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Filed Pursuant to Rule 424(b)(5)
Registration No. 33-50165
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED SEPTEMBER 8, 1993
$25,000,000
Gulf Power Company
a subsidiary of The Southern Company
First Mortgage Bonds, 6 1/2% Series Due November 1, 2006
Interest payable May 1 and November 1
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Interest on the new Bonds will accrue from November 1, 1996 and will be
payable semi-annually onMay 1 and November 1, beginning May 1, 1997.
The new Bonds will be redeemable at the option of Gulf Power
Company ("GULF") in whole or in part at any time upon not
less than 30 days' notice at the regular redemption
prices described herein. See "Certain Terms of the
New Bonds -- Redemption Provisions" herein.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRE- SENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC (1) COMMISSIONS GULF (1)(2)
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<S> <C> <C> <C>
Per Bond.................................. 98.559% .418% 98.141%
Total..................................... $24,639,750 $104,500 $24,535,250
</TABLE>
(1) Plus accrued interest from November 1, 1996.
(2) Before deducting estimated expenses of $253,000 payable by GULF.
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The new Bonds are offered by the Underwriter, when, as and if issued by
GULF, delivered to and accepted by the Underwriter and subject to its right to
reject orders in whole or in part. It is expected that delivery of the new
Bonds will be made on or about November 20, 1996, against payment in
immediately available funds.
CS First Boston
The date of this Prospectus Supplement is November 6, 1996.
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
HEREBY OFFERED AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
IT IS EXPECTED THAT DELIVERY OF THE NEW BONDS WILL BE MADE AGAINST PAYMENT
THEREFOR ON OR ABOUT THE DATE SPECIFIED IN THE LAST PARAGRAPH ON THE COVER
PAGE OF THIS PROSPECTUS SUPPLEMENT, WHICH IS THE TENTH BUSINESS DAY FOLLOWING
THE DATE HEREOF (SUCH SETTLEMENT CYCLE BEING HEREIN REFERRED TO AS "T+10").
PURCHASERS OF THE NEW BONDS SHOULD NOTE THAT TRADING OF THE NEW BONDS ON THE
DATE HEREOF AND THE NEXT SIX SUCCEEDING BUSINESS DAYS MAY BE AFFECTED BY THE
T+10 SETTLEMENT. SEE "UNDERWRITING."
USE OF PROCEEDS
The proceeds from the sale of the new Bonds, together with $27,000,000 in
bank borrowings having a term of three years, will be applied by GULF to the
redemption in December 1996 of the $49,180,000 outstanding principal amount of
its First Mortgage Bonds, 8 3/4% Series due December 1, 2021. Such redemption
is subject to GULF's closing the sale of the new Bonds and effecting such
borrowings.
RECENT RESULTS OF OPERATIONS; RECENT DEVELOPMENTS
For the twelve months ended September 30, 1996, "Operating Revenues",
"Income Before Interest Charges" and "Net Income After Dividends on Preferred
Stock" were $629,212,000, $88,420,000 and $53,151,000, respectively. In the
opinion of the management of GULF, the above unaudited amounts for the twelve
months ended September 30, 1996 reflect all adjustments (which, except as
described in the following paragraph, were only normal recurring adjustments)
necessary to present fairly the results of operations for such period. The
"Ratio of Earnings to Fixed Charges" for the twelve months ended September 30,
1996 was 4.07. The "Ratios of Earnings to Fixed Charges" for the years ended
December 31, 1993, 1994 and 1995 were 3.57, 3.89 and 4.25, respectively.
"Income Before Interest Charges" and "Net Income After Dividends on
Preferred Stock" for the twelve months ended September 30, 1996 reflect
charges of approximately $5,900,000, after taxes, reflecting benefits provided
pursuant to work force reduction programs.
As described in "Item 7 - Management's Discussion and Analysis of Results of
Operations and Financial Condition - Future Earnings Potential" in GULF's
Annual Report on Form 10-K for the year ended December 31, 1995, in September
1995 GULF filed a petition with the Florida Public Service Commission ("FPSC")
seeking approval of a new optional Commercial/Industrial Service Rider (CISR).
On September 3, 1996, the FPSC approved GULF's petition for the CISR to be
implemented on a pilot/experimental basis. The CISR will allow GULF the
flexibility to negotiate prices and other terms of service with its large
commercial and industrial customers who have competitive alternatives to
taking electric service from GULF.
CERTAIN TERMS OF THE NEW BONDS
The following description of certain terms of the new Bonds offered hereby
supplements, and should be read together with, the statements under
"Description of New Bonds" in the accompanying Prospectus.
GENERAL: The new Bonds will mature on the date shown in their title. They
will bear interest from November 1, 1996 at the rate per annum shown in their
title, payable on May 1 and November 1 in each year. Interest will, subject to
certain exceptions, be paid to registered holders of record at the close of
business on the April 15 or October 15, as the case may be, next preceding the
interest payment date.
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Settlement by the purchasers of the new Bonds will be made in immediately
available funds. The new Bonds will initially be issued in the form of one or
more fully registered securities, representing the aggregate principal amount
of the new Bonds, that will be deposited with, or on behalf of, The Depository
Trust Company ("DTC"), and registered in the name of CEDE & Co., the nominee
of DTC. All payments to DTC of principal and interest on the new Bonds will be
made in immediately available funds.
