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WASHINGTON, DC 20549
FORM 8 - K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 18, 2000
Florida East Coast Industries, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Florida
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2-89530 59-2349968
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(Commission File Number) (IRS Employer Identification Number)
One Malaga Street, St. Augustine, FL 32084
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(Address of Principal Executive Offices (Zip Code)
904/826-2398
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(Registrant's Telephone Number, Including Area Code)
ITEM 5. OTHER EVENTS
The purpose of this Form 8-K is to file an Analyst
Presentation dated May 18, 2000. A copy of the presentation is filed with this
Form 8-K as Exhibit 99.1 and is incorporated by reference.
EXHIBIT INDEX
Exhibit 99.1 Analyst Presentation dated May 18, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1935, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Florida East Coast Industries, Inc.
(Registrant)
Date: May 22, 2000 By: /s/ Heidi J. Eddins
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Name: Heidi J. Eddins
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Title: Executive Vice President
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and General Counsel
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FORWARD LOOKING STATEMENTS
This discussion contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements are based on
current expectations and are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties materialize or
should the underlying assumptions prove incorrect, the company's actual
performance may differ materially from that indicated or suggested by any
forward-looking statement contained herein.
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FLORIDA EAST COAST INDUSTRIES, INC.
<TABLE>
<S> <C> <C> <C>
FLORIDA EAST GRAN CENTRAL INTERNATIONAL EPIK
COAST RAILWAY CORPORATION TRANSIT, INC. COMMUNICATIONS INCORPORATED
(FECR) (GCC) (ITI) (EPIK)
</TABLE>
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BUILDING ON OUR LEGACY
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POSITIONING FECI FOR THE FUTURE
- - Management team
- - Financial independence
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INVESTMENTS IN THE FUTURE
- - One-time charges
- Workforce reduction at the railroad
- Spin off from St. Joe
- Prior year's lawsuit
- - Increase in operating profits in core businesses
- Railroad
- Real estate
- - Investment in EPIK
<PAGE> 6
1999 FINANCIAL HIGHLIGHTS
CONSOLIDATED INCOME STATEMENT DATA
<TABLE>
<CAPTION>
Years Ended December 31
----------------------------------
(in thousands, except per share amount) 1999 1998 1997
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues $324,273 $247,776 $250,520
Operating Profit $ 61,410 $ 57,837 $ 52,322
Net Income (including special charges)* $ 40,779 $ 43,621 $ 40,135
Diluted Earnings Per Share $ 1.12 $ 1.20 $ 1.11
</TABLE>
* Net income including special charges of $8.2 million ($5.1 million,
after-tax)
<PAGE> 7
1999 FINANCIAL HIGHLIGHTS
BALANCE SHEET DATA
<TABLE>
<CAPTION>
At December 31
----------------------------------
(in thousands) 1999 1998 1997
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<S> <C> <C> <C>
Total Assets $910,878 $871,541 $825,490
Cash, Cash Equivalents
and Marketable Securities $102,552 $ 85,423 $103,144
Shareholders' Equity $724,441 $686,831 $648,875
</TABLE>
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FLA VS STOCK INDICES
NOVEMBER 2, 1998 TO MAY 12, 2000
(GRAPH)
[GRAPH]
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FLORIDA'S GROWING ECONOMY
(BAR CHART)
ECONOMIC PROJECTIONS, 1998-2010
<TABLE>
<CAPTION>
AVERAGE
EMPLOYMENT EARNINGS GSP/GNP PERSONAL INCOME GROWTH
GROWTH GROWTH GROWTH GROWTH (1998-2010)
------------- -------------- ------------- --------------- --------------
FLORIDA US FLORIDA US FLORIDA US FLORIDA US FLORIDA US
------- -- ------- -- ------- -- ------- -- ------- --
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3.0% 2.7% 2.7% 2.9%
2.5% 2.6%
2.0% 1.9% 2.0% 2.0% 2.1% 1.9%
1.5% 1.3%
1.0%
0.5%
0%
</TABLE>
Source: The Monitor Company
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A STRATEGICALLY LOCATED SYSTEM
(MAP)
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GROWING HIGHWAY CONGESTION
(PHOTO)
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FEC RAILWAY (PHOTO)
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RAILWAY FOCUS
- - Operating ratio
- - Asset utilization
- - Cost cutting
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RAILWAY TRAFFIC MIX
(PIE CHARTS)
UNITS REVENUE
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INTERNATIONAL TRANSIT, INC.
