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FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-8841
FPL GROUP, INC.
(Exact name of registrant as specified in its charter)
Florida 59-2449419
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
700 Universe Boulevard
Juno Beach, Florida 33408
(Address of principal executive offices)
(Zip Code)
(407) 694-4647
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $.01 Par Value, outstanding at October 31, 1994:
186,803,199 shares
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
FPL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Utility ........................................ $1,501,896 $1,586,141 $4,076,258 $4,011,181
Non-utility .................................... 11,004 16,544 58,590 73,534
Total operating revenues ..................... 1,512,900 1,602,685 4,134,848 4,084,715
OPERATING EXPENSES:
Utility operations:
Fuel, purchased power and interchange ........ 470,319 533,799 1,308,720 1,384,387
Other operations and maintenance ............. 253,416 322,727 877,562 925,377
Cost reduction program charge ................ - 138,000 - 138,000
Non-utility operations ......................... 9,868 10,389 51,815 56,645
Depreciation and amortization .................. 206,186 152,694 543,378 442,694
Taxes other than income taxes .................. 144,986 150,223 401,124 401,228
Total operating expenses ..................... 1,084,775 1,307,832 3,182,599 3,348,331
OPERATING INCOME ................................. 428,125 294,853 952,249 736,384
OTHER (INCOME) DEDUCTIONS:
Interest expense ............................... 79,430 91,690 241,072 281,771
Allowance for funds used during construction ... (3,939) (12,673) (19,662) (52,666)
Preferred stock dividend requirements of
Florida Power & Light Company ................ 9,879 10,712 29,687 32,631
Other - net .................................... (13,296) (27,612) (9,842) (55,675)
Total other deductions - net ................. 72,074 62,117 241,255 206,061
INCOME BEFORE INCOME TAXES ....................... 356,051 232,736 710,994 530,323
INCOME TAXES ..................................... 133,807 92,214 268,467 187,305
NET INCOME ....................................... $ 222,244 $ 140,522 $ 442,527 $ 343,018
Average number of common shares outstanding ...... 177,203 188,133 178,558 185,813
Earnings per share of common stock ............... $ 1.25 $ 0.75 $ 2.48 $ 1.85
Dividends per share of common stock .............. $ 0.42 $ 0.62 $ 1.46 $ 1.85
</TABLE>
This report should be read in conjunction with the Notes to Condensed
Consolidated Financial Statements on Pages 5 through 7 herein and the
Notes to Consolidated Financial Statements appearing in FPL Group,
Inc.'s (FPL Group) 1993 Annual Report on Form 10-K (Form 10-K).
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FPL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30,
1994 December 31,
(Unaudited) 1993
(Thousands of Dollars)
<S> <C> <C>
ASSETS
PROPERTY, PLANT AND EQUIPMENT:
Electric utility plant - at original cost,
including nuclear fuel under capital lease ........................... $15,706,907 $14,838,160
Construction work in progress .......................................... 274,143 781,435
Other .................................................................. 245,363 261,125
Less accumulated depreciation and amortization ......................... 6,050,699 5,591,265
Total property, plant and equipment - net ............................ 10,175,714 10,289,455
INVESTMENTS .............................................................. 1,014,199 984,992
CURRENT ASSETS:
Cash and cash equivalents .............................................. 210,405 152,014
Marketable securities - at market value (cost
of $40,906 and $169,328, respectively) ............................... 39,006 171,988
Receivables - net ...................................................... 613,047 504,597
Materials, supplies and fossil fuel stock - at average cost ............ 310,894 329,599
Other .................................................................. 71,402 93,159
Total current assets ................................................. 1,244,754 1,251,357
OTHER ASSETS AND DEFERRED DEBITS:
Unamortized debt reacquisition costs of Florida Power & Light Company .. 292,464 302,561
Deferred litigation items of Florida Power & Light Company ............. 110,859 110,859
Other .................................................................. 130,417 138,788
Total other assets and deferred debits ............................... 533,740 552,208
TOTAL ASSETS ............................................................... $12,968,407 $13,078,012
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock ........................................................... $ 1,868 $ 1,901
Other shareholders' equity ............................................. 4,201,632 4,098,706
Preferred stock of Florida Power & Light Company:
Without sinking fund requirements .................................... 451,250 451,250
With sinking fund requirements ....................................... 94,000 97,000
Long-term debt ......................................................... 3,909,063 3,748,983
Total capitalization ................................................. 8,657,813 8,397,840
CURRENT LIABILITIES:
Commercial paper ....................................................... 16,511 349,600
Current maturities of long-term debt and preferred stock ............... 254,277 279,680
