portfolios.  The VaR is the estimated nominal loss of market value based on a one-day holding period at a 95% confidence level using historical simulation methodology.  As of September 30, 2004 and December 31, 2003, the VaR figures are as follows:

|                             |                                                                                                                                                                                                                                                                         |   |                                             |   |          
|---------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------------------------------- | - | ---------
|                             | Trading and Managed Hedges                                                                                                                                                                                                                                              |   | Non-Qualifying Hedges
and Hedges in OCI (a) |   | Total    
|                             |                                                                                                                                                                                                                                                                         |   |                                             |   |          
|                             | FPL                                                                                                                                                                                                                                                                     |   | FPL
Energy                                  |   | FPL
Group
|                             |                                                                                                                                                                                                                                                                         |   |                                             |   |          
|                             | (millions)                                                                                                                                                                                                                                                             
|                             |                                                                                                                                                                                                                                                                         |   |                                             |   |          
|December 31, 2003            | $                                                                                                                                                                                                                                                                       | - |                                             | $ | -        
|September 30, 2004           | $                                                                                                                                                                                                                                                                       | - |                                             | $ | 1        
|                             |                                                                                                                                                                                                                                                                        
|Average for the period ended |                                                                                                                                                                                                                                                                         |   |                                             |   |          
|September 30, 2004           | $                                                                                                                                                                                                                                                                       | - |                                             | $ | 1        
|_____________________        |                                                                                                                                                                                                                                                                        
|(a)                          | Non-qualifying hedges are employed to reduce the market risk exposure to physical assets which are not marked to market.  The VaR figures for the non-qualifying hedges and hedges in OCI category do not represent the economic exposure to commodity price movements.

Interest rate risk - FPL Group and FPL are exposed to risk resulting from changes in interest rates as a result of their issuances of debt, investments in special use funds, including the storm fund, and interest rate swaps.  FPL Group and FPL manage their interest rate exposure by monitoring current interest rates and adjusting their variable rate debt in relation to total capitalization.

The following are estimates of the fair value of FPL Group's and FPL's financial instruments:

|                                                              | September 30, 2004 |       | December 31, 2003   
|------------------------------------------------------------- | ------------------ | ----- | --------------------
|                                                              |                    |       |                     
|                                                              | Carrying
Amount    |       | Estimated
Fair Value
|                                                              |                    |       |                     
|                                                              | (millions)        
|FPL Group:                                                    |                    |       |                     
|Long-term debt, including current maturities                  | $                  | 9,263 |                     
|Fixed income securities:                                      |                    |       |                     
|Special use funds, including storm fund                       | $                  | 1,414 |                     
|Other investments                                             | $                  | 69    |                     
|Interest rate swaps - net unrealized loss                     | $                  | (10   | )                   
|                                                              |                    |       |                     
|FPL:                                                          |                    |       |                     
|Long-term debt, including current maturities                  | $                  | 3,313 |                     
|Fixed income securities:                                      |                    |       |                     
|Special use funds, including storm fund                       | $                  | 1,278 |                     
|Interest rate swaps - net unrealized loss                     | $                  | (2    | )                   
|_____________________                                         |                   
|(a)Based on market prices provided by external sources.      
|(b)Based on quoted market prices for these or similar issues.
|(c)Based on market prices modeled internally.                

The special use funds of FPL Group include restricted funds set aside to cover the cost of storm damage for FPL and for the decommissioning of FPL Group's and FPL's nuclear power plants.  At September 30, 2004, the special use funds set aside to cover the cost of storm damage for FPL were reclassified to a current asset on FPL Group's and FPL's condensed consolidated balance sheets as FPL expects to utilize these funds during the next twelve months.  A portion of the special use funds is invested in fixed income debt securities carried at their market value.  Adjustments to market value result in a corresponding adjustment to the related liability accounts based on current regulatory treatment for FPL.  The market value adjustments of FPL Group's non-rate regulated operations result in a corresponding adjustment to OCI.  Because the funds set aside by FPL for storm damage could be needed at any time, the related investments are generally more liquid and, therefore, are less sensitive to changes in interest rates.  The nuclear decommissioning funds, in contrast, are generally invested in longer-term securities, as decommissioning activities are not expected to begin until at least 2012.





