10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedJune 30, 2006

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 COMPANY 700 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.

		FPL Group, Inc.    Yes   X      No		Florida Power & Light Company    Yes          No   X
Indicate by check mark whether the registrants are a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of "large accelerated filer" and "accelerated filer" in Rule 12b-2 of the Securities Exchange Act of 1934.
	FPL Group, Inc.		Large Accelerated Filer   X    Accelerated Filer         Non-Accelerated Filer
	Florida Power & Light Company		Large Accelerated Filer         Accelerated Filer         Non-Accelerated Filer   X

Indicate by check mark whether the registrants are shell companies (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 June 30, 2006:  404,419,359 shares.

As of June 30, 2006, there were issued and outstanding 1,000 shares of Florida Power & Light Company 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.

Florida Power & Light Company meets the conditions set forth under General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this form with reduced disclosure format.

TABLE OF CONTENTS

		Page No.
Forward-Looking Statements		2
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	4
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 5.	Other Information	38
Item 6.	Exhibits	39
Signatures		41

FPL Group, Inc., Florida Power & Light Company, FPL Group Capital Inc and FPL Energy, LLC each have subsidiaries and affiliates with names that include FPL, FPL Energy, FPLE and similar references.  For convenience and simplicity, in this report the terms FPL Group, FPL, FPL Group Capital and FPL Energy are sometimes used as abbreviated references to specific subsidiaries, affiliates or groups of subsidiaries or affiliates.  The precise meaning depends on the context.

FORWARD-LOOKING STATEMENTS

This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  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 have a significant impact on FPL Group, Inc.'s (FPL Group's) and/or Florida Power & Light Company's (FPL's) operations and financial results, and could cause FPL Group's and/or FPL's actual results to differ materially from those contained in forward-looking statements made by or on behalf of FPL Group and/or FPL in this combined Form 10-Q, in presentations, on their respective websites, in response to questions or otherwise.

• FPL Group and FPL are subject to complex laws and regulations and to changes in laws and regulations as well as changing governmental policies and regulatory actions, including initiatives regarding deregulation and restructuring of the energy industry.  FPL holds franchise agreements with local municipalities and counties, and must renegotiate expiring agreements.  These factors may have a negative impact on the business and results of operations of FPL Group and FPL.

• The operation of power generation facilities, including nuclear facilities, involves significant risks that could adversely affect the results of operations and financial condition of FPL Group and FPL.

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

• The use of derivative contracts by FPL Group and FPL in the normal course of business could result in financial losses that negatively impact the results of operations of FPL Group and FPL.

• FPL Group's competitive energy business is subject to risks, many of which are beyond the control of FPL Group, that may reduce the revenues and adversely impact the results of operations and financial condition of FPL Group.

• FPL Group's ability to successfully identify, complete and integrate acquisitions, including the proposed merger with Constellation Energy Group, Inc. (Constellation Energy), is subject to significant risks, including the effect of increased competition for acquisitions resulting from the consolidation of the power industry.

• FPL Group's proposed merger with Constellation Energy is subject to receipt of consents or approvals from governmental entities that could delay or prevent the completion of the merger or impose conditions that could have a material adverse effect on the combined company or that could cause abandonment of the merger.

• The anticipated benefits of combining FPL Group and Constellation Energy may not be realized.

• FPL Group and FPL will be subject to business uncertainties and contractual restrictions while the merger is pending that could adversely affect their businesses.

• Because FPL Group and FPL rely on access to capital markets, the inability to maintain current credit ratings and access capital markets on favorable terms may limit the ability of FPL Group and FPL to grow their businesses and would likely increase interest costs.

• Customer growth in FPL's service area affects FPL Group's and FPL's results of operations.

• Weather affects FPL Group's and FPL's results of operations.

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

• Threats of terrorism and catastrophic events that could result from terrorism may impact the operations of FPL Group and FPL in unpredictable ways.

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

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

These and other risk factors are included in this report in Part II, Item 1A. Risk Factors and in Part I, Item 1A. Risk Factors of FPL Group's and FPL's Annual Report on Form 10-K for the year ended December 31, 2005.  Any forward-looking statement speaks only as of the date on which such statement is made, and FPL Group and FPL undertake no obligation to update any forward-looking statement to reflect events or circumstances, including unanticipated events, after the date on which such statement is made.  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.

PART I - FINANCIAL INFORMATION
Item 1.  Financial Statements
FPL GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (millions, except per share amounts) (unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,
	2006			2005			2006			2005
OPERATING REVENUES	$	3,809		$	2,741		$	7,393		$	5,178
OPERATING EXPENSES
Fuel, purchased power and interchange		2,174			1,393			4,227			2,631
Other operations and maintenance		521			437			995			852
Disallowed storm costs		54			-			54			-
Merger-related		6			-			11			-
Amortization of storm reserve deficiency		37			44			70			63
Depreciation and amortization		294			314			581			621
Taxes other than income taxes		285			233			548			458
Total operating expenses		3,371			2,421			6,486			4,625
OPERATING INCOME		438			320			907			553
OTHER INCOME (DEDUCTIONS)
Interest charges		(178	)		(140	)		(347	)		(278	)
Equity in earnings of equity method investees		30			26			41			46
Gains on disposal of equity method investees
and leveraged leases - net		-			8			-			23
Allowance for equity funds used during construction		5			12			9			22
Interest income		20			17			27			32
Other - net		-			14			1			18
Total other deductions - net		(123	)		(63	)		(269	)		(137	)
INCOME BEFORE INCOME TAXES		315			257			638			416
INCOME TAXES		77			54			152			76
NET INCOME	$	238		$	203		$	486		$	340
Earnings per share of common stock:
Basic	$	0.60		$	0.53		$	1.24		$	0.90
Assuming dilution	$	0.60		$	0.52		$	1.23		$	0.89
Dividends per share of common stock	$	0.375		$	0.355		$	0.75		$	0.71
Weighted-average number of common shares outstanding:
Basic		394.3			381.4			391.8			376.1
Assuming dilution		396.7			386.3			394.9			381.5
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, 2005 (2005 Form 10-K) for FPL Group and FPL.

FPL GROUP, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(millions)(unaudited)
	June 30, 2006			December 31, 2005
PROPERTY, PLANT AND EQUIPMENT
Electric utility plant in service and other property	$	33,175			$	31,886
Nuclear fuel		621				520
Construction work in progress		1,383				945
Less accumulated depreciation and amortization		(11,301	)			(10,888	)
Total property, plant and equipment - net		23,878				22,463
CURRENT ASSETS
Cash and cash equivalents		134				530
Customer receivables, net of allowances of $30 and $34, respectively		1,372				1,064
Other receivables, net of allowances of $10 and $9, respectively		472				366
Materials, supplies and fossil fuel inventory - at average cost		777				567
Regulatory assets:
Deferred clause and franchise expenses		577				795
Storm reserve deficiency		158				156
Derivatives		215				-
Other		7				7
Derivatives		218				1,074
Other		437				428
Total current assets		4,367				4,987
OTHER ASSETS
Nuclear decommissioning reserve funds		2,608				2,401
Other investments		437				467
Regulatory assets:
Storm reserve deficiency		801				957
Deferred clause expenses		170				307
Unamortized loss on reacquired debt		40				42
Other		81				37
Other		1,382				1,343
Total other assets		5,519				5,554
TOTAL ASSETS	$	33,764			$	33,004
CAPITALIZATION
Common stock	$	4			$	4
Additional paid-in capital		4,486				4,182
Retained earnings		4,696				4,506
Accumulated other comprehensive loss		(111	)			(193	)
Total common shareholders' equity		9,075				8,499
Long-term debt		8,360				8,039
Total capitalization		17,435				16,538
CURRENT LIABILITIES
Commercial paper		1,692				1,159
Current maturities of long-term debt		1,878				1,404
Accounts payable		1,061				1,245
Customer deposits		457				433
Margin cash deposits		15				393
Accrued interest and taxes		409				253
Regulatory liabilities:
Deferred clause and franchise revenues		39				32
Derivatives		-				757
Derivatives		580				463
Other		699				1,128
Total current liabilities		6,830				7,267
OTHER LIABILITIES AND DEFERRED CREDITS
Asset retirement obligations		1,898				1,685
Accumulated deferred income taxes		3,257				3,015
Regulatory liabilities:
Accrued asset removal costs		2,005				2,033
Asset retirement obligation regulatory expense difference		764				786
Unamortized investment tax credits		53				62
Other		90				90
Other		1,432				1,528
Total other liabilities and deferred credits		9,499				9,199
COMMITMENTS AND CONTINGENCIES
TOTAL CAPITALIZATION AND LIABILITIES	$	33,764			$	33,004
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2005 Form 10-K for FPL Group and FPL.

FPL GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (millions) (unaudited)
	Six Months Ended June 30,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	486		$	340
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		560			600
Nuclear fuel amortization		64			45
Recoverable storm-related costs of FPL		(319	)		(246	)
Amortization of storm reserve deficiency		70			63
Unrealized (gains) losses on marked to market energy contracts		(26	)		126
Deferred income taxes and related regulatory credit		268			164
Deferred pension cost		(48	)		(46	)
Cost recovery clauses and franchise fees		362			(35	)
Equity in earnings of equity method investees		(41	)		(46	)
Distribution of earnings from equity method investees		55			9
Changes in operating assets and liabilities:
Customer receivables		(307	)		(237	)
Other receivables		66			(35	)
Material, supplies and fossil fuel inventory		(197	)		(81	)
Other current assets		(52	)		(36	)
Accounts payable		(159	)		253
Customer deposits		24			2
Margin cash deposits		(378	)		6
Income taxes		(153	)		(76	)
Interest and other taxes		156			114
Other current liabilities		(15	)		(101	)
Other liabilities		(13	)		(8	)
Other - net		71			19
Net cash provided by operating activities		474			794
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures of FPL		(933	)		(808	)
Independent power investments		(1,076	)		(434	)
Nuclear fuel purchases		(106	)		(38	)
Sale of independent power investments		-			16
Proceeds from sale of securities in nuclear decommissioning funds		1,866			1,134
Purchases of securities in nuclear decommissioning and storm funds		(1,904	)		(1,212	)
Proceeds from sale of other securities		36			64
Purchases of other securities		(46	)		(76	)
Funding of secured loan		-			(33	)
Proceeds from termination of leveraged lease		-			43
Other - net		(8	)		20
Net cash used in investing activities		(2,171	)		(1,324	)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuances of long-term debt		1,541			799
Retirements of long-term debt		(759	)		(675	)
Proceeds from purchased Corporate Units		210			-
Payments to terminate Corporate Units		(258	)		-
Retirements of preferred stock - FPL		-			(5	)
Net change in short-term debt		533			(21	)
Issuances of common stock		303			610
Dividends on common stock		(296	)		(271	)
Other - net		27			22
Net cash provided by financing activities		1,301			459
Net decrease in cash and cash equivalents		(396	)		(71	)
Cash and cash equivalents at beginning of period		530			225
Cash and cash equivalents at end of period	$	134		$	154
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Issuance of common stock and conversion of options and warrants in connection with
the acquisition of Gexa Corp. (Gexa)	$	-		$	81
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2005 Form 10-K for FPL Group and FPL.

FLORIDA POWER & LIGHT COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (millions) (unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,
	2006			2005			2006			2005
OPERATING REVENUES	$	2,999		$	2,298		$	5,583		$	4,338
OPERATING EXPENSES
Fuel, purchased power and interchange		1,751			1,149			3,289			2,226
Other operations and maintenance		359			316			689			626
Disallowed storm costs		54			-			54			-
Amortization of storm reserve deficiency		37			44			70			63
Depreciation and amortization		197			232			392			462
Taxes other than income taxes		262			214			504			418
Total operating expenses		2,660			1,955			4,998			3,795
OPERATING INCOME		339			343			585			543
OTHER INCOME (DEDUCTIONS)
Interest charges		(75	)		(50	)		(143	)		(99	)
Allowance for equity funds used during construction		5			12			9			22
Interest income		12			2			13			4
Other - net		(4	)		(1	)		(5	)		1
Total other deductions - net		(62	)		(37	)		(126	)		(72	)
INCOME BEFORE INCOME TAXES		277			306			459			471
INCOME TAXES		95			105			154			158
NET INCOME	$	182		$	201		$	305		$	313
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2005 Form 10-K for FPL Group and FPL.

FLORIDA POWER & LIGHT COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (millions) (unaudited)
	June 30, 2006			December 31, 2005
ELECTRIC UTILITY PLANT
Plant in service	$	23,644			$	23,251
Nuclear fuel		394				380
Construction work in progress		1,018				776
Less accumulated depreciation and amortization		(9,740	)			(9,530	)
Electric utility plant - net		15,316				14,877
CURRENT ASSETS
Cash and cash equivalents		60				56
Customer receivables, net of allowances of $15 and $20, respectively		925				653
Other receivables, net of allowances of $1 and $1, respectively		174				313
Materials, supplies and fossil fuel inventory - at average cost		566				449
Regulatory assets:
Deferred clause and franchise expenses		577				795
Storm reserve deficiency		158				156
Derivatives		215				-
Other		7				7
Derivatives		18				828
Other		181				212
Total current assets		2,881				3,469
OTHER ASSETS
Nuclear decommissioning reserve funds		2,098				2,083
Regulatory assets:
Storm reserve deficiency		801				957
Deferred clause expenses		170				307
Unamortized loss on reacquired debt		40				42
Other		81				37
Other		999				954
Total other assets		4,189				4,380
TOTAL ASSETS	$	22,386			$	22,726
CAPITALIZATION
Common stock	$	1,373			$	1,373
Additional paid-in capital		4,318				4,318
Retained earnings		1,350				1,046
Total common shareholder's equity		7,041				6,737
Long-term debt		4,213				3,271
Total capitalization		11,254				10,008
CURRENT LIABILITIES
Commercial paper		958				1,159
Current maturities of long-term debt		-				135
Accounts payable		743				863
Customer deposits		446				423
Margin cash deposits		-				382
Accrued interest and taxes		329				174
Regulatory liabilities:
Deferred clause and franchise revenues		39				32
Derivatives		-				757
Derivatives		198				-
Other		618				929
Total current liabilities		3,331				4,854
OTHER LIABILITIES AND DEFERRED CREDITS
Asset retirement obligations		1,513				1,474
Accumulated deferred income taxes		2,584				2,647
Regulatory liabilities:
Accrued asset removal costs		2,005				2,033
Asset retirement obligation regulatory expense difference		764				786
Unamortized investment tax credits		53				62
Other		90				90
Other		792				772
Total other liabilities and deferred credits		7,801				7,864
COMMITMENTS AND CONTINGENCIES
TOTAL CAPITALIZATION AND LIABILITIES	$	22,386			$	22,726
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2005 Form 10-K for FPL Group and FPL.

FLORIDA POWER & LIGHT COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (millions) (unaudited)
	Six Months Ended June 30,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	305		$	313
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		371			441
Nuclear fuel amortization		43			35
Recoverable storm-related costs		(319	)		(246	)
Amortization of storm reserve deficiency		70			63
Deferred income taxes and related regulatory credit		175			114
Deferred pension cost		(39	)		(37	)
Cost recovery clauses and franchise fees		362			(35	)
Changes in operating assets and liabilities:
Customer receivables		(272	)		(102	)
Other receivables		32			8
Material, supplies and fossil fuel inventory		(118	)		(76	)
Other current assets		(44	)		(42	)
Accounts payable		(91	)		160
Customer deposits		23			7
Margin cash deposits		(382	)		-
Income taxes		125			85
Interest and other taxes		155			116
Other current liabilities		(10	)		(36	)
Other liabilities		(23	)		26
Other - net		46			(18	)
Net cash provided by operating activities		409			776
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(933	)		(808	)
Nuclear fuel purchases		(42	)		(37	)
Proceeds from sale of securities in nuclear decommissioning funds		1,579			1,101
Purchases of securities in nuclear decommissioning and storm funds		(1,611	)		(1,170	)
Other - net		-			(2	)
Net cash used in investing activities		(1,007	)		(916	)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuances of long-term debt		938			294
Retirements of long-term debt		(135	)		-
Retirements of preferred stock		-			(25	)
Net change in short-term debt		(201	)		(55	)
Dividends		-			(66	)
Net cash provided by financing activities		602			148
Net increase in cash and cash equivalents		4			8
Cash and cash equivalents at beginning of period		56			65
Cash and cash equivalents at end of period	$	60		$	73
This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2005 Form 10-K for FPL Group and FPL.

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

The accompanying condensed consolidated financial statements should be read in conjunction with the 2005 Form 10-K for FPL Group and FPL.  In the opinion of FPL Group and FPL management, all adjustments (consisting of normal recurring accruals) considered necessary for fair financial statement presentation have been made.  Certain amounts included in the prior year's condensed consolidated financial statements have been reclassified to conform to the current year's presentation.  The results of operations for an interim period generally will not give a true indication of results for the year.

1.  Employee Retirement Benefits

Employee Benefit Plans and Other Postretirement Plan - FPL Group sponsors a qualified noncontributory defined benefit pension plan for substantially all employees of FPL Group and its subsidiaries.  FPL Group also has a supplemental executive retirement plan (SERP).  See Supplemental Retirement Plan below.  In addition to pension benefits, FPL Group sponsors a contributory postretirement plan for health care and life insurance benefits (other benefits) for retirees of FPL Group and its subsidiaries meeting certain eligibility requirements.

The following table provides the components of net periodic benefit (income) cost for the plans:

	Pension Benefits						Other Benefits						Pension Benefits						Other Benefits
	Three Months Ended June 30,												Six Months Ended June 30,
	2006			2005			2006			2005			2006			2005			2006			2005
	(millions)
Service cost	$	13		$	13		$	1		$	2		$	25		$	26		$	3		$	4
Interest cost		22			22			6			6			44			43			12			13
Expected return on plan assets		(53	)		(53	)		(1	)		(1	)		(107	)		(105	)		(2	)		(2	)
Amortization of transition obligation		-			-			1			1			-			-			2			2
Amortization of prior service benefit		(1	)		(1	)		-			-			(2	)		(2	)		-			-
Amortization of (gains) losses		(4	)		(4	)		-			1			(7	)		(8	)		-			1
Other		-			-			-			-			-			-			2			-
Net periodic benefit (income) cost at FPL Group	$	(23	)	$	(23	)	$	7		$	9		$	(47	)	$	(46	)	$	17		$	18
Net periodic benefit (income) cost at FPL	$	(19	)	$	(18	)	$	6		$	8		$	(38	)	$	(37	)	$	15		$	16

Supplemental Retirement Plan - FPL Group has a SERP which includes a non-qualified supplemental defined pension benefit component that provides benefits to a select group of management and highly compensated employees.  The cost of this SERP component is included in the determination of net periodic benefit income for pension benefits in the preceding table and amounted to approximately $1 million and $1 million for FPL Group for the three months ended June 30, 2006 and 2005, respectively, and approximately $2 million and $1 million for the six months ended June 30, 2006 and 2005, respectively.

2.  Derivative Instruments

Derivative instruments, when required to be marked to market under Statement of Financial Accounting Standards No. (FAS) 133, "Accounting for Derivative Instruments and Hedging Activities," as amended, are recorded on FPL Group's and FPL's condensed consolidated balance sheets as either an asset or liability measured at fair value.

FPL Group's and FPL's mark-to-market derivative instrument assets (liabilities) are included in the condensed consolidated balance sheets as follows:

	FPL Group							FPL
	June 30,			December 31,				June 30,			December 31,
	2006				2005			2006				2005
	(millions)
Current derivative assets	$	218			$	1,074		$	18			$	828
Other assets		46				62			1				-
Current derivative liabilities		(580	)			(463	)		(198	)			-
Other liabilities		(265	)			(387	)		(31	)			-
Total mark-to-market derivative instrument
assets (liabilities)	$	(581	)		$	286		$	(210	)		$	828

FPL Group and FPL use derivative instruments (primarily swaps, options and forwards) to manage the commodity price risk inherent in the purchase and sale of fuel and electricity, as well as interest rate risk associated with long-term debt.  In addition, FPL Group uses derivatives to optimize the value of power generation assets.  At FPL, substantially all changes in the fair value of derivatives are deferred as a regulatory asset or liability until the contracts are settled.  Upon settlement, any gains or losses are passed through the fuel and purchased power cost recovery clause (fuel clause) or the capacity cost recovery clause (capacity clause).  For FPL Group's non-rate regulated operations, predominantly FPL Energy, LLC (FPL Energy), essentially all changes in the derivatives' fair value for power purchases and sales and trading activities are recognized on a net basis 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.  While the majority of FPL Energy's derivative transactions are entered into for the purposes described above, hedge accounting is only applied where specific criteria are met and it is practicable to do so.  In order to apply hedge accounting, the transaction must be designated as a hedge and it must be highly effective in offsetting the hedged risk.  Additionally, for hedges of commodity price risks, physical delivery for forecasted commodity transactions must be probable.  FPL Group believes that where offsetting positions exist at the same location for the same time, the transactions are considered to have been netted and therefore physical delivery has not occurred.  Transactions for which physical delivery is deemed not to have occurred are presented on a net basis.  Generally, the hedging instrument's effectiveness is assessed utilizing regression analysis at the inception of the hedge and on at least a quarterly basis throughout its life.

