UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-8841
Employee Thrift and Retirement Savings Plan for
Bargaining Unit Employees of Florida Power & Light Company
(Full title of the plan)
FPL GROUP, INC.
(Name of issuer of the securities held pursuant to the plan)
700 Universe Boulevard
Juno Beach, Florida 33408
(Address of principal executive office)
INDEPENDENT AUDITORS' REPORT
EMPLOYEE BENEFITS COMMITTEE OF THE BOARD OF DIRECTORS