FPL GROUP INC, 11-K, 1998-06-29

FPL GROUP INC
11-K, 1998-06-29
ELECTRIC SERVICES

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 11-K

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

For the fiscal year ended December 31, 1997

[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-8841

FPL Group Employee Thrift Plan
(Full title of the plan)

FPL GROUP, INC.
(Name of issuer of the securities held pursuant to the plan)

700 Universe Boulevard
Juno Beach, Florida 33408
(Address of principal executive office)

INDEPENDENT AUDITORS' REPORT

EMPLOYEE BENEFITS COMMITTEE OF THE BOARD OF DIRECTORS
OF FPL GROUP, INC.:

We have audited the accompanying statements of net assets available for
benefits of the FPL Group Employee Thrift Plan (the "Plan") as of December 31,
1997 and 1996, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1997. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1997 and 1996 and the changes in net assets available for benefits for the year
ended December 31, 1997 in conformity with generally accepted accounting
principles.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1)
assets held for investment as of December 31, 1997, and (2) transactions in
excess of five percent of the current value of plan assets for the year ended
December 31, 1997, are presented for the purpose of additional analysis and are
not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules are the responsibility of the Plan's
management. Such schedules have been subjected to the auditing procedures
applied in our audit of the basic 1997 financial statements and, in our
opinion, are fairly stated in all material respects when considered in relation
to the basic financial statements taken as a whole.

DELOITTE & TOUCHE LLP

Miami, Florida
June 26, 1998

FPL GROUP EMPLOYEE THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

<TABLE>
<CAPTION>
December 31,
---------------------------------
1997 1996
-------------- ---------------
<S> <C> <C>
ASSETS
Accrued interest receivable - ESOP account ...................................... $ 1,730 $ 2,687

General investments, at fair value:
Interest-bearing cash ......................................................... 6,972,866 6,598,924
Loans to participants - other ................................................. 23,773,117 24,214,344
Value of interest in master trusts ............................................ 280,285,885 269,909,329
Value of interest in registered investment companies .......................... 341,399,961 242,085,635

Total general investments ................................................... 652,431,829 542,808,232

Employer securities, at fair value:
Employer securities held by the Plan .......................................... 342,682,045 299,873,755
Leveraged ESOP employer securities ............................................ 360,163,701 293,761,010

Total employer securities ................................................... 702,845,746 593,634,765

Total assets .................................................................... 1,355,279,305 1,136,445,684

LIABILITIES
Interest payable - ESOP Account ................................................. 750,574 762,421
Acquisition indebtedness of leveraged ESOP ...................................... 232,375,835 236,043,545

Total liabilities ............................................................... 233,126,409 236,805,966

NET ASSETS AVAILABLE FOR BENEFITS ............................................... $1,122,152,896 $ 899,639,718
</TABLE>

The accompanying Notes to Financial Statements are an integral part of these
statements.

FPL GROUP EMPLOYEE THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

<TABLE>
<CAPTION>
Year Ended December 31, 1997
------------------------------
<S> <C> <C>
INCOME
Contributions:
Received from employer ........................................................... $ 4,166,627
Received from participants ....................................................... 28,452,579
Noncash contributions (from employer) ............................................ 8,509,995
Total contributions ............................................................ $ 41,129,201

Earnings on investments:
Interest:
Interest-bearing cash .......................................................... 353,569
Other loans (participant loans) ................................................ 2,006,772
Total interest ............................................................... 2,360,341

Common stock dividends ........................................................... 9,678,430

Net appreciation in fair value of investments:
Employer securities ............................................................ 78,544,860
Master trusts .................................................................. 28,294,937
Registered investment companies ................................................ 54,244,956
Total net appreciation in fair value of investments .......................... 161,084,753
Total income ....................................................................... 214,252,725

EXPENSES
Benefit payments to participants or beneficiaries .................................. 63,172,060
Administrative expenses ............................................................ 76,707
Total expenses ................................................................... 63,248,767

NET INCOME ......................................................................... 151,003,958

TRANSFERS
Transfers to the Plan - net ........................................................ 1,427,929
Effect of current year Leveraged ESOP activity ..................................... 70,081,291
Total transfers to the Plan ........................................................ 71,509,220

NET ASSETS AT DECEMBER 31, 1996 .................................................... 899,639,718
NET ASSETS AT DECEMBER 31, 1997 .................................................... $1,122,152,896
</TABLE>

The accompanying Notes to Financial Statements are an integral part of these
statements.

FPL GROUP EMPLOYEE THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
For the year ended December 31, 1997

1. Description of the Plan and Significant Accounting Policies

The Plan

The following description of the FPL Group Employee Thrift Plan (Plan) provides
only general information. Participating employees (Members) should refer to
the Summary Plan Description in their employee handbook for a more complete
description of the Plan. Fidelity Management Trust Company (Trustee)
administers the trust (Trust) established under the Plan and the Employee
Thrift and Retirement Savings Plan for the Bargaining Unit Employees of Florida
Power & Light Company (FPL Bargaining Plan).