At June 30, 2006, FPL Group had cash flow hedges with expiration dates through December 2010 for energy contract derivative instruments, and interest rate cash flow hedges with expiration dates through November 2019.  The effective portion of the gain or loss on a derivative instrument designated as a cash flow hedge is reported as a component of other comprehensive income and is reclassified into earnings in the period(s) during which the transaction being hedged affects earnings.  The ineffective portion of net unrealized gains (losses) on these hedges flows through earnings in the current period and amounted to $4 million and $(5) million for the three months ended June 30, 2006 and 2005, respectively, and $12 million and $(10) million for the six months ended June 30, 2006 and 2005, respectively.  Settlement gains and losses are included within the line items in the statements of income to which they relate.

FPL Group's unrealized mark-to-market gains (losses) on derivative transactions reflected in the condensed consolidated statements of income for consolidated subsidiaries and equity method investees are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2006			2005			2006			2005
	(millions)
Consolidated subsidiaries	$	(35	)	$	(80	)	$	26		$	(126	)
Equity method investees	$	(5	)	$	(3	)	$	(15	)	$	(3	)

3.  Comprehensive Income

FPL Group's comprehensive income is as follows:

	Three Months Ended June 30,
	2006			2005
	(millions)
Net income of FPL Group	$	238		$	203
Net unrealized gains (losses) on commodity cash flow hedges:
Effective portion of net unrealized gains (losses)
(net of $12 tax expense and $12 tax benefit, respectively)		17			(18	)
Reclassification from other comprehensive income (OCI) to net income
(net of $4 and $5 tax expense, respectively)		6			7
Net unrealized gains (losses) on interest rate cash flow hedges:
Effective portion of net unrealized gains (losses)
(net of $2 tax expense and $2 tax benefit, respectively)		3			(4	)
Reclassification from OCI to net income
(net of $0.4 and $0.4 tax expense, respectively)		1			1
Net unrealized gains (losses) on available for sale securities
(net of $5 tax benefit and $1 tax expense, respectively)		(8	)		2
Comprehensive income of FPL Group	$	257		$	191

	Six Months Ended June 30,
	2006			2005
	(millions)
Net income of FPL Group	$	486		$	340
Net unrealized gains (losses) on commodity cash flow hedges:
Effective portion of net unrealized gains (losses)
(net of $38 tax expense and $56 tax benefit, respectively)		55			(81	)
Reclassification from OCI to net income
(net of $13 and $10 tax expense, respectively)		20			16
Net unrealized gains (losses) on interest rate cash flow hedges:
Effective portion of net unrealized gains (losses)
(net of $4 tax expense and $0.4 tax benefit, respectively)		8			(1	)
Reclassification from OCI to net income
(net of $1 and $1 tax expense, respectively)		1			2
Net unrealized losses on available for sale securities
(net of $2 and $2 tax benefit, respectively)		(3	)		(3	)
Supplemental retirement plan liability adjustment
(net of $0.5 tax expense in 2006)		1			-
Comprehensive income of FPL Group	$	568		$	273

Approximately $65 million of losses included in FPL Group's accumulated other comprehensive loss at June 30, 2006 will be reclassified into earnings within the next twelve months as either the hedged fuel is consumed, electricity is sold or interest payments are made.  Such amount assumes no change in fuel prices, power prices or interest rates.  Accumulated other comprehensive loss is separately displayed on the condensed consolidated balance sheets of FPL Group.

4.  Common Stock

Earnings Per Share - The reconciliation of FPL Group's basic and diluted earnings per share of common stock is shown below:

		Three Months Ended June 30,				Six Months Ended June 30,
		2006		2005		2006		2005
		(millions, except per share amounts)
Numerator - net income		$	238	$	203	$	486	$	340
Denominator:
Weighted-average number of common shares
outstanding - basic			394.3		381.4		391.8		376.1
Restricted stock, performance share awards,
options, warrants and equity units (a)			2.4		4.9		3.1		5.4
Weighted-average number of common shares
outstanding - assuming dilution			396.7		386.3		394.9		381.5
Earnings per share of common stock:
Basic		$	0.60	$	0.53	$	1.24	$	0.90
Assuming dilution		$	0.60	$	0.52	$	1.23	$	0.89
_____________________
(a)	Performance share 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 were the end of the term of the award.  Restricted stock, performance share awards, options, warrants 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 0.3 million and 0.4 million for the three months ended June 30, 2006 and 2005, respectively, and 0.3 million and 0.4 million for the six months ended June 30, 2006 and 2005, respectively.

In February 2006, FPL Group issued approximately 8.7 million shares of common stock upon settlement of the stock purchase contracts issued in connection with its 8% Corporate Units.  See Note 7.

Stock-Based Compensation - Effective January 1, 2006, FPL Group adopted FAS 123(R), "Share-Based Payment," using the modified prospective application transition method.  Accordingly, the condensed consolidated balance sheet as of December 31, 2005, the condensed consolidated statements of income for the three and six months ended June 30, 2005 and the condensed consolidated statements of cash flows for the six months ended June 30, 2005 do not reflect any restated amounts.  Because FPL Group adopted the fair value recognition provisions of FAS 123, "Accounting for Stock-Based Compensation," in 2004, the adoption of FAS 123(R) did not have a significant effect on FPL Group's financial statements.

Net income for the three and six months ended June 30, 2006 includes approximately $8 million and $18 million, respectively, of compensation costs and $3 million and $7 million, respectively, of income tax benefits related to stock-based compensation arrangements.  Net income for the three and six months ended June 30, 2005 includes approximately $9 million and $15 million, respectively, of compensation costs and $3 million and $6 million, respectively, of income tax benefits related to stock-based compensation arrangements.  As of June 30, 2006, there were approximately $55 million of unrecognized compensation costs related to nonvested/nonexercisable share-based compensation arrangements.  These costs are expected to be recognized over a weighted-average period of 1.7 years.  For awards granted subsequent to December 31, 2005, compensation costs for awards with graded vesting are recognized on a straight-line basis over the requisite service period for the entire award.  For awards granted prior to that date, compensation costs for awards with graded vesting are recognized using the graded vesting attribution method.

At June 30, 2006, approximately 26.6 million shares of common stock were authorized and 18.8 million were available for awards (including outstanding awards) to officers, employees and non-employee directors of FPL Group and its subsidiaries under FPL Group's long-term incentive plan (LTIP) and non-employee directors stock plan.  FPL Group satisfies restricted stock and performance share awards by issuing new shares of its common stock or by purchasing shares of its common stock in the open market.  FPL Group satisfies stock option exercises by issuing new shares of its common stock.

Restricted Stock and Performance Share Awards - Restricted stock typically vests within three years and is subject to, among other things, restrictions on transferability prior to vesting.  The fair value of restricted stock is measured based upon the closing market price of FPL Group common stock as of the date of grant.  Performance share awards are typically payable at the end of a three-year performance period if the specified performance criteria are met.  The fair value of performance share awards is estimated based upon the closing market price of FPL Group common stock as of the date of grant less the present value of expected dividends, multiplied by an estimated performance multiple determined on the basis of historical experience, which is subsequently trued up at vesting based on actual performance.

The activity in restricted stock and performance share awards for the three months ended June 30, 2006 was as follows:

	Shares		Weighted-Average Grant Date Fair Value
Restricted Stock:
Nonvested balance, April 1, 2006	1,155,801			$	37.85
Granted	6,900			$	39.49
Vested	(15,128	)		$	32.45
Forfeited	(5,166	)		$	39.92
Nonvested balance, June 30, 2006	1,142,407			$	37.92
Performance Share Awards:
Nonvested balance, April 1, 2006	1,150,423			$	33.57
Granted	-			$	-
Vested	-			$	-
Forfeited	(7,630	)		$	33.72
Nonvested balance, June 30, 2006	1,142,793			$	33.56

The activity in restricted stock and performance share awards for the six months ended June 30, 2006 was as follows:

	Shares		Weighted-Average Grant Date Fair Value
Restricted Stock:
Nonvested balance, January 1, 2006	1,022,545			$	35.54
Granted	363,939			$	41.76
Vested	(231,811	)		$	33.36
Forfeited	(12,266	)		$	40.41
Nonvested balance, June 30, 2006	1,142,407			$	37.92
Performance Share Awards:
Nonvested balance, January 1, 2006	1,145,502			$	29.88
Granted	581,978			$	34.08
Vested	(574,947	)		$	26.73
Forfeited	(9,740	)		$	33.52
Nonvested balance, June 30, 2006	1,142,793			$	33.56

The weighted-average grant date fair value of restricted stock granted for the three and six months ended June 30, 2005 was $40.50 and $38.20, respectively.  The weighted-average grant date fair value of performance share awards granted for the three and six months ended June 30, 2005 was $40.42 and $34.16, respectively.

The total fair value of restricted stock and performance share awards vested was $1 million and $2 million for the three months ended June 30, 2006 and 2005, respectively, and $34 million and $15 million for the six months ended June 30, 2006 and 2005, respectively.

Options - Options typically vest within three years and have a maximum term of ten years.  The exercise price of each option granted equals the closing market price of FPL Group common stock on the date of grant.  The fair value of the options is estimated on the date of the grant using the Black-Scholes option-pricing model and based on the following assumptions:

		2006		2005
Expected volatility (a)		19.56	%	20.00	%
Expected dividends		3.40	%	3.68	%
Expected term (years) (b)		6		7
Risk-free rate		4.60	%	4.08	%
_____________________
(a)	Based on historical experience.
(b)	In 2006, FPL Group elected to use the "simplified" method to calculate the expected term.  In 2005, the expected term was derived from historical experience.

Option activity for the three months ended June 30, 2006 was as follows:

	Shares Underlying Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (millions)
Balance, April 1, 2006	7,431,807		$	29.99
Granted	-		$	-
Exercised	(129,903	)	$	28.18
Forfeited	-		$	-
Expired	-		$	-
Balance, June 30, 2006	7,301,904		$	30.03		6.2	$	83

Option activity for the six months ended June 30, 2006 was as follows:

	Shares Underlying Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (millions)
Balance, January 1, 2006	7,228,617		$	29.42
Granted	334,500		$	41.76
Exercised	(250,218	)	$	28.24
Forfeited	(10,995	)	$	28.38
Expired	-		$	-
Balance, June 30, 2006	7,301,904		$	30.03		6.2	$	83
Exercisable, June 30, 2006	6,530,072		$	29.10		5.9	$	80

The weighted-average grant date fair value of options granted was $7.46 and $6.30 for six months ended June 30, 2006 and 2005, respectively.  There were no options granted during the three months ended June 30, 2006 or 2005.

The total intrinsic value of stock options exercised was approximately $2 million and $4 million for the three months ended June 30, 2006 and 2005, respectively, and approximately $3 million and $14 million for the six months ended June 30, 2006 and 2005, respectively.

Cash received from option exercises was approximately $4 million and $8 million for the three months ended June 30, 2006 and 2005, respectively, and approximately $7 million and $33 million for the six months ended June 30, 2006 and 2005, respectively.  The tax benefits realized from options exercised was approximately $0.5 million and $1 million for the three months ended June 30, 2006 and 2005, respectively, and approximately $1 million and $5 million for the six months ended June 30, 2006 and 2005, respectively.

5.  Storm Reserve Deficiency

FPL was impacted by four hurricanes in 2005 and three hurricanes in 2004 which did major damage in parts of FPL's service territory.  Storm restoration costs incurred by FPL during 2005 and 2004 exceeded the amount in the storm and property insurance reserve.  At June 30, 2006, FPL's storm reserve deficiency totaled approximately $959 million.  In May 2006, the Florida Public Service Commission (FPSC) approved the issuance of approximately $708 million of bonds pursuant to the securitization provisions of Section 366.8260 of the Florida Statutes for the net-of-tax recovery by FPL of the estimated storm reserve deficiency at the time the bonds are issued or, approximately $934 million, including interest, and for a storm and property insurance reserve of $200 million.  The unrecovered 2004 storm restoration costs will continue to be recovered through a previously approved storm damage surcharge until the bonds are issued.

In its decision, the FPSC applied a different standard for recovery of 2005 storm costs than was used for the 2004 storm costs.  Accordingly, the FPSC made certain adjustments and disallowances to amounts sought to be recovered by FPL.  In addition, the FPSC allowed FPL to recover interest on 2005 storm restoration costs.  These adjustments and disallowances, net of interest, reduced FPL Group's and FPL's net income for the three and six months ended June 30, 2006 by approximately $28 million, reduced FPL Group's and FPL's storm reserve deficiency by approximately $35 million and reduced FPL Group's and FPL's property, plant and equipment by approximately $11 million at June 30, 2006.

6.  Income Taxes

FPL Group's effective income tax rate for the three months ended June 30, 2006 and 2005 was approximately 24.4% and 21.1%, respectively.  The reduction from the statutory rate mainly reflects the benefit of production tax credits (PTCs) of approximately $38 million and $37 million, respectively, related to FPL Energy's wind projects.  The corresponding rates and amounts for the six months ended June 30, 2006 and 2005 were approximately 23.8% and 18.3%, respectively, and approximately $81 million and $63 million, respectively.

FPL Group recognizes PTCs as wind energy is generated and sold based on a per kilowatt-hour rate prescribed in applicable federal and state statutes, which may differ significantly from amounts computed, on a quarterly basis, using an overall effective income tax rate anticipated for the full year.  FPL Group utilizes this method of recognizing PTCs for specific reasons including that they are an integral part of the financial viability of most wind projects and a fundamental component of such wind projects' results of operations.

7.  Debt

In June 2002, FPL Group sold 10.12 million 8% Corporate Units.  In connection with the 8% Corporate Units financing, FPL Group Capital Inc (FPL Group Capital) issued $506 million principal amount of 5% debentures due February 16, 2008, which were absolutely, irrevocably and unconditionally guaranteed by FPL Group.  During 2005, FPL Group Capital remarketed these debentures and the annual interest rate was reset to 5.551%.  Each 8% Corporate Unit initially consisted of a $50 FPL Group Capital debenture and a purchase contract pursuant to which the holder was required to purchase $50 of FPL Group common shares on or before February 16, 2006, and FPL Group made payments of 3% of the unit's $50 stated value until the shares were purchased.  In February 2006, FPL Group paid approximately $48 million net to cancel approximately 4.2 million of its 8% Corporate Units.  Also in February 2006, FPL Group issued approximately 8.7 million shares of common stock in re turn for approximately $296 million in proceeds upon settlement of the stock purchase contracts issued in connection with the remainder of the 8% Corporate Units.

In January 2006, FPL issued $400 million principal amount of 5.65% first mortgage bonds maturing in February 2037.  The proceeds were used to repay a portion of FPL's short-term borrowings and for other corporate purposes.  Also during the three months ended March 31, 2006, FPL borrowed $300 million in notes payable under an uncommitted credit facility.  These notes matured in April and May 2006 and had interest rates ranging from 4.8% to 4.92%.

In April 2006, FPL issued $300 million principal amount of 6.20% first mortgage bonds maturing in June 2036 in a private placement transaction.  The proceeds were used to repay a portion of FPL's short-term borrowings and for other corporate purposes.

In May 2006, FPL borrowed $250 million under a new five-year term loan facility.  The loan bears interest at a variable rate and the principal is due in May 2008.  The proceeds from the loan were used for general corporate purposes.  Under the terms of the term loan facility, FPL is required to maintain a minimum ratio of funded debt to total capitalization.

In June 2006, FPL Group Capital borrowed $400 million under three separate two-year term loan facilities.  Each of the loans bears interest at a variable rate and the principal is due in June 2008.  The proceeds from the loans were used for general corporate purposes.  Pursuant to its guarantee agreement with FPL Group Capital, FPL Group guarantees the payment of these term loans and is required to maintain a minimum ratio of funded debt to total capitalization under the terms of the term loan facilities.

Also in June 2006, Bison Wind, LLC (Bison Wind), an FPL Energy subsidiary, issued $186 million of 6.665% limited-recourse senior secured notes maturing in January 2031.  In addition, Bison Wind Portfolio, LLC (Bison Wind Portfolio), another subsidiary of FPL Energy, issued $20 million of 7.51% limited-recourse senior secured notes maturing in July 2021.  Principal and interest on each series of notes are payable semi-annually.  Substantially all of the proceeds from these note issuances were distributed to FPL Energy in return for a portion of the capital contributions that it made to certain of its direct and indirect subsidiaries for the investment by such subsidiaries in the development, acquisition and construction of two wind power projects located in North Dakota and Oklahoma.  The Bison Wind notes are secured by liens on the wind projects' assets and the Bison Wind Portfolio notes are secured by certain other assets.  FPL Group Capital has guaranteed c ertain payments with respect to PTCs generated by the projects, and certain contingent payment and indemnification obligations related to the projects, but did not guarantee payments on either series of the notes.  Pursuant to its guarantee agreement with FPL Group Capital, FPL Group guarantees these FPL Group Capital payment guarantees.

8.  Commitments and Contingencies

Commitments - FPL Group and its subsidiaries have made commitments in connection with a portion of their projected capital expenditures.  Capital expenditures at FPL include, among other things, 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 cost, including capitalized interest, for construction of wind projects and the procurement of nuclear fuel.  FPL FiberNet, LLC's (FPL FiberNet's) capital expenditures primarily include costs to meet customer specific requirements and sustain its fiber-optic network.  At June 30, 2006, planned capital expenditures for the remainder of 2006 through 2010 were estimated as follows:

		2006		2007		2008		2009		2010		Total
FPL:		(millions)
Generation: (a)
New (b)		$	85	$	365	$	540	$	645	$	500	$	2,135
Existing (c)			290		555		395		410		285		1,935
Transmission and distribution (c)			340		885		790		840		850		3,705
Nuclear fuel			25		120		85		125		135		490
General and other			85		155		165		160		165		730
Total		$	825	$	2,080	$	1,975	$	2,180	$	1,935	$	8,995
FPL Energy:
Wind (d)		$	365	$	990	$	5	$	5	$	5	$	1,370
Nuclear (e)			90		140		100		130		150		610
Gas			40		35		35		15		10		135
Other			25		35		10		5		15		90
Total		$	520	$	1,200	$	150	$	155	$	180	$	2,205
FPL FiberNet		$	7	$	11	$	11	$	11	$	11	$	51
_____________________
(a)	Includes allowance for funds used during construction (AFUDC) of approximately $20 million, $33 million, $51 million, $72 million and $71 million in 2006, 2007, 2008, 2009 and 2010, respectively.
(b)	Includes generating structures, transmission interconnection and integration, licensing and AFUDC.
(c)	Includes estimated capital costs associated with FPL's Storm SecureSM Plan, an initiative to enhance its electrical grid and power plants as a result of heightened hurricane activity and in response to concerns expressed by the community, state leaders and regulators.  These capital costs are subject to change over time based on productivity enhancements and prioritization.
(d)	Capital expenditures for new wind projects are estimated through 2007, when eligibility for PTCs for new wind projects is scheduled to expire.
(e)	Includes nuclear fuel.

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 June 30, 2006, FPL Energy had approximately $2.1 billion in firm commitments, primarily for the purchase of wind turbines and towers, natural gas transportation, purchase and storage, firm transmission service, nuclear fuel and a portion of its projected capital expenditures.  In addition, 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  Financial Accounting Standards Board (FASB) Interpretation No. (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 June 30, 2006, 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 12 years.  The maximum potential amount of future payments that could be required under these guarantees at June 30, 2006 was approximately $14 million.  At June 30, 2006, 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 provided to unconsolidated entities entered into subsequent to December 31, 2002, and the related fair value, were not material as of June 30, 2006.

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 becoming liable for 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.

Contracts - FPL Group has entered into a long-term agreement for the purchase of wind, combustion and steam turbines, as well as parts, repairs and on-site services through 2021.  The related commitments as of June 30, 2006 are included in FPL Energy's and Corporate and Other's minimum payments shown in the table below and in FPL Energy's estimated capital expenditures shown in the table above.

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 megawatts (mw) of power annually through mid-2015 and 381 mw annually thereafter through 2021, and one of the Southern subsidiaries' contracts is subject to minimum quantities.  FPL also has various firm pay-for-performance contracts to purchase approximately 700 mw of generating capacity from certain cogenerators and small power producers (qualifying facilities) with expiration dates ranging from 2009 through 2026.  The purchased power contracts provide for capacity and energy payments.  Energy payments are based on the actual power taken under these contracts.  Capacity payments for the pay-for-performance contracts are subject to the qualifying facilities meeting certain contract conditions.  FPL has various agr eements with several electricity suppliers to purchase an aggregate of up to approximately 1,600 mw of generating capacity with expiration dates ranging from 2007 through 2012.  In general, the agreements require FPL to make capacity payments and supply the fuel consumed by the plants under the contracts.  FPL has contracts with expiration dates through 2028 for the purchase of natural gas, coal and oil, transportation of natural gas and coal, and storage of natural gas.

