Filed Pursuant to Rule 424(b)(5)
Registration No. 33-50165
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED SEPTEMBER 8, 1993
$30,000,000
GULF POWER COMPANY
A SUBSIDIARY OF THE SOUTHERN COMPANY
FIRST MORTGAGE BONDS, 6 7/8% SERIES DUE JANUARY 1, 2026
Interest on the new Bonds will accrue from January 1, 1996 and will be
payable semi-annually onJanuary 1 and July 1, beginning July 1, 1996. The new
Bonds will not be redeemable prior to January 1, 2006. On or after January 1,
2006, 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 and, under certain circumstances, at the special
redemption price as described herein. See "Certain Terms of the New Bonds --
Redemption Provisions" herein.
Reference is made to "Certain Terms of the New Bonds -- Redemption
Provisions" herein for the terms of a covenant prohibiting, in any calendar
year subsequent to 2005, the redemption of new Bonds by operation of the
replacement provisions of the Mortgage in a principal amount exceeding
$300,000.
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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 TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE (1) DISCOUNT (2) GULF (1)(3)
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<S> <C> <C> <C>
Per Bond............................ 98.8684% .1000% 98.7684%
Total............................... $29,660,520 $30,000 $29,630,520
</TABLE>
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(1) Plus accrued interest from January 1, 1996.
(2) GULF has agreed to indemnify the Underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
(3) Before deducting estimated expenses of $330,000 payable by GULF.
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The new Bonds offered hereby are offered by the Underwriter, subject to
receipt and acceptance by it and subject to its right to reject any order in
whole or in part. It is expected that the new Bonds will be ready for delivery
in New York, New York, on or about January 25, 1996, against payment therefor
in immediately available funds.
FIRST UNION CAPITAL MARKETS CORP.
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The date of this Prospectus Supplement is January 17, 1996.
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE SECURITIES
HEREBY OFFERED OR OTHER SECURITIES OF GULF AT LEVELS ABOVE THOSE WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
USE OF PROCEEDS
The proceeds from the sale of the new Bonds will be applied by GULF to repay
a portion of its outstanding short-term debt which aggregated approximately
$84,000,000 as of January 16, 1996.
RECENT RESULTS OF OPERATIONS; RECENT DEVELOPMENTS
For the year ended December 31, 1995, "Operating Revenues", "Income Before
Interest Charges" and "Net Income After Dividends on Preferred Stock" were
$619,077,000, $92,693,000 and $57,154,000, respectively. In the opinion of the
management of GULF, the above unaudited amounts for the year ended December
31, 1995 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 year ended December 31, 1995 was 4.25. The "Ratios of
Earnings to Fixed Charges" for the years ended December 31, 1993 and 1994 were
3.57 and 3.89, respectively.
"Income Before Interest Charges" and "Net Income After Dividends on
Preferred Stock" for the year ended December 31, 1995 reflect charges of
approximately $4,300,000, after taxes, reflecting benefits provided pursuant
to a work force reduction program announced in the fourth quarter of 1995.
In December 1995, the Florida Public Service Commission (the "FPSC")
approved GULF's request to increase the amount of its annual accrual to the
Accumulated Provision for Property Damage account from $1,200,000 to
$3,500,000, effective October 1, 1995. As of December 31, 1995, in accordance
with the FPSC's order such account had a negative balance of approximately
$7,500,000 as the result of charges for expenses relating to Hurricanes Erin
and Opal. The approved accrual increase is intended to restore the account
balance to a reasonable level within five years. The FPSC also ordered GULF to
file within six months a study addressing the appropriate accumulated
provision account balance and annual accrual amount. It is anticipated that
the FPSC will reconsider this matter based upon such study.
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 January 1, 1996 at the rate per annum shown in their
title, payable on January 1 and July 1 in each year. Interest will, subject to
certain exceptions, be paid to registered holders of record at the close of
business on the December 15 or June 15, as the case may be, next preceding the
interest payment date.
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 not be redeemable prior to January
1, 2006. On or after January 1, 2006, 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 principal amount and accrued
interest, plus the Regular Redemption Premiums set forth below, if such new
Bonds are redeemed otherwise than by operation of the improvement fund or the
replacement provisions of the Mortgage or by the use of proceeds of released
property. New Bonds also will be redeemable by GULF on or after January 1,
2006, on like notice, by operation of the improvement fund or the replacement
provisions of the Mortgage or by the use of proceeds of released property at
the special redemption price equal to the principal amount thereof and accrued
interest, without premium.
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(If redeemed during the 12 months' period ending on the last day of December
of the year stated)
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REGULAR
REDEMPTION
YEAR PREMIUM
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<S> <C>
2006............................................................ 2.88%
2007............................................................ 2.59%
2008............................................................ 2.30%
2009............................................................ 2.02%
2010............................................................ 1.73%
2011............................................................ 1.44%
2012............................................................ 1.15%
2013............................................................ 0.87%
2014............................................................ 0.58%
2015............................................................ 0.29%
</TABLE>
The regular redemption price shall be without premium for redemptions on or
after January 1, 2016.
GULF will covenant in Section 3 of the new Supplemental Indenture that it
will not, in any calendar year subsequent to 2005, redeem new Bonds through
the operation of the replacement provisions of the Mortgage in a principal
amount which would exceed 1% of the initial aggregate principal amount of the
new Bonds, i.e., $300,000. See "Description of New Bonds -- Replacement
Requirement" in the accompanying Prospectus.
RESTRICTIONS ON COMMON STOCK DIVIDENDS: By Section 4 of the new Supplemental
Indenture, so long as any of the new Bonds are outstanding, cash dividends may
not be paid or distributions be made on Common Stock (except where an equal
amount is concurrently paid as a capital contribution or as the purchase price
of Common Stock) or Common Stock be purchased in an aggregate amount which
would exceed earned surplus accumulated after December 31, 1995, plus earned
surplus accumulated prior to January 1, 1996 in an amount not exceeding
$55,500,000, plus such additional amount as shall be authorized or approved by
the Securities and Exchange Commission, or any successor commission, under the
Public Utility Holding Company Act of 1935, as amended.
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.
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, 1994, 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, 1994, 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.
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UNDERWRITING
Subject to the terms and conditions set forth in the Purchase Contract dated
the date hereof, GULF has agreed to sell to First Union Capital Markets Corp.
(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 0.100% of the principal amount of the new Bonds. The
Underwriter may allow, and such dealers may reallow, a concession not to
exceed 0.100% 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 their respective businesses, certain affiliates of
the Underwriter have engaged, and may in the future engage, in commercial
banking transactions with GULF and its affiliates.
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