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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):October 5, 2000
Florida East Coast Industries, Inc.
(Exact name of Registrant as Specified in Charter)
Florida 001-08723 59-2349968
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
1 Malaga Street
St. Augustine, Florida 32084
(Address of Principal Executive Offices):
Registrant's telephone number, including area code: (904) 829-3421
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Item 5. Other Events.
Recapitalization
On October 9, 2000 the recapitalization of Florida East Coast Industries,
Inc. ("FECI") and the pro rata spin-off by The St. Joe Company ("St. Joe") of
the approximate 54 percent equity interest held by St. Joe in FECI to St. Joe
shareholders was completed. Consequently, St. Joe no longer has an equity
interest in FECI.
As part of the recapitalization, St. Joe exchanged all of it shares of
FECI common stock for an equal number of shares of FECI Class B common stock
("Class B Common Stock"), which was distributed to St. Joe shareholders on
October 9, 2000. Holders of Class B Common Stock have the right to elect, as a
class, at least 80% of the FECI Board of Directors. This change permitted the
distribution to be tax-free to St. Joe and its shareholders. All shares of FECI
common stock, other than the shares of Class B Stock distributed to St. Joe
shareholders, have been redesignated as FECI Class A common stock ("Class A
Common Stock"). Except with respect to voting rights and with respect to the
election or removal of directors, the Class A Common Stock and Class B Common
Stock are identical. Stock certificates of FECI common stock outstanding prior
to the distribution (excluding the shares held by St. Joe) continue to
represent an equal number of shares of Class A Common Stock. No physical
exchange of stock certificates is necessary.
Shareholder Rights Plan
Also on October 9, 2000, in connection with the recapitalization, FECI and
First Union National Bank (the "Rights Agent") entered into a Shareholder
Rights Agreement (as the same may be amended, the "Rights Plan"), and the FECI
Board of Directors declared a dividend of one Right (a "Right") for each share
of FECI common stock, including both Class A Common Stock and Class B Common
Stock, held of record on of the close of business on October 9, 2000. The
Rights Plan is included as an exhibit to the 8-A describing the Rights Plan
filed by FECI with the Securities and Exchange Commission (the "SEC") on
October 4, 2000 and is incorporated herein by reference.
The Rights Plan is designed to discourage the unsolicited acquisition of
control of FECI through only the purchase of shares of Class B Common Stock and
the unsolicited acquisition of a substantial amount of both Class A Common
Stock and Class B Common Stock. The Rights Plan does not apply to a takeover
proposal, whether or not unsolicited, which treats Class A Common Stock and
Class B Common Stock stockholders equally.
As part of this recapitalization, FECI also adopted a number of corporate
governance amendments which, together with the Rights Plan, will make it more
difficult for any potential acquirer to take unfair advantage of FECI's new
capital structure. The corporate governance amendments are described more fully
in the Proxy Statement which was filed by FECI with the SEC on February 2, 2000
and mailed to FECI shareholders on February 4, 2000 in connection with the
approval of the recapitalization, and is incorporated herein by reference.
The threshold percentages for triggering the Rights Plan have been
established slightly above the ownership levels of common stock to be held
collectively by the Nemours Foundation and the Alfred I. duPont Testamentary
Trust after the distribution. These entities are affiliates of St. Joe. As a
result of the distribution, the Nemours Foundation and Alfred I. duPont
Testamentary Trust beneficially own an aggregate of approximately 38% of the
outstanding shares of both Class A Common Stock and Class B Common Stock and
61% of the outstanding shares of Class B common stock.
Investor Presentation
In connection with the recapitalization and pro rata spin-off of the Class
B Common Stock by St. Joe to its shareholders, FECI management conducted
investor meetings on October 5 and 6, 2000. During the meetings, FECI
management presented slides with certain information relating to FECI's new
capital structure and FECI's various business units. For the convenience of
investors, the information contained in the slide presentation is reproduced
below and the slide presentation has been posted to FECI's corporate website
(www.feci.com).