FPL Energy has entered into several contracts for the purchase of wind turbines and towers in support of substantially all of its planned new wind generation.  In addition, FPL Energy has contracts primarily for the purchase, transportation and storage of natural gas and firm transmission service with expiration dates ranging from 2007 through 2033.  FPL Energy also has several contracts for the purchase, conversion, enrichment and fabrication of nuclear fuel with expiration dates ranging from late-2006 to 2014.

The required capacity and minimum payments under these contracts as of June 30, 2006 were estimated as follows:

		2006		2007		2008		2009		2010		Thereafter
FPL:		(millions)
Capacity payments: (a)
JEA and Southern subsidiaries (b)		$	100	$	200	$	200	$	210	$	200	$	1,180
Qualifying facilities (b)		$	150	$	320	$	320	$	320	$	290	$	3,500
Other electricity suppliers (b)		$	55	$	60	$	50	$	50	$	10	$	10
Minimum payments, at projected prices:
Southern subsidiaries - energy (b)		$	40	$	80	$	80	$	90	$	40	$	-
Natural gas, including transportation and storage (c)		$	1,335	$	1,375	$	260	$	260	$	260	$	2,405
Coal (c)		$	30	$	45	$	30	$	10	$	5	$	5
Oil (c)		$	490	$	-	$	-	$	-	$	-	$	-
FPL Energy		$	530	$	600	$	50	$	50	$	50	$	700
Corporate and Other		$	55	$	-	$	-	$	-	$	-	$	-
_____________________
(a)	Capacity payments under these contracts, the majority of which are recoverable through the capacity clause, totaled approximately $155 million and $156 million for the three months ended June 30, 2006 and 2005, respectively, and approximately $300 million and $307 million for the six months ended June 30, 2006 and 2005, respectively.
(b)	Energy payments under these contracts, which are recoverable through the fuel clause, totaled approximately $108 million and $90 million for the three months ended June 30, 2006 and 2005, respectively, and approximately $199 million and $179 million for the six months ended June 30, 2006 and 2005, respectively.
(c)	Recoverable through the fuel clause.

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 $604 million ($402 million for FPL), plus any applicable taxes, per incident at any nuclear reactor in the United States, payable at a rate not to exceed $90 million ($60 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 Station (Seabrook), Duane Arnold Energy Center (Duane Arnold) and St. Lucie Unit No. 2, which approxi mates $12 million, $30 million and $15 million, plus any applicable taxes, per incident, respectively.

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 $132 million ($88 million for FPL), plus any applicable taxes, 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, Duane Arn old and St. Lucie Unit No. 2, which approximates $2 million, $5 million and $3 million, plus any applicable taxes, respectively.

Due to the high cost and limited coverage available from third-party insurers, FPL has essentially no insurance coverage on its transmission and distribution property and FPL Group has no insurance coverage for FPL FiberNet's fiber-optic cable located throughout Florida.  Under the terms of the agreement regarding FPL's retail base rates approved by the FPSC (2005 rate agreement), FPL may recover prudently incurred storm restoration costs either through securitization pursuant to Section 366.8260 of the Florida Statutes or through surcharges.  See Note 5.

In the event of a loss, the amount of insurance available might not be adequate to cover property damage and other expenses incurred.  Uninsured losses, to the extent not recovered from customers 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.

Litigation - In 1999, the Attorney General of the United States, on behalf of the U.S. Environmental Protection Agency (EPA), brought an action against Georgia Power Company and other subsidiaries of The Southern Company for certain alleged violations of the Clean Air Act.  In May 2001, the EPA amended its complaint.  The amended complaint alleges, among other things, that Georgia Power Company constructed and is continuing to operate Scherer Unit No. 4, in which FPL owns a 76% interest, without obtaining proper permitting, and without complying with performance and technology standards as required by the Clean Air Act.  It also alleges that unspecified major modifications have been made at Scherer Unit No. 4 that require its compliance with the aforementioned Clean Air Act provisions.  The EPA seeks injunctive relief requiring the installation of best available control technology and civil penalties of up to $25,000 per day for each violation from an unspecifie d date after June 1, 1975 through January 30, 1997 and $27,500 per day for each violation thereafter.  The EPA further revised its civil penalty rule in February 2004, such that the maximum penalty is $32,500 per day for each violation after March 15, 2004.  Georgia Power Company has answered the amended complaint, asserting that it has complied with all requirements of the Clean Air Act, denying the plaintiff's allegations of liability, denying that the plaintiff is entitled to any of the relief that it seeks and raising various other defenses.  In June 2001, a federal district court stayed discovery and administratively closed the case pending resolution of the EPA's motion for consolidation of discovery in several Clean Air Act cases that was filed with a Multi-District Litigation (MDL) panel.  In August 2001, the MDL panel denied the motion for consolidation.  In September 2001, the EPA moved that the federal district court reopen this case for purposes of discovery.  Georgia Power Company opposed that motion asking that the case remain closed until the Eleventh Circuit Court of Appeals ruled on the Tennessee Valley Authority's (TVA) appeal of an EPA administrative compliance order relating to legal issues that are also central to this case.  In August 2002, the federal district court denied without prejudice the EPA's motion to reopen.  In June 2003, the Eleventh Circuit issued its order dismissing the TVA's appeal because it found the provision of the Clean Air Act allowing the EPA to issue binding administrative compliance orders was unconstitutional, and hence found that the TVA order was a non-final order that courts of appeal do not have jurisdiction to review.  In September 2003, the Eleventh Circuit denied the EPA's motion for rehearing.  In May 2004, the U.S. Supreme Court denied the EPA's petition for review of the Eleventh Circuit order.  The EPA has not yet moved to reopen the Georgia Power Company case.

In 2001, Florida Municipal Power Agency (FMPA) filed with the U.S. Court of Appeals for the District of Columbia (DC Circuit) a petition for review asking the DC Circuit to reverse and remand orders of the Federal Energy Regulatory Commission (FERC) denying FMPA's request for credits for transmission facilities owned by FMPA members.  The transmission credits sought by FMPA would offset the transmission charges that FPL bills FMPA for network transmission service to FMPA's member cities.  FMPA member cities have been taking network transmission service under FPL's open access transmission tariff since 1996.  In the orders appealed by FMPA, the FERC ruled that FMPA would be entitled to credits for any FMPA facilities that were "integrated" with the FPL transmission system.  Based on the evidence submitted, the FERC concluded that none of the FMPA facilities met the integration test and, therefore, FMPA was not entitled to credits against FPL's charges for transmission s ervice.  In January 2003, the DC Circuit upheld the FERC's order denying FMPA credits for its facilities; in March 2003, the DC Circuit denied FMPA's rehearing request of the DC Circuit's decision; and in October 2003, the U.S. Supreme Court denied FMPA's petition for review of the DC Circuit's decision.

FMPA also has requested that the FERC decide the same crediting issue in a separate FERC proceeding.  That proceeding dates back to a filing by FPL in 1993 of a comprehensive restructuring of its then-existing tariff structure.  All issues in that case were settled in September 2000 except for three issues reserved by FMPA:  (i) the crediting issue, (ii) treatment of behind-the-meter generation and load ratio pricing for network integration transmission service, and (iii) exclusions from FPL's transmission rates of the costs of FPL's facilities that failed to meet the same integration test that was applied to FMPA's facilities with respect to the crediting issue.  In December 2003, the FERC issued an order addressing the three reserved issues.  With respect to the crediting issue, the FERC stated that it had previously determined that FMPA was not entitled to credits for its facilities in the related proceeding discussed above and saw no persuasive reason to revisit that determination in this proceeding.  Regarding the issue of behind-the-meter generation, the FERC stated that it had addressed the issue of load ratio pricing for network integration transmission service and the related issue of behind-the-meter generation in Order Nos. 888 and 888-A, and saw no persuasive reason to revisit that determination in this proceeding.  With respect to the third issue, the FERC directed FPL to make a compliance filing of a proposed rate schedule that does not include those facilities of FPL that fail to meet the same integration test applied to the FMPA facilities.

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 the 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, the FERC issued an order denying FMPA's rehearing request.  In April 2004, FMPA petitioned the DC Circuit for review of the FERC's December 2003 order and March 2004 order.  FMPA filed its initial brief in that proceeding in October 2004.  FMPA's arguments are limited to the issue of behind-the-meter generation and load ratio pricing for network integration transmission service in instances when, according to FMPA, FPL cannot provide transmission service because of "physical transmission limitations."  In June 2005, the DC Circuit remanded the case to the FERC for further consideration.  The DC Circuit concluded that the FERC failed to explain in its orders why network customers should be charged by the transmission provider for network service that the provider is physically constrained from offering and why physical impossibility should not be recognized as an exception to the general rule against permitting partial load ratio pricing for network customers.  The DC Circuit noted that it was not reaching a determination on whether charging on a full load basis in fact is unjust and unreasonable under the circumstances, that it was not defining what constitutes physical impossibility, and that it was not determining whether FMPA made a showing of impossibility.  In December 2005, the FERC issued an order on remand answering the DC Circuit's question by finding that FPL is entitled to load ratio share pricing, notwithstanding constraints on a third-party's system.  In January 2006, FMPA filed a rehearing request of this order with the F ERC.  In July 2006, the FERC denied FMPA's request for rehearing.

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.  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.  In January 2005, the FERC issued an order on FPL's compliance filing.  In the order, the FERC accepted FPL's standards for analyzing the transmission system and agreed that FPL's "Georgia Ties" and "Turkey Point Lines" are part of FPL's integrated grid.  The FERC required FPL to make an additional compliance filing removing the co st of all radial transmission lines from transmission rates, rather than only radial lines that serve one customer, analyzing the FPL transmission system to remove the cost of any transmission facilities that provide only "unneeded redundancy," and calculating rate adjustments using 1993 data rather than 1998 data.  FPL made this compliance filing in April 2005, reducing FPL's rate $0.04 per kw per month.  In May 2005, FMPA protested FPL's compliance filing, claiming that FPL had not followed the FERC's mandate and argued that FPL's rates should be reduced by an additional $0.20 per kw per month, potentially resulting in a refund obligation to FMPA of approximately $20 million at June 30, 2006.  Any reduction in FPL's network service rate also would apply effective January 1, 2004 to Seminole Electric Cooperative Inc. (Seminole), FPL's other network customer.  T he refund obligation to Seminole based on FMPA's position is approximately $7 million at June 30, 2006.

In December 2005, the FERC issued an order accepting FPL's April 2005 compliance filing in part, rejecting it in part, and directing the submission of a further compliance filing.  The FERC accepted FPL's compliance filing wherein FPL proposed a reduction in its rate base created by the exclusion of certain radial lines valued at $29 million net plant.  However, the FERC concluded that it is not clear whether FPL failed to test its non-radial facilities in a manner comparable to the way it tested FMPA's facilities.  The December 2005 order directed FPL to make a further compliance filing within 60 days to explain the meaning of "unserved load" as it applies to Florida Reliability Coordinating Council (FRCC) standards, and to remove from rates any facility where the unserved load occurred only as a result of the contingency facility.  The FERC stated that FRCC and North American Electric Reliability Council (NERC) standards allow for the controlled loss of load on radia l facilities and that FPL tested FMPA facilities for loss of local load as well as load at other load centers.  FPL filed a rehearing request in January 2006, contending that the FERC misapplied FRCC/NERC planning criteria for radial facilities to network systems and misinterpreted the test FPL applied to FMPA facilities.  FPL also filed a request to delay the compliance filing pending FERC action on FPL's rehearing request, and in January 2006, the FERC granted that request.  In July 2006, the FERC denied FPL's request for rehearing and ordered FPL to make its compliance filing within 60 days.  At June 30, 2006, FPL's refund liability under the FERC's most recent order is estimated to be up to approximately $10 million to FMPA and up to approximately $3 million to Seminole.

In 1995 and 1996, FPL Group, through an indirect subsidiary, purchased from Adelphia Communications Corporation (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 tr ansaction for which any property remaining with Adelphia had 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 has filed an answer to the complaint.  FPL Group believes that the complaint is without merit 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.  Discovery has been temporarily stayed at the request of the plaintiffs and the case has been reset for trial in January 2008.

In 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, as subsequently amended, 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.  In January 2006, the court granted FPL's motion for final summary judgm ent and dismissed the case.  On February 8, 2006, the plaintiffs filed a notice of appeal of the court's decision granting final summary judgment for FPL.  Plaintiff's appeal of this matter is pending before the U.S. Court of Appeals for the 11^th Circuit.

In 2003, Tish Blake and John Lowe, as personal representatives of the Estate of Ashton Lowe, on behalf of the estate and themselves, as surviving parents, brought an action in the U.S. District Court for the Southern District of Florida alleging that their son developed cancer (medulo-blastoma) 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 allegations, counts and damages demanded in the complaint, as subsequently amended, are virtually identical to those contained in the Finestone lawsuit described above.  In January 2006, the court granted FPL's motion for final summary judgment and dismissed the case.  On February 8, 2006, the plaintiffs filed a notice of appeal of the court's decision granting final summary judgment for FPL.  Plaintiff's appeal of this m atter is pending before the U.S. Court of Appeals for the 11^th Circuit.

In 2003, Pedro C. and Emilia Roig brought an action on behalf of themselves and their son, Pedro Anthony Roig, in the Circuit Court of the 11^th Judicial Circuit in and for Miami-Dade County, Florida (the state court), which was removed in October 2003 to the U.S. District Court for the Southern District of Florida, against Aventis Pasteur and a number of other named and unnamed drug manufacturing and distribution companies and FPL, alleging that their son has suffered toxic neurological effects from mercury poisoning.  The sources of mercury exposure are alleged to be vaccines containing a preservative called thimerosal that were allegedly manufactured and distributed by the drug companies, mercury amalgam dental fillings, and emissions from FPL power plants in southeast Florida.  The complaint includes counts against all defendants for civil battery and against FPL for alleged negligence in operating the plants such that the son was exposed to mercury and other heavy metals em issions.  The damages demanded from FPL are for injuries and losses allegedly suffered by the son as a result of his exposure to the plants' mercury emissions and the parents' alleged pain and suffering, medical expenses, loss of wages, and loss of their son's services and companionship.  No amount of damages is specified.  The U.S. District Court remanded the action back to the state court.  The drug manufacturing and distribution companies have moved to dismiss the action.  Plaintiffs and FPL have agreed that FPL will not respond to the complaint until the state court rules on those motions.

In 2003, Edward and Janis Shiflett brought an action on behalf of themselves and their son, Phillip Benjamin Shiflett, in the Circuit Court of the 18^th Judicial Circuit in and for Brevard County, Florida (the state court), which was removed in January 2004 to the U.S. District Court for the Middle District of Florida, against Aventis Pasteur and a number of other named and unnamed drug manufacturing and distribution companies, FPL and the Orlando Utilities Commission, alleging that their son has suffered toxic neurological effects from mercury poisoning.  The allegations, counts and damages demanded in the complaint with respect to FPL are virtually identical to those contained in the Roig lawsuit described above.  FPL's motion to dismiss the complaint was denied.  The U.S. District Court subsequently remanded the action back to the state court.  The drug manufacturing and distribution companies have moved to dismiss the action.  Plaintiffs and FPL have agreed that FPL will not respond to the complaint until the state court rules on those motions.

In October 2004, TXU Portfolio Management Company (TXU) served FPL Energy Pecos Wind I, LP, FPL Energy Pecos Wind I GP, LLC, FPL Energy Pecos Wind II, LP, FPL Energy Pecos Wind II GP, LLC and Indian Mesa Wind Farm, LP (FPL Energy Affiliates) as defendants in a civil action filed in the District Court in Dallas County, Texas.  The petition alleges that the FPL Energy Affiliates had a contractual obligation to produce and sell to TXU a minimum quantity of energy each year and that the FPL Energy Affiliates failed to meet this obligation.  The plaintiff has asserted claims for breach of contract and declaratory judgment and seeks damages of approximately $21 million.  The FPL Energy Affiliates filed their answer and counterclaim in November 2004, denying the allegations.  The counterclaim, as now amended, asserts claims for conversion, breach of fiduciary duty, breach of warranty, conspiracy, breach of contract and fraud and seeks termination of the contract and damages.& nbsp; At the end of 2005, TXU amended its complaint to add FPL Group, FPL Energy, FPL Group Capital and ESI Energy, LLC (ESI Energy), as defendants.  Motions to dismiss those entities as defendants were filed, and FPL Group, FPL Group Capital and ESI Energy have been dismissed.  The case is in discovery and has been set for trial in November 2006.

In addition to those legal proceedings discussed above, 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.

FPL Group and FPL believe that they have meritorious defenses to all the pending litigation and proceedings discussed above under the heading Litigation and are vigorously defending the lawsuits.  While management is unable to predict with certainty the outcome of the legal proceedings and claims discussed or described herein, based on current knowledge it is not expected that their ultimate resolution, individually or collectively, will have a material adverse effect on the financial statements of FPL Group or FPL.

9.  Segment Information

FPL Group's reportable segments include FPL, a rate-regulated utility, and FPL Energy, a competitive energy business.  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 June 30,
	2006										2005
	FPL		FPL Energy(a)			Corporate & Other			Total		FPL		FPL Energy(a)		Corporate & Other				Total
	(millions)
Operating revenues	$	2,999		$	771	$	39		$	3,809	$	2,298	$	420		$	23			$	2,741
Operating expenses	$	2,660		$	661	$	50		$	3,371	$	1,955	$	444		$	22			$	2,421
Net income (loss) (b)	$	182		$	92	$	(36	)	$	238	$	201	$	20		$	(18	)		$	203

	Six Months Ended June 30,
	2006										2005
	FPL		FPL Energy(a)			Corporate & Other			Total		FPL		FPL Energy(a)		Corporate & Other				Total
	(millions)
Operating revenues	$	5,583		$	1,723	$	87		$	7,393	$	4,338	$	792		$	48			$	5,178
Operating expenses	$	4,998		$	1,388	$	100		$	6,486	$	3,795	$	783		$	47			$	4,625
Net income (loss) (b)	$	305		$	243	$	(62	)	$	486	$	313	$	57		$	(30	)		$	340

		June 30, 2006									December 31, 2005
		FPL		FPL Energy			Corporate & Other		Total		FPL		FPL Energy		Corporate & Other		Total
		(millions)
Total assets		$	22,386		$	10,806	$	572	$	33,764	$	22,726	$	9,408	$	870	$	33,004
_____________________
(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)	See Note 6 for a discussion of FPL Energy's tax benefits related to PTCs recognized based on its tax sharing agreement with FPL Group.

10.  Summarized Financial Information of FPL Group Capital

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, including its debentures, and payment guarantees are fully and unconditionally guaranteed by FPL Group.  Condensed consolidating financial information is as follows:

Condensed Consolidating Statements of Income
	Three Months Ended June 30,
	2006													2005
	FPL Group (Guarantor)			FPL Group Capital				Other(a)			FPL Group Consoli- dated			FPL Group (Guarantor)			FPL Group Capital				Other(a)			FPL Group Consoli- dated
	(millions)
Operating revenues	$	-			$	812		$	2,997		$	3,809		$	-			$	443		$	2,298		$	2,741
Operating expenses		(6	)			(706	)		(2,659	)		(3,371	)		-				(466	)		(1,955	)		(2,421	)
Interest charges		(5	)			(103	)		(70	)		(178	)		(6	)			(89	)		(45	)		(140	)
Other income (deductions) - net		255				42			(242	)		55			208				68			(199	)		77
Income (loss) before income taxes		244				45			26			315			202				(44	)		99			257
Income tax expense (benefit)		6				(25	)		96			77			(1	)			(49	)		104			54
Net income (loss)	$	238			$	70		$	(70	)	$	238		$	203			$	5		$	(5	)	$	203

		Six Months Ended June 30,
		2006												2005
		FPL Group (Guarantor)			FPL Group Capital			Other(a)			FPL Group Consoli- dated			FPL Group (Guarantor)			FPL Group Capital			Other(a)			FPL Group Consoli- dated
		(millions)
Operating revenues		$	-		$	1,813		$	5,580		$	7,393		$	-		$	839		$	4,339		$	5,178
Operating expenses			(11	)		(1,481	)		(4,994	)		(6,486	)		-			(829	)		(3,796	)		(4,625	)
Interest charges			(11	)		(204	)		(132	)		(347	)		(13	)		(177	)		(88	)		(278	)
Other income (deductions) - net			512			69			(503	)		78			351			125			(335	)		141
Income (loss) before income taxes			490			197			(49	)		638			338			(42	)		120			416
Income tax expense (benefit)			4			(6	)		154			152			(2	)		(80	)		158			76
Net income (loss)		$	486		$	203		$	(203	)	$	486		$	340		$	38		$	(38	)	$	340
_____________________
(a)	Represents FPL and consolidating adjustments.