Accounts payable ....................................................... 276,328 323,282
Customers' deposits .................................................... 222,045 216,140
Accrued interest and taxes ............................................. 416,981 204,086
Other .................................................................. 240,135 465,829
Total current liabilities ............................................ 1,426,277 1,838,617
OTHER LIABILITIES AND DEFERRED CREDITS
Accumulated deferred income taxes ...................................... 1,596,484 1,512,067
Deferred regulatory credit - income taxes............................... 199,772 216,546
Unamortized investment tax credits ..................................... 308,227 323,791
Capital lease obligations .............................................. 204,959 271,498
Other .................................................................. 574,875 517,653
Total other liabilities and deferred credits ......................... 2,884,317 2,841,555
COMMITMENTS AND CONTINGENCIES
TOTAL CAPITALIZATION AND LIABILITIES ....................................... $12,968,407 $13,078,012
</TABLE>
This report should be read in conjunction with the Notes to Condensed
Consolidated Financial Statements on Pages 5 through 7 herein and the
Notes to Consolidated Financial Statements appearing in FPL Group's
1993 Form 10-K.
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FPL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1994 1993
(Thousands of Dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ................................................................ $ 442,527 $ 343,018
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ......................................... 543,378 442,694
Increase (decrease) in deferred income taxes and related
regulatory credit ................................................... 67,643 (18,250)
(Deferrals) recoveries under cost recovery clauses (1) ................ (75,681) 68,987
Other - net ........................................................... 113,788 174,189
Net cash provided by operating activities ............................... 1,091,655 1,010,638
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2) .................................................. (542,599) (901,201)
Other - net ............................................................... 65,599 (7,853)
Net cash used in investing activities ................................... (477,000) (909,054)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of bonds and other long-term debt ................................ 172,850 2,026,485
Issuance of preferred stock of Florida Power & Light Company .............. - 190,000
Retirement of long-term debt and preferred stock .......................... (254,281) (2,116,530)
Issuance of common stock .................................................. 16,685 257,892
Repurchase of common stock ................................................ (114,590) -
(Decrease) increase in commercial paper ................................... (133,089) 120,000
Dividends on common stock ................................................. (260,645) (344,124)
Other - net................................................................ 16,806 40,436
Net cash (used in) provided by financing activities ..................... (556,264) 174,159
Net increase in cash and cash equivalents ................................... 58,391 275,743
Cash and cash equivalents at beginning of period ............................ 152,014 78,156
Cash and cash equivalents at end of period .................................. $ 210,405 $ 353,899
Supplemental disclosures of cash flow information:
Cash paid for interest (net of amount capitalized) ........................ $ 255,984 $ 288,080
Cash paid for income taxes ................................................ $ 122,350 $ 91,627
Supplemental schedule of noncash investing and financing activities:
Additions to capital lease obligations .................................... $ 61,055 $ 34,294
(1) Represents the effect on cash flows from operating activities of the net amounts deferred or recovered under the fuel
and purchased power, oil-backout, energy conservation, capacity and environmental cost recovery clauses.
(2) Capital expenditures exclude allowance for equity funds used during construction.
</TABLE>
This report should be read in conjunction with the Notes to Condensed
Consolidated Financial Statements on Pages 5 through 7 herein and the
Notes to Consolidated Financial Statements appearing in FPL Group's
1993 Form 10-K.
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FPL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The accompanying condensed consolidated financial statements should
be read in conjunction with FPL Group's 1993 Form 10-K; also see
Note 1 to FPL Group's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1994 for a discussion of the changes in
accounting for Employee Stock Ownership Plans. In the opinion of FPL
Group, all adjustments (consisting only of normal recurring accruals)
necessary to present fairly the financial position as of September 30,
1994 and December 31, 1993, the results of operations for the three and
nine months ended September 30, 1994 and 1993 and the cash flows
for the nine months ended September 30, 1994 and 1993 have been
made. The results of operations for an interim period may not give a
true indication of results for the year.