Slide 1:
AT THE CENTER OF GROWTH
(Photo with building, truck, train and fiber optics)
FLORIDA EAST COAST INDUSTRIES
OCTOBER 2000
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Slide 2:
FORWARD LOOKING STATEMENTS
This presentation contains "forward-looking statements" concerning revenues,
expenses, earnings, assessments of current industry and market conditions,
technology, and prospects for the future. The Company cautions that such
statements are necessarily based on certain assumptions, which are subject to
risks and uncertainties which could cause actual results to materially differ
from those contained in these forward looking statements, including, but not
limited to, the ability to complete systems and expand and enhance its
telecommunications network within currently estimated time frames and budgets;
the ability to compete effectively in a rapidly evolving and price competitive
marketplace and to respond to customer demands and industry changes; the
ability to achieve revenues from products and services in the
telecommunications business that are in the early stages of development or
operation; the ability to manage growth, changes in business strategy, changes
in regulations and technological changes, and general economic conditions
particularly in the state of Florida. Further information on these risk factors
is included in the Company's filings with the Securities and Exchange
Commission, including the Company's Form 10-K and most recently filed 10-Q. The
Company assumes no obligation to update the information contained in this
presentation.
Slide 3:
FLORIDA EAST COAST INDUSTRIES
Headquarters: St. Augustine, Florida
Exchange: NYSE: Ticker(s) FLA; FLA.b
Shares Outstanding: 36.4 million
Spin-Off: Distribution, October 9, 2000
Pre Spin: St. Joe Corp. 54%
Public Shareholders 46%
Post-Spin: Public Shareholders
Class B 54%
Public Shareholders
Class A 46%
Post Spin-Off: Alfred I. duPont Trust and Nemours Foundation will
own 38% of all Shares Outstanding
Slide 4:
(graphic) FLORIDA EAST COAST INDUSTRIES
Florida East Coast Railway, LLC (FECR)
International Transit, Inc. (ITI)
Flagler Development Company (Flagler)
EPIK Communications Incorporated (EPIK)
Slide 5:
A CLIMATE FOR CHANGE
Yesterday
Great Assets - Non Core to St. Joe
Sub Optimal Capital Structure
No Wall Street Research Coverage
Low Trading Volume
(graphic of arrow pointing toward "Today" column)
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Today
Growth Oriented Management Team
Willingness to Deploy Capital/Leverage
Wall Street Research Visibility
Increased Liquidity
Platform for Growth
(graphic) FLORIDA EAST COAST INDUSTRIES
Slide 6:
INVESTMENT HIGHLIGHTS
Established and Expanding Transportation and Real Estate Businesses
Significant Opportunity in High Growth Telecommunications Sector
Strategically Positioned to Benefit from Florida's Fast Growing Economy and to
Access Latin American and Caribbean Markets
Ample Financial Flexibility - No Leverage
Strong Management Team
(graphic) FLORIDA EAST COAST INDUSTRIES
Slide 7:
STRONG MANAGEMENT TEAM
(organizational chart)
Robert W. Anestis
Chairman, CEO & President
Robert F. MacSwain
EVP, President Flagler
Heidi J. Eddins
EVP, Secy & GC
Bohn H. Crain
VP & Treasurer
FECR
John D. McPherson
President
ITI
Tom Connard
President
Flagler
John Carey
Chief Operating Officer
EPIK
John D. Mc Clellan
President
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Slide 8:
TRANSPORTATION: FECR AND ITI
FECR
railroad (photo of train)
ITI
trucking (photo of truck)
(graphic) FLORIDA EAST COAST INDUSTRIES
Slide 9:
A STRATEGICALLY LOCATED SYSTEM
(map of State of Florida with the following cities indicated)
FEC Railway: (Cities)
Jacksonville
St. Augustine
Daytona
New Smyrna Beach
Titusville
City Point
Cocoa-Rockledge
Melbourne
Fort Pierce
West Palm Beach
Pompano Beach Ft. Lauderdale
Miami
Seaports: Port of West Palm Beach
Port Everglades
Port of Miami
(Other Cities indicated):
Pensacola
Tallahassee
Orlando
Tampa
Sarasota
Ft. Myers
Naples
I-95: (indicated along coast of Florida)
FLORIDA EAST COAST INDUSTRIES, INC.