Condensed Consolidating Balance Sheets
		June 30, 2006												December 31, 2005
		FPL Group (Guarantor)			FPL Group Capital			Other(a)			FPL Group Consoli- dated			FPL Group (Guarantor)			FPL Group Capital			Other(a)			FPL Group Consoli- dated
		(millions)
PROPERTY, PLANT AND EQUIPMENT
Electric utility plant in service and other property		$	-		$	10,122		$	25,057		$	35,179		$	-		$	8,945		$	24,406		$	33,351
Less accumulated depreciation and amortization			-			(1,561	)		(9,740	)		(11,301	)		-			(1,359	)		(9,529	)		(10,888	)
Total property, plant and equipment - net			-			8,561			15,317			23,878			-			7,586			14,877			22,463
CURRENT ASSETS
Cash and cash equivalents			4			70			60			134			7			467			56			530
Receivables			235			698			911			1,844			5			584			841			1,430
Other			63			747			1,579			2,389			63			518			2,446			3,027
Total current assets			302			1,515			2,550			4,367			75			1,569			3,343			4,987
OTHER ASSETS
Investment in subsidiaries			9,054			-			(9,054	)		-			8,647			-			(8,647	)		-
Other			140			1,488			3,891			5,519			140			1,339			4,075			5,554
Total other assets			9,194			1,488			(5,163	)		5,519			8,787			1,339			(4,572	)		5,554
TOTAL ASSETS		$	9,496		$	11,564		$	12,704		$	33,764		$	8,862		$	10,494		$	13,648		$	33,004
CAPITALIZATION
Common shareholders' equity		$	9,075		$	2,013		$	(2,013	)	$	9,075		$	8,499		$	1,911		$	(1,911	)	$	8,499
Long-term debt			-			4,147			4,213			8,360			-			4,768			3,271			8,039
Total capitalization			9,075			6,160			2,200			17,435			8,499			6,679			1,360			16,538
CURRENT LIABILITIES
Debt due within one year			-			2,613			957			3,570			-			1,269			1,294			2,563
Accounts payable			3			315			743			1,061			17			365			863			1,245
Other			163			737			1,299			2,199			85			803			2,571			3,459
Total current liabilities			166			3,665			2,999			6,830			102			2,437			4,728			7,267
OTHER LIABILITIES AND DEFERRED CREDITS
Asset retirement obligations			-			384			1,514			1,898			-			211			1,474			1,685
Accumulated deferred income taxes			(14	)		780			2,491			3,257			(5	)		464			2,556			3,015
Regulatory liabilities			-			-			2,912			2,912			-			-			2,971			2,971
Other			269			575			588			1,432			266			703			559			1,528
Total other liabilities and deferred credits			255			1,739			7,505			9,499			261			1,378			7,560			9,199
COMMITMENTS AND CONTINGENCIES
TOTAL CAPITALIZATION AND LIABILITIES		$	9,496		$	11,564		$	12,704		$	33,764		$	8,862		$	10,494		$	13,648		$	33,004
_____________________
(a)	Represents FPL and consolidating adjustments.

Condensed Consolidating Statements of Cash Flows
		Six Months Ended June 30,
		2006												2005
		FPL Group (Guarantor)			FPL Group Capital			Other(a)			FPL Group Consoli- dated			FPL Group (Guarantor)			FPL Group Capital			Other(a)				FPL Group Consoli- dated
		(millions)
NET CASH PROVIDED BY OPERATING ACTIVITIES		$	49		$	197		$	228		$	474		$	48		$	37		$		709			$		794
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures and independent power
investments			-			(1,140	)		(975	)		(2,115	)		-			(440	)		(845		)			(1,285		)
Sale of independent power investments			-			-			-			-			-			16			-					16
Other -net			-			(14	)		(42	)		(56	)		(409	)		12			342					(55		)
Net cash used in investing activities			-			(1,154	)		(1,017	)		(2,171	)		(409	)		(412	)		(503		)			(1,324		)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuances of long-term debt			-			604			937			1,541			-			505			294					799
Retirements of long-term debt			-			(624	)		(135	)		(759	)		-			(675	)		-					(675		)
Retirements of preferred stock			-			-			-			-			-			-			(5		)			(5		)
Net change in short-term debt			-			734			(201	)		533			-			34			(55		)			(21		)
Proceeds from purchased Corporate Units			210			-			-			210			-			-			-					-
Payments to terminate Corporate Units			(258	)		-			-			(258	)		-			-			-					-
Issuances of common stock			303			-			-			303			610			-			-					610
Dividends on common stock			(296	)		-			-			(296	)		(271	)		-			-					(271		)
Other -net			(11	)		(154	)		192			27			(2	)		456			(432		)			22
Net cash provided by (used in) financing activities			(52	)		560			793			1,301			337			320			(198		)			459
Net increase (decrease) in cash and cash equivalents			(3	)		(397	)		4			(396	)		(24	)		(55	)		8					(71		)
Cash and cash equivalents at beginning of period			7			467			56			530			26			134			65					225
Cash and cash equivalents at end of period		$	4		$	70		$	60		$	134		$	2		$	79		$	73			$		154
_____________________
(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 2005 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.

Results of Operations

Presented below is a summary of earnings contributions by segment:

	Three Months Ended June 30,									Six Months Ended June 30,
	2006			2005			Increase (Decrease)			2006			2005			Increase (Decrease)
	(millions)
FPL	$	182		$	201		$	(19	)	$	305		$	313		$	(8	)
FPL Energy		92			20			72			243			57			186
Corporate and Other		(36	)		(18	)		(18	)		(62	)		(30	)		(32	)
Total	$	238		$	203		$	35		$	486		$	340		$	146

During the three months ended June 30, 2006 and 2005, FPL Energy recorded after-tax net unrealized mark-to-market losses on non-qualifying hedge activity of approximately $20 million and $52 million, respectively.  During the six months ended June 30, 2006, FPL Energy recorded approximately $2 million of after-tax net unrealized mark-to-market gains on non-qualifying hedge activity compared to losses of $83 million in the same period in 2005.  Unrealized mark-to-market gains/losses are affected by fluctuations in forward power and fuel prices.  As a general rule, a gain (loss) in the non-qualifying hedge category is offset by decreases (increases) in the fair value of physical asset positions in the portfolio or contracts, which are not marked to market under generally accepted accounting principles.  In addition, Corporate and Other's results for the three and six months ended June 30, 2006 reflect after-tax costs related to the proposed merger between FPL Group and C onstellation Energy of approximately $4 million and $7 million, respectively.  See Note 9 for segment information.

FPL Group's management uses earnings excluding certain items (adjusted earnings), which were the unrealized mark-to-market effect of non-qualifying hedges and merger-related expenses, 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, management believes that the amount and/or nature of such items make period to period comparisons of operations difficult and potentially confusing.

FPL Group's effective income tax rate for the three and six months ended June 30, 2006 was higher than the prior year periods reflecting an approximately $7 million deferred tax expense resulting from a change in tax laws in Texas as well as the effect of PTCs for wind projects at FPL Energy.  PTCs are recognized as wind energy is generated and sold based on a per kilowatt-hour rate prescribed in applicable federal and state statutes, and amounted to approximately $38 million and $81 million for the three and six months ended June 30, 2006, respectively, and $37 million and $63 million for the comparable periods in 2005.  PTCs can significantly affect FPL Group's effective income tax rate depending on the amount of pretax income and wind generation.

FPL - FPL's net income for the three months ended June 30, 2006 was $182 million compared to $201 million for the same period in 2005.  For the six months ended June 30, 2006, FPL's net income was $305 million compared to $313 million for the same period in 2005.  These decreases were primarily due to the storm cost disallowance by the FPSC, higher other operations and maintenance (O&M) and interest expenses and lower AFUDC, partly offset by lower depreciation expense and higher base revenues reflecting warmer weather and retail customer growth.  In the second quarter of 2006, FPL recorded approximately $8 million of pretax interest income on the 2005 storm restoration costs approved for recovery, as permitted by the FPSC.  The disallowed storm costs, net of the interest income, reduced FPL Group's and FPL's net income by approximately $28 million.  See Note 5.

FPL's operating revenues consisted of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
	2006		2005		2006			2005
	(millions)
Retail base	$	956	$	917		$	1,733		$	1,690
Cost recovery clauses and other pass-through costs		2,009		1,333			3,775			2,551
Other, primarily gas, transmission and wholesale sales
and customer-related fees		34		48			75			97
Total	$	2,999	$	2,298		$	5,583		$	4,338

For the three months ended June 30, 2006, customer usage increased 4.8% primarily due to warmer weather compared to the prior year.  This usage increase, as well as other factors, increased retail base revenues by approximately $35 million.  A 2.0% increase in the average number of retail customer accounts increased retail base revenues by approximately $18 million.  In addition, under the 2005 rate agreement, FPL was authorized by the FPSC to collect, through a separate charge on a customer's bill, the portion (approximately 1.5%) of gross receipts taxes that was previously embedded in base rates.  This resulted in an approximately $14 million reduction in retail base revenues with a corresponding increase in revenues from cost recovery clauses and other pass-through costs.

For the six months ended June 30, 2006, customer usage increased 2.3% primarily due to warmer weather compared to the prior year.  This usage increase, as well as other factors, increased retail base revenues by approximately $33 million.  A 2.1% increase in the average number of retail customer accounts increased retail base revenues by approximately $35 million.  The reduction in retail base revenues and the corresponding increase in revenues from cost recovery clauses and other pass-through costs, resulting from the removal of gross receipts taxes from base rates, amounted to approximately $25 million for the six months ended June 30, 2006.

Revenues from cost recovery clauses and other pass-through costs, such as franchise fees, revenue taxes and storm cost recoveries, do not significantly affect net income; however, under- or over-recovery of such costs can significantly affect FPL Group's and FPL's operating cash flows.  Fluctuations in these revenues, as well as in fuel, purchased power and interchange expense, are primarily driven by changes in energy sales, fuel prices and capacity charges.  The increase in revenues from cost recovery clauses and other pass-through costs is primarily attributable to the increase in the fuel clause recovery factor, effective January 2006, in response to higher expected fuel prices in 2006, as well as the recovery of a portion of underrecovered fuel costs from 2005.  The increase in the fuel factor was the primary contributor to the $362 million decrease in deferred clause and franchise expenses (current and noncurrent, collectively) on FPL Group's and FPL's condensed consolidat ed balance sheets at June 30, 2006, and positively affected FPL Group's and FPL's cash flows from operations for the six months ended June 30, 2006.  In February 2005, FPL began recovering the 2004 storm restoration cost deficiency from retail customers.  For the three months ended June 30, 2006 and 2005, the amount billed to customers related to these storm restoration cost recoveries amounted to approximately $37 million and $44 million, respectively.  The corresponding amounts for the six months ended June 30, 2006 and 2005 were $70 million and $63 million.  The expense for the amortization of the storm reserve deficiency is shown as a separate line on the condensed consolidated statements of income.  In May 2006, the FPSC approved the issuance of bonds to recover FPL's unrecovered 2004 and 2005 storm restoration costs, as well as establish a storm and property insurance reserve of $200 million.  See Note 5.  The decrease in o ther revenues is primarily due to the FPSC-approved sale, effective January 1, 2006, of FPL's retail gas business to a subsidiary of FPL Group Capital, which also reduced FPL's fuel expenses.

FPL's O&M expenses for the three and six months ended June 30, 2006 increased primarily due to higher distribution costs reflecting implementation of the Storm Secure Plan and higher fleet vehicle costs and increased staffing costs at FPL's nuclear plants.  This was partially offset by an approximately $11 million reversal of the previously accrued nuclear outage reserve costs, which is more fully discussed below.  Management expects to see a continued upward trend in O&M expenses in 2006 in the areas of transmission, distribution, including costs associated with the Storm Secure Plan, fossil generation and customer service, as well as continued increases in employee benefit costs.  See Management's Discussion - Liquidity and Capital Resources for additional discussion of FPL's Storm Secure Plan.

In mid-June 2006, St. Lucie Unit No. 2 completed its scheduled refueling outage, which included the inspection of its reactor vessel head for cracks and corrosion.  No cracking was detected and no repairs to the reactor vessel head were made during this outage.  FPL intends to replace the reactor vessel head at St. Lucie Unit No. 2 during its fall 2007 scheduled refueling outage and has replaced within the last two years the reactor vessel heads at FPL's other three nuclear units.  The estimated cost of performing inspections and any necessary repairs to St. Lucie Unit No. 2's and the other units' reactor vessel head(s) until replacement is being recognized as expense on a levelized basis over a five-year period that began in 2002, as authorized by the FPSC, and amounted to approximately $0.3 million and $2 million for the three months ended June 30, 2006 and 2005, respectively, and approximately $2 million and $3 million for the six months ended June 30, 2006 and 2005, respecti vely.  As of June 30, 2006, there is a credit of approximately $1 million remaining to be amortized through December 31, 2006 for the reactor vessel head inspection costs, resulting primarily from a true-up of the St. Lucie Unit No. 2 inspection costs since no repairs were required.  As of June 30, 2006, FPL's portion of the estimated remaining cost to replace St. Lucie Unit No. 2's reactor vessel head, including AFUDC, is approximately $49 million and is included in FPL's estimated capital expenditures.  See Note 8 - Commitments.

FPL intends to replace, along with the reactor vessel head, St. Lucie Unit No. 2's steam generators during its fall 2007 scheduled refueling outage.  Currently, 23.0% and 27.8% of the tubes in the two steam generators have been plugged in order to prevent the tubes from leaking during plant operations.  It had been anticipated that during the spring 2006 outage, the 30%per steam generator tube plugging limit previously approved by the U. S. Nuclear Regulatory Commission (NRC) could have been exceeded and a more expensive sleeving process would have been required.  However, sleeving was not required during this outage and, accordingly, FPL reversed in the second quarter of 2006 a portion (approximately $11 million pretax) of previously accrued nuclear outage reserve costs.  As of June 30, 2006, FPL's portion of the remaining cost to replace St. Lucie Unit No. 2's steam generators, includi ng AFUDC, is approximately $148 million and is included in FPL's estimated capital expenditures.  See Note 8 - Commitments.

Depreciation and amortization expense for the three and six months ended June 30, 2006 decreased $35 million and $70 million, respectively, benefiting from lower depreciation rates and the elimination of the decommissioning accrual approved as part of the 2005 rate agreement.  This reduction in rates applied to substantially all power plant assets including Turkey Point Units Nos. 3 and 4 and St. Lucie Units Nos. 1 and 2, which have received 20-year license extensions.  This was partially offset by increased depreciation from the addition of two new generating units at FPL's existing Martin and Manatee power plant sites, which became operational on June 30, 2005, increased nuclear depreciation primarily related to plant additions and FPL's continued investment in transmission and distribution expansion to support customer growth and demand.  FPL expects to place an additional approximately 1,150 mw generating unit into service at its Turkey Point site by mid-2007.

Interest charges increased for the three and six months ended June 30, 2006 primarily due to higher average debt balances used to fund increased investment in generation, transmission and distribution expansion and to pay for unrecovered fuel and storm restoration costs.  The decline in AFUDC is primarily attributable to the placement of the additional Martin and Manatee units in service on June 30, 2005.

Interest income increased for the three and six months ended June 30, 2006 primarily due to interest recorded in the second quarter of 2006 on the 2005 storm restoration costs which have yet to be recovered from customers.

FPL Energy - FPL Energy's net income for the three months ended June 30, 2006 and 2005 was $92 million and $20 million, respectively.  FPL Energy's net income for the six months ended June 30, 2006 and 2005 was $243 million and $57 million, respectively.  The primary drivers, on an after-tax basis, of these increases were as follows:

		Three Months Ended June 30, 2006					Six Months Ended June 30, 2006
			(millions)
New investment (a)				$	28			$	47
Existing assets (a)					12				76
Asset optimization and trading					6				7
Restructuring activities					(5	)			(17	)
Interest expense and other					(1	)			(12	)
Change in unrealized mark-to-market non-qualifying hedge activity (b)					32				85
Total increase				$	72			$	186
_____________________
(a)	Does not include allocation of interest expense or corporate general and administrative expenses.  Does include PTCs on wind projects.  See Note 6.
(b)	For discussion of derivative instruments, see Note 2.

The increase in FPL Energy's results from new investment reflects the addition of over 1,240 mw of wind and nuclear generation during or after the three months ended June 30, 2005 and over 1,420 mw of nuclear, wind and solar generation during or after the six months ended June 30, 2005.  The existing portfolio in both periods benefited from improved market conditions in the New England Power Pool (NEPOOL), Electric Reliability Council of Texas (ERCOT) and PJM Interconnection, L.L.C. (PJM) regions and the absence of a refueling outage at Seabrook partially offset by the absence of a benefit associated with obtaining an additional partnership interest in a coal plant in California.  In addition, for the three months ended June 30, 2006, the existing portfolio experienced a lower wind resource while results for the six months ended June 30, 2006 benefited from a higher wind resource.  FPL Energy also recognized increased gains in both periods from its asset optimization and trading activities.  Restructuring activities in both periods reflect the absence of gains recorded in 2005 from asset sales and, for the six months ended June 30, 2006, the absence of a gain recorded in 2005 from a contract restructuring.  Interest expense and other includes higher interest expense due to higher debt balances as a result of growth in the business as well as an increase in average interest rates of approximately 46 basis points and 58 basis points for the three and six months ended June 30, 2006, respectively.  During the three months ended June 30, 2006 and 2005, FPL Energy recorded after-tax net unrealized mark-to-market losses on non-qualifying hedge activity of approximately $20 million and $52 million, respectively.  During the six months ended June 30, 2006, FPL Energy recorded approximately $2 million of after-tax net unrealized mark-to-market gains on non-qualifying hedge activity compared to losses of $83 million in the same period in 2005.

FPL Energy's operating revenues for the three and six months ended June 30, 2006 increased $351 million and $931 million, respectively, primarily due to favorable market conditions in the NEPOOL, ERCOT and PJM regions, project additions, the lack of a refueling outage at Seabrook, and gains on unrealized mark-to-market non-qualifying hedge activity in 2006 as compared to losses in the 2005 period.  In addition, a lower wind resource reduced operating revenues during the three months ended June 30, 2006 while a higher wind resource increased operating revenues during the six months ended June 30, 2006.  FPL Energy's operating expenses for the three and six months ended June 30, 2006 increased $217 million and $605 million, respectively, primarily due to project additions and increased fuel costs as a result of market conditions.  In addition, FPL Energy's operating expenses increased for the three months ended June 30, 2006 due to higher unrealized mark-to-market non-qualify ing hedge losses in 2006 compared to 2005 and, for the six months period, unrealized mark-to-market non-qualifying hedge losses in 2006 compared to gains in 2005.

Equity in earnings of equity method investees for the quarter ended June 30, 2006 increased $4 million from the prior year quarter primarily due to the receipt of a portion of a settlement from a development project partially offset by higher unrealized mark-to-market losses from non-qualifying hedge activity.  The $5 million decrease in equity in earnings of equity method investees for the six months ended June 30, 2006 is primarily due to higher unrealized mark-to-market losses from non-qualifying hedge activity partially offset by the project settlement.  The favorable effect on operating results from a prior contract restructuring was offset by the absence of an approximately $13 million gain on a contract restructuring recorded in 2005.

FPL Energy's interest expense for the three and six months ended June 30, 2006 increased $8 million and $19 million, respectively, reflecting higher average debt balances due to growth in the business and an increase in average interest rates.  Other - net in FPL Group's condensed consolidated statements of income for the three and six months ended June 30, 2005 includes pretax gains on the sale of joint venture projects and a benefit associated with obtaining an additional partnership interest in a coal plant in California.  PTCs from FPL Energy's wind projects are reflected in FPL Energy's earnings.  PTCs are recognized as wind energy is generated and sold based on a per kilowatt-hour rate prescribed in applicable federal and state statutes, and amounted to approximately $38 million and $81 million for the three and six months ended June 30, 2006, respectively, and approximately $37 million and $63 million for the comparable periods in 2005.