(TRUCKING PHOTO)
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GRAN CENTRAL (REAL ESTATE PHOTO)
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LAND ENTITLEMENTS
<TABLE>
<CAPTION>
ACRES SQUARE FEET
------ -----------
<S> <C> <C>
OFFICE 625 7,961,524
INDUSTRIAL 611 7,456,476
COMMERCIAL 30 535,600
------ ----------
1,266 15,953,600
</TABLE>
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BUILDING PORTFOLIO
<TABLE>
<CAPTION>
EXISTING UNDER DEV. TOTAL
--------- ---------- ---------
<S> <C> <C> <C>
JACKSONVILLE 2,301,466 -- 2,301,466
ORLANDO 554,621 274,800 829,421
MIAMI 3,060,021 100,000 3,160,021
--------- ---------- ---------
5,916,108 374,800 6,290,908
</TABLE>
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MAJOR LAND HOLDINGS
- - 5,900 acres in central Florida between I-95 and U.S. 1
- - 3,320 acres in north Florida along growing U.S. 1 corridor
- - 1,700 acres in central Florida along I-95 and U.S. 1
- - 565 acres in south Florida at the intersection of I-95 and the Florida
Turnpike
- - 9 acres in the Central Business District of downtown Miami
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GCC 1999 OPERATING RESULTS
(BAR GRAPH)
$ in millions
<TABLE>
<CAPTION>
97 98 99 97 98 99 97 98 99
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RENTAL REVENUES $50.8
$45.1
$38.6
RENTAL EBITDA $32.4
$27.1
$23.5
PROFIT FROM
LAND SALES $21.4
$5.4
$4.3
</TABLE>
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EPIK COMMUNICATIONS
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EVOLVING TECHNOLOGY
- - 1980's build
- - 1990's build
- - 2000 and beyond
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DOWNTOWN MIAMI CENTRAL BUSINESS DISTRICT
(BLACK AND WHITE PHOTO)
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DOWNTOWN MIAMI CENTRAL BUSINESS DISTRICT
(AERIAL PHOTO)
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[EPIK LOGO]
BEYOND THE ORDINARY
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Telecom is the most dynamic industry in the world today
EXPLOSIVE
DEMAND
INCREASES
2
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Demand for capacity, driven by the Internet and data communications, is rapidly
growing and gives no indication of slowing down
Millions of Voice / Data Circuit-Miles
(Log Scale)
- - Bandwidth will skyrocket at an average of more than 35% per year from
1996 to 2006."
- J. Montgomery, Chairman and founder of ElectroniCast Corp.
- - "Bandwidth demand triples every three years."
- Schroder, Wertheim & Co.
- - "Traffic in our backbone is now at 100% per year compounded annually."
- V. Cerf, SVP MCI
- - "According to MCI WorldCom's findings, data traffic doubles every 100 days."
- R.P. Kasargod, Morgan Keegan & Co.
- - "Internet bandwidth demand is expanding by 10 times per year."
- J. Sidgmore, CEO UUNet
Sources: Yankee Group, South Coast Capital LLC,
Research Bank
3
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EPIK will deliver new sources of untapped value to FECI shareholders by
exploiting the geographic and economic advantages of the Florida railroad right
of way to create a leading telecommunications company
4
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EPIK will become a leading telecommunications company serving the rapidly
growing "carriers' carrier" market segment
- - Competitive Local Exchange Carriers (CLECs)
- - Internet Service Providers (ISPs)
- - Long Distance Carriers (IXCs)
- - Wireless and Cellular Carriers
5
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EPIK will deliver new sources of untapped value to FECI shareholders by
creating a leading telecommunications company that exploits the geographic and
economic advantages of the Florida railroad right of way
- - Bandwidth (Private Lines)
- - Dark fiber
- - Wave Services
- - Collocation
- - Internet Protocol Services
6
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EPIK will deliver new sources of untapped value to FECI shareholders by
creating a leading telecommunications company that exploits the geographic and
economic advantages of the Florida railroad right of way
- - Integrated solutions for carrier customers
- - Rapid time-to-market
- - Flexible growth paths for customers
7
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EPIK'S WINNING EQUATION
[GRAPH]
8
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Florida's economy is growing faster than the rest of the country
FLORIDA VS. US ECONOMIC PROJECTIONS, 1998-2010
CAGR 1998-2010
<TABLE>
<CAPTION>
Employment Growth Earnings Growth GSP/GNP Growth Personal Income Growth
<S> <C> <C> <C> <C>
Florida 1.9% 2.7% 2.7% 2.9%
US 1.3% 2.0% 2.0% 2.1%
</TABLE>
Source: Bureau of Economic and Business Research at the University of Florida,
US Census Bureau, US Department of Commerce:
Bureau of Economic Analysis, FCC, Monitor Analysis
9
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By the end of 1998, a larger number of CLECs had entered the Florida market