Slide 10:
STRATEGIC ADVANTAGES
Unique Franchise
Excellent Physical Plant
Favorable Labor Agreements
(graphic) FEC
Slide 11:
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FECR: PERFORMANCE DRIVEN
Locomotive Availability
Slow Orders
Hitch Utilization
Safety & Accident Prevention
ISO 9002 Certification
On Time Service
Operating Ratio
(bar chart with approximate ratios):
1998: .75
1999: .745
2000E: .74
Operating Ratio Adj for Fuel (bar chart with approximate ratios):
1998: .75
1999: .745
2000E: .71
(graphic) FEC
Slide 12:
REDIRECTED FOCUS
(map of States east of the Mississippi River with the following cities
indicated)
International Transit Terminal
Cincinnati
Charlotte
Atlanta
Jacksonville
Miami
Direct TL Service Coverage/Intermodal Service
Detroit
Chicago
Cleveland
Columbus
Indianapolis
Richmond
Louisville
Roanoke
Norfolk
Lexington
Raleigh
Nashville
Knoxville
Memphis
Greenville
Spartanburg
Columbia
Birmingham
Macon
Columbus
Montgomery
Albany
Orlando
Tampa
Ft. Lauderdale
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(graphic) INTERNATIONAL TRANSIT
Slide 13:
PLATFORM FOR GROWTH
New Management Team
Realigned/Centralized Operations
Improved Asset Utilization
Redesigned Owner/Operator Plans
(graphic) INTERNATIONAL TRANSIT
Slide 14:
REAL ESTATE: Flagler
(photo of building)
FLORIDA EAST COAST INDUSTRIES, INC.
(graphic) FLAGLER DEVELOPMENT COMPANY
Slide 15:
(graphic)
FLAGLER DEVELOPMENT CENTER
(map of Florida with graphic stars next to:
Jacksonville
Orlando
Tampa
Ft. Lauderdale
Miami)
Land Portfolio
Entitlements
Building Portfolio
Slide 16:
(graphic) FLAGLER DEVELOPMENT COMPANY
(Four photos of Florida East Coast Industries buildings)
Slide 17:
FLAGLER OPERATING RESULTS
(Bar Chart 1) Title: Rental Revenues (Dollars in Millions)
1997: $38.6
1998: $45.1
1999: $50.8
Progress in 2000
Occupancy rates have improved from 89% to 92% over the last year Rental EBITDA
has increased 19.4%
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(Bar Chart 2) Title: Rental EBITDA
1997: $23.5
1998: $27.1
1999: $32.4
(Bar Chart 3> Title: Profit from Land/Building Sales
1997: $4.3
1998: $5.4
1999: $21.4
(graphic) FLAGLER DEVELOPMENT COMPANY
Slide 18:
Title: FLAGLER: MAXIMIZE VALUE
"Demand Driven" Development in High Growth Markets
Opportunistic Acquisitions & Sales
Value Creation Through Entitlement Process
Capital Flexibility (No Debt)
(graphic) FLAGLER DEVELOPMENT CENTER
Slide 19:
TELECOMMUNICATIONS: EPIK
(telecommunications: photo of fiber optics)
(EPIK graphic)
Slide 20:
EPIK's "FLORIDA FOOTPRINT" NETWORK
(map of Florida and Georgia (starting with Atlanta)
Atlanta
Tallahassee
Jacksonville
St. Augustine
Daytona Beach
Tampa
Orlando
Melbourne
Ft. Myers
West Palm Beach
Ft. Lauderdale
Miami
(graphic) EPIK COMMUNICATIONS
Network Development
Current 2001
Lit Route Miles 450/1,500 1,850
Fiber Miles 170,000 262,000
Long Haul POPs 12 14
Metro POPs 4 40
Protected OC-192 2 3
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Rings
(bar chart) Title: Revenue Backlog
($ in millions)
Dec. 1999 19
March 2000 61
June 2000 75
September 2000 150
Slide 21:
EPIK'S WINNING EQUATION
(Visio chart)
Prime Florida Location
Strong Parent Backing
Low Cost Asset Base
Investment in Best Technologies
Solutions for Carrier Customers
Strong Experienced Team
(EPIK graphic)
Slide 22:
FLORIDA WHOLESALE TRANSPORT MARKET
(chart with upward trend in CAGR of 56% from 1999 to 2004)
CLECS
Internet Services
Wireless Services
International Hub
Sources: Yankee Group, Monitor Company
Slide 23:
NEW INITIATIVES
Collocation
Metro Rings
Wave Services
Internet Services
Fiber Swaps
(EPIK graphic)
Slide 24:
EPIK's INTERNET LEADERSHIP
(AT&T graphic)
(Williams Communications graphic)
(Global Crossing graphic)
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(360 Networks graphic)
(Cable & Wireless graphic)
(L3 Communications graphic)
EPIK has led the development of the new Internet Network Access Point (NAP) in
South Florida
The NAP of the Americas will reinforce Miami's telecom leadership as the
world's 5th largest telecom hub
EPIK's leadership of the 60 member NAP consortium is creating long term
