<PAGE>
Prospectus Supplement to Prospectus dated December 30, 1997
$50,000,000
LOGO OF GULF POWER COMPANY APPEARS HERE
Series B 7.05% Senior Notes due August 15, 2004
---------------
Gulf Power Company will pay interest on the Series B Senior Notes on February
15 and August 15 of each year. The first payment will be made on February 15,
2000. The Series B Senior Notes will be issued only in denominations of $1,000
and integral multiples of $1,000.
Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus supplement or the accompanying prospectus. Any
representation to the contrary is a criminal offense.
---------------
<TABLE>
<CAPTION>
Per
Series B
Senior Note Total
----------- -----------
<S> <C> <C>
Initial Public Offering Price*......................... 99.935% $49,967,500
Underwriting Discounts and Commissions................. 0.227% $ 113,500
Net Proceeds, before expenses, to Gulf Power Company... 99.708% $49,854,000
</TABLE>
---------------
* The initial public offering price set forth above does not include accrued
interest, if any. Interest on the Series B Senior Notes will accrue from the
date the Series B Senior Notes are issued.
The underwriters expect to deliver the Series B Senior Notes in book-entry
form only through the facilities of The Depository Trust Company against
payment in New York, New York on August 24, 1999.
---------------
Bear, Stearns & Co. Inc__________________________Banc.One Capital Markets, Inc.
The date of this Prospectus Supplement is August 17, 1999
<PAGE>
THE COMPANY
Gulf Power Company (the "Company") is a corporation organized under the laws
of the State of Maine on November 2, 1925, and admitted to do business in
Florida on January 15, 1926, in Mississippi on October 25, 1976 and in Georgia
on November 20, 1984. The mailing address of the Company's principal executive
offices is One Energy Place, Pensacola, Florida 32520-0102, and the telephone
number is (850) 444-6111. The Company is a wholly owned subsidiary of The
Southern Company.
The Company is a regulated public utility engaged in the generation,
transmission, distribution and sale of electric energy within an approximately
7,400 square mile service area within the northwestern portion of the State of
Florida.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of June
30, 1999, and as adjusted to reflect the issuance of the Series B Senior
Notes. The following data is qualified in its entirety by reference to and,
therefore, should be read together with the detailed information and financial
statements appearing in the documents incorporated herein by reference. See
also "Selected Information" in the accompanying Prospectus.
<TABLE>
<CAPTION>
As of June 30, 1999
-----------------------
Actual As Adjusted
-------- --------------
(Thousands, except
percentages)
<S> <C> <C> <C>
Common Stock Equity................................... $415,578 $415,578 47.6%
Cumulative Preferred Stock............................ 4,236 4,236 0.5
Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trusts Holding Company
Junior Subordinated Notes............................ 85,000 85,000 9.7
Senior Notes.......................................... 50,000 100,000 11.5
Other Long-Term Debt.................................. 267,497 267,497 30.7
-------- -------- -----
Total, excluding amounts due within one year........ $822,311 $872,311 100.0%
======== ======== =====
</TABLE>
USE OF PROCEEDS
The proceeds from the sale of the Series B Senior Notes will be applied by
the Company to repay a portion of its outstanding short-term indebtedness,
which aggregated approximately $72,500,000 as of August 17, 1999.
RECENT RESULTS OF OPERATIONS
For the twelve months ended June 30, 1999, "Operating Revenues," "Income
Before Interest Charges" and "Net Income After Dividends on Preferred Stock"
were $633,759,000, $84,728,000 and $54,329,000, respectively. In the opinion
of the management of the Company, the above amounts for the twelve months
ended June 30, 1999 reflect all adjustments (which were only normal recurring
adjustments) necessary to present fairly the results of operations for such
period. The "Ratio of Earnings to Fixed Charges" and the "Ratio of Earnings to
Fixed Charges Plus Preferred Dividend Requirements (Pre-Income Tax Basis)" for
the twelve months ended June 30, 1999 were 3.79 and 3.73, respectively. The
"Ratio of Earnings to Fixed Charges" and the "Ratio of Earnings to Fixed
Charges Plus Preferred Dividend Requirements (Pre-Income Tax Basis)" for the
year ended December 31, 1997 were 4.18 and 3.53, respectively. The "Ratio of
Earnings to Fixed Charges" and the "Ratio of Earnings to Fixed Charges Plus
Preferred Dividend Requirements (Pre-Income Tax Basis)" for the year ended
December 31, 1998 were 3.83 and 3.72, respectively.
S-2
<PAGE>
DESCRIPTION OF THE SERIES B SENIOR NOTES
Set forth below is a description of the specific terms of the Series B 7.05%
Senior Notes due August 15, 2004 (the "Series B Senior Notes"). This
description supplements, and should be read together with, the description of
the general terms and provisions of the Senior Notes set forth in the
accompanying Prospectus under the caption "Description of the Senior Notes."