|Notional
Amount                        |                              | Effective
Date |   | Maturity
Date |   | Rate
Paid      |  | Rate
Received |     | Estimated
Fair Value
|-------------------------------------- | ---------------------------- | -------------- | - | ------------- | - | -------------- |  | ------------- | --- | --------------------
|                                       |                              |                |   |               |   |                |  |               |     |                     
|(millions)                             |                              |                |   |               |   |                |  |               |     |                     
|                                       |                              |                |   |               |   |                | 
|Fair value hedges - FPL:               |                              |                |   |               |   |                | 
|$                                      | 250                          |                |   | April 2004    |   | December 2005  |  | variable      | (a) | 6.875               
|$                                      | 250                          |                |   | May 2004      |   | December 2005  |  | variable      | (b) | 6.875               
|                                       |                              |                |   |               |   |                |  |               |     |                     
|Fair value hedges - FPL Group Capital: |                              |                |   |               |   |                |  |               |     |                     
|$                                      | 150                          |                |   | July 2003     |   | September 2006 |  | variable      | (c) | 7.625               
|$                                      | 150                          |                |   | July 2003     |   | September 2006 |  | variable      | (d) | 7.625               
|$                                      | 200                          |                |   | January 2004  |   | March 2005     |  | variable      | (e) | 1.875               
|                                       |                              |                |   |               |   |                |  |               |     |                     
|Total fair value hedges                |                              |                |   |               |   |                |  |               |     |                     
|                                       |                              |                |   |               |   |                |  |               |    
|                                       |                              |                |   |               |   |                |  |               |     |                     
|Cash flow hedges - FPL Energy:         |                              |                |   |               |   |                |  |               |     |                     
|$                                      | 98                           |                |   | July 2002     |   | December 2007  |  | 4.41          | %   | variable            
|$                                      | 200                          |                |   | August 2003   |   | November 2007  |  | 3.557         | %   | variable            
|$                                      | 94                           |                |   | December 2003 |   | December 2017  |  | 4.245         | %   | variable            
|$                                      | 30                           |                |   | April 2004    |   | December 2017  |  | 3.845         | %   | variable            
|                                       |                             
|Total cash flow hedges                 |                              |                |   |               |   |                |  |               | (3  | )                   
|                                       |                             
|Total interest rate hedges             |                              |                | $ | (10           | )
|                                       |                              |                |   |              
|_____________________                  |                             
|(a)                                    | Six-month LIBOR plus 3.7285%
|(b)                                    | Six-month LIBOR plus 3.6800%
|(c)                                    | Six-month LIBOR plus 4.9900%
|(d)                                    | Six-month LIBOR plus 4.9925%
|(e)                                    | Six-month LIBOR less 0.1375%
|(f)                                    | Three-month LIBOR           

Based upon a hypothetical 10% decrease in interest rates, which is a reasonable near-term market change, the net fair value of FPL Group's net liabilities would increase by approximately $199 million ($83 million for FPL) at September 30, 2004.

Equity price risk - Included in the special use funds of FPL Group are marketable equity securities carried at their market value of approximately $957 million and $926 million ($809 million and $781 million for FPL) at September 30, 2004 and December 31, 2003, respectively.  A hypothetical 10% decrease in the prices quoted by stock exchanges, which is a reasonable near-term market change, would result in a $96 million ($81 million for FPL) reduction in fair value and corresponding adjustments to the related liability accounts based on current regulatory treatment for FPL, or adjustments to OCI for FPL Group's non-rate regulated operations, at September 30, 2004.

Credit risk - For all derivative and contractual transactions, FPL Group's energy marketing and trading operations, which includes FPL's energy marketing and trading division, are exposed to losses in the event of nonperformance by counterparties to these transactions.  Relevant considerations when assessing FPL Group's energy marketing and trading operations' credit risk exposure include:































Based on FPL Group's policies and risk exposures related to credit, FPL Group and FPL do not anticipate a material adverse effect on their financial positions as a result of counterparty nonperformance.  As of September 30, 2004, approximately 100% of FPL Group's and 100% of FPL's energy marketing and trading counterparty credit risk exposure is associated with companies that have at least investment grade credit ratings.



See Management's Discussion - Energy Marketing and Trading and Market Risk Sensitivity - Market Risk Sensitivity.

Item 4.  Controls and Procedures

(a)	Evaluation of Disclosure Controls and Procedures

As of September 30, 2004, FPL Group and FPL had performed an evaluation, under the supervision and with the participation of its management, including FPL Group's and FPL's chief executive officer and chief financial officer, of the effectiveness of the design and operation of each company's disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) or 15d-15(e)).  Based upon that evaluation, the chief executive officer and chief financial officer of FPL Group and FPL concluded that the company's disclosure controls and procedures are effective in timely alerting them to material information relating to the company and its consolidated subsidiaries required to be included in the company's reports filed or submitted under the Exchange Act.  FPL Group and FPL each have a Disclosure Committee, which is made up of several key management employees and reports directly to the chief executive officer and chief financial officer of each company, to monitor and evaluate these disclosure controls and procedures.  Due to the inherent limitations of the effectiveness of any established disclosure controls and procedures, management of FPL Group and FPL cannot provide absolute assurance that the objectives of its disclosure controls and procedures will be met.

(b)	Changes in Internal Controls

FPL Group and FPL are continuously seeking to improve the efficiency and effectiveness of their operations and of their internal controls.  This results in refinements to processes throughout FPL Group and FPL.  However, there has been no change in FPL Group's or FPL's internal control over financial reporting that occurred during FPL Group's and FPL's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, FPL Group's or FPL's internal control over financial reporting.