1. Capitalization
Preferred Stock - The 1994 sinking fund requirement for the 6.84%
Preferred Stock, Series Q, $100 Par Value was met by redeeming and
retiring 30,000 shares in April 1994. There are no other sinking fund
requirements for the remainder of 1994.
Long-Term Debt - In January 1994, FPL Group Capital Inc (FPL Group
Capital) redeemed $150 million of its 8 7/8% Debentures using an
advance from FPL Group and internally generated funds.
In March and July 1994, Florida Power & Light Company (FPL) sold a
total of $172.85 million principal amount of Pollution Control Revenue
Refunding Bonds, maturing in September 2024 and July 2029, at
variable interest rates that initially ranged from 2.00% to 3.20%. The
proceeds were used to redeem and retire in March, May and October
1994 a total of approximately $172.85 million principal amount of
Pollution Control Revenue Bonds, maturing in 2007 through 2019, at
interest rates ranging from 5.90% to 11 3/8%.
At September 30, 1994, $200 million of commercial paper has been
included in long-term debt pursuant to financing agreements which allow
FPL to refinance these amounts for periods extending beyond
September 30, 1995.
2. Commitments and Contingencies
Commitments - FPL has made commitments in connection with a portion
of its projected capital expenditures. Capital expenditures for the
construction or acquisition of additional facilities and equipment to meet
customer demand are estimated to be $3.7 billion, including allowance
for funds used during construction (AFUDC), for the years 1994 through
1998. Included in the five-year forecast are capital expenditures for
1994 of $879 million, of which $561 million had been spent through
September 30, 1994. Cost control efforts may significantly reduce the
amount originally projected for the full year 1994.
FPL Group Capital has committed to invest approximately $2 million in,
and lend approximately $1 million to, partnerships and joint ventures
entered into through ESI Energy, Inc. (ESI), all of which are expected to
be funded in the remainder of 1994. Additionally, FPL Group Capital
and its subsidiaries, primarily ESI, have guaranteed up to approximately
$98 million of lease obligations, debt service payments and other
payments subject to certain contingencies.
FPL Group, through a consolidated limited partnership, has entered into
forward commitments at September 30, 1994 to sell short approximately
$14 million of U.S. Treasury Notes on various dates in October 1994 at
specified prices. At September 30, 1994, the amounts committed
approximated the market value of the related securities.
Insurance - Liability for accidents at nuclear power plants is governed by
the Price-Anderson Act, which limits the liability of nuclear reactor
owners to the amount of the insurance available from private sources
and under an industry retrospective payment plan. In accordance with
this Act, FPL maintains $200 million of private liability insurance, which is
the maximum obtainable, and participates in a secondary financial
protection system under which it is subject to retrospective assessments
of up to $317 million per incident at any nuclear utility reactor in the
United States, payable at a rate not to exceed $40 million per incident
per year.
FPL participates in insurance pools and other arrangements that provide
$2.75 billion of limited insurance coverage for property damage,
decontamination and premature decommissioning risks at its nuclear
plants. The proceeds from such insurance, however, must first be used
for reactor stabilization and site decontamination before they can be
used for plant repair. FPL also participates in an insurance program that
provides limited coverage for replacement power
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costs if a plant is out of service because of an accident. In the event of
an accident at one of FPL's or another participating insured's nuclear
plants, FPL could be assessed up to $58 million in retrospective
premiums, and in the event of a subsequent accident at such nuclear
plants during the policy period, the maximum aggregate assessment is
$72 million under the programs in effect at September 30, 1994.
Effective January 1995, FPL could be assessed up to $76 million in the
event of one nuclear accident, and in the event of a subsequent accident
during the policy period, the maximum aggregate assessment would be
$90 million. This contingent liability would be partially offset by a portion
of FPL's storm and property insurance reserve (storm fund), which
totaled $91 million at September 30, 1994.