In January 2006, FPL Energy completed the acquisition of a 70% interest, or approximately 415 mw, in Duane Arnold, a nuclear power plant located near Cedar Rapids, Iowa, from Interstate Power and Light Company (IP&L).  FPL Energy purchased the 70% interest, including nuclear fuel, inventory and other items, for a net purchase price of approximately $351 million.  FPL Energy is selling its share of the output of Duane Arnold to IP&L at a price of approximately $46 per megawatt-hour (mwh) in 2006, escalating annually to approximately $61 per mwh in 2013, under a long-term contract expiring in 2014.  FPL Energy is responsible for management and operation of the plant, as well as for the ultimate decommissioning of the facility, the cost of which will be shared on a pro-rata basis by the joint owners.  FPL Energy received approximately $188 million of decommissioning funds at closing which is included in nuclear decommissioning reserve funds on FPL Group's condense d consolidated balance sheet at June 30, 2006.  FPL Energy expects to file for a license extension for the plant in 2009, which, if approved, will enable the plant to continue to operate for an additional 20 years beyond its current license expiration of 2014.

FPL Energy's earnings are subject to variability due to, among other things, operational performance, commodity price exposure, counterparty performance, weather conditions and project restructuring activities.  FPL Energy's exposure to commodity price risk is reduced by the degree of contract coverage obtained for 2006 and 2007.  As of June 30, 2006, FPL Energy's capacity under contract for the remainder of 2006 and 2007 is as follows:

		Remainder of 2006					2007
Project Portfolio Category		Available MW (a)		% MW Under Contract			Available MW (a)		% MW Under Contract
Wind			3,297	95	%	(b)		3,319	98	%	(b)
Contracted (c)			2,435	100	%	(b)		2,423	100	%	(b)
Merchant: (d)
NEPOOL			2,082	68	%	(e)		2,367	66	%	(e)
ERCOT			2,552	86	%	(e)		2,550	81	%	(e)
All Other			1,411	74	%	(e)		1,386	45	%	(e)
Total portfolio (f)			11,777	87	%	(e)		12,045	82	%	(e)
_____________________
(a)	Weighted to reflect in-service dates, planned maintenance, Seabrook's planned refueling outage and power uprate in 2006, Duane Arnold's planned refueling outage in 2007 and expected production from renewable resource assets.
(b)	Reflects round-the-clock mw under contract.
(c)	Includes all projects with mid- to long-term purchase power contracts for substantially all of their output.
(d)	Includes only those facilities that require active hedging.
(e)	Reflects on-peak mw under contract.
(f)	Totals may not add due to rounding.

FPL Energy expects its future portfolio capacity growth to come primarily from wind development benefiting from the extension of the production tax credit program through 2007 for new wind facilities, as well as from asset acquisitions.  In addition to the acquisition of Duane Arnold discussed above, FPL Energy purchased in 2006 additional ownership interests, or approximately 47 mw, in wind projects in California and Minnesota and, in the second quarter of 2006 began commercial operation of a total of approximately 372 mw of wind projects in Texas.  FPL Energy has approximately 760 mw of new wind development projects that have either been completed or are expected to reach commercial operation by the end of 2006.  FPL Energy expects to add a total of at least 1,500 mw of new wind generation in 2006 and 2007.

In March 2006, a settlement agreement was submitted to the FERC that would establish a new forward capacity market (FCM) in the NEPOOL region.  The parties to the settlement agreement include wholesale power generators in New England, including FPL Energy, and four of the six New England states.  Under the FCM proposal, capacity payments to generators would be established competitively through an annual auction, the first of which would be conducted in the first quarter of 2008 to purchase capacity for the twelve months starting June 1, 2010.  The settlement agreement also provides for a transition period starting December 1, 2006 through May 31, 2010, during which capacity suppliers would receive fixed capacity payments, subject to penalties for forced outages during peak demand periods.  In June 2006, the FERC approved the settlement agreement.  The settlement agreement, as approved by the FERC, is expected to result in increased gross margins for FPL Energ y's assets in the NEPOOL region during the transition period.

Corporate and Other - Corporate and Other is primarily comprised of interest expense, FPL FiberNet and other business activities, as well as corporate interest income and expenses.  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.  Corporate and Other's net loss for the three and six months ended June 30, 2006 was $36 million and $62 million, respectively, compared to a net loss of $18 million and $30 million for the comparable periods in 2005.  Results for the three and six months ended June 30, 2006 reflect approximately $4 million and $7 million, respectively, of after-tax costs associated with the proposed merger between FPL Group and Constellation Energy and an approximately $7 million deferred tax expense resulting from a modification of the Texas franchise tax enacted in May 2006.  Results for the six months ended June 30, 2005 include an approximately $7 million gain ($4 million after-tax) from the termination of a leveraged lease agreement, which is included in gains on disposal of equity method investees and leveraged leases - net in FPL Group's condensed consolidated statements of income.  Corporate and Other's interest income declined for both the three and six months ended June 30, 2006 reflecting the repayment of a secured third party loan in the fourth quarter of 2005.  The increase in operating revenues and operating expenses at Corporate and Other is primarily due to the sale, effective January 1, 2006, of FPL's retail gas business to a subsidiary of FPL Group Capital.

Liquidity and Capital Resources

FPL Group and its subsidiaries, including FPL, require funds to support and grow their businesses.  These funds are used for working capital, capital expenditures and investments in or acquisitions of assets and businesses, to pay maturing debt obligations and, from time to time, to redeem outstanding debt and/or repurchase common 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, FPL's and FPL Group Capital's ability to obtain short- and long-term financing, the cost of such financing and the execution of their respective financing strategies.

The changes in cash and cash equivalents are summarized as follows:

	FPL Group							FPL
	Six Months Ended June 30,
	2006			2005				2006			2005
	(millions)
Net cash provided by operating activities	$	474		$	794		$		409		$	776
Net cash used in investing activities		(2,171	)		(1,324	)			(1,007	)		(916	)
Net cash provided by financing activities		1,301			459				602			148
Net increase (decrease) in cash and cash equivalents	$	(396	)	$	(71	)	$		4		$	8

FPL Group's and FPL's cash flows for the six months ended June 30, 2006 benefited from net issuances of debt and the recovery from customers of previously incurred fuel costs at FPL.  In addition, FPL Group's cash flows benefited from the issuance of common stock.  These funds were used to fund capital expenditures at FPL and additional investments at FPL Energy, the return of margin cash deposits to FPL counterparties and the payment of storm-related costs at FPL.

FPL Group's cash flows from operating activities for the six months ended June 30, 2006 reflect a decrease in underrecovered fuel costs at FPL primarily due to an increase in the fuel clause recovery factor effective January 2006, the return of cash collateral (margin cash deposits) primarily to FPL's counterparties related to declining energy contract prices, the payment of storm-related costs at FPL, an increase in FPL's accounts receivable due to higher prices primarily reflecting the higher fuel factor, a decrease in accounts payable and an increase in fossil fuel inventory.  The increase in fossil fuel inventory is primarily due to the accumulation of oil inventory at FPL reflecting the burning of more natural gas due to relatively lower natural gas prices and the addition, at an FPL Energy plant, of oil and gas inventory which was purchased pursuant to the termination of a fuel management contract.

FPL Group's cash flows from operating activities for the six months ended June 30, 2005 reflect underrecovered fuel costs at FPL caused primarily by higher than anticipated fuel prices and FPL's payment of storm restoration costs associated with the 2004 hurricane season, partly offset by the receipt of funds associated with the storm reserve deficiency surcharge.  In addition, cash flows from operating activities for the six months ended June 30, 2005 reflect an increase in FPL's fossil fuel inventory, which was affected by higher fuel prices as well as volume increases in anticipation of the 2005 hurricane season.

FPL Group's cash flows from investing activities for the six months ended June 30, 2006 reflect capital investments of approximately $933 million by FPL to meet customer demand and investments at FPL Energy of approximately $1,076 million, including the purchase of Duane Arnold.  FPL Group's cash flows from investing activities also include amounts related to the purchase and sale of restricted securities held in the nuclear decommissioning funds as a result of the reinvestment of fund earnings and new contributions from FPL Energy, as well as other investment activity within the funds.  FPL suspended nuclear decommissioning fund contributions of approximately $79 million annually, beginning in September 2005, pursuant to the terms of the 2005 rate agreement.

FPL Group's cash flows from investing activities for the six months ended June 30, 2005 reflect capital investments of approximately $808 million by FPL to meet customer demand and investments at FPL Energy of approximately $434 million.  FPL Group's cash flows from investing activities also include amounts related to the purchase and sale of restricted securities held in the nuclear decommissioning funds as a result of the reinvestment of fund earnings and new contributions from FPL Energy, as well as other investment activity within the funds.  

During the six months ended June 30, 2006, FPL Group generated proceeds of approximately $2.4 billion from financing activities, including the issuance of $700 million in FPL first mortgage bonds, the borrowing of $250 million by FPL under a five-year term loan facility, the borrowing of $400 million by FPL Group Capital under three separate two-year term loan facilities, the issuance of $206 million of limited-recourse senior secured notes by FPL Energy subsidiaries, a net increase in short-term debt of approximately $533 million ($201 million decrease at FPL), approximately $296 million from the issuance of FPL Group common stock related to its 8% Corporate Units and approximately $7 million related to the exercise of stock options.  During the six months ended June 30, 2006, FPL Group used proceeds of approximately $1.1 billion for financing activities, including approximately $500 million for maturing FPL Group Capital debentures, approximately $135 million for maturing senior secured note s of a consolidated variable interest entity that leases nuclear fuel to FPL, approximately $48 million net to cancel approximately 4.2 million of its 8% Corporate Units, approximately $296 million for the payment of dividends on its common stock and approximately $124 million for principal payments on FPL Energy debt.

During the six months ended June 30, 2005, FPL Group generated proceeds of approximately $1.4 billion from financing activities and redeemed, had mature or made principal payments on debt and preferred stock totaling approximately $680 million.  The proceeds from financing activities included approximately $575 million from the sale of FPL Group common stock related to Corporate Units issued in February 2002, the issuance of $300 million in first mortgage bonds at FPL, approximately $516 million from the issuance of limited-recourse senior secured bonds and draws on a construction revolver by FPL Energy subsidiaries, and the issuance of approximately $36 million in common stock by FPL Group related to the exercise of stock options.  Redemptions, maturities and principal payments during the six months ended June 30, 2005 included the redemption of FPL preferred stock, a redemption of approximately $5 million in 7.35% bonds at FPL Group Capital, maturity of $600 million in debentures at FPL Group Capital and principal payments of approximately $70 million on FPL Energy debt.

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

	FPL Group				FPL
	June 30, 2006		December 31, 2005		June 30, 2006		December 31, 2005
Weighted-average annual interest rate (a)	6.0	%	5.9	%	5.2	%	5.2	%
Weighted-average life (years)	10.0		9.3		17.2		15.1
Annual average of floating rate debt to total debt (a)	41	%	35	%	46	%	40	%
____________________
(a)  Calculations include interest rate swaps.

FPL was impacted by four hurricanes in 2005 and three hurricanes in 2004 which did major damage in parts of FPL's service territory.  Storm restoration costs incurred by FPL during 2005 and 2004 exceeded the amount in the storm and property insurance reserve.  At June 30, 2006, FPL's storm reserve deficiency totaled approximately $959 million.  In May 2006, the FPSC approved the issuance of approximately $708 million of bonds pursuant to the securitization provisions of Section 366.8260 of the Florida Statues for the net-of-tax recovery by FPL of the estimated storm reserve deficiency at the time the bonds are issued or, approximately $934 million, including interest, and for a storm and property insurance reserve of $200 million.  The unrecovered 2004 storm restoration costs will continue to be recovered through a previously approved storm damage surcharge until the bonds are issued.  See Note 5.

In January 2006, the FPSC held an electric infrastructure workshop to discuss the damage to electric utility facilities incurred due to recent hurricanes and to explore ways of minimizing damage and resulting outages to customers in the future.  Presentations on hurricane issues were made by representatives of city governments, vendors and the Florida electric utilities.  On January 30, 2006, FPL filed a report with the FPSC outlining its Storm Secure Plan, an initiative to enhance its electrical grid and power plants as a result of heightened hurricane activity and in response to concerns expressed by the community, state leaders and regulators.  On February 7, 2006, the FPSC approved a rule that requires the Florida electric utilities to inspect their wooden transmission and distribution poles on an eight-year inspection cycle and file an annual report with the FPSC regarding such inspections.  Pursuant to an FPSC order, on June 1, 2006, FPL filed detailed plans on s pecific aspects of its storm preparedness plans, including estimated implementation costs for ongoing storm preparedness initiatives.  An FPSC decision on FPL's storm preparedness plans is expected by September 2006.  On June 28, 2006, the FPSC issued an order for rulemaking requiring all of Florida's electric utilities to meet more stringent distribution construction standards and revising the customer's contribution in aid of construction calculations for underground conversions and extensions.  In July 2006, several interested parties requested a hearing regarding these proposed rules which is scheduled for August 31, 2006.  Estimated Storm Secure Plan capital costs for the remainder of 2006 through 2010 are included in FPL's projected capital expenditures and are subject to change over time based on productivity enhancements and prioritization.  See Note 8 - Commitments.  See Management's Discussion - Results of Operations for further discussion regarding the impact of Storm Secure Plan costs on O&M expense.

FPL Group's commitments at June 30, 2006 were as follows:

		2006		2007		2008		2009		2010		Thereafter				Total
		(millions)
Long-term debt, including interest: (a)
FPL		$	120	$	227	$	663	$	420	$	188		$	7,511	$		9,129
FPL Energy			99		720		572		231		224			1,586			3,432
Corporate and Other			720		1,213		988		666		18			913			4,518
Purchase obligations:
FPL (b)			3,025		4,160		2,915		3,120		2,740			7,100			23,060
FPL Energy (c)			547		624		58		58		57			780			2,124
Corporate and Other			55		-		-		-		-			-			55
Asset retirement activities:(d)
FPL (e)			-		-		-		-		-			11,571			11,571
FPL Energy (f)			-		-		-		-		-			3,141			3,141
Total		$	4,566	$	6,944	$	5,196	$	4,495	$	3,227		$	32,602	$		57,030
____________________
(a)	Includes principal, interest and interest rate swaps.  Variable rate interest was computed using June 30, 2006 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 8 - Contracts), and projected capital expenditures through 2010 to meet, among other things, increased electricity usage and customer growth, capital improvements to and maintenance of existing facilities and estimated capital costs associated with FPL's Storm Secure Plan.  Estimated capital costs associated with FPL's Storm Secure Plan are subject to change over time based on productivity enhancements and prioritization (see Note 8 - Commitments).
(c)	Represents firm commitments primarily in connection with the purchase of wind turbines and towers, natural gas transportation, purchase and storage, firm transmission service, nuclear fuel and a portion of its projected capital expenditures.  See Note 8 - Commitments and Contracts.
(d)	Represents expected cash payments adjusted for inflation for estimated costs to perform asset retirement activities.
(e)	At June 30, 2006, FPL had approximately $2,098 million in restricted trust funds for the payment of future expenditures to decommission FPL's nuclear units, which are included in FPL Group's and FPL's nuclear decommissioning reserve funds.
(f)	At June 30, 2006, FPL Energy's 88.23% portion of Seabrook's and 70% portion of Duane Arnold's restricted trust funds for the payment of future expenditures to decommission Seabrook and Duane Arnold totaled approximately $510 million and are included in FPL Group's nuclear decommissioning reserve funds.

Securities of FPL Group and its subsidiaries are currently rated by Moody's Investors Service, Inc. (Moody's), Standard & Poor's Ratings Services (S&P) and Fitch Ratings (Fitch).  At August 4, 2006, Moody's, S&P and Fitch had assigned the following credit ratings to FPL Group, FPL and FPL Group Capital:

		Moody's (a)	S&P (a)	Fitch (a)
FPL Group: (b)
Corporate credit rating		A2	A	A
FPL: (b)
Corporate credit rating		A1	A/A-1	A
First mortgage bonds		Aa3	A	AA-
Pollution control, solid waste disposal and
industrial development revenue bonds		Aa3/VMIG-1	A	A+
Commercial paper		P-1	A-1	F-1
FPL Group Capital: (b)
Corporate credit rating		N/A	A/A-1	A
Debentures		A2	A-	A
Commercial paper		P-1	A-1	F-1
____________________
(a)	A security rating is not a recommendation to buy, sell or hold securities and should be evaluated independently of any other rating.  The rating is subject to revision or withdrawal at any time by the assigning rating organization.
(b)	The outlook indicated by Moody's, S&P and Fitch is negative, watch negative and stable, respectively.

FPL Group and FPL obtain letters of credit and issue guarantees to facilitate commercial transactions with third parties and financings.  At June 30, 2006, FPL Group had standby letters of credit of approximately $704 million ($53 million for FPL) and approximately $6,100 million notional amount of guarantees ($330 million for FPL), of which approximately $5,091 million ($353 million for FPL) have expirations within the next five years.  These letters of credit and guarantees support the buying and selling of wholesale energy commodities, debt-related reserves, nuclear decommissioning activities and other contractual agreements.  FPL Group and FPL believe it is unlikely that they would be required to perform or otherwise incur any liabilities associated with these letters of credit and guarantees.  At June 30, 2006, FPL Group and FPL did not have any liabilities recorded for these letters of credit and guarantees.  In addition, FPL Group has guarant eed certain payment obligations of FPL Group Capital, including most of those under FPL Group Capital's debt, including all of its debentures and commercial paper issuances, as well as most of its payment guarantees, and FPL Group Capital has guaranteed certain debt and other obligations of FPL Energy and its subsidiaries.  See Note 8 - Commitments.

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 becoming liable for 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.

Bank revolving lines of credit available to FPL Group and its subsidiaries, including FPL, are as follows:

FPL (a)			FPL Group Capital			Total (a)		Maturity Date
(millions)
$	2,000			$	2,500	$	4,500	November 2010
_____________________
(a)		Excludes $300 million in senior secured revolving credit facilities of an entity consolidated by FPL under FIN 46R "Consolidation of Variable Interest Entities," as revised (the VIE) that leases nuclear fuel to FPL and are available only to the VIE.

These credit facilities provide for the issuance of letters of credit up to $4.5 billion and are available to support the companies' commercial paper programs and to provide additional liquidity in the event of a loss to the companies' or their subsidiaries' operating facilities (including, in the case of FPL, a transmission and distribution property loss), as well as for general corporate purposes.  At June 30, 2006, letters of credit totaling $308 million were outstanding under FPL Group Capital's credit facilities and $41 million were outstanding under FPL's credit facilities.  FPL Group (which guarantees the payment of FPL Group Capital's credit facilities pursuant to a 1998 guarantee agreement) is required to maintain a minimum ratio of funded debt to total capitalization under the terms of FPL Group Capital's credit facility.  FPL is required to maintain a minimum ratio of funded debt to total capitalization under the terms of FPL's cr edit facility.  At June 30, 2006, each of FPL Group and FPL was in compliance with its respective ratio.

Also, 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 June 30, 2006, there were no amounts outstanding for either FPL Group Capital or FPL under the uncommitted credit facilities.

During the second quarter of 2006, FPL entered into a $250 million five-year term loan facility expiring in May 2011 and FPL Group Capital entered into three separate two-year term loan facilities aggregating $400 million and each expiring in June 2008.  Both FPL and FPL Group Capital borrowed the full amount under the term loan facilities during the second quarter of 2006.  Under the terms of the term loan facilities, each of FPL and FPL Group is required to maintain a minimum ratio of funded debt to total capitalization.  At June 30, 2006, each of FPL Group and FPL was in compliance with its respective ratio.  Pursuant to its guarantee agreement with FPL Group Capital, FPL Group guarantees the payment of FPL Group Capital's term loans.

In addition to the bank lines of credit discussed above, the consolidated VIE that leases nuclear fuel to FPL has established a $100 million senior secured revolving credit facility, which expires in June 2009, and a $200 million senior secured revolving credit facility, which expires in May 2007.  Both credit facilities provide backup support for the VIE's commercial paper program.  FPL has provided an unconditional guarantee of the payment obligations of the VIE under the credit facilities, which is included in the guarantee discussion above.  At June 30, 2006, the VIE had no outstanding borrowings under the revolving credit facilities and had approximately $198 million of commercial paper outstanding.

As of August 4, 2006, FPL Group and FPL Group Capital had $2.0 billion (issuable by either or both of them up to such aggregate amount) of available capacity under shelf registration statements filed with the Securities and Exchange Commission (SEC).  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.

New Accounting Rules and Interpretations

Variable Interest Entities - In April 2006, the FASB issued Financial Statement Position (FSP) 46(R)-6, "Determining the Variability to Be Considered in Applying FASB Interpretation No. (FIN) 46(R)", which states that the variability to be considered when applying FIN 46(R) should be based on an analysis of the design of an entity which entails analyzing the nature of the risks in the entity and determining the purpose for which the entity was created and determining the variability the entity is designed to create and pass along to its interest holders.  The role of a contract or arrangement in the design of the entity, regardless of its legal form or accounting classification, shall dictate whether that interest should be treated as creating or absorbing variability for the entity.  The effective date of FSP 46(R)-6 is July 1, 2006 and it is to be applied prospectively.  The adoption of FSP 46(R)-6 is not expected to have a significant financial statement impact on FPL Group or FPL.