PART II - OTHER INFORMATION





























(c)FPL Group, Inc. Purchases of Securities

|Period                |                                                                                                                                                                                           | Total Number of
Shares Purchased(a) |       | Average Price
Paid Per Share |  | Total Number of
Shares Purchased as Part of a
Publicly Announced Program |   | Maximum Number of
Shares that May Yet be
Purchased Under the Program(b)
|--------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------- | ----- | ---------------------------- |  | ------------------------------------------------------------------------ | - | -----------------------------------------------------------------------
|                      |                                                                                                                                                                                           |                                     |       |                             
|                      |                                                                                                                                                                                           |                                     |       |                              |  |                                                                          |   | (thousands)                                                            
|                      |                                                                                                                                                                                           |                                     |       |                              |  |                                                                          |   |                                                                        
|7/1/04-7/31/04        |                                                                                                                                                                                           |                                     | 1,124 |                              |  |                                                                          | $ | 64.18                                                                  
|8/1/04-8/31/04        |                                                                                                                                                                                           |                                     | 310   |                              |  |                                                                          | $ | 68.12                                                                  
|9/1/04-9/30/04        |                                                                                                                                                                                           |                                     | 1,940 |                              |  |                                                                          | $ | 68.32                                                                  
|                      |                                                                                                                                                                                           |                                     |       |                              |  |                                                                          |  
|Total                 |                                                                                                                                                                                           |                                     | 3,374 |                              |  |                                                                          | $ | 66.92                                                                  
|                      |                                                                                                                                                                                           |                                     |       |                              |  |                                                                          |  
|_____________________
|(a)                   | Represents shares of common stock purchased by FPL Group from employees to pay taxes related to the vesting of restricted stock granted to employees.                                    
|(b)                   | In February 1997, FPL Group's board of directors authorized the repurchase of up to 10 million shares of common stock over an unspecified period as part of a publicly announced program.

Item 5.  Other Information



(i)	Reference is made to Item 1. Business - FPL Operations - Retail Ratemaking in the 2003 Form 10-K for FPL Group and FPL.



In October 2004, the Florida Supreme Court affirmed the FPSC's approval of the 2002-2005 rate agreement, which had been appealed by the South Florida Hospital and Healthcare Association and certain hospitals in April 2002.  The appellants have until November 5, 2004 to request a rehearing.



(ii)	Reference is made to Item 1. Business - FPL Operations - Nuclear Operations in the 2003 Form 10-K for FPL Group and FPL.



Due to the impact of Hurricanes Frances and Jeanne in September 2004, St. Lucie Unit No. 2's scheduled nuclear refueling outage was delayed and is now scheduled to begin in January 2005.



(iii)	Reference is made to Item 1. Business - FPL Operations - Fuel in the 2003 Form 10-K for FPL Group and FPL and Part II, Item 5. Other Information in the Quarterly Report on Form 10-Q for the period ended June 30,  2004 for FPL Group and FPL.



NRC approval for the additional storage racks at Turkey Point Units Nos. 3 and 4 is expected in late 2004.



(iv)	Reference is made to Item 1. Business - FPL Operations - Employees in the 2003 Form 10-K for FPL Group and FPL.

The International Brotherhood of Electrical Workers (IBEW) voted to extend the collective bargaining agreement with FPL until October 31, 2005.  Meanwhile, FPL and the IBEW are discussing a proposal for a successor agreement.



(v)	Reference is made to Item 1. Business - FPL Energy Operations - Portfolio by Category - Wind Assets in the 2003 Form 10-K for FPL Group.



In October 2004, Congress passed, and the President signed into law, an extension of the production tax credit program through the end of 2005.



FPL Energy announced that it will build, own and operate two new wind projects; a 106.5 mw wind farm in Oklahoma and a 114 mw wind farm in Texas.  In addition, FPL Energy is currently repowering a wind farm in California which will add 20.5 mw.  Including these wind additions, FPL Energy expects to add 250 mw to 750 mw of new wind projects by the end of 2005.



(vi)Reference is made to Item 2. Properties - Transmission and Distribution in the 2003 Form 10-K for FPL Group and FPL.



FPL's service territory was affected by Hurricane Charley in mid-August 2004, Hurricane Frances in early September 2004 and by Hurricane Jeanne in late September 2004.  Damage to FPL property was primarily to the transmission and distribution systems.  See Note 8 - Storm Reserve Deficiency.





|Item 6.  Exhibits
|-----------------
|                 
|                 
|                 
|                 
|                 
|                 
|                 
|                 
|                 
|                 
|                 
|                 



|                                                                                                                                                                                            
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|SIGNATURES                                                                                                                                                                                  
|                                                                                                                                                                                            
|Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.
|                                                                                                                                                                                            
|FPL GROUP, INC.                                                                                                                                                                             
|FLORIDA POWER & LIGHT COMPANY                                                                                                                                                               
|(Registrants)                                                                                                                                                                               
|                                                                                                                                                                                            
|Date:  November 2, 2004                                                                                                                                                                     
|                                                                                                                                                                                            
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