In the event of a catastrophic loss at one of FPL's nuclear plants, the
amount of insurance available may not be adequate to cover property
damage and other expenses incurred. Uninsured losses, to the extent
not recovered through rates, would be borne by FPL and could have a
material adverse effect on FPL Group's and FPL's financial condition.
In 1993, FPL replaced its transmission and distribution (T&D) property
insurance coverage with a self-insurance program due to the high cost
and limited coverage available from third-party insurers. Costs incurred
under the self-insurance program will be charged against FPL's storm
fund. Recovery of any losses in excess of the storm fund from
ratepayers will require the approval of the Florida Public Service
Commission (FPSC). FPL's available lines of credit include $300 million
to provide additional liquidity in the event of a T&D property loss.
Contracts - FPL has take-or-pay contracts with the Jacksonville Electric
Authority (JEA) for 374 megawatts (mw) of power through 2022 and with
subsidiaries of the Southern Company to purchase 1,007 mw of power
through May 1995, and 913 mw thereafter through mid-2010. FPL also
has various firm pay-for-performance contracts to purchase
approximately 1,000 mw from certain cogenerators and small power
producers (qualifying facilities) with expiration dates ranging from 2002
through 2026. These contracts provide for capacity and energy
payments. Energy payments are based on the actual power taken under
these contracts. Capacity payments for the pay-for-performance
contracts are subject to the qualifying facilities meeting certain contract
obligations.
The required capacity payments through 1998 under these contracts are
estimated to be as follows:
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
(Millions of Dollars)
<S> <C> <C> <C> <C> <C>
JEA .................................................... $ 80 $ 80 $ 80 $ 80 $ 80
Southern Companies ..................................... 200 150 140 140 140
Qualifying Facilities .................................. 140 160 310 340 350
</TABLE>
FPL's capacity and energy charges under these contracts were as
follows:
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
1994 Charges 1993 Charges 1994 Charges 1993 Charges
Capacity Energy(1) Capacity Energy(1) Capacity Energy(1) Capacity Energy(1)
(Millions of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JEA .................... $19(2) $13 $22(2) $12 $ 62(2) $35 $ 65(2) $ 38
Southern Companies ..... 39(3) 30 58(3) 40 147(3) 99 209(3) 155
Qualifying Facilities... 35(3) 19 15(3) 10 101(3) 50 45(3) 30
(1) Recovered through the fuel and purchased power cost recovery clause.
(2) Recovered through base rates and the capacity cost recovery clause (capacity clause).
(3) Recovered through the capacity clause.
</TABLE>
FPL has take-or-pay contracts for the supply and transportation of
natural gas under which it is required to make payments estimated to
be $250 million for 1994, $430 million for 1995, $460 million for
1996, $480 million for 1997 and $500 million for 1998. Total
payments made under these contracts for the three and nine months
ended September 30, 1994 were $71 million and $187 million,
respectively. Total payments made under these contracts for the
three and nine months ended September 30, 1993 were $86 million and
$221 million, respectively.<PAGE>
<PAGE>
Litigation - Union Carbide Corporation sued FPL and Florida Power
Corporation alleging that, through a territorial agreement approved
by the FPSC, they conspired to eliminate competition in violation of
federal antitrust laws. Praxair, Inc., an entity that was formerly a
unit of Union Carbide, has been substituted as the plaintiff. The
suit seeks treble damages of an unspecified amount based on alleged
higher prices paid for electricity and product sales lost. Cross
motions for summary judgment were denied. Both parties are appealing
the denials.
A suit brought by the partners in a cogeneration project located in
Dade County, Florida, alleges that FPL Group, FPL and ESI have
engaged in anti-competitive conduct intended to eliminate competition
from cogenerators generally, and from their facility in particular,
in violation of federal antitrust laws and have wrongfully interfered
with the cogeneration project's contractual relationship with
Metropolitan Dade County. The suit seeks damages in excess of $100
million, before trebling under antitrust law, plus other unspecified
compensatory and punitive damages. A motion for summary judgment by
FPL Group, FPL and ESI has been denied. FPL Group, FPL and ESI are
appealing the denial.