The Plan is a defined contribution plan subject to the provisions of the
Employee Retirement Income Securities Act of 1974, as amended (ERISA).
Participation in the Plan is voluntary. Employees (other than union employees)
are eligible to participate in the Plan on the first day of the month
coincident with the completion of six continuous full months of service with
FPL Group, Inc. (FPL Group or Company) or certain of its subsidiaries or on the
first day of any month thereafter. The Plan includes a cash or deferred
compensation arrangement (Tax Saver Option) permitted by Section 401(k) of the
Internal Revenue Code of 1986, as amended (Code). The Tax Saver Option permits
a Member to elect to defer federal income taxes on all or a portion of their
contributions (Tax Saver Contributions) until they are distributed from the
Plan. Tax Saver Contributions were limited in 1997 to a maximum of $9,500 per
Member and may be increased or decreased in future years for cost-of-living
adjustments.

The Plan also includes leveraged employee stock ownership plan (Leveraged ESOP)
provisions. The Leveraged ESOP is a stock bonus plan within the meaning of
Treasury Regulation Section 1.401-1(b)(1)(iii) that is qualified under Section
401(a) of the Code and is designed to invest primarily in common stock of FPL
Group, Inc. (Common Stock). The Trust purchased Common Stock from FPL Group
using the proceeds of a loan (Acquisition Indebtedness) from FPL Group Capital
Inc (FPL Group Capital), a subsidiary of FPL Group (see Note 3). The Common
Stock acquired by the Trust is initially held in a separate account (ESOP
Account). As the Acquisition Indebtedness (including interest) is repaid, each
Member's account is allocated its portion of Common Stock released from the
ESOP Account.

The Company has in place a Flexible Dividend Program which enables participants
to choose how their dividends on certain shares of Common Stock held in the
Plan are to be paid. Dividends on Common Stock acquired through the Leveraged
ESOP do not qualify under this program. The options available to participants
include reinvestment of dividends in Company Stock; distribution of dividends
in cash; distribution of dividends in cash and contribution of an equivalent
amount of their compensation to their thrift plan account; or a partial
distribution with the balance reinvested in Common Stock.

Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100 percent vested in their accounts.

Contributions, Loans, Withdrawals and Transfers to (from) the Plan

The Plan provides for basic contributions by eligible employees in whole
percentages from 1% to 7% of their base compensation (Earnings), which is
matched in part by the Company with shares of Common Stock. For basic Tax
Saver or After-Tax Contributions, the Company match is 100% on the first 3% of
a Member's Earnings, 50% on the next 3% and 25% on the last 1%. The Plan also
provides for supplemental contributions by Members to be made in whole
percentages from 1% to 9% of their Earnings, bringing the total maximum
contributions to 16%. Supplemental contributions are not matched by the
Company.

The value of a Member's contributions (including all income, gains and losses)
is at all times 100% vested. Company contributions vest at a rate of 20% each
year and are fully vested upon a Member attaining five years of service as a
Member of the Plan. An employee may also receive vesting credit for prior
years of service as a member of the FPL Bargaining Plan.

The Plan's investment options include fourteen investment choices: eleven core
investment options and three investment strategy options. The core investment
options include various mutual funds, a separately managed portfolio of short-
and long-term investment contracts and Common Stock. The strategy options
combine portions of the individual core investment options available through
the Plan providing various combinations of stocks and fixed income investments.

The Plan allows Members, at any time, to change their contribution percentage,
to change their investment option allocation for future contributions or to
transfer their account balance attributable to Member contributions from one
investment option to another. At year end, the number of Members contributing
to the Plan was 6,746. Company contributions are primarily made from Common
Stock shares released from the ESOP Account. Forfeitures of non-vested Company
contributions due to termination of Plan participation are used to reduce the
amount of future Company contributions to the Plan. A Member who has attained
at least the age of fifty and completed five years of service while a Member
will be permitted to transfer all or any portion of Company contributions made
to his or her account and any earnings thereon to one or more of the other
investment options. Any future Company contributions will continue to be
invested in Common Stock.

A Member may borrow from his or her account during his or her employment under
certain conditions. At December 31, 1997, the loan interest rate was 8.5%.

Withdrawals by Members from certain of their accounts during their employment
are permitted with certain penalties and restrictions. The penalties limit a
Member's contributions to the Plan for varying periods following a withdrawal.

Transfers to (from) the Plan generally represent net transfers between the Plan
and the FPL Bargaining Plan. The transfers arise as a result of members
transferring between bargaining unit and non-bargaining unit status while
employed by Florida Power & Light Company (FPL).

