September 26, 2002

FPL Group announces restructuring of unregulated businesses and favorable IRS ruling

• Anticipates Non-Cash Charges of $140 Million to $175 Million After Tax
• Expects $300 Million Added Cash Flow from Tax Ruling
• Reaffirms Ongoing Earnings Per Share for 2002 of $4.70 to $4.75

JUNO BEACH, Fla. -- FPL Group, Inc. (NYSE: FPL) today announced it is restructuring its wholesale energy and telecommunications businesses in response to current challenging market conditions. As a result, the company said that in the third quarter of 2002 it expects to take one-time, non-cash restructuring and other charges in the range of $140 million to $175 million after tax. Also, the company said it has received recently a $229 million tax refund out of an estimated $300 million it expects to receive as a result of a recent IRS ruling.

The company reaffirmed that it expects 2002 earnings of $4.70 to $4.75 per share, excluding nonrecurring items. Third quarter earnings are expected to be down slightly from the prior-year quarter at $1.74 to $1.78 per share, excluding nonrecurring items, but earnings in the fourth quarter are expected to be above last year's quarter at $.69 to $.71 per share. The restructuring and other charges will negatively impact reported earnings in the third quarter by $.82 to $.99 per share.

"We remain optimistic about the outlook for FPL Group," said Lew Hay, chairman and chief executive officer. "We expect increased earnings in 2003 - anywhere from slightly above 2002 levels to over $5.00 per share."

FPL Energy Restructures, Adjusts Strategy

"The wholesale energy sector has been facing difficult market conditions including reduced profit margins, decreased market liquidity and continued low price volatility," said Hay. "As a result, we have undertaken a thorough review of business development plans, organizational structure and expenses, and have taken steps to modify our business strategy and align our organization to better ensure success in the future."

Major elements of the restructuring include:

• Successful contract renegotiations to significantly reduce overall commitments for gas turbines and other related equipment, resulting in a termination charge of $10 million after tax. In a separate agreement, FPL Energy has committed to purchase wind turbines to support its industry-leading wind development activities.
• With only a few exceptions, exiting the fossil-fueled greenfield power plant development business, resulting in a $40 million to $45 million after-tax charge for site development and other associated capitalized expenses.
• Realigning the organization structure and other actions associated with the restructuring, resulting in approximately $5 million to $10 million after tax charge in the quarter.

In addition, FPL Energy said it expects to take a charge ranging from $5 million to $15 million after tax associated with certain regulatory issues involving FPL Energy's partner in two wind facilities built in the early 1990s.

"We are very pleased to have restructured our turbine contract - greatly reducing our financial obligation for gas turbines to a level consistent with our current needs, while at the same time securing wind turbines for our planned portfolio growth. This, plus the other actions, will better position FPL Energy in the competitive energy market," said Hay. "Our strategy going forward will be to focus on improved operating performance and profitable growth through added wind power facilities and highly selective asset acquisitions."

Other Operations to Take Special Charges

The company also said it has been reviewing the impact of the changing telecommunications market on its fiber optic network business, FPL FiberNet. The subsidiary has decided to defer indefinitely its planned build-out of metro fiber rings in certain second-tier cities in Florida and has reduced its expectations for future revenue growth due to continued deterioration of the market. As a result, the subsidiary expects to record charges of approximately $50 million to $65 million after tax.

FPL Group also expects to take an after-tax charge of approximately $30 million associated with interests in certain leveraged leases of fiber optic cable of which MCI has been the lessee since 1988 and is now in default.

Favorable Tax Ruling Provides Cash Flow Benefits

In response to a recent IRS ruling, Florida Power & Light has modified its tax treatment of certain expenditures. As a result, the company expects to receive tax refunds of approximately $300 million, of which $229 million has been received in the third quarter. While the tax refunds have a positive cash flow benefit for the company, they have no direct effect on reported net income.

Outlook for FPL Group Remains Solid

"Despite significant turmoil in the energy and telecommunications sectors, FPL Group remains a solid performer, especially relative to our industry peers," said Hay.

"Florida Power & Light Company, our utility subsidiary, provides more than 85 percent of our earnings and benefits from a vibrant economy in Florida as evidenced by continued growth in new customer accounts and usage per customer. It also operates under an incentive-based rate agreement that will remain in effect through 2005," said Hay.

"FPL Energy is on track to realize 10 to 15 percent earnings growth in 2002, excluding nonrecurring items, and we remain confident about its future growth prospects. It expects to nearly double its wind energy portfolio by the end of 2003, maintaining its leadership in this fast-growing clean-energy segment. In addition, its fossil-fueled portfolio includes highly efficient plants, geographically diversified and strategically positioned throughout the United States."

"Although we are experiencing tough market conditions, we are committed to meeting our earnings expectations in 2002," said Hay, "and we remain confident that we will see increased earnings in 2003."

FPL Group, with annual revenues of more than $8 billion, is nationally known as a high quality, efficient, and customer-driven organization focused on energy-related products and services. With a growing presence in 21 states, it is widely recognized as one of the country's premier power companies. Its principal subsidiary, Florida Power & Light Company, serves approximately 4 million customer accounts in Florida. FPL Energy, LLC, an FPL Group energy-generating subsidiary, is a leader in producing electricity from clean and renewable fuels. Additional information is available on the Internet at www.fplgroup.com, www.fpl.com and www.fplenergy.com.

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

NOTE: A Webcast of a conference call hosted by FPL Group is scheduled at 5 p.m. ET on Thursday, September 26, 2002, and will be available on FPL Group's Web site, www.fplgroup.com, by following the link provided.