FPL Group believes that it and its subsidiaries have meritorious
defenses to all of the litigation described above and is vigorously
defending these suits. Accordingly, the liabilities, if any, arising
from this litigation are not anticipated to have a material adverse
effect on FPL Group's financial statements.
A former cable installation contractor for Telesat Cablevision, Inc.
(Telesat) sued FPL Group, FPL Group Capital and Telesat for breach of
contract, fraud, violation of racketeering statutes and several other
claims. Plaintiff claimed more than $24 million in compensatory
damages, treble damages under racketeering statutes, punitive damages
and attorneys' fees. The trial court entered a judgment in favor of
FPL Group and Telesat on nine of twelve counts, including all of the
racketeering and fraud claims, and in favor of FPL Group Capital on
all counts. It also denied all parties' claims for attorneys' fees.
However, the jury in the case awarded the contractor damages totaling
approximately $6 million against FPL Group and Telesat for breach of
contract and tortious interference. All parties have appealed. The
final liability, if any, is not anticipated to have a material
adverse effect on FPL Group's financial statements.
3. Cost Reduction Program
In the third quarter of 1993, FPL implemented a major cost reduction
program, which resulted in a $138 million charge and reduced net
income by approximately $85 million. The charge consisted of costs
associated with a workforce reduction of approximately 1,700
positions through early retirement and severance programs.
4. Summarized Financial Information
Summarized financial information of FPL Group Capital, a consolidated
wholly-owned subsidiary whose debentures are guaranteed by FPL Group,
is provided below:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Operating revenues ............................... $11,082 $16,650 $58,840 $73,853
Operating expenses ............................... 12,905 14,051 59,827 66,919
Income before extraordinary item ................. 6,257 7,837 4,458 11,245
Net income ....................................... 6,257 7,837 4,458 5,873
</TABLE>
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
(Thousands of Dollars)
<S> <C> <C>
Current assets .............................................................. $ 185,155 $ 96,387
Noncurrent assets ........................................................... 1,020,364 1,169,552
Current liabilities ......................................................... 170,715 313,605
Noncurrent liabilities ...................................................... 697,849 619,818
</TABLE>
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This discussion should be read in conjunction with the Notes to
Condensed Consolidated Financial Statements contained herein and
Management's Discussion and Analysis of Financial Condition and
Results of Operations appearing in FPL Group's 1993 Form 10-K. The
results of operations for an interim period may not give a true indication
of results for the year. In the following discussion, all comparisons are
with the corresponding items in the prior year.
RESULTS OF OPERATIONS
For the three and nine months ended September 30, 1994, net income
was favorably affected by the benefits of ongoing cost reduction
measures and higher energy sales, resulting from customer growth.
Higher energy sales for the nine months ended September 30, 1994 also
benefitted from increased energy usage per retail customer. Partially
offsetting these factors, were higher depreciation expense and lower
AFUDC.
Revenues from base rates, which were $921 million and $915 million for
the three months ended September 30, 1994 and 1993 and $2.5 billion
and $2.3 billion for the nine months ended September 30, 1994 and
1993, respectively, are derived primarily from retail operations regulated
by the FPSC. Such revenues increased for both the three and nine
months ended September 30, 1994 mainly due to higher energy sales.
Retail energy sales increased 0.5% for the three months ended
September 30, 1994 primarily due to customer growth of 2.0%, partially
offset by lower usage per retail customer resulting from milder weather.
Retail energy sales increased 6.2% for the nine months ended
September 30, 1994 primarily due to increased usage per retail
customer resulting from warmer weather in the first half of the year, and
customer growth of 2.2%. Revenues derived from cost recovery clause
rates and franchise fees comprise substantially all of the remaining
portion of operating revenues. These revenues represent a
pass-through of costs and do not significantly affect net income.
Other operations and maintenance expenses of FPL decreased mainly
due to cost savings from ongoing cost reduction efforts, despite
additional costs relating to generating units placed in service after the
first quarter in 1993 and the effects of customer growth. Higher electric
utility plant balances, reflecting facilities added to meet customer growth,
higher depreciation rates approved by the FPSC in September 1994, and
a nonrecurring third quarter charge related to assets replaced during
plant modifications resulted in increased depreciation expense for the
three and nine months ended September 30, 1994.