Basis of Accounting

The financial statements of the Plan are prepared under the accrual basis of
accounting. Investment income and interest income on loans to Members is
recognized when earned. Contributions by Members and Company contributions are
accrued on the basis of amounts withheld through payroll deductions.
Distributions to Members are recorded when paid.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, and changes therein,
and disclosure of contingent assets and liabilities. Actual results could
differ from those estimates.

Investment Valuation and Income Recognition

The Plan's investments are stated at fair value, except insurance and financial
institution investment contracts which are stated at contract value (see
Investment Contracts below). Shares of registered investment companies are
valued at quoted market prices, which represent the net asset value of shares
held by the Plan at year end. The FPL Group Company stock is valued at its
quoted market price. Loans to participants are valued at cost, which
approximates fair value.

Purchases and sales of investment securities are recorded on the trade date.
Gains or losses on sales of investment securities are determined using the
carrying amount of the securities. The carrying amounts of securities held in
Member accounts are adjusted daily; securities held in the ESOP Account (see
Note 2) are adjusted annually. Unrealized appreciation or depreciation is
recorded to recognize changes in market value.

Investment Contracts

The Plan has entered into investment contracts with various insurance companies
and financial institutions. The contracts are fully benefit responsive and are
included in the financial statements at contract value (which represents
contributions made under the contract, plus earnings, less withdrawals and
administrative expenses). There are no reserves against contract values for
credit risk of the contract issuer or otherwise. The contract value of
investment contracts at December 31, 1997, which are held in the Conservative
Investment Strategy, Moderate Growth Investment Strategy, Long-Term Growth
Investment Strategy, and FPL Managed Income Portfolio was $9,338,000,
$12,360,000, $4,485,000 and $153,881,000, respectively. As of the same date,
the fair value of investment contracts in these funds was $9,421,000,
$12,470,000, $4,525,000 and $155,252,000, respectively. At December 31, 1996,
the contract value of investment contracts for these funds was $8,699,000,
$10,330,000, $3,308,000 and $147,695,000, respectively, with fair values of
$8,750,000, $10,390,000, $3,327,000 and $148,559,000, respectively. The
average yield for the portfolio of investment contracts was 6.67% and 6.68% for
1997 and 1996, respectively. The crediting interest rate at December 31, 1997
and 1996 was 6.43% and 6.24%, respectively. The crediting interest rate is
based on an agreed-upon formula with the issuer, but cannot be less than zero.

2. Employee Stock Ownership Plan Account Allocation

The assets, liabilities and net income of the ESOP Account are not considered
plan assets but are for the joint benefit of the Plan and the FPL Bargaining
Plan. The ESOP Account is allocated for financial reporting purposes based on
each plan's relative net assets. The Plan's allocation of Common Stock held in
the ESOP Account (employer securities), Acquisition Indebtedness and interest
payable have been reflected in the Statements of Net Assets Available for
Benefits, but are not available for, or the obligation of, Plan Members. The
employer securities will be released from the ESOP Account and distributed to
Members' accounts in satisfaction of part or all of the Company's matching
contribution obligation under the Plan as the Acquisition Indebtedness is
repaid (see Note 3). ESOP shares allocated to date are classified as employer
securities held by the Plan on the Statements of Net Assets Available for
Benefits. The Acquisition Indebtedness will be repaid from dividends on the
shares acquired by the ESOP Account, as well as from cash contributions from
FPL Group. The net effect of a change in the allocation percentage from year
to year is reported as a transfer to or from the Plan. The value of the shares
distributed to Member accounts is not affected by these allocations.

Condensed financial statements of the ESOP Account are presented below,
indicating the allocations made to each plan. The effect of current year
Leveraged ESOP activity on net assets is included in transfers to (from) the
plan in the financial statements of each plan. Distributions of shares to the
plans are presented as noncash contributions in the financial statements of
each plan.

<TABLE>
<CAPTION>
The FPL
Total ESOP Bargaining
Account The Plan Plan
------------ ------------ ------------
<S> <C> <C> <C>
Allocation percentage ............................................. 100% 68% 32%

Accrued interest .................................................. $ 2,537 $ 1,730 $ 807
Employer securities ............................................... 528,105,440 360,163,701 167,941,739
Total assets .................................................... 528,107,977 360,165,431 167,942,546

Interest payable .................................................. 1,100,561 750,574 349,987
Acquisition indebtedness .......................................... 340,731,013 232,375,835 108,355,178
Total liabilities ............................................... 341,831,574 233,126,409 108,705,165

Net assets at December 31, 1997 ................................... $186,276,403 $127,039,022 $ 59,237,381

Contributions received from employer .............................. $ 13,612,372
Interest income ................................................... 5,668
Dividends ......................................................... 17,393,116
Net appreciation in fair value of investments ..................... 117,994,417
Total income .................................................... 149,005,573