relationships with industry leaders
(EPIK graphic)
Slide 25:
FIBER SWAPS HAVE GREATLY EXPANDED EPIK's NETWORK
(map of the United States with the following cities indicated:)
Seattle
Portland
Sacramento
San Francisco
Oakland
San Jose
Los Angeles
Denver
Omaha
Kansas City
Amarillo
Dallas
Austin
San Antonio
Des Moines
Chicago
St. Louis
Memphis
New Orleans
Detroit
Indianapolis
Nashville
Chattanooga
Atlanta
Tallahassee
Jacksonville
Daytona Beach
Orlando
Tampa
Miami
Toronto
Albany
Boston
New York
Philadelphia
Baltimore
Washington
(EPIK graphic)
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Slide 26:
BUILDING A LEADING WHOLESALE CARRIER
EPIK has a strong headstart due to the parent company's unique location and
pre-existing assets
Our wholesale strategy enables us to grow rapidly with reduced capital exposure
and SG&A burn rate vs. retail players
We are becoming a major player in the Florida marketplace, and our backlog is
growing rapidly
We are making sound investments to strengthen our competitive position in the
Southeast
We are positioning ourselves to move into higher value added services to ensure
future competitive advantage
Our fiber swapping strategy will allow us to extend our fiber footprint at the
lowest possible incremental cost
Slide 27:
FINANCIAL HIGHLIGHTS
(graphic) Florida East Coast Industries
Slide 28:
WHERE WE WERE: YEAR ENDED 1999 (Dollars in Millions)
Florida East Coast Industries
Revenue: $324.3
Operating Income: $76.31
EBITDA: $108.81
Transportation
(FECR and ITI)
Revenue: $190.5
Operating Income: $40.02
EBITDA: $57.02
1 Excludes special charge and Corp G&A of $8.2 mm and $7.5mm, respectively.
2 Excludes special charge of $5.5mm.
Real Estate
Revenue: $128.4
Operating Income: $34.4
EBITDA: $49.7
Telecom
Revenue: $5.4
Operating Income: $1.9
EBITDA: $2.1
(graphic) FLORIDA EAST COAST INDUSTRIES
Slide 29:
TRANSPORTATION AND REAL ESTATE DOMINATED THE PORTFOLIO THROUGH 1999
(dollars in millions)
1999 Revenues: $324.3 1
(pie chart)
Real Estate 39.6%
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Telecom 1.7%
Transportation 58.7%
1 Excludes Intersegment Revenues of $4.9 mm
1999 Operating Income $76.3
(pie chart)
Real Estate 45.1%
Telecom 2.5%
Transportation 52.4%
1999 EBITDA: $108.82
(pie chart)
Real Estate 46.8%
Telecom 1.8%
Transportation 51.4%
2 Excludes special charge of $5.5mm
(graphic) FLORIDA EAST COAST INDUSTRIES
Slide 30:
CONTINUING STRONG RESULTS
10.6 percent growth in 2nd Quarter Railway operating profit (excluding special
charges for 1999); quarterly operating ratio continues three-year improvement
to 75.7 percent
2nd Quarter Rental revenues rise 18.9 percent at Flagler Development Company
EPIK Communications brings revenue backlog to $150 million
2nd Quarter Trucking revenues up by 7.0 percent with new management team in
place at ITI
(graphic) FLORIDA EAST COAST INDUSTRIES
Slide 31:
EPIK WILL BECOME A SIGNIFICANT CONTRIBUTOR
1999 (2 pie charts with Telecom, Real Estate and Transportation 1999 Revenues
and EBITDA)
2003+
2 pie charts with Real Estate, Transportation and an increased Telecom presence
for 2003+ Revenues and EBITDA
(graphic) FLORIDA EAST COAST INDUSTRIES
Slide 32:
STRONG BALANCE SHEET TO FUND GROWTH
Balance Sheet Data
(Dollar in Millions)
At 6/30/00
Cash and Equivalents $68.7
Total Assets 959.0
Total Debt 0.0
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Slide 33:
AT THE CENTER OF GROWTH
(Picture)
FLORIDA EAST COAST INDUSTRIES, INC.
Established and Expanding Transportation and Real Estate Businesses
Significant Opportunity in High Growth Telecommunications Sector
Strategically Positioned to Benefit from Florida's Fast Growing Economy and
Access Latin America and Caribbean Markets
Ample Financial Flexibility - No Debt
Strong Management Team
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FLORIDA EAST COAST INDUSTRIES, INC.
By: /s/ /s/ Heidi J. Eddins
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Name: Heidi J. Eddins
Title: Senior Vice President,
Secretary and General
Counsel
October 10, 2000
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