The following description does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, the description in the
accompanying Prospectus and the Senior Note Indenture dated as of January 1,
1998 (the "Senior Note Indenture") between the Company and The Chase Manhattan
Bank, as trustee (the "Senior Note Indenture Trustee").
General
The Series B Senior Notes will be issued as a series of Senior Notes under
the Senior Note Indenture. The Series B Senior Notes will be limited in
aggregate principal amount to $50,000,000.
The entire principal amount of the Series B Senior Notes will mature and
become due and payable, together with any accrued and unpaid interest thereon,
on August 15, 2004. The Series B Senior Notes are not subject to any sinking
fund provision. The Series B Senior Notes are available for purchase in
denominations of $1,000 and any integral multiple thereof.
Interest
Each Series B Senior Note shall bear interest at the rate of 7.05% per annum
(the "Securities Rate") from the date of original issuance, payable
semiannually in arrears on February 15 and August 15 of each year to the
person in whose name such Series B Senior Note is registered at the close of
business on the February 1 or August 1, as the case may be, immediately
preceding such payment date. The initial Interest Payment Date is February 15,
2000. The amount of interest payable will be computed on the basis of a 360-
day year of twelve 30-day months. In the event that any date on which interest
is payable on the Series B Senior Notes is not a Business Day, then payment of
the interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect
of any such delay), with the same force and effect as if made on such date.
Ranking
The Series B Senior Notes will be direct, unsecured and unsubordinated
obligations of the Company ranking pari passu with all other unsecured and
unsubordinated obligations of the Company. The Series B Senior Notes will be
effectively subordinated to all secured debt of the Company, including its
first mortgage bonds, aggregating approximately $281,700,000 outstanding at
June 30, 1999. The Senior Note Indenture contains no restrictions on the
amount of additional indebtedness that may be incurred by the Company.
Redemption
The Series B Senior Notes will not be redeemable at the option of the
Company prior to maturity.
Book-Entry Only Issuance--The Depository Trust Company
The Depository Trust Company ("DTC") will act as the initial securities
depositary for the Series B Senior Notes. The Series B Senior Notes will be
issued only as fully registered securities registered in the name of Cede &
Co., DTC's nominee. One or more fully registered global Series B Senior Notes
certificates will be issued, representing in the aggregate the total principal
amount of Series B Senior Notes, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a
S-3
<PAGE>
"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended. DTC holds securities
that its participants ("Participants") deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American
Stock Exchange, Inc., and the National Association of Securities Dealers, Inc.
Access to the DTC system is also available to others such as securities brokers
and dealers, banks and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Participants are
on file with the Securities and Exchange Commission.
Purchases of Series B Senior Notes within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Series B
Senior Notes on DTC's records. The ownership interest of each actual purchaser
of Series B Senior Notes ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the Direct
or Indirect Participants through which the Beneficial Owners purchased Series B
Senior Notes. Transfers of ownership interests in the Series B Senior Notes are
to be accomplished by entries made on the books of Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Series B Senior Notes, except in the
event that use of the book-entry system for the Series B Senior Notes is
discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Series B Senior
Notes. DTC's records reflect only the identity of the Direct Participants to
whose accounts such Series B Senior Notes are credited, which may or may not be
the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants and
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Series B
Senior Notes are being redeemed, DTC will reduce the amount of the interest of
each Direct Participant in the Series B Senior Notes in accordance with its
procedures.
Although voting with respect to the Series B Senior Notes is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Series B Senior Notes. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Company as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the Series B
Senior Notes are credited on the record date (identified in a listing attached
to the Omnibus Proxy).
Payments on the Series B Senior Notes will be made to DTC. DTC's practice is
to credit Direct Participants' accounts on the relevant payment date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the account of customers registered in "street name," and will be the
responsibility of such Participant and not of DTC or the Company, subject to
any statutory or regulatory requirements as may be in effect from time to time.
Payment to DTC is the responsibility of the Company, disbursement of such
payments to Direct Participants is the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners is the responsibility of Direct and
Indirect Participants.
S-4
<PAGE>
Except as provided herein, a Beneficial Owner of a global Series B Senior
Note will not be entitled to receive physical delivery of Series B Senior
Notes. Accordingly, each Beneficial Owner must rely on the procedures of DTC
to exercise any rights under the Series B Senior Notes. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of securities in definitive form. Such laws may impair the ability to
transfer beneficial interests in a global Series B Senior Note.
DTC may discontinue providing its services as securities depositary with
respect to the Series B Senior Notes at any time by giving reasonable notice
to the Company. Under such circumstances, in the event that a successor
securities depositary is not obtained, Series B Senior Notes certificates will
be printed and delivered to the holders of record. Additionally, the Company
may decide to discontinue use of the system of book-entry transfers through
DTC (or a successor depositary) with respect to the Series B Senior Notes. In
that event, certificates for the Series B Senior Notes will be printed and
delivered to the holders of record.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but
the Company takes no responsibility for the accuracy thereof. The Company has
no responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
EXPERTS
The financial statements and schedules of the Company included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1998,
incorporated by reference herein, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated herein 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 the Company's
Annual Report on Form 10-K for the year ended December 31, 1998, relating to
titles to property of the Company under "Item 2--Properties--Titles to
Property," and relating to the Company under "Item 1--Business--Regulation,"
"Item 1--Business--Rate Matters" and "Item 1--Business--Competition," have
been reviewed by Beggs & Lane, A Registered Limited Liability Partnership,
general counsel for the Company, and such statements are made upon the
authority of such firm as experts.