than any other state; the Florida PSC currently regulates over 330 competitive
local exchange carriers
US STATES WITH THE LARGEST NUMBER OF CLEC CERTIFICATES ISSUED, 1998
<TABLE>
<CAPTION>
CLEC CERTIFICATES
<S> <C>
FL 201
TX 198
KY 167
CA 136
IL 129
GA 125
</TABLE>
Source: FCC
10
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South Florida serves as the landing point many international submarine cables
[MAP]
Source: Alcatel
11
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Florida's economic growth, rapid entry of CLECs and role as international hub
are driving rapid wholesale growth
FLORIDA WHOLESALE TRANSPORT, MARKET SIZE AND GROWTH, 1999-2004
[GRAPH]
12
<PAGE> 37
EPIK Communications enters the market with strong parent backing and a low cost
asset base
STARTING ASSETS:
- - Telecommunications conduit loop created through barter and swaps
- - Reaches 12 of 15 largest population centers and 73% of all Floridians
- - 12,600 fiber miles of dark fiber on East Coast
EPIK COMMUNICATIONS:
- - Incorporated in May 1999 as a wholly-owned subsidiary of FECI
- - Capitalized with equity contribution in excess of $200 million
- - Contributed assets with market value of approximately $50 million
- - Cash infusion of $151 million
- - 1 Conduit
13
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EPIK enjoys a low cost position due to starting assets and creative strategy
[GRAPH]
14
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Ongoing Investment in State-of-the-Art Technology means low costs and highest
service quality
[GRAPH]
15
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ONGOING INVESTMENT IN STATE-OF-THE-ART TECHNOLOGY
MEANS LOW COSTS AND HIGHEST SERVICE QUALITY
[GRAPH]
16
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ONGOING INVESTMENT IN STATE-OF-THE-ART TECHNOLOGY
MEANS LOW COSTS AND HIGHEST SERVICE QUALITY
[GRAPH]
17
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WE HAVE RECRUITED TOP TALENT WITH PROVEN EXPERTISE
[CHART]
18
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WINNING IN THE MARKETPLACE: RAPID EXECUTION OF NETWORK SOLUTIONS
[GRAPH]
19
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BY THE END OF 2000, WE WILL HAVE NEARLY 2000 LIT FIBER MILES AND POPS IN 13
MAJOR METROPOLITAN AREAS IN THE SOUTH EAST
[MAP]
[EPIK COMMUNICATIONS LOGO]
NETWORK DEVELOPMENT
(DECEMBER 2000 TARGETS)
<TABLE>
<S> <C>
Lit Route Miles 1,850
Fiber Miles 262,000
Major POPs 13
Metro POPs 40
Protected OC-192 Rings 3
</TABLE>
REVENUE BACKLOG
<TABLE>
<S> <C>
December 1999 $19 Million
May 2000 $61 Million
</TABLE>
20
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EPIK'S LONG TERM STRATEGIC OBJECTIVE IS TO BECOME A LEADING PROVIDER
OF ADVANCED WHOLESALE BROADBAND SERVICES
FOUR VECTORS FOR STRATEGIC EXPANSION:
DEVELOP METRO FIBER RINGS IN MAJOR CITIES
EXPLOIT SYNERGIES WITH GRAN CENTRAL REAL ESTATE ASSETS
ESTABLISH INTERNET PROTOCOL (IP) SERVICE
LEVERAGE FLORIDA FOOTPRINT(TM) INTO MULTI-REGIONAL/NATIONAL FIBER BACKBONE
21
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METRO RINGS ARE A MAJOR SOURCE OF DIFFERENTIATION
BENEFITS OF METRO RINGS
- - Brings the EPIK network closer to customers' facilities
- - Makes it easier to use EPIK as a single-source provider
- - Reduces provisioning time
- - Avoids using customers' competitors (RBOCs) as high-priced suppliers
for metro connections
- - We will light up metro rings in major cities along our backbone
network:
- Miami, Orlando, Tampa, Jacksonville and Atlanta
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INTERNET SERVICES REPRESENT ONE OF THE FASTEST GROWING TELECOM SECTORS
EPIK'S INTERNET SERVICES STRATEGY
- - Install state-of-the-art "IP on Glass" technologies on network
- - Create suite of wholesale service offerings
- Accelerate our customers' IP capabilities
- - Provide value-added data center services
23
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THERE ARE TREMENDOUS SYNERGIES BETWEEN FECI'S REAL ESTATE ASSETS AND EPIK
[PHOTOGRAPH]
24
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FECI'S DOWNTOWN MIAMI PROPERTY CAN SERVE AS A HUB FOR TELECOM
ACTIVITY IN SOUTH FLORIDA
[MAP/PHOTOGRAPH]
25
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WE HAVE EXECUTED FIBER SWAPS THAT EXPAND OUR FOOTPRINT 6000 MILES
[MAP]
[EPIK COMMUNICATIONS LOGO]
26
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EPIK COMMUNICATIONS IS A CRITICAL PART OF FECI'S FUTURE GROWTH
- - Telecom is a rapidly growing and attractive industry, offering new
opportunities for FECI
- - FECI's unique location and pre-existing assets give EPIK a strong
headstart
- - Our wholesale strategy enables us to grow rapidly with reduced capital
exposure and SG&A burn rate
- - We are becoming a major player in the Florida marketplace, and our
backlog is growing rapidly
- - We are making sound investments to strengthen our relative competitive
position in the Southeast
- - Our fiber swapping strategy will allow us to extend our fiber footprint
at the lowest possible incremental cost
27