Interest expense .................................................. 33,114,393

Net income ........................................................ $115,891,180 $ 79,036,860 $ 36,854,320
Distribution of shares to plans ................................... (12,474,438) (8,509,995) (3,964,443)
Transfers to (from) the plan ...................................... - (445,574) 445,574
Effect of current year Leveraged ESOP activity on net assets ...... 103,416,742 70,081,291 33,335,451
Net assets at December 31, 1996 ................................... 82,859,661 56,957,731 25,901,930
Net assets at December 31, 1997 ................................... $186,276,403 $127,039,022 $ 59,237,381
</TABLE>

3. Acquisition Indebtedness

In December 1990, the Trust, which holds plan assets for both the Plan and the
FPL Bargaining Plan, borrowed $360 million from FPL Group Capital to purchase
approximately 12.4 million shares of Common Stock. The Acquisition
Indebtedness matures in 2019, bears interest at a fixed rate of 9.69% per year
and is to be repaid using dividends received on both Common Stock held by the
ESOP Account and ESOP shares distributed to Member accounts, along with cash
contributions from FPL Group. For those dividends on shares allocated to
Member accounts used to repay the loan, additional shares, equal in value to
those dividends, will be allocated to Member accounts. In 1997, dividends
received from shares held by the ESOP and shares distributed to Member accounts
totaled approximately $17,393,000 and $4,765,000, respectively. Cash
contributed in 1997 by FPL Group for the debt service shortfall totaled
approximately $13,612,000.

The unallocated shares of Common Stock acquired with the proceeds of the
Acquisition Indebtedness are collateral for the Acquisition Indebtedness. As
principal payments are made, a percentage of Common Stock is released as
collateral and becomes available to satisfy matching contributions, as well as
to repay dividends on ESOP shares distributed to Member accounts for debt
service. During 1997, 367,653 shares of Common Stock were released as
collateral for the Acquisition Indebtedness. The scheduled principal
repayments of the Acquisition Indebtedness for the next five years and
thereafter are as follows: 1998 - $1,672,000; 1999 - $1,825,000; 2000 -
$1,873,000; 2001 - $3,883,000; 2002 - $4,452,000 and thereafter - $327,026,000.

See Note 2 for information on the Plan's allocation percentage of the
Acquisition Indebtedness.

4. Parties-In-Interest Transactions

Company contributions are primarily made in Common Stock released from the ESOP
Account or in cash which is used by the Trustee to purchase Common Stock. Such
amounts are reported as noncash contributions (from employer) and contributions
received from employer, respectively.

Dividend income earned by the Plan results from dividends on Common Stock.
Dividends on shares held in the ESOP Account were used to repay the Acquisition
Indebtedness (see Note 3). Certain dividends on shares held in Members'
accounts are reinvested in Common Stock for the benefit of its Members pursuant
to FPL Group's Dividend Reinvestment and Common Share Purchase Plan in which
the Trustee participates.

5. Statement of Net Assets Available for Benefits Information by Investment
Fund Option

Information about the Statements of Net Assets Available for Benefits by
investment fund option is as follows:

<TABLE>
<CAPTION>
December 31,
----------------------------
1997 1996
------------ ------------
<S> <C> <C>
Interest-bearing cash:
Fidelity Retirement Government Money Market Portfolio .............................. $ 6,972,866 $ 6,598,924

Value of interest in master trusts:
Conservative Investment Strategy ................................................... $ 16,831,751 $ 16,735,918
Moderate Growth Investment Strategy ................................................ 52,102,264 48,888,853
Long-term Growth Investment Strategy ............................................... 54,479,923 45,603,632
Short-term liquid investments maintained in FPL Group Company Stock Fund ........... 2,991,224 3,624,176
FPL Managed Income Portfolio ....................................................... 153,880,723 155,056,750
$280,285,885 $269,909,329
Value of interest in registered investment companies:
Fidelity U.S. Bond Index Fund ...................................................... $ 14,843,916 $ 14,739,302
Spartan U.S. Equity Index Fund ..................................................... 119,946,605 82,132,216
T. Rowe Price Equity Income Fund ................................................... 15,749,652 -
Fidelity Magellan Fund ............................................................. 84,982,862 69,812,448
Fidelity OTC Portfolio ............................................................. 52,081,236 49,397,073
Brandywine Fund, Inc. ............................................................. 21,997,246 -
Fidelity Overseas Fund ............................................................. 26,868,842 26,004,596
Templeton Foreign Fund I .......................................................... 4,929,602 -
$341,399,961 $242,085,635

FPL Group Company Stock Fund ......................................................... $342,682,045 $299,873,755

Loan fund ............................................................................ $ 23,773,117 $ 24,214,344
</TABLE>

6. Statement of Changes in Net Assets Available for Benefits Information by
Investment Fund Option

Information about the Statement of Changes in Net Assets Available for Benefits
by investment fund option is as follows:

<TABLE>
<CAPTION>
Fidelity
Retirement Moderate Long-term
Government Conservative Growth Growth
Money Mkt. Investment Investment Investment
Portfolio Strategy Strategy Strategy
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCOME
Contributions ............................................ $ 265,029 $ 297,424 $ 1,963,474 $ 3,419,794
Interest ................................................. 353,569 - - -
Net appreciation in fair value of investments in
master trusts .......................................... - 1,968,045 7,516,940 8,937,639
Total income ......................................... 618,598 2,265,469 9,480,414 12,357,433

EXPENSES
Benefit payments to participants or beneficiaries ........ 1,277,870 1,730,670 1,946,956 2,118,931
Administrative expenses .................................. 2,002 692 2,753 3,420
Total expenses ....................................... 1,279,872 1,731,362 1,949,709 2,122,351

NET INCOME (LOSS) ........................................ (661,274) 534,107 7,530,705 10,235,082

TRANSFERS
Net transfers to (from) the Plan ......................... 192 (5,661) 78,378 (46,653)
Net exchanges between investment funds ................... 1,054,208 (588,459) (4,435,283) (1,695,784)
Net participant loan activity ............................ (19,184) 155,846 39,611 383,646
Total transfers ...................................... 1,035,216 (438,274) (4,317,294) (1,358,791)

NET ASSETS AT DECEMBER 31, 1996 .......................... 6,598,924 16,735,918 48,888,853 45,603,632
NET ASSETS AT DECEMBER 31, 1997 .......................... $6,972,866 $16,831,751 $52,102,264 $54,479,923
</TABLE>

<TABLE>
<CAPTION>
FPL Managed Fidelity Spartan T. Rowe Price
Income U.S. Bond U.S. Equity Equity Income
Portfolio Index Fund Index Fund Fund
------------ ----------- ------------ --------------
<S> <C> <C> <C> <C>
INCOME
Contributions .......................................... $ 3,507,752 $ 751,857 $ 4,539,440 $ 328,602
Net appreciation in fair value of investments
in master trusts ..................................... 9,872,313 - - -
Net appreciation in fair value of investments
in registered investment companies ................... - 1,327,932 28,297,692 1,177,597
Total income ....................................... 13,380,065 2,079,789 32,837,132 1,506,199

EXPENSES
Benefit payments to participants or beneficiaries ...... 14,327,606 788,897 7,302,392 397,945
Administrative expenses ................................ 7,168 12,658 27,201 -
Total expenses ..................................... 14,334,774 801,555 7,329,593 397,945

NET INCOME (LOSS) ...................................... (954,709) 1,278,234 25,507,539 1,108,254

TRANSFERS
Net transfers to (from) the Plan ....................... 551,665 2,908 44,885 (3,549)
Net exchanges between investment funds ................. (649,242) (1,173,299) 12,231,623 14,614,893
Net participant loan activity .......................... (123,741) (3,229) 30,342 30,054
Total transfers .................................... (221,318) (1,173,620) 12,306,850 14,641,398

NET ASSETS AT DECEMBER 31, 1996 ........................ 155,056,750 14,739,302 82,132,216 -
NET ASSETS AT DECEMBER 31, 1997 ........................ $153,880,723 $14,843,916 $119,946,605 $15,749,652
</TABLE>

<TABLE>
<CAPTION>
Fidelity Fidelity Fidelity
Magellan OTC Brandywine Overseas
Fund Portfolio Fund, Inc. Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCOME
Contributions .......................................... $ 4,649,896 $ 3,419,307 $ 532,459 $ 2,056,404
Net appreciation (depreciation) in fair value of
investments in registered investment companies ...... 17,888,562 4,770,080 (2,215,784) 3,280,593
Total income (loss) ................................ 22,538,458 8,189,387 (1,683,325) 5,336,997

EXPENSES
Benefit payments to participants or beneficiaries ...... 5,198,342 3,258,827 399,353 1,692,076
Administrative expenses ................................ 12,328 1,154 - 611
Total expenses ..................................... 5,210,670 3,259,981 399,353 1,692,687

NET INCOME (LOSS) ...................................... 17,327,788 4,929,406 (2,082,678) 3,644,310

TRANSFERS
Net transfers to (from) the Plan ....................... 113,563 138,896 - 99,792
Net exchanges between investment funds ................. (2,617,072) (2,714,938) 24,019,871 (3,130,120)
Net participant loan activity .......................... 346,135 330,799 60,053 250,264
Total transfers .................................... (2,157,374) (2,245,243) 24,079,924 (2,780,064)

NET ASSETS AT DECEMBER 31, 1996 ........................ 69,812,448 49,397,073 - 26,004,596
NET ASSETS AT DECEMBER 31, 1997 ........................ $84,982,862 $52,081,236 $21,997,246 $26,868,842
</TABLE>