AFUDC decreased for the three and nine months ended September 30,
1994 as a result of the placement in service of the repowered
Lauderdale units in the second quarter of 1993 and Martin Units Nos. 3
and 4 in the first and second quarter of 1994, respectively. Interest and
preferred stock dividend requirements declined for the three and nine
months ended September 30, 1994 due to the refunding of higher cost
debt and preferred stock during 1993 with lower rate instruments.
In the first quarter of 1994, FPL Group adopted AICPA Statement of
Position (SOP) 93-6, "Employers' Accounting for Employee Stock
Ownership Plans." Under the new accounting rules, the 10.375 million
unallocated shares currently held by the Trust for the Employee Thrift
Plans of FPL Group and FPL are no longer considered outstanding for
earnings per share purposes. These shares will be included as
outstanding when allocated to employee accounts over the next 15
years. The effect of adopting SOP 93-6, primarily reflected in Other -
net, was to reduce net income for the three and nine months ended
September 30, 1994 by approximately $5 million and $16 million,
respectively.
FINANCIAL CONDITION
FPL Group's primary capital requirements consist of expenditures under
FPL's construction program. Internally generated funds are expected to
fund virtually all of these expenditures. The balance, if any, will be
temporarily provided by commercial paper.
In May 1994, the board of directors of FPL Group announced a change
in financial strategy. The key elements of the new strategy include a
revised dividend payout ratio and a common stock repurchase program.
The targeted dividend payout ratio will be 60-65% of prior year's
earnings, equating to a current quarterly common stock dividend of 42
cents per share ($1.68 annually). The FPL Group board of directors
authorized the repurchase of 10 million shares of common stock over the
next three years. An effort is being made to repurchase a total of four
million shares by year-end. Through September 1994, 3.7 million shares
have been repurchased.
For information concerning capital commitments, see Note 2. For a
discussion of changes in capitalization, see Note 1.
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 5. Other Information
(1) Reference is made to Item 1. Business - Utility Operations -
Employees in FPL Group's 1993 Form 10-K.
FPL's collective bargaining agreement with the International
Brotherhood of Electrical Workers (IBEW), which expired
October 31, 1994, has been automatically extended for a period of
one year. However, the FPL and the IBEW negotiating
committees have agreed on a contract proposal, which is subject
to ratification by the membership in late November 1994. The
IBEW negotiating committee has unanimously recommended the
approval of the contract proposal.
(2) Reference is made to Item 1. Business - Utility Operations - Fuel
in FPL Group's 1993 Form 10-K and Item 5(3) in FPL Group Form
10-Q for the quarter ended March 31, 1994.
In August 1994, the FPSC approved the accelerated recovery of
the costs required to convert Manatee Units Nos. 1 and 2 to burn
Orimulsion, a low cost fuel oil substitute. The FPSC also found
that FPL's decision to convert the Manatee units to burn
Orimulsion was prudent and reasonable. FPL is seeking
environmental approvals.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
*4(a) Restated Articles of Incorporation of FPL Group
dated December 31, 1984, as amended through
December 17, 1990 (filed as Exhibit 4(a) to
Post-Effective Amendment No. 5 to Form S-8, File
No. 33-18669)
*4(b) Bylaws of FPL Group, as amended November 15,
1993 (filed as Exhibit 3(ii) to Form 10-K for the year
ended December 31, 1993, File No. 1-8841)
*4(c) Rights Agreement dated as of June 16, 1986
between FPL Group, Inc. and the First National Bank
of Boston (filed as Exhibit 4(e) to Post-Effective
Amendment No. 5 to Form S-8, File No. 33-18669)
*4(d) Mortgage and Deed of Trust dated as of January 1,
1944, and Ninety-five Supplements thereto between
FPL and Bankers Trust Company and The Florida
National Bank of Jacksonville (now First Union
National Bank of Florida) Trustees (as of
September 2, 1992, the sole trustee is Bankers Trust
Company) (filed as Exhibit B-3, File No. 2-4845;
Exhibit 7(a), File No. 2-7126; Exhibit 7(a), File No.