Accounting for Uncertainty in Income Taxes - In July 2006, the FASB issued FIN 48, "Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109".  The interpretation prescribes a more-likely-than-not recognition threshold and establishes measurement requirements for financial statement reporting of an entity's income tax positions.  The interpretation is effective for fiscal years beginning after December 15, 2006.  The impact, if any, of applying the provisions of FIN 48 will be reported as a cumulative effect adjustment in the first quarter of 2007.  FPL Group and FPL are currently evaluating the impact of FIN 48.

Accumulated Other Comprehensive Income (Loss)

FPL Group's total other comprehensive income (loss) activity is as follows:

	Accumulated Other Comprehensive Income (Loss)
	Six Months Ended June 30,
	2006										2005
	Net Unrealized Gains (Losses) On Cash Flow Hedges				Other			Total			Net Unrealized Gains (Losses) On Cash Flow Hedges				Other			Total
	(millions)
Balances at December 31 of prior year		$	(215	)	$	22		$	(193	)		$	(67	)	$	21		$	(46	)
Net unrealized gains (losses) on commodity cash flow hedges:
Effective portion of net unrealized gains (losses)
(net of $38 tax expense and $56 tax benefit, respectively)			55			-			55				(81	)		-			(81	)
Reclassification from OCI to net income
(net of $13 and $10 tax expense, respectively)			20			-			20				16			-			16
Net unrealized gains (losses) on interest rate cash flow hedges:
Effective portion of net unrealized gains (losses)
(net of $4 tax expense and $0.4 tax benefit, respectively)			8			-			8				(1	)		-			(1	)
Reclassification from OCI to net income
(net of $1 and $1 tax expense, respectively)			1			-			1				2			-			2
Net unrealized losses on available for sale securities
(net of $2 and $2 tax benefit, respectively)			-			(3	)		(3	)			-			(3	)		(3	)
Supplemental retirement plan liability adjustment
(net of $0.5 tax expense in 2006)			-			1			1				-			-			-
Balances at June 30		$	(131	)	$	20		$	(111	)		$	(131	)	$	18		$	(113	)

Energy Marketing and Trading and Market Risk Sensitivity

Energy Marketing and Trading - Certain of FPL Group's subsidiaries, including FPL and FPL Energy, use derivative instruments (primarily swaps, options and forwards) to manage the commodity price risk inherent in the purchase and sale of fuel and electricity, as well as to optimize the value of power generation assets.  To a lesser extent, FPL Group and FPL engage 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 condensed consolidated balance sheets as either an asset or liability 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 or 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 on a net basis 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.  See Note 2.

The changes in the fair value of FPL Group's consolidated subsidiaries' energy contract derivative instruments for the three and six months ended June 30, 2006 were as follows:

				Hedges on Owned Assets
	Trading			Non- Qualifying			OCI			FPL Cost Recovery Clauses			FPL Group Total
	(millions)
Three months ended June 30, 2006
Fair value of contracts outstanding at March 31, 2006	$	8		$	(125	)	$	(285	)	$	(5	)	$	(407	)
Reclassification to realized at settlement of contracts		1			22			11			80			114
Effective portion of changes in fair value recorded in OCI		-			-			29			-			29
Ineffective portion of changes in fair value recorded in earnings		-			4			-			-			4
Changes in fair value excluding reclassification to realized		(5	)		(58	)		-			(323	)		(386	)
Fair value of contracts outstanding at June 30, 2006		4			(157	)		(245	)		(248	)		(646	)
Net option premium payments (receipts)		(1	)		12			-			40			51
Total mark-to-market energy contract net assets (liabilities) at June 30, 2006	$	3		$	(145	)	$	(245	)	$	(208	)	$	(595	)

				Hedges on Owned Assets
	Trading			Non- Qualifying			OCI			FPL Cost Recovery Clauses			FPL Group Total
	(millions)
Six months ended June 30, 2006
Fair value of contracts outstanding at December 31, 2005	$	2		$	(176	)	$	(373	)	$	757		$	210
Reclassification to realized at settlement of contracts		15			35			34			(146	)		(62	)
Effective portion of changes in fair value recorded in OCI		-			-			94			-			94
Ineffective portion of changes in fair value recorded in earnings		-			11			-			-			11
Changes in fair value excluding reclassification to realized		(13	)		(27	)		-			(859	)		(899	)
Fair value of contracts outstanding at June 30, 2006		4			(157	)		(245	)		(248	)		(646	)
Net option premium payments (receipts)		(1	)		12			-			40			51
Total mark-to-market energy contract net assets (liabilities) at June 30, 2006	$	3		$	(145	)	$	(245	)	$	(208	)	$	(595	)

FPL Group's total mark-to-market energy contract net assets (liabilities) at June 30, 2006 shown above are included in the condensed consolidated balance sheet as follows:

	June 30, 2006
	(millions)
Current derivative assets		$	210
Other assets			31
Current derivative liabilities			(571	)
Other liabilities			(265	)
FPL Group's total mark-to-market energy contract net assets (liabilities)		$	(595	)

The sources of fair value estimates and maturity of energy contract derivative instruments at June 30, 2006 were as follows:

	Maturity
	2006				2007				2008				2009				2010			Thereafter					Total
Trading:	(millions)
Actively quoted (i.e., exchange trade) prices	$	(3	)	$		1		$		-		$		-		$		-			$	-		$		(2	)
Prices provided by other external sources		(73	)			(21	)			1				-				-				1				(92	)
Modeled		79				19				-				-				-				-				98
Total		3				(1	)			1				-				-				1				4
Owned Assets - Non-Qualifying:
Actively quoted (i.e., exchange trade) prices		(101	)			(33	)			(5	)			(2	)			(8	)			(7	)			(156	)
Prices provided by other external sources		53				(6	)			(9	)			(2	)			(2	)			(18	)			16
Modeled		(12	)			(1	)			(1	)			-				-				(3	)			(17	)
Total		(60	)			(40	)			(15	)			(4	)			(10	)			(28	)			(157	)
Owned Assets - OCI:
Actively quoted (i.e., exchange trade) prices		(1	)			-				-				-				-				-				(1	)
Prices provided by other external sources		(28	)			(138	)			(45	)			(17	)			(4	)			-				(232	)
Modeled		(2	)			(5	)			(5	)			-				-				-				(12	)
Total		(31	)			(143	)			(50	)			(17	)			(4	)			-				(245	)
Owned Assets - FPL Cost Recovery Clauses:
Actively quoted (i.e., exchange trade) prices		(241	)			(46	)			-				-				-				-				(287	)
Prices provided by other external sources		27				(2	)			-				-				-				-				25
Modeled		13				1				-				-				-				-				14
Total		(201	)			(47	)			-				-				-				-				(248	)
Total sources of fair value	$	(289	)	$		(231	)	$		(64	)	$		(21	)	$		(14	)		$	(27	)	$		(646	)

The changes in the fair value of FPL Group's consolidated subsidiaries' energy contract derivative instruments for the three and six months ended June 30, 2005 were as follows:

				Hedges on Owned Assets
	Trading			Non- Qualifying			OCI			FPL Cost Recovery Clauses			FPL Group Total
	(millions)
Three months ended June 30, 2005
Fair value of contracts outstanding at March 31, 2005	$	2		$	(45	)	$	(202	)	$	289		$	44
Reclassification to realized at settlement of contracts		(1	)		(20	)		11			(26	)		(36	)
Acquisition of Gexa contracts		-			38			-			-			38
Effective portion of changes in fair value recorded in OCI		-			-			(30	)		-			(30	)
Ineffective portion of changes in fair value recorded in earnings		-			(5	)		-			-			(5	)
Changes in fair value excluding reclassification to realized		1			(62	)		-			(45	)		(106	)
Fair value of contracts outstanding at June 30, 2005		2			(94	)		(221	)		218			(95	)
Net option premium payments (receipts)		-			(1	)		-			19			18
Total mark-to-market energy contract net assets (liabilities) at June 30, 2005	$	2		$	(95	)	$	(221	)	$	237		$	(77	)

				Hedges on Owned Assets
	Trading			Non- Qualifying			OCI			FPL Cost Recovery Clauses			FPL Group Total
	(millions)
Six months ended June 30, 2005
Fair value of contracts outstanding at December 31, 2004	$	4		$	(10	)	$	(109	)	$	(9	)	$	(124	)
Reclassification to realized at settlement of contracts		(4	)		(27	)		24			(19	)		(26	)
Acquisition of Gexa contracts		-			38			-			-			38
Effective portion of changes in fair value recorded in OCI		-			-			(136	)		-			(136	)
Ineffective portion of changes in fair value recorded in earnings		-			(10	)		-			-			(10	)
Changes in fair value excluding reclassification to realized		2			(85	)		-			246			163
Fair value of contracts outstanding at June 30, 2005		2			(94	)		(221	)		218			(95	)
Net option premium payments (receipts)		-			(1	)		-			19			18
Total mark-to-market energy contract net assets (liabilities) at June 30, 2005	$	2		$	(95	)	$	(221	)	$	237		$	(77	)

Market Risk Sensitivity - Financial instruments and positions affecting the financial statements of FPL Group and FPL described below are held primarily for purposes other than trading.  Market risk is measured as the potential loss in fair value resulting from hypothetical reasonably possible changes in commodity prices, interest rates or equity prices over the next year.  Management has established risk management policies to monitor and manage market risks.  FPL Group's Exposure Management Committee (EMC), which is comprised of certain members of senior management, is responsible for the overall approval of market risk management policies and the delegation of approval and authorization levels.  The EMC receives periodic updates on market positions and related exposures, credit exposures and overall risk management activities.

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 June 30, 2006 and December 31, 2005, the VaR figures were as follows:

		Trading						Non-Qualifying Hedges and Hedges in OCI and FPL Cost Recovery Clauses (a)						Total
		FPL		FPL Energy		FPL Group		FPL		FPL Energy		FPL Group		FPL		FPL Energy		FPL Group
								(millions)
December 31, 2005		$	-	$	1	$	1	$	114	$	38	$	98	$	114	$	39	$	98
June 30, 2006		$	-	$	1	$	1	$	131	$	45	$	102	$	131	$	44	$	102
Average for the period ended June 30, 2006		$	-	$	2	$	2	$	111	$	46	$	93	$	111	$	45	$	92
_____________________
(a)	Non-qualifying hedges are employed to reduce the market risk exposure to physical assets or contracts which are not marked to market.  The VaR figures for the non-qualifying hedges and hedges in OCI and FPL cost recovery clauses 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 respective issuances of debt, investments in nuclear decommissioning reserve funds and interest rate swaps.  FPL Group and FPL manage their respective interest rate exposure by monitoring current interest rates, entering into interest rate swaps 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:

		June 30, 2006						December 31, 2005
		Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value
					(millions)
FPL Group:
Long-term debt, including current maturities		$	10,238		$	10,048	(a)	$	9,443		$	9,540	(a)
Fixed income securities:
Nuclear decommissioning reserve funds		$	1,361		$	1,361	(b)	$	1,290		$	1,290	(b)
Other investments		$	88		$	88	(b)	$	80		$	80	(b)
Interest rate swaps - net unrealized loss		$	(2	)	$	(2	)(c)	$	(9	)	$	(9	)(c)
FPL:
Long-term debt, including current maturities		$	4,213		$	4,031	(a)	$	3,406		$	3,416	(a)
Fixed income securities:
Nuclear decommissioning reserve funds		$	1,177		$	1,177	(b)	$	1,151		$	1,151	(b)
_____________________
(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 nuclear decommissioning reserve funds of FPL Group consist of restricted funds set aside to cover the cost of decommissioning of FPL Group's and FPL's nuclear power plants.  A portion of these 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.

FPL Group and its subsidiaries use a combination of fixed rate and variable rate debt to manage interest rate exposure.  Interest rate swaps are used to adjust and mitigate interest rate exposure when deemed appropriate based upon market conditions or when required by financing agreements.  At June 30, 2006, the estimated fair value for FPL Group interest rate swaps was as follows:

Notional Amount			Effective Date	Maturity Date	Rate Paid		Rate Received		Estimated Fair Value
(millions)										(millions)
Fair value hedges - FPL Group Capital:
$		150	July 2003	September 2006	variable	(a)	7.625	%			$	(5	)
$		150	July 2003	September 2006	variable	(b)	7.625	%				(5	)
$		300	November 2004	February 2007	variable	(c)	4.086	%				(8	)
$		275	December 2004	February 2007	variable	(d)	4.086	%				(7	)
Total fair value hedges												(25	)
Cash flow hedges - FPL Energy:
$		88	August 2002	December 2007	4.410	%	variable	(e)				1
$		181	August 2003	November 2007	3.557	%	variable	(e)				5
$		6	February 2005	June 2008	4.255	%	variable	(e)				1
$		82	December 2003	December 2017	4.245	%	variable	(e)				5
$		28	April 2004	December 2017	3.845	%	variable	(e)				2
$		245	December 2005	November 2019	4.905	%	variable	(e)				9
Total cash flow hedges												23
Total interest rate hedges											$	(2	)
____________________
(a)	Six-month LIBOR plus 4.9900%
(b)	Six-month LIBOR plus 4.9925%
(c)	Three-month LIBOR plus 0.50577%
(d)	Three-month LIBOR plus 0.4025%
(e)	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 $349 million ($182 million for FPL) at June 30, 2006.

Equity price risk - Included in the nuclear decommissioning reserve funds of FPL Group are marketable equity securities carried at their market value of approximately $1,247 million and $1,113 million ($921 million and $933 million for FPL) at June 30, 2006 and December 31, 2005, respectively.  A hypothetical 10% decrease in the prices quoted by stock exchanges, which is a reasonable near-term market change, would result in a $125 million ($92 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 June 30, 2006.

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:

• Operations are primarily concentrated in the energy industry.

• Trade receivables and other financial instruments are predominately with energy, utility and financial services related companies, as well as municipalities, cooperatives and other trading companies in the United States.

• Overall credit risk is managed through established credit policies.

• Prospective and existing customers are reviewed for creditworthiness based upon established standards, with customers not meeting minimum standards providing various credit enhancements or secured payment terms, such as letters of credit or the posting of cash collateral.

• The use of master netting agreements to offset cash and non-cash gains and losses arising from derivative instruments with the same counterparty.  FPL Group's policy is to have master netting agreements in place with significant counterparties.

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 June 30, 2006, approximately 99% of FPL Group's and 93% of FPL's energy marketing and trading counterparty credit risk exposure is associated with companies that have investment grade credit ratings.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

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 June 30, 2006, each of 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 each 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 and ensuring that information required to be disclosed in the company's reports filed or submitted under the Exchange Act is accumulated and communicated to management, including its principal executive and principal financial off icers, to allow timely decisions regarding required disclosure.  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 their respective disclosure controls and procedures will be met.
(b)	Changes in Internal Control over Financial Reporting
	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.
	In June 2005, a wholly-owned subsidiary of FPL Group completed the acquisition of Gexa, which was valued at approximately $73 million, payable in shares of FPL Group common stock.  Total assets and operating revenues of the entities acquired in connection with the acquisition of Gexa represent less than 1% and approximately 4%, respectively, of FPL Group's consolidated total assets as of June 30, 2006 and its total operating revenues for each of the three and six months ended June 30, 2006.  FPL Group does not consider Gexa material to FPL Group's results of operations, financial position and cash flows.  FPL Group has evaluated the impact of Gexa's business on FPL Group's internal control over financial reporting and noted numerous inadequacies throughout Gexa's operations, including the contract approval and administration process, the customer enrollment process, billing system security and accounting and financial controls.  During the second quarter of 2006, FPL G roup completed designing and documenting controls in key areas and expects to complete testing of these controls by the end of 2006.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

Reference is made to Item 3.  Legal Proceedings in the 2005 Form 10-K for FPL Group and FPL and Part II, Item 1. Legal Proceedings in the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2006 for FPL Group and FPL.

In the FMPA proceedings, in July 2006, the FERC denied FMPA's request for rehearing of the FERC's December 2005 order which entitled FPL to load ratio share pricing, notwithstanding constraints on a third-party's system.  Also in July 2006, the FERC denied FPL's request for rehearing of the FERC's December 2005 order on FPL's April 2005 compliance filing.  The FERC also ordered FPL to make its compliance filing, which was delayed pending the FERC's decision on the rehearing request, within 60 days.  At June 30, 2006, FPL's refund liability under the FERC's most recent order is estimated to be up to approximately $10 million to FMPA and up to approximately $3 million to Seminole.

In the Adelphia lawsuit, discovery has been temporarily stayed at the request of the plaintiffs and the case has been reset for trial in January 2008.

In the Shiflett case, the drug manufacturing and distribution companies have moved to dismiss the action.

In the TXU lawsuit, FPL Group, FPL Group Capital and ESI Energy have been dismissed.

In June 2006, the plaintiffs in the Rabbino lawsuit dismissed their complaint with prejudice.

Item 1A.  Risk Factors

In addition to the risk factors discussed below and other information set forth in this report, the factors discussed in Part I, Item 1A. Risk Factors in FPL Group's and FPL's 2005 Form 10-K, which could materially affect FPL Group's and FPL's businesses, financial condition and/or future operating results should be carefully considered.  The risks described herein and in FPL Group's and FPL's 2005 Form 10-K are not the only risks facing FPL Group and FPL.  Additional risks and uncertainties not currently known to FPL Group or FPL, or that are currently deemed to be immaterial, also may materially adversely affect FPL Group's or FPL's business, financial condition and/or future operating results.

FPL Group's proposed merger with Constellation Energy is subject to receipt of consents or approvals from governmental entities that could delay or prevent the completion of the merger or impose conditions that could have a material adverse effect on the combined company or that could cause abandonment of the merger.

• Completion of the merger is conditioned upon the receipt of consents, orders, approvals or clearances, as required, from the FERC, the NRC and the public service commissions or similar entities in several of the states in which Constellation Energy and/or FPL Group operate electric and/or gas businesses, including the state of Maryland.  Among other things, governmental entities could condition their approval of the merger upon Constellation Energy and/or FPL Group entering into agreements to restrict the operations of the combined businesses in accordance with specified business conduct rules or to take other actions which governmental entities deem necessary or desirable in the public interest.  The terms of any such conditions that may be imposed, if any, are not known by FPL Group as of the date hereof.  If those approvals are not received, or they are not received on terms that satisfy the conditions set forth in the m erger agreement, then neither Constellation Energy nor FPL Group will be required to complete the merger.  Recently adopted energy legislation in Maryland requires the appointment of a new group of commissioners at the Maryland Public Service Commission (MPSC) and directs the MPSC to complete a prompt and comprehensive review of the merger pursuant to new standards.  These changes have created additional uncertainty about the MPSC approval process and may result in substantial delay in the timing of required MPSC approval of the merger or the imposition of terms and conditions that are unfavorable to the combined company, such as a requirement to forego an amount of expected merger savings.  A substantial delay in obtaining satisfactory approvals or the imposition of unfavorable terms or conditions in connection with such approvals could have a material adverse effect on the business, financial condition or results of operations of the combined company, could result in litigatio n with one or more governmental entities and/or may cause the abandonment of the merger.

The anticipated benefits of combining FPL Group and Constellation Energy may not be realized.

• FPL Group entered into the merger agreement with the expectation that the merger would result in various benefits, including, among other things, synergies, cost savings and operating efficiencies.  Although FPL Group expects to achieve the anticipated benefits of the merger, including the synergies, achieving them is subject to a number of uncertainties, including:

• the ability of the two companies to combine certain of their operations or take advantage of expected growth opportunities;

• whether the FERC, the NRC, state or any other regulatory authorities whose approval is required to complete the merger impose conditions on the merger or require the combined company to share a portion of the expected synergies of the merger relating to utility operations with customers, any of which may have an adverse effect on the combined company; and

• general competitive factors in the marketplace.

No assurance can be given that these benefits will be achieved, or if achieved, the timing of their achievement.  Failure to achieve these anticipated benefits could result in increased costs and decreases in the amount of expected revenues of the combined company.

• In addition, Constellation Energy's business involves certain risks which are different from the risks of FPL Group's current business, and as a result the combined company may be exposed to competitive, regulatory, operational and other challenges that do not affect FPL Group's businesses to a similar extent.

FPL Group and FPL will be subject to business uncertainties and contractual restrictions while the merger is pending that could adversely affect their businesses.

• Uncertainty about the effect of the merger on employees and customers may have an adverse effect on FPL Group and FPL, regardless of whether the merger is eventually completed.  Although FPL Group and FPL have taken steps designed to reduce any adverse effects, these uncertainties may impair FPL Group's and FPL's ability to attract, retain and motivate key personnel until the merger is completed, or the merger agreement is terminated, and for a period of time thereafter, and could cause customers, suppliers and others that deal with FPL Group and FPL to seek to change existing business relationships with FPL Group and FPL.