<TABLE>
<CAPTION>
FPL Group
Templeton Company Loan
Foreign Fund I Stock Fund Fund
-------------- ------------ -----------
<S> <C> <C> <C>
INCOME
Contributions .......................................... $ 170,191 $ 15,227,572 -
Interest and dividends ................................. - 9,678,430 $ 2,006,772
Net appreciation in fair value of investments
in employer securities ............................... - 78,544,860 -
Net depreciation in fair value of investments
in registered investment companies ................... (281,716) - -
Total income (loss) ................................ (111,525) 103,450,862 2,006,772

EXPENSES
Benefit payments to participants or beneficiaries ...... 40,016 21,733,312 958,867
Administrative expenses ................................ - 6,720 -
Total expenses ..................................... 40,016 21,740,032 958,867

NET INCOME (LOSS) ...................................... (151,541) 81,710,830 1,047,905

TRANSFERS
Net transfers to (from) the Plan ....................... - 274,255 -
Net exchanges between investment funds ................. 5,060,730 (39,977,128) -
Net participant loan activity .......................... 20,413 167,381 (1,489,132)
Total transfers .................................... 5,081,143 (39,535,492) (1,489,132)

NET ASSETS AT DECEMBER 31, 1996 ........................ - 303,497,931 24,214,344
NET ASSETS AT DECEMBER 31, 1997 ........................ $4,929,602 $345,673,269 $23,773,117
</TABLE>

7. Income Taxes

In February 1996, FPL received from the Internal Revenue Service (IRS) a
favorable determination that the Plan, as amended and restated through January
1, 1995, met the requirements of Section 401 of the Code. The Trust
established under the Plan will generally be exempt from federal income taxes
under Section 501(a) of the Code; Company contributions paid to the Trust under
the Plan will be allowable federal income tax deductions of the Company subject
to the conditions and limitations of Section 404 of the Code; and the Plan will
meet the requirements of Section 401(k) of the Code allowing Tax Saver
Contributions to be exempt from federal income tax at the time such
contributions are made, provided that in operation the Plan and Trust meet the
applicable provisions of the Code. In addition, FPL Group will be able to
claim an income tax deduction for dividends used to repay the Acquisition
Indebtedness and for dividends distributed directly to members.

Company contributions to the Plan on a Member's behalf, Member's Tax Saver
Contributions, and the earnings thereon generally are not taxable to the Member
until such Company contributions, Tax Saver Contributions, and earnings from
investments are distributed or withdrawn. A loan from a Member's account
generally will not represent a taxable distribution if the loan is repaid in a
timely manner and does not exceed certain limitations.

8. Expenses

Certain fees such as annual account maintenance and investment management fees
are paid by Plan participants. Trustee's fees and expenses are paid by FPL
Group (which may charge each company under the Plan its allocated share) and,
therefore, are not reflected in the financial statements.

9. Master Trusts

A summary of participating interest in and financial statements for the Master
Trusts follow.

<TABLE>
<CAPTION>
Percent of
Interest in Master Trust
December 31,
------------------------
1997 1996
------- -------
<S> <C> <C>
FPL MANAGED INCOME PORTFOLIO
FPL Group Employee Thrift Plan
EIN 59-0247775
PN 002 ............................................................................... 73.5% 75.3%

Employee Thrift and Retirement Savings Plan for Bargaining Unit Employees of
Florida Power & Light Company
EIN 59-0247775
PN 003 ............................................................................... 26.5% 24.7%

CONSERVATIVE INVESTMENT STRATEGY
FPL Group Employee Thrift Plan
EIN 59-0247775
PN 002 ............................................................................... 78.8% 78.5%

MODERATE GROWTH INVESTMENT STRATEGY
FPL Group Employee Thrift Plan
EIN 59-0247775
PN 002 ............................................................................... 69.9% 72.8%

LONG-TERM GROWTH INVESTMENT STRATEGY
FPL Group Employee Thrift Plan
EIN 59-0247775
PN 002 ............................................................................... 72.2% 73.2%

FPL MANAGED INCOME PORTFOLIO

STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS

<TABLE>
<CAPTION>
December 31,
---------------------------
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
General investments:
Value of unallocated insurance and financial institution contracts ............... $209,333,382 $205,997,972

Total assets ....................................................................... 209,333,382 205,997,972

LIABILITIES ........................................................................ - -

NET ASSETS AVAILABLE FOR BENEFITS .................................................. $209,333,382 $205,997,972
</TABLE>

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
Year Ended
December 31,
1997
------------
<S> <C>
INCOME
Contributions received from participants .......................................................... $ 5,594,289

Earnings on investments:
Interest ........................................................................................ 13,246,947

Total income ...................................................................................... 18,841,236

EXPENSES
Benefit payments to participants or beneficiaries ................................................. 18,543,665