2-7523; Exhibit 7(a), File No. 2-7990; Exhibit 7(a),
File No. 2-9217; Exhibit 4(a)-5, File No. 2-10093;
Exhibit 4(c), File No. 2-11491; Exhibit 4(b)-1, File No.
2-12900; Exhibit 4(b)-1, File No. 2-13255; Exhibit
4(b)-1, File No. 2-13705; Exhibit 4(b)-1, File No.
2-13925; Exhibit 4(b)-1, File No. 2-15088; Exhibit
4(b)-1, File No. 2-15677; Exhibit 4(b)-1, File
No. 2-20501; Exhibit 4(b)-1, File No. 2-22104; Exhibit
2(c), File No. 2-23142; Exhibit 2(c), File No. 2-24195;
Exhibit 4(b)-1, File No. 2-25677; Exhibit 2(c), File No.
2-27612; Exhibit 2(c), File No. 2-29001; Exhibit 2(c),
File No. 2-30542; Exhibit 2(c), File No. 2-33038;
Exhibit 2(c), File No. 2-37679; Exhibit 2(c), File
No. 2-39006; Exhibit 2(c), File No. 2-41312; Exhibit
2(c), File No. 2-44234; Exhibit 2(c), File No. 2-46502;
Exhibit 2(c), File No. 2-48679; Exhibit 2(c), File No.
2-49726; Exhibit 2(c), File No. 2-50712; Exhibit 2(c),
File No. 2-52826; Exhibit 2(c), File No. 2-53272;
Exhibit 2(c), File No. 2-54242; Exhibit 2(c), File No.
2-56228; Exhibits 2(c) and 2(d), File No. 2-60413;
Exhibits 2(c) and 2(d), File No. 2-65701; Exhibit 2(c),
File No. 2-66524; Exhibit 2(c), File No. 2-67239;
Exhibit 4(c), File No. 2-69716; Exhibit 4(c), File
No. 2-70767; Exhibit 4(b), File No. 2-71542; Exhibit
4(b), File No. 2-73799; Exhibits 4(c), 4(d) and 4(e),
File No. 2-75762; Exhibit 4(c), File No. 2-77629;
Exhibit 4(c), File No. 2-79557; Exhibit 99(a) to
Post-Effective Amendment No. 5 to Form S-8, File
No. 33-18669; Exhibit 99(a) to Post-Effective
Amendment No. 1 to Form S-3, File No. 33-46076;
Exhibit 4(b) to Form 10-K for the year ended
December 31, 1993, File No. 1-3545; and Exhibit 4(i)
to Form 10-Q for the quarter ended June 30, 1994,
File No. 1-3545)
*10(a) Supplemental Executive Retirement Plan, as
amended and restated (filed as Exhibit 99(b) to
Post-Effective Amendment No. 5 to Form S-8, File
No. 33-18669)
<PAGE>
<PAGE>
*10(b) Benefit Restoration Plan of FPL Group and affiliates,
as amended and restated (filed as Exhibit 99(c) to
Post-Effective Amendment No. 5 to Form S-8, File
No. 33-18669)
*10(c) FPL Group Amended and Restated Supplemental
Executive Retirement Plan for J. L. Broadhead (filed
as Exhibit 99(d) to Post-Effective Amendment No. 5
to Form S-8, File No. 33-18669)
*10(d) Employment Agreement between FPL Group and D.