S-5
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated the date hereof, the Company has agreed to sell to each of the
Underwriters named below and each of the Underwriters severally has agreed to
purchase the principal amount of Series B Senior Notes set forth opposite its
name below:
<TABLE>
<CAPTION>
Principal
Amount of
Series B Senior
Name Notes
---- ---------------
<S> <C>
Bear, Stearns & Co. Inc...................................... $25,000,000
Banc One Capital Markets, Inc................................ 25,000,000
-----------
Total....................................................... $50,000,000
===========
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Series B Senior Notes are
subject to, among other things, the approval of certain legal matters by their
counsel and certain other conditions. The Underwriters are obligated to take
and pay for all the Series B Senior Notes if any are taken.
The Underwriters propose initially to offer all or part of the Series B
Senior Notes to the public at the public offering price set forth on the cover
page of this prospectus supplement and to certain dealers at such price less a
concession not in excess of 0.125% of the principal amount of the Series B
Senior Notes. The Underwriters may allow, and such dealers may reallow, a
discount not in excess of 0.100% of the principal amount of the Series B
Senior Notes to certain other dealers. After the initial public offering, the
public offering price, concession and discount may be changed.
The underwriting discounts and commissions to be paid to the Underwriters by
the Company with this offering will be 0.227% per Series B Senior Note, for a
total of $113,500. In addition, the Company estimates that it will incur other
offering expenses of approximately $145,000.
In order to facilitate the offering of the Series B Senior Notes, the
Underwriters or their affiliates may engage in transactions that stabilize,
maintain or otherwise affect the price of the Series B Senior Notes.
Specifically, the Underwriters or their affiliates may over-allot in
connection with this offering, creating short positions in the Series B Senior
Notes for their own account. In addition, to cover over-allotments or to
stabilize the price of the Series B Senior Notes, the Underwriters or their
affiliates may bid for, and purchase Series B Senior Notes in the open market.
Finally, the Underwriters or their affiliates may reclaim selling concessions
allowed to an underwriter or dealer for distributing Series B Senior Notes in
this offering, if the Underwriters or their affiliates repurchase previously
distributed Series B Senior Notes in transactions that cover syndicate short
positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the Series B Senior Notes above
independent market levels. The Underwriters or their affiliates are not
required to engage in these activities, and may end any of these activities at
any time.
Neither the Company nor either of the Underwriters makes any representation
or prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the Series B Senior
Notes. In addition, neither the Company nor either of the Underwriters makes
any representation that such transactions will be engaged in or that such
transactions, once commenced, will not be discontinued without notice.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
The Underwriters and their affiliates engage in transactions with and
perform services for the Company in the ordinary course of business and have
engaged, and may in the future engage, in commercial banking and/or investment
banking transactions with the Company or its affiliates.
S-6
<PAGE>
The Series B Senior Notes will not have an established trading market when
issued. There can be no assurance of a secondary market for the Series B
Senior Notes or the continued liquidity of such market if one develops. It is
not anticipated that the Series B Senior Notes will be listed on any
securities exchange.
S-7
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$50,000,000
GULF POWER COMPANY APPEARS HERE
Series B 7.05% Senior Notes due August 15, 2004
-----------
TABLE OF CONTENTS
-----------
<TABLE>
<CAPTION>
Page
----
Prospectus Supplement
<S> <C>
The Company.............................................................. S-2
Capitalization........................................................... S-2
Use of Proceeds.......................................................... S-2
Recent Results of Operations............................................. S-2
Description of the Series B Senior Notes................................. S-3
Experts.................................................................. S-5
Underwriting............................................................. S-6
Prospectus
Available Information.................................................... 2
Incorporation of Certain Documents by Reference.......................... 2
Selected Information..................................................... 3
Gulf Power Company....................................................... 4
The Trusts............................................................... 4
Accounting Treatment..................................................... 5
Use of Proceeds.......................................................... 5
Recent Results of Operations............................................. 5
Description of the Senior Notes.......................................... 5
Description of the Junior Subordinated Notes............................. 9
Description of the Preferred Securities.................................. 14
Description of the Guarantees............................................ 15
Relationship Among the Preferred Securities, the Junior Subordinated
Notes and the Guarantees................................................ 17
Plan of Distribution..................................................... 19
Legal Matters............................................................ 19
Experts.................................................................. 20
</TABLE>
-----------
PROSPECTUS SUPPLEMENT
-----------
Bear, Stearns & Co. Inc.
Banc One Capital Markets, Inc.
August 17, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