Account maintenance fees .......................................................................... 11,180

Total expenses .................................................................................... 18,554,845

NET INCOME ........................................................................................ 286,391

TRANSFERS
Transfers into fund ............................................................................... 3,822,002
Transfers out of fund ............................................................................. (772,983)

Net transfers ..................................................................................... 3,049,019

NET ASSETS AT DECEMBER 31, 1996 ................................................................... 205,997,972

NET ASSETS AT DECEMBER 31, 1997 ................................................................... $209,333,382
</TABLE>

CONSERVATIVE INVESTMENT STRATEGY

STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS

<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Receivables:
Income ........................................................................... $ 94,080 $ 92,010
Other ........................................................................... 25,847 -
Total receivables ............................................................ 119,927 92,010

General investments:
Value of unallocated insurance and financial institution contracts ............... 11,853,200 11,130,733
Mutual funds ..................................................................... 9,388,949 10,114,440

Total general investments .................................................... 21,242,149 21,245,173

Total assets ....................................................................... 21,362,076 21,337,183

LIABILITIES ........................................................................ 176 10,000

NET ASSETS AVAILABLE FOR BENEFITS .................................................. $21,361,900 $21,327,183
</TABLE>

Earnings on investments:
Interest .......................................................................... 729,081
Dividends ......................................................................... 582,847
Net appreciation in fair value of investments ..................................... 1,198,859

Total income ........................................................................ 2,949,680

EXPENSES
Benefit payments to participants or beneficiaries ................................... 2,227,602

Account maintenance fees ............................................................ 1,313

Total expenses ...................................................................... 2,228,915

NET INCOME .......................................................................... 720,765

TRANSFERS
Transfers into fund ................................................................. 4,608,355
Transfers out of fund ............................................................... (5,294,403)

Net transfers ....................................................................... (686,048)

NET ASSETS AT DECEMBER 31, 1996 ..................................................... 21,327,183

NET ASSETS AT DECEMBER 31, 1997 ..................................................... $21,361,900
</TABLE>

MODERATE GROWTH INVESTMENT STRATEGY

STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS

<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Receivables:
Income ........................................................................... $ 205,402 $ 189,105
Other ............................................................................ 686 289,362
Total receivables .............................................................. 206,088 478,467

General investments:
Value of unallocated insurance and financial institution contracts ............... 17,684,993 16,619,701
Mutual funds ..................................................................... 56,678,220 50,206,139

Total general investments .................................................... 74,363,213 66,825,840

Total assets ....................................................................... 74,569,301 67,304,307

LIABILITIES ........................................................................ 9,549 160,161

NET ASSETS AVAILABLE FOR BENEFITS .................................................. $74,559,752 $67,144,146
</TABLE>

Earnings on investments:
Interest .......................................................................... 1,078,866
Dividends ......................................................................... 3,090,215
Net appreciation in fair value of investments ..................................... 6,265,853

Total income ........................................................................ 13,309,374

EXPENSES
Benefit payments to participants or beneficiaries ................................... 2,652,618

Account maintenance fees ............................................................ 4,204

Total expenses ...................................................................... 2,656,822

NET INCOME .......................................................................... 10,652,552

TRANSFERS
Transfers into fund ................................................................. 12,159,118
Transfers out of fund ............................................................... (15,396,064)

Net transfers ....................................................................... (3,236,946)

NET ASSETS AT DECEMBER 31, 1996 ..................................................... 67,144,146

NET ASSETS AT DECEMBER 31, 1997 ..................................................... $ 74,559,752
</TABLE>

LONG-TERM GROWTH INVESTMENT STRATEGY

STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS

<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Receivables:
Income ........................................................................... $ 93,471 $ 84,421
Other ............................................................................ 21,324 144,682
Total receivables .............................................................. 114,795 229,103

General investments:
Value of unallocated insurance and financial institution contracts ............... 6,214,020 5,841,951
Mutual funds ..................................................................... 69,328,846 56,400,940

Total general investments .................................................... 75,542,866 62,242,891

Total assets ....................................................................... 75,657,661 62,471,994

LIABILITIES ........................................................................ 192,276 159,707

NET ASSETS AVAILABLE FOR BENEFITS .................................................. $75,465,385 $62,312,287
</TABLE>

Earnings on investments:
Interest .......................................................................... 383,520
Dividends ......................................................................... 3,342,428
Net appreciation in fair value of investments ..................................... 8,454,382

Total income ........................................................................ 16,799,880

EXPENSES
Benefit payments to participants or beneficiaries ................................... 2,997,391

Account maintenance fees ............................................................ 4,861

Total expenses ...................................................................... 3,002,252

NET INCOME .......................................................................... 13,797,628

TRANSFERS
Transfers into fund ................................................................. 19,963,254
Transfers out of fund ............................................................... (20,607,784)