P. Coyle dated June 12, 1989 (filed as Exhibit 99(e)
to Post-Effective Amendment No. 5 to Form S-8, File
No. 33-18669)
*10(e) Employment Agreement between FPL and Stephen
E. Frank dated July 31, 1990 (filed as Exhibit 99(f) to
Post-Effective Amendment No. 5 to Form S-8, File
No. 33-18669)
*10(f) Employment Agreement between FPL and Jerome
H. Goldberg dated August 9, 1989 (filed as
Exhibit 99(g) to Post-Effective Amendment No. 5 to
Form S-8, File No. 33-18669)
*10(g) FPL Group Long-Term Incentive Plan of 1985, as
amended (filed as Exhibit 99(h) to Post-Effective
Amendment No. 5 to Form S-8, File No. 33-18669)
*10(h) Director and Executive Compensation Deferral Plan
of FPL, as amended (filed as Exhibit 99(i) to
Post-Effective Amendment No. 5 to Form S-8, File
No. 33-18669)
*10(i) Employment Agreement between FPL Group and
James L. Broadhead dated February 13, 1989 (filed
as Exhibit 99(j) to Post-Effective Amendment No. 5
to Form S-8, File No. 33-18669)
*10(j) Employment Agreement between FPL Group and
James L. Broadhead dated as of December 13, 1993
(filed as Exhibit 10(j) to Form 10-K for the year
ended December 31, 1993, File No. 1-8841)
*10(k) Annual Incentive Plan dated as of March 31, 1994
(filed as Exhibit 10(k) to Form 10-Q for the quarter
ended March 31, 1994, File No. 1-8841)
*10(l) Long-Term Incentive Plan dated as of February 14,
1994 (filed as Exhibit 10(l) to Form 10-Q for the
quarter ended March 31, 1994, File No. 1-8841)
*10(m) Employment Agreement between FPL and Jerome
H. Goldberg dated July 25, 1994 (filed as Exhibit
10(m) to Form 10-Q for the quarter ended June 30,
1994, File No. 1-8841)
27 Financial Data Schedule
* Incorporated herein by reference
(b) Reports on Form 8-K
None
SIGNATURES
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.
FPL GROUP, INC.
(Registrant)
PAUL J. EVANSON
Paul J. Evanson
Vice President, Finance
and Chief Financial Officer
(Principal Financial Officer)
Date: November 10, 1994
<TABLE> <S> <C>
<S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from FPL Group's condensed consolidated balance sheet as of
September 30, 1994 and condensed consolidated statements of income and cash flows for the nine months ended September 30, 1994 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<PERIOD-TYPE> 9-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> $9,985,216
<OTHER-PROPERTY-AND-INVEST> $1,204,698
<TOTAL-CURRENT-ASSETS> $1,244,754
<TOTAL-DEFERRED-CHARGES> $403,323
<OTHER-ASSETS> $130,417
<TOTAL-ASSETS> $12,968,407
<COMMON> $1,868
<CAPITAL-SURPLUS-PAID-IN> $3,189,945
<RETAINED-EARNINGS> $1,011,687
<TOTAL-COMMON-STOCKHOLDERS-EQ> $4,203,500
$94,000
$451,250
<LONG-TERM-DEBT-NET> $3,909,063
<SHORT-TERM-NOTES> $0
<LONG-TERM-NOTES-PAYABLE> $0
<COMMERCIAL-PAPER-OBLIGATIONS> $16,511
<LONG-TERM-DEBT-CURRENT-PORT> $252,777
$1,500
<CAPITAL-LEASE-OBLIGATIONS> $204,959
<LEASES-CURRENT> $0
<OTHER-ITEMS-CAPITAL-AND-LIAB> $3,834,847
<TOT-CAPITALIZATION-AND-LIAB> $12,968,407
<GROSS-OPERATING-REVENUE> $4,134,848
<INCOME-TAX-EXPENSE> $268,467
<OTHER-OPERATING-EXPENSES> $3,182,599
<TOTAL-OPERATING-EXPENSES> $3,182,599
<OPERATING-INCOME-LOSS> $952,249
<OTHER-INCOME-NET> ($29,504)
<INCOME-BEFORE-INTEREST-EXPEN> $952,066
<TOTAL-INTEREST-EXPENSE> $241,072
<NET-INCOME> $442,527
$29,687
<EARNINGS-AVAILABLE-FOR-COMM> $442,527
<COMMON-STOCK-DIVIDENDS> $260,645
<TOTAL-INTEREST-ON-BONDS> $0
<CASH-FLOW-OPERATIONS> $1,091,655
<EPS-PRIMARY> $2.48
<EPS-DILUTED> $2.48
</TABLE>