• Employee retention and recruitment may be particularly challenging during the pendency of the merger, as employees and prospective employees may experience uncertainty about their future roles with the combined company.  If, despite FPL Group's and FPL's retention and recruiting efforts, key employees depart or fail to accept employment with either of the companies because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the combined company, FPL Group's, FPL's or the combined company's business could be seriously harmed.

• The pursuit of the merger and the preparation for the integration of Constellation Energy and FPL Group may place a significant burden on management and internal resources.  The diversion of management attention away from day-to-day business concerns and any difficulties encountered in the transition and integration process could harm FPL Group's and FPL's businesses, financial condition and operating results, regardless of whether the merger is eventually completed.

• In addition, the merger agreement restricts FPL Group and FPL, without Constellation Energy's consent, from making certain acquisitions and taking other specified actions until the merger occurs or the merger agreement terminates.  These restrictions may prevent FPL Group and FPL from pursuing otherwise attractive business opportunities and making other changes to their businesses prior to completion of the merger or termination of the merger agreement.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

The following table presents information regarding purchases made by FPL Group of its common stock:

Period		Total Number of Shares Purchased (a)		Average Price Paid Per Share (a)			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)
4/1/06 - 4/30/06			1,863		$	40.27		-		20,000
5/1/06 - 5/31/06			706		$	39.31		-		20,000
6/1/06 - 6/30/06			1,438		$	40.25		-		20,000
Total			4,007					-
_____________________
(a)	Represents shares of common stock purchased from employees to pay certain withholding taxes upon the vesting of stock awards granted to such employees under the LTIP.
(b)	In February 2005, FPL Group's board of directors authorized a common stock repurchase plan of up to 20 million shares of common stock over an unspecified period, which authorization was ratified and confirmed by the board of directors in December 2005.

Item 5.  Other Information

(a)	None
(b)	On May 26, 2006, the board of directors of FPL Group adopted an amendment to its Bylaws, effective immediately, which requires that shareholders provide advance notice to FPL Group in order to make nominations of persons for election to the board of directors or other proposals at shareholder meetings.
(c)	Other Events
	(i)	Reference is made to Item 1. Business - FPL Operations - Competition in the 2005 Form 10-K for FPL Group and FPL and Part II, Item 5. (c)(i) in the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2006 for FPL Group and FPL.
		In June 2006, FPL received approval from the FPSC to build two approximately 1,200 mw natural gas-fired combined cycle units in western Palm Beach County, Florida, that would be operational in 2009 and 2010.  The project is also subject to approval by a Siting Board (comprised of the governor and cabinet) under the Florida Electrical Power Plant Siting Act with a decision expected to be issued by December 2006.
	(ii)	Reference is made to Item 1. Business - FPL Operations - System Capability and Load and Item 1. Business - FPL Energy Operations - Portfolio by Category in the 2005 Form 10-K for FPL Group and FPL.
		In June 2006, FPL experienced a failure in a combustion turbine compressor blade at one of its generating units.  As a result of this failure and other known blade failures in the electric utility industry related to certain types of combustion turbine compressors, FPL and FPL Energy began conducting inspections of all such blades in their generating fleets.  These inspections revealed some blade cracking and resulted in the replacement of the blade set in several combustion turbine compressors.  FPL and FPL Energy are currently working with the combustion turbine compressor manufacturer to determine the root cause of the blade cracking and to identify mitigation efforts, including frequency of blade inspection.

Item 6.  Exhibits

Exhibit Number	Description	FPL Group	FPL
*3(i)a	Restated Articles of Incorporation of FPL Group dated December 31, 1984, as amended through March 10, 2005 (filed as Exhibit 3(i) to Form S-4, File No. 333-124438)	x
*3(i)b	Amendment to FPL Group's Restated Articles of Incorporation dated July 3, 2006 (filed as Exhibit 3(i) to Form 8-K dated June 30, 2006, File No. 1-8841)	x
*3(i)c	Restated Articles of Incorporation of FPL dated March 23, 1992 (filed as Exhibit 3(i)a to Form 10-K for the year ended December 31, 1993, File No. 1-3545)		x
*3(i)d	Amendment to FPL's Restated Articles of Incorporation dated March 23, 1992 (filed as Exhibit 3(i)b to Form 10-K for the year ended December 31, 1993, File No. 1-3545)		x
*3(i)e	Amendment to FPL's Restated Articles of Incorporation dated May 11, 1992 (filed as Exhibit 3(i)c to Form 10-K for the year ended December 31, 1993, File No. 1-3545)		x
*3(i)f	Amendment to FPL's Restated Articles of Incorporation dated March 12, 1993 (filed as Exhibit 3(i)d to Form 10-K for the year ended December 31, 1993, File No. 1-3545)		x
*3(i)g	Amendment to FPL's Restated Articles of Incorporation dated June 16, 1993 (filed as Exhibit 3(i)e to Form 10-K for the year ended December 31, 1993, File No. 1-3545)		x
*3(i)h	Amendment to FPL's Restated Articles of Incorporation dated August 31, 1993 (filed as Exhibit 3(i)f to Form 10-K for the year ended December 31, 1993, File No. 1-3545)		x
*3(i)i	Amendment to FPL's Restated Articles of Incorporation dated November 30, 1993 (filed as Exhibit 3(i)g to Form 10-K for the year ended December 31, 1993, File No. 1-3545)		x
*3(i)j	Amendment to FPL's Restated Articles of Incorporation dated January 20, 2004 (filed as Exhibit 3(i)j to Form 10-K dated December 31, 2003, File No. 2-27612)		x
*3(i)k	Amendment to FPL's Restated Articles of Incorporation dated January 20, 2004 (filed as Exhibit 3(i)k to Form 10-K dated December 31, 2003, File No. 2-27612)		x
*3(i)l	Amendment to FPL's Restated Articles of Incorporation dated February 11, 2005 (filed as Exhibit 3(i)m to Form 10-K for the year ended December 31, 2004, File No. 1-8841)		x
3(ii)a	Amended and Restated Bylaws of FPL Group (as amended through May 26, 2006)	x
*3(ii)b	Bylaws of FPL dated May 11, 1992 (filed as Exhibit 3 to Form 8-K dated May 1, 1992, File No. 1-3545)		x
*4(a)	Mortgage and Deed of Trust dated as of January 1, 1944, and One hundred and ten Supplements thereto, between FPL and Deutsche Bank Trust Company Americas, Trustee (filed as Exhibit B-3, File No. 2-4845; Exhibit 7(a), File No. 2-7126; Exhibit 7(a), File No. 2-7523; Exhibit 7(a), File No. 2-7990; Exhibit 7(a), File No. 2-9217; Exhibit 4(a)-5, File No. 2-10093; Exhibit 4(c), File No. 2-11491; Exhibit 4(b)-1, File No. 2-12900; Exhibit 4(b)-1, File No. 2-13255; Exhibit 4(b)-1, File No. 2-13705; Exhibit 4(b)-1, File No. 2-13925; Exhibit 4(b)-1, File No. 2-15088; Exhibit 4(b)-1, File No. 2-15677; Exhibit 4(b)-1, File No. 2-20501; Exhibit 4(b)-1, File No. 2-22104; Exhibit 2(c), File No. 2-23142; Exhibit 2(c), File No. 2-24195; Exhibit 4(b)-1, File No. 2-25677; Exhibit 2(c), File No. 2-27612; Exhibit 2(c), File No. 2-29001; Exhibit 2(c), File No. 2-30542; Exhibit 2(c), File No. 2-33038; Exhibit 2(c), File No. 2-37679; Exhibit 2(c), File No. 2-39006; Exhibit 2(c), File No. 2-41312; Exhibit 2(c), File No. 2-44234; Exhibit 2(c), File No. 2-46502; Exhibit 2(c), File No. 2-48679; Exhibit 2(c), File No. 2-49726; Exhibit 2(c), File No. 2-50712; Exhibit 2(c), File No. 2-52826; Exhibit 2(c), File No. 2-53272; Exhibit 2(c), File No. 2-54242; Exhibit 2(c), File No. 2-56228; Exhibits 2(c) and 2(d), File No. 2-60413; Exhibits 2(c) and 2(d), File No. 2-65701; Exhibit 2(c), File No. 2-66524; Exhibit 2(c), File No. 2-67239; Exhibit 4(c), File No. 2-69716; Exhibit 4(c), File No. 2-70767; Exhibit 4(b), File No. 2-71542; Exhibit 4(b), File No. 2-73799; Exhibits 4(c), 4(d) and 4(e), File No. 2-75762; Exhibit 4(c), File No. 2-77629; Exhibit 4(c), File No. 2-79557; Exhibit 99(a) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669; Exhibit 99(a) to Post-Effective Amendment No. 1 to Form S-3, File No. 33-46076; Exhibit 4(b) to Form 10-K for the year ended December 31, 1993, File No. 1-3545; Exhibit 4(i) to Form 10-Q for the quarter ended June 30, 1994, File No. 1-3545; Exhibit 4(b) to Form 10-Q for the quarter ended June 30, 1995, File No. 1-3545; Exhibit 4(a) to Form 10-Q for the quarter ended March 31,1996, File No. 1-3545; Exhibit 4 to Form 10-Q for the quarter ended June 30, 1998, File No. 1-3545; Exhibit 4 to Form 10-Q for the quarter ended March 31, 1999, File No. 1-3545; Exhibit 4(f) to Form 10-K for the year ended December 31, 2000, File No. 1-3545; Exhibit 4(g) to Form 10-K for the year ended December 31, 2000, File No. 1-3545; Exhibit 4(o), File No. 333-102169; Exhibit 4(k) to Post-Effective Amendment No. 1 to Form S-3, File No. 333-102172; Exhibit 4(l) to Post-Effective Amendment No. 2 to Form S-3, File No. 333-102172; Exhibit 4(m) to Post-Effective Amendment No. 3 to Form S-3, File No. 333-102172; Exhibit 4(a) to Form 10-Q for the quarter ended September 30, 2004, File No. 2-27612); Exhibit 4(f) to Amendment No. 1 to Form S-3, File No. 333-125275; Exhibit 4(y) to Post-Effective Amendment No. 2 to Form S-3, File Nos. 333-116300, 333-116300-01 and 333-116300-02; Exhibit 4(z) to Post-Effective Amendment No. 3 to Form S-3, File Nos. 333-116300, 333-116300-01 and 333-116300-02; and Exhibit 4(b) to Form 10-Q for the quarter ended March 31, 2006, File No. 2-27612)	x	x
*4(b)	Registration Rights Agreement dated April 24, 2006 relating to FPL's first mortgage bonds (filed as Exhibit 4(c) to Form 10-Q for the quarter ended March 31, 2006, File No. 2-27612)	x	x
12(a)	Computation of Ratios	x
12(b)	Computation of Ratios		x
31(a)	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of FPL Group	x
31(b)	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of FPL Group	x
31(c)	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of FPL		x
31(d)	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of FPL		x
32(a)	Section 1350 Certification of FPL Group	x
32(b)	Section 1350 Certification of FPL		x
_____________________
*Incorporated herein by reference
FPL Group and FPL agree to furnish to the SEC upon request any instrument with respect to long-term debt that FPL Group and FPL have not filed as an exhibit pursuant to the exemption provided by Item 601(b)(4)(iii)(A) of Regulation S-K.

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:  August 4, 2006
		K. MICHAEL DAVIS
	K. Michael Davis Controller and Chief Accounting Officer of FPL Group, Inc. Vice President, Accounting, Controller and Chief Accounting Officer of Florida Power & Light Company (Principal Accounting Officer of the Registrants)

EX-12

Exhibit 12(a)
FPL GROUP, INC. AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (a)
		Six Months Ended June 30, 2006
		(millions of dollars)
Earnings, as defined:
Net income			$	486
Income taxes				152
Fixed charges included in the determination of net income, as below				353
Amortization of capitalized interest				6
Distributed income of equity method investees				55
Less:  Equity in earnings of equity method investees				41
Total earnings, as defined			$	1,011
Fixed charges, as defined:
Interest charges			$	347
Rental interest factor				6
Fixed charges included in the determination of net income				353
Capitalized interest				13
Total fixed charges, as defined			$	366
Ratio of earnings to fixed charges and ratio of earnings
to combined fixed charges and preferred stock dividends (a)				2.76
_____________________
(a)	FPL Group, Inc. has no preference equity securities outstanding; therefore, the ratio of earnings to fixed charges is the same as the ratio of earnings to combined fixed charges and preferred stock dividends.

EX-12

Exhibit 12(b)
FLORIDA POWER & LIGHT COMPANY AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (a)
		Six Months Ended June 30, 2006
		(millions of dollars)
Earnings, as defined:
Net income			$	305
Income taxes				154
Fixed charges, as below				151
Total earnings, as defined			$	610
Fixed charges, as defined:
Interest charges			$	143
Rental interest factor				3
Capitalized interest				5
Total fixed charges, as defined			$	151
Ratio of earnings to fixed charges and ratio of earnings to				4.04
combined fixed charges and preferred stock dividends (a)
_____________________
(a)	Florida Power & Light Company has no preference equity securities outstanding; therefore, the ratio of earnings to fixed charges is the same as the ratio of earnings to combined fixed charges and preferred stock dividends.

EX-31

Exhibit 31(a)
Rule 13a-14(a)/15d-14(a) Certification
I, Lewis Hay, III, certify that:
1.	I have reviewed this Form 10-Q for the quarterly period ended June 30, 2006 of FPL Group, Inc. (the registrant);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date:   August 4, 2006
			LEWIS HAY, III
			Lewis Hay, III Chairman of the Board, President and Chief Executive Officer of FPL Group, Inc.

EX-31

Exhibit 31(b)
Rule 13a-14(a)/15d-14(a) Certification
I, Moray P. Dewhurst, certify that:
1.	I have reviewed this Form 10-Q for the quarterly period ended June 30, 2006 of FPL Group, Inc. (the registrant);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date:   August 4, 2006
			MORAY P. DEWHURST
			Moray P. Dewhurst Vice President, Finance and Chief Financial Officer of FPL Group, Inc.

EX-31

Exhibit 31(c)
Rule 13a-14(a)/15d-14(a) Certification
I, Lewis Hay, III, certify that:
1.	I have reviewed this Form 10-Q for the quarterly period ended June 30, 2006 of Florida Power & Light Company (the registrant);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date:   August 4, 2006
			LEWIS HAY, III
			Lewis Hay, III Chairman of the Board and Chief Executive Officer of Florida Power & Light Company

EX-31

Exhibit 31(d)
Rule 13a-14(a)/15d-14(a) Certification
I, Moray P. Dewhurst, certify that:
1.	I have reviewed this Form 10-Q for the quarterly period ended June 30, 2006 of Florida Power & Light Company (the registrant);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date:   August 4, 2006
			MORAY P. DEWHURST
			Moray P. Dewhurst Senior Vice President, Finance and Chief Financial Officer of Florida Power & Light Company

EX-32

Exhibit 32(a)
Section 1350 Certification
We, Lewis Hay, III and Moray P. Dewhurst, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)	The Quarterly Report on Form 10-Q of FPL Group, Inc. (FPL Group) for the quarterly period ended June 30, 2006 (Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of FPL Group.
Dated:  August 4, 2006
		LEWIS HAY, III
		Lewis Hay, III Chairman of the Board, President and Chief Executive Officer of FPL Group, Inc.
		MORAY P. DEWHURST
		Moray P. Dewhurst Vice President, Finance and Chief Financial Officer of FPL Group, Inc.
A signed original of this written statement required by Section 906 has been provided to FPL Group and will be retained by FPL Group and furnished to the Securities and Exchange Commission or its staff upon request.
The foregoing certification is being furnished as an exhibit to the Report pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 and, accordingly, is not being filed with the Securities and Exchange Commission as part of the Report and is not to be incorporated by reference into any filing of FPL Group under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Report, irrespective of any general incorporation language contained in such filing).

EX-32

Exhibit 32(b)
Section 1350 Certification
We, Lewis Hay, III and Moray P. Dewhurst, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)	The Quarterly Report on Form 10-Q of Florida Power & Light Company (FPL) for the quarterly period ended June 30, 2006 (Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of FPL.
Dated:  August 4, 2006
		LEWIS HAY, III
		Lewis Hay, III Chairman of the Board and Chief Executive Officer of Florida Power & Light Company
		MORAY P. DEWHURST
		Moray P. Dewhurst Senior Vice President, Finance and Chief Financial Officer of Florida Power & Light Company
A signed original of this written statement required by Section 906 has been provided to FPL and will be retained by FPL and furnished to the Securities and Exchange Commission or its staff upon request.
The foregoing certification is being furnished as an exhibit to the Report pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 and, accordingly, is not being filed with the Securities and Exchange Commission as part of the Report and is not to be incorporated by reference into any filing of FPL under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Report, irrespective of any general incorporation language contained in such filing).

EX-3

Exhibit 3(ii)a

FPL GROUP, INC.

AMENDED AND RESTATED BYLAWS

ARTICLE I. MEETINGS OF SHAREHOLDERS

Section 1.   Annual Meeting.   The annual meeting of the shareholders of the Corporation shall be held at the time and place designated by the board of directors of the Corporation.

Section 2.   Special Meetings.   Special meetings of the shareholders may be called by the chairman of the board of directors or the president or the secretary of the Corporation and shall be called upon the written request of a majority of the entire board of directors or the holder or holders of not less than a majority of all the outstanding shares of stock of the Corporation entitled to vote on the matter or matters to be presented at the meeting. Such request shall state the purpose or purposes of the proposed meeting. No business shall be conducted at any special meeting other than the business for which the special meeting is called as set forth in the notice of the special meeting. Special meetings shall be held at the time and place designated by the chief executive officer of the Corporation.

Section 3.   Place and Presiding Officer.   Meetings of the shareholders may be held within or without the State of Florida.

Meetings of the shareholders may be presided over by the chairman of the board, the president or any vice president. The secretary of the Corporation, or any person chosen by the person presiding over the shareholders' meeting, shall act as secretary for the meeting.

Section 4.   Notice.   Written notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the meeting, personally, by United States mail, or in such other manner as may be permitted by law, by or at the direction of the chairman of the board, the president, the secretary, or the officer or persons calling the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the shareholder at his or her address as it appears on the stock transfer books of the Corporation, with postage thereon prepaid.

Section 5.   Notice of Adjourned Meetings.   When a meeting is adjourned to another time or place, it shall not be necessary to give any notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, and at the adjourned meeting any business may be transacted that might have been transacted on the original date of the meeting. If, however, after the adjournment the board of directors fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given as provided in Section 4 of this Article I to each shareholder of record on the new record date entitled to vote at such meeting.

Section 6.   Closing of Transfer Books and Fixing Record Date.   For the purpose of determining shareholders entitled to notice of, or to vote at, any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other purpose, the board of directors may provide that the stock transfer books shall be closed for a stated period not to exceed, in any case, sixty days (or such longer period as may from time to time be permitted by law). If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of, or to vote at, a meeting of shareholders, such books shall be closed for at least ten days immediately preceding such meeting.

In lieu of closing the stock transfer books, the board of directors may fix in advance a date as the record date for any determination of shareholders, such date in any case to be not more than sixty days (or such longer period as may from time to time be permitted by law) and, in case of a meeting of shareholders, not less than ten days prior to the date on which the particular action requiring such determination of shareholders is to be taken.

If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the board of directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders.

When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this Section 6, such determination shall apply to any adjournment thereof, unless the board of directors fixes a new record date for the adjourned meeting.

Section 7.   Shareholder Quorum and Voting.   A majority of the total number of shares outstanding and entitled to vote, present in person or represented by proxy thereat, shall constitute a quorum at a meeting of shareholders for the transaction of business, except as otherwise provided by law or by the Corporation's Restated Articles of Incorporation (the "Charter"). If a specified item of business is required to be voted on by a class or series of shares, a majority of the total number of shares outstanding and entitled to vote of such class or series, present in person or represented by proxy thereat, shall constitute a quorum at a meeting of shareholders for the transaction of such item of business by such class or series. If, however, a quorum does not exist at a meeting, the holders of a majority of the shares present at such meeting and entitled to vote may adjourn the meeting from time to time, without notice other than by announcement at the meeting, until the requisite number of shares entitled to vote shall be present. At any such adjourned meeting at which a quorum exists, any business may be transacted which might have been transacted at the meeting as originally noticed. After a quorum has been established at a meeting, the subsequent withdrawal of shareholders, so as to reduce the number of shares entitled to vote at the meeting below the number required for a quorum, shall not affect the validity of any action taken at the meeting or any adjournment thereof.

If a quorum exists, action on a matter (including the election of directors) shall be approved by the shareholders of the Corporation if the matter receives the affirmative vote of a majority of the total number of shares represented at the meeting and entitled to vote on such matter, unless the matter is one upon which, by express provision of law a greater vote is required or from time to time permitted by action of the board of directors, or by the Charter or these bylaws a greater or different vote is required, in either which case such express provision shall govern and control the requisite vote requirement.