Net transfers ....................................................................... (644,530)

NET ASSETS AT DECEMBER 31, 1996 ..................................................... 62,312,287

NET ASSETS AT DECEMBER 31, 1997 ..................................................... $ 75,465,385
</TABLE>

ATTACHMENT: SCHEDULE 1
FORM 5500: Line 27(a)

FLORIDA POWER & LIGHT COMPANY
EIN 59-0247775

FPL GROUP EMPLOYEE THRIFT PLAN

PLAN #002

PLAN YEAR: 1997

ASSETS HELD FOR INVESTMENT AS OF DECEMBER 31, 1997

<TABLE>
<CAPTION>
Historic Current
Units Fund Name Price Cost Value
- --------------- ----------------------------------------------------- ------ ------------ --------------
<S> <C> <C> <C> <C>
6,972,865.910 Fidelity Retirement Government Money Market Portfolio $ 1.00 $ 6,972,866 $ 6,972,866
1,177,045.522 Conservative Investment Strategy $14.30 12,685,119 16,831,751
3,258,428.041 Moderate Growth Investment Strategy $15.99 35,548,292 52,102,264
3,167,437.358 Long-Term Growth Investment Strategy $17.20 37,768,584 54,479,923
153,880,723.170 FPL Managed Income Portfolio $ 1.00 153,880,723 153,880,723
1,375,710.443 Fidelity U.S. Bond Index Fund $10.79 14,580,415 14,843,916
3,429,005.295 Spartan U.S. Equity Index Fund $34.98 79,962,691 119,946,605
604,129.334 T. Rowe Price Equity Income Fund $26.07 15,832,626 15,749,652
892,021.226 Fidelity Magellan Fund $95.27 71,856,229 84,982,862
1,556,987.635 Fidelity OTC Portfolio $33.45 47,159,744 52,081,236
712,115.460 Brandywine Fund, Inc. $30.89 26,857,202 21,997,246
825,717.335 Fidelity Overseas Fund $32.54 24,971,431 26,868,842
495,437.381 Templeton Foreign Fund I $ 9.95 5,688,870 4,929,602
15,499,496.056 FPL Company Stock Fund $15.89 131,024,255 246,286,993
6,219,416.536 FPL Company Stock Fund - LESOP $15.98 63,517,651 99,386,276
6,085,131.168 Leveraged ESOP Employer Securities $59.19 176,468,804 360,163,701
Outstanding Loan Balances (7.5% to 9.75%; 23,773,117 23,773,117
maturing 1998-2002)

Total Assets Held for Investment $928,548,619 $1,355,277,575
</TABLE>

ATTACHMENT: SCHEDULE 2
FORM 5500: Line 27(d)

FLORIDA POWER & LIGHT COMPANY
EIN 59-0247775

FPL GROUP EMPLOYEE THRIFT PLAN

PLAN #002

PLAN YEAR: 1997

TRANSACTIONS IN EXCESS OF FIVE PERCENT OF THE
CURRENT VALUE OF PLAN ASSETS FOR THE
YEAR ENDED DECEMBER 31, 1997

Transaction by Total Total Number of Number Realized
Fund or Carrier Purchases Sales Purchases of Sales Gain (Loss)
- ----------------------------- ------------ ------------ --------- -------- -----------
<S> <C> <C> <C> <C> <C>
FPL Managed Income Portfolio $193,295,338 $194,471,364 256 253 -
Brandywine Fund, Inc. $ 42,940,847 $156,308,824 128 117 $ 774,821
FPL Group Company Stock Fund $ 60,755,030 $ 98,654,377 253 253 $20,013,532
Fidelity Magellan Fund $ 30,765,616 $ 28,004,533 253 253 $ 2,646,221
Fidelity OTC Portfolio $ 49,017,124 $ 47,452,634 253 253 $ 2,304,364
Fidelity Overseas Fund $ 49,235,834 $ 50,344,723 253 251 $ 1,473,414
Spartan U.S. Equity Index Fund $ 87,343,491 $ 75,211,908 253 253 $ 7,286,130
</TABLE>

SIGNATURES

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Employee Benefits Plan Administrative Committee has duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.

DATE: June 26, 1998 FPL Group Employee Thrift Plan
(Name of Plan)

By: JAMES K. PETERSON
-----------------------
James K. Peterson
Director, Human Resources Centers of Expertise

EXHIBIT 23

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Post-Effective Amendment No. 2
to Registration Statement No. 33-31487 on Form S-8 and Registration Statement
No. 333-30697 on Form S-8 of our report dated June 26, 1998 on the financial
statements of the FPL Group Employee Thrift Plan for the year ended
December 31, 1997 appearing in this Annual Report on Form 11-K of FPL Group,
Inc. for the year ended December 31, 1997.

DELOITTE & TOUCHE LLP

Miami, Florida
June 26, 1998