REDEMPTION PROVISIONS: The new Bonds will be redeemable by GULF in whole or
in part at any time upon not less than 30 nor more than 45 days' notice, at
regular redemption prices equal to the greater of (i) 100% of the principal
amount of the new Bonds being redeemed or (ii) the sum of the present values
of the remaining scheduled payments of principal of and interest on the new
Bonds being redeemed discounted to the date of redemption on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months) at a
discount rate equal to the Treasury Yield plus 5 basis points, plus, for (i)
and (ii) above, whichever is applicable, accrued interest on the new Bonds to
the date of redemption. New Bonds will not be redeemable by GULF by operation
of the improvement fund or the replacement provisions of the Mortgage or by
the use of proceeds of released property.
"Treasury Yield" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed
as a percentage of its principal amount) equal to the Comparable Treasury
Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable
to the remaining term of new Bonds to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the new Bonds.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day in New York City preceding such redemption date, as set forth in
the daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for US Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
business day, the Reference Treasury Dealer Quotation for such redemption
date.
"Independent Investment Banker" means an independent investment banking
institution of national standing appointed by GULF and reasonably acceptable
to the Trustee.
"Reference Treasury Dealer" means a primary US Government securities dealer
in New York City appointed by GULF and reasonably acceptable to the Trustee.
"Reference Treasury Dealer Quotation" means, with respect to the Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount and quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third business day in New York City preceding such redemption date).
ISSUANCE OF NEW BONDS: The new Bonds will be issued under Article V of the
Mortgage against the retirement of other bonds heretofore outstanding under
the Mortgage.
REGARDING THE TRUSTEE: The Chase Manhattan Bank (formerly known as Chemical
Bank) is the successor Trustee under the Mortgage. Such bank is a depositary
of GULF, and GULF and affiliates of GULF from time to time borrow money from
such bank. The Citizens & Peoples National Bank of Pensacola resigned as Co-
Trustee under the Mortgage effective December 9, 1993.
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LEGAL OPINIONS AND EXPERTS
Beggs & Lane, Pensacola, Florida, general counsel for GULF, will render an
opinion as to the legality of the new Bonds. Troutman Sanders LLP, Atlanta,
Georgia, counsel for GULF, will also render an opinion to the Underwriter as
to the legality of the new Bonds. Dewey Ballantine, New York, New York, will
act as counsel for the Underwriter and will render an opinion to it as to the
legality of the new Bonds.
The financial statements and schedules of GULF filed with GULF's Annual
Report on Form 10-K for the year ended December 31, 1995, incorporated by
reference in the accompanying Prospectus, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with
respect thereto, and are incorporated by reference therein in reliance upon
the authority of said firm as experts in accounting and auditing in giving
said reports.
Statements as to matters of law and legal conclusions in GULF's Annual
Report on Form 10-K for the year ended December 31, 1995, relating to titles
to property of GULF under "Item 2 -- Properties -- Titles to Property",
relating to GULF under "Item 1 -- Business -- Regulation" and "Item 1 --
Business -- Rate Matters", and in the accompanying Prospectus relating to the
lien of GULF's Mortgage and the priority of the new Bonds under "Description
of New Bonds -- Priority and Security", have been reviewed by Beggs & Lane,
general counsel for GULF, and such statements are made upon their authority as
experts. G. Edison Holland, Jr., a partner of Beggs & Lane, is Vice President
and Corporate Counsel of GULF.
UNDERWRITING
Subject to the terms and conditions set forth in the Purchase Contract dated
the date hereof, GULF has agreed to sell to CS First Boston Corporation (the
"Underwriter"), and the Underwriter has agreed to purchase, the entire
principal amount of the new Bonds. Under the terms and conditions of the
Purchase Contract, the Underwriter is obligated to take and pay for all of the
new Bonds if any are taken.
The Underwriter proposes to offer the new Bonds in part directly to retail
purchasers at the public offering price set forth on the cover page of this
Prospectus Supplement and in part to certain securities dealers at such price
less a concession of 0.30% of the principal amount of the new Bonds. The
Underwriter may allow, and such dealers may reallow, a concession not to
exceed 0.25% of the principal amount of the new Bonds to certain brokers and
dealers. After the new Bonds are released for sale to the public, the offering
price and other selling terms may from time to time be varied by the
Underwriter.
The new Bonds are a new issue of securities with no established trading
market. GULF has been advised by the Underwriter that such Underwriter intends
to make a market in the new Bonds but is not obligated to do so and may
discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the new Bonds.
GULF has agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
In the ordinary course of business, the Underwriter and certain of its
affiliates have engaged, and may in the future engage, in transactions with
GULF and its affiliates.
It is expected that delivery of the new Bonds will be made against payment
therefor on or about the date specified in the last paragraph on the cover
page of this Prospectus Supplement, which is the tenth business day following
the date hereof. Pursuant to Rule 15c6-1 under the Securities Exchange Act of
1934, as amended, trades in the secondary market generally are required to
settle in three business days, unless the parties to any such trade expressly
agree otherwise at the time of the transaction. Accordingly, purchasers who
wish to trade the new Bonds on the date hereof or the next six succeeding
business days will be required, by virtue of the fact that the new Bonds
initially will settle in T+10, to specify an alternate settlement cycle at the
time of any such trade to prevent a failed settlement. Purchasers of the new
Bonds who wish to trade the new Bonds on the date hereof or the next six
succeeding business days should consult their own advisor.
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