Section 8.   Inspectors of Election.   Prior to each meeting of shareholders, the board of directors shall appoint not less than two nor more than seven inspectors of election who shall have such duties and perform such functions in connection with the meeting as shall be determined by the board of directors.

Section 9.   Order of Business.

(a) (1) Nominations of persons for election to the board of directors of the Corporation and the proposal of any other business to be considered by the shareholders of the Corporation may be made at any annual meeting of shareholders, only (i) pursuant to the Corporation's notice of meeting (or any supplement thereto), (ii) by or at the direction of the board of directors (or any duly authorized committee thereof) or (iii) by any shareholder of the Corporation who is a holder of record at the time of the giving of the notice provided for in this Section 9, who is entitled to vote at the meeting and who complies with the procedures set forth in this Section 9.

(2) For nominations or other business properly to be brought before an annual meeting by a shareholder of the Corporation, the shareholder must have given timely notice thereof in proper written form to the secretary of the Corporation and any such proposed business other than the nomination of persons for election to the board of directors must constitute a proper matter for shareholder action. To be timely, a shareholder's notice must be delivered in person or by facsimile, or sent by U.S. certified mail and received, at the principal executive offices of the Corporation not earlier than the 120th day prior and not later than the close of business on the 90th day prior to the anniversary date of the immediately preceding annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days earlier or more than 60 days later than such anniversary date, notice by the shareholder to be timely must be so delivered or received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of notice by a shareholder as described above. To be in proper written form, a shareholder's notice to the secretary of the Corporation shall set forth in writing as to each matter the shareholder proposes to bring before the annual meeting: (i) as to each person whom the shareholder proposes to nominate for election or re-election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Excha nge Act") (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (ii) as to any other business that the shareholder proposes to bring before the meeting, a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration) and the reasons for conducting such business at the annual meeting and in the event that such business includes a proposal to amend the by-laws of the Corporation, the language of the proposed amendment; (iii) the name and address, as they appear on the Corporation's books, of the shareholder proposing such business or nomination and the name and address of the beneficial owner, if any, on whose behalf the nomination or proposal is being made; (iv) the class or series and number of shares of the Corporation which are beneficially owned or owned of record by the shareholder and the beneficial ow ner; (v) any material interest of the shareholder in such nomination or other business; (vi) a representation that the shareholder is a holder of record of stock of the Corporation entitled to vote at such annual meeting on the matter proposed and intends to appear in person or by proxy at such meeting to propose such nomination or other business; and (vii) if the shareholder intends to solicit proxies in support of such shareholder's proposal, a representation to that effect.

(3) Notwithstanding anything in paragraph (a)(2) above to the contrary, in the event that the number of directors to be elected to the board of directors at an annual meeting of the shareholders is increased in accordance with Article II, Section 2 and there is no public announcement naming all of the nominees for directors or specifying the size of the increased board of directors made by the Corporation at least 90 days prior to the first anniversary of the date of the immediately preceding annual meeting, a shareholder's notice required by this Section 9 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered in person or by facsimile, or sent by U.S. certified mail and received by the secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.< /P>

(b) Only such business shall be conducted at a special meeting of shareholders as shall have been brought before the meeting pursuant to the Corporation's notice of meeting. Nominations of persons for election to the board of directors may be made at a special meeting of shareholders at which directors are to be elected pursuant to the Corporation's notice of meeting (i) by or at the direction of the board of directors (or any duly authorized committee thereof) or (ii) provided that the board of directors has determined that directors shall be elected at such meeting, by any shareholder of the Corporation who is a holder of record at the time of the giving of notice provided for in this Section 9, who is entitled to vote at the meeting for the election of directors and who complies with the procedures set forth in this Section 9. In the event a special meeting of shareholders is properly called for the purpose of electing one or more directors to the board of directors, any such shareholde r may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation's notice of meeting, if the shareholder has given timely notice thereof in proper written form to the secretary of the Corporation. To be timely, a shareholder's notice must be delivered in person or by facsimile, or sent by U.S. certified mail and received, at the principal executive offices of the Corporation not earlier than the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement of the date of such special meeting is first made. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of notice by a shareholder as described above. To be in proper written form, such notice must meet the requirements of paragraph (a)(2) above appl icable to nominations of persons for election to the board of directors.

(c) The notice requirements set forth in this Section 9 shall be deemed satisfied by a shareholder if the shareholder has notified the Corporation of his or her intention to make a nomination or present a proposal at the applicable meeting of shareholders and such shareholder's nominee or proposal has been included in a proxy statement that has been prepared by management of the Corporation to solicit proxies for such meeting; provided, however, that if such shareholder does not appear or send a qualified representative to present such nominee or proposal at such meeting, the Corporation need not present such nominee or proposal for a vote at such meeting notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 9, to be considered a qualified representative of the shareholder, a person must be authorized by a writing executed by such shareholder or an electronic transmission (as defined in the Florida Business Corporation Act, as amended) delivered by such shareholder to the secretary of the Corporation to act for such shareholder as proxy at the meeting of shareholders and such person must produce such writing or electronic transmission, or a reliable reproduction of such writing or electronic transmission, at the meeting of shareholders. The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation (including any applicable requirements regarding the independence of directors).

(d) Except as otherwise provided in the Corporation's Restated Articles of Incorporation, as amended from time to time, only such persons who are nominated in accordance with this Section 9 or are chosen to fill any vacancy occurring in the board of directors in accordance with Article II, Section 3 shall be eligible to serve as directors of the Corporation and only such business shall be conducted at a meeting of shareholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 9. The chairman of a meeting shall refuse to permit any business to be brought before the meeting which fails to comply with the foregoing or if a shareholder solicits proxies in support of such shareholder's nominee or proposal without such shareholder having made the representation required by clause (vii) of paragraph (a)(2) above.

(e) For purposes of this Section 9, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Services, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(f) Notwithstanding the foregoing provisions of this Section 9, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder, and all applicable rules and requirements of the New York Stock Exchange (the "NYSE") or, if the Corporation's shares are not listed on the NYSE, the applicable rules and requirements of the primary securities exchange or quotation system on which the Corporation's shares are listed or quoted, in each case with respect to the matters set forth in this Section 9. Nothing in this Section 9 shall be deemed to affect any rights of shareholders to request inclusion of proposals or nominations in the Corporation's proxy statement pursuant to applicable rules and regulations promulgated under the Exchange Act.

ARTICLE II. DIRECTORS

Section 1.   Function.   All corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of, the board of directors.

Section 2.   Number.   The number of directors of the Corporation shall not be less than three nor more than sixteen. The authorized number of directors, within the limits above specified, shall be determined by the affirmative vote of a majority of the entire board of directors given at a regular or special meeting thereof. No decrease in the number of directors constituting the board of directors shall shorten the term of any incumbent director.

At each annual meeting the shareholders shall elect directors to hold office until the next succeeding annual meeting. Each director so elected shall hold office for the term of which he or she is elected and until his or her successor shall have been elected and qualified or until his or her earlier resignation, retirement, removal from office or death. No person who shall have attained the age of 72 years by the date of election shall be eligible for election as a director of the Corporation, and no director who shall have attained the age of 70 years by the date of election shall be eligible for election as chairman of the board of directors; provided, however, that these limitations shall not be applied in a manner which would cause the involuntary retirement of an employee of the Corporation.

Section 3.   Vacancies.   Any vacancy occurring in the board of directors, including any vacancy created by reason of an increase in the number of directors, shall be filled only by a majority vote of the directors then in office, and directors so chosen shall hold office for a term expiring at the next annual meeting of shareholders.

Section 4.   Removal.   A director may be removed by the majority vote of the entire board of directors. A director may also be removed by shareholders, but only for cause and only by the affirmative vote of the holders of at least 75% of the voting power of the then outstanding shares of Voting Stock (as defined in the Charter), voting together as a single class. Except as may otherwise be provided by law, cause for removal shall be construed to exist only if the director whose removal is proposed has been convicted of a felony by a court of competent jurisdiction and such conviction is no longer subject to direct appeal or has been adjudged by a court of competent jurisdiction to be liable for negligence or misconduct in the performance of his or her duty to the Corporation in a matter of substantial importance to the Corporation, and such adjudication is no longer subject to direct appeal.

Notwithstanding the foregoing, and except as otherwise provided by law, in the event that holders of any class or series of Preferred Stock are entitled, voting separately as a class, to elect one or more directors, the provisions of this Section 4 shall apply, in respect to the removal of a director so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares of Voting Stock voting together as a single class.

Section 5.   Quorum and Voting.   A majority of the number of directors fixed by, or in the manner provided in, these bylaws shall constitute a quorum for the transaction of business; provided, however, that whenever, for any reason, a vacancy occurs in the board of directors, the quorum shall consist of a majority of the remaining directors until the vacancy has been filled. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors.

Section 6.   Executive and Other Committees.   The board of directors, by resolution adopted by a majority of the entire board of directors, may designate from among its members an executive committee and one or more other committees. Each committee of the board of directors shall have such powers and functions as may be delegated to it by resolution adopted by the entire board of directors, except as prohibited by law.

The board of directors, by resolution adopted in accordance with this Section 6, shall designate a chairman for each committee it establishes who shall preside at all meetings of the committee and who shall have such additional duties as shall from time to time be designated by the board of directors.

The board of directors, by resolution adopted in accordance with this Section 6, may designate one or more directors as alternate members of any such committee, who may act in the place and stead of any absent member or members at any meeting of such committee.

Section 7.   Meetings.   Regular meetings of the board of directors shall be held without notice at the location of and immediately after the adjournment of the annual meeting of shareholders in each year, and at such other time and place, as may be determined by the board of directors. Notice of the time and place of special meetings of the board of directors shall be given to each director either by personal delivery, telegram, cablegram, or by telephone at least two days prior to the meeting. Notice may also be given through the postal service if mailed at least five days prior to the meeting.

Notice of a meeting of the board of directors need not be given to any director who signs a waiver of notice either before or after the meeting. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting and a waiver of any and all objections to the place of the meeting, the time of the meeting, or the manner in which it has been called or convened, except when a director states, at the beginning of the meeting, any objection to the transaction of business because the meeting is not lawfully called or convened.

Except as otherwise provided in the Charter, neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting.

A majority of the directors present, whether or not a quorum exists, may adjourn any meeting of the board of directors to another time and place. Notice of any such adjourned meeting shall be given to the directors who were not present at the time of the adjournment and, unless the time and place of the adjourned meeting are announced at the time of adjournment, to the other directors.

Meetings of the board of directors may be called by the chairman of the board, the president, or by any two directors.

Members of the board of directors may participate in a meeting of such board by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time. Participation by such means shall constitute presence in person at a meeting.

Meetings of the board of directors shall be presided over by the chairman of the board, or if such position is vacant or such person is absent, by the president. If neither the chairman of the board nor the president is present, the directors shall elect a chairman for the meeting from one of their members present.

Section 8.   Action Without a Meeting.   Any action required to be taken at a meeting of the directors or any action which may be taken at a meeting of the directors or a committee thereof, may be taken without a meeting if a consent in writing, setting forth the action so to be taken, signed by all of the directors or all the members of the committee, as the case may be, is filed in the minutes of the proceedings of the board or of the committee. Such consent shall have the same effect as a unanimous vote.

ARTICLE III. OFFICERS

Section 1.    Types.   The officers of the Corporation shall consist of a chairman of the board, a president, a secretary, a treasurer and such vice presidents and other officers as may be appointed by the board of directors or by a duly appointed officer authorized by these bylaws or by resolution of the board of directors to appoint officers.

The chief executive officer of the Corporation shall be either the chairman of the board or the president as determined by the board of directors.

The chief executive officer of the Corporation shall have the authority to appoint one or more assistant treasurers, assistant controllers and assistant secretaries.

Section 2.   Appointment and Term.   The officers of the Corporation shall be appointed by the board of directors or by a duly appointed officer authorized to appoint officers. Each officer shall hold office until the first board of directors meeting immediately following the annual shareholders' meeting next occurring after his or her appointment to office and until his or her successor shall have been appointed or until his or her earlier resignation, retirement, removal from office or death.

Section 3.   Duties.   All officers of the Corporation shall have such authority and shall perform such duties as generally pertain to their respective offices and shall have such additional authority and perform such additional duties as may from time to time be determined by resolution of the board of directors.

Section 4.   Removal of Officers.   Any officer may be removed by the board of directors at any time with or without cause. Any officer appointed by the chief executive officer may be removed by the chief executive officer at any time with or without cause.

Removal of any officer shall be without prejudice to the contract rights, if any, of the person so removed; provided, however, the appointment of any officer shall not of itself create contract rights.

ARTICLE IV. STOCK CERTIFICATES

Certificates representing shares in the Corporation shall be signed by the president or a vice president and the secretary or an assistant secretary. In addition, such certificates may be signed by a transfer agent or a registrar (other than the Corporation itself) and may be sealed with the seal of the Corporation or a facsimile thereof. Any or all of the signatures on such certificates may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of its issuance.

Each certificate representing shares shall state upon the face thereof: the name of the Corporation; that the Corporation is organized under the laws of Florida; the name of the person or persons to whom issued; the number and class of shares and the designation of the series, if any, which such certificate represents; and the par value of each share represented by such certificate or a statement that the shares are without par value.

ARTICLE V. DIVIDENDS

The board of directors of the Corporation may, from time to time, declare, and the Corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and by the Charter.

ARTICLE VI. INDEMNIFICATION

Section 1.   Right to Indemnification.   Each person who was or is made a party or is threatened to be made a party to or was or is called as a witness or was or is otherwise involved in any Proceeding in connection with his or her status as an Indemnified Person, shall be indemnified and held harmless by the Corporation to the fullest extent permitted under the Florida General Corporation Act (the "Act"), as the same now exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than the Act permitted the Corporation to provide prior to such amendment). Such indemnification shall cover all expenses incurred by an Indemnified Person (including, but not limited to, attorneys' fees and other expenses of litigation) and all liabilities and losses (including, but not limited to, judgments, fines, ERISA or other excise taxes or pe nalties and amounts paid or to be paid in settlement) incurred by such person in connection therewith.

Notwithstanding the foregoing, except with respect to indemnification specified in Section 3 of this Article VI, the Corporation shall indemnify an Indemnified Person in connection with a Proceeding (or part thereof) initiated by such person only if authorization for such Proceeding (or part thereof) was not denied by the board of directors of the Corporation prior to 60 days after receipt of notice thereof from such person.

For purposes of this Article VI:

(i) a "Proceeding" is an action, suit or proceeding, whether civil, criminal, administrative or investigative, and any appeal therefrom;

(ii) an "Indemnified Person" is a person who is or was (A) a director or officer of the Corporation, (B) a director, officer or other employee of the Corporation serving as a trustee or fiduciary of an employee benefit plan of the Corporation, (C) an agent or non-officer employee of the Corporation as to whom the Corporation has agreed to grant such indemnity, or (D) serving at the request of the Corporation in any capacity with any entity or enterprise other than the Corporation and as to whom the Corporation has agreed to grant such indemnity.

Section 2.   Expenses.   Expenses, including attorneys' fees, incurred by a person indemnified pursuant to Section 1 of this Article VI in defending or otherwise being involved in a Proceeding shall be paid by the Corporation in advance of the final disposition of such Proceeding, including any appeal therefrom, (i) in the case of a director or officer of the Corporation or director, officer or other employee of the Corporation serving as a trustee or fiduciary of any employee benefit plan of the Corporation, upon receipt of an undertaking ("Undertaking") by or on behalf of such person to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the Corporation; or (ii) in the case of any other person, upon such terms and as the board of directors, the chairman of the board or the president of the Corporation deems appropriate.

Notwithstanding the foregoing, in connection with a Proceeding (or part thereof) initiated by such person, except a Proceeding authorized by Section 3 of this Article VI, the Corporation shall pay said expenses in advance of final disposition only if authorization for such Proceeding (or part thereof) was not denied by the board of directors of the Corporation prior to 60 days after receipt of a request for such advancement accompanied by an Undertaking.

A person to whom expenses are advanced pursuant to this Section 2 shall not be obligated to repay pursuant to an Undertaking until the final determination of any pending Proceeding in a court of competent jurisdiction concerning the right of such person to be indemnified or the obligation of such person to repay pursuant to such Undertaking.

Section 3.   Protection of Rights.   If a claim under Section 1 of this Article VI is not promptly paid in full by the Corporation after a written claim has been received by the Corporation or if expenses pursuant to Section 2 of this Article VI have not been promptly advanced after a written request for such advancement accompanied by an Undertaking has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim or the advancement of expenses. If successful, in whole or in part, in such suit, such claimant shall also be entitled to be paid the reasonable expense thereof. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any Proceeding in advance of its final disposition where the required Undertaking has been tendered to the Corporation) that indemnification of the claimant is pr ohibited by law, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its board of directors, independent legal counsel, or its shareholders) to have made a determination, if required, prior to the commencement of such action that indemnification of the claimant is proper in the circumstances, nor an actual determination by the Corporation (including its board of directors, independent legal counsel, or its shareholders) that indemnification of the claimant is prohibited, shall be a defense to the action or create a presumption that indemnification of the claimant is prohibited.

Section 4   Miscellaneous.

(i) Power to Request Service and to Grant Indemnification.   The chairman of the board or the president or the board of directors may request any director, officer, agent or employee of the Corporation to serve as its representative in the position of a director or officer (or in a substantially similar capacity) of an entity or enterprise other than the Corporation, and may grant to such person indemnification by the Corporation as described in Section 1 of this Article VI.

(ii) Non-Exclusivity of Rights.   The rights conferred on any person by this Article VI shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the Charter, bylaw, agreement, vote of shareholders or disinterested directors or otherwise. The board of directors shall have the authority, by resolution, to provide for such indemnification of employees or agents of the Corporation or others and for such other indemnification of directors, officers, employees or agents as it shall deem appropriate.

(iii) Insurance Contracts and Funding.   The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of or person serving in any other capacity with, the Corporation or another corporation, partnership, joint venture, trust or other enterprise (including serving as a trustee or fiduciary of any employee benefit plan) against any expenses, liabilities or losses, whether or not the Corporation would have the power to indemnify such person against such expenses, liabilities or losses under the Act. The Corporation may enter into contracts with any director, officer, agent or employee of the Corporation in furtherance of the provisions of this Article VI, and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect the advancing of expenses and indemnification as provided in this Article VI.

(iv) Contractual Nature.   The provisions of this Article VI shall continue as to a person who has ceased to be a director, officer, agent or employee and shall inure to the benefit of the heirs, executors and administrators of such person. This Article VI shall be deemed to be a contract between the Corporation and each person who, at any time that this Article VI is in effect, serves or served in any capacity which entitles him or her to indemnification hereunder and any repeal or other modification of this Article VI or any repeal or modification of the Act, or any other applicable law shall not limit any rights of indemnification for Proceedings then existing or arising out of events, acts or omissions occurring prior to such repeal or modification, including without limitation, the right to indemnification for Proceedings commenced after such repeal or modification to enforce this Article VI with regard to Proceedings arising out of acts, omissions or eve nts arising prior to such repeal or modification.

(v) Savings Clause.   If this Article VI or any portion hereof shall be invalidated or held to be unenforceable on any ground by any court of competent jurisdiction, the decision of which shall not have been reversed on appeal, the Corporation shall nevertheless indemnify each Indemnified Person as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any Proceeding, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article that shall not have been invalidated and as permitted by applicable law.

ARTICLE VII. ACTION WITH RESPECT TO

SECURITIES OF OTHER CORPORATIONS

Unless otherwise directed by the board of directors, the chief executive officer or his or her designee shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of shareholders of or with respect to any action of shareholders of any other corporation in which the Corporation may hold securities and to otherwise exercise any and all rights and powers which the Corporation may possess by reason of its ownership of securities in such other corporation.

ARTICLE VIII. AMENDMENT

The power to adopt, alter, amend or repeal bylaws shall be vested in the board of directors. Bylaws adopted by the board of directors may be repealed or changed, and new bylaws may be adopted by shareholders only if such repeal, change or adoption is approved by the affirmative vote of the holders of at least 75% of the then outstanding Voting Stock (as defined in the Charter), voting together as a single class.

ARTICLE IX. CONTINUING EFFECT OF BYLAW PROVISIONS

Any provisions contained in these bylaws which, at the time of its adoption, was authorized or permitted by applicable law shall continue to remain in full force and effect until such time as such provision is specifically amended in accordance with these bylaws, notwithstanding any subsequent modification of such law (except to the extent such bylaw provision expressly provides for its modification by or as a result of any such subsequently enacted law).

(amended and restated effective May 26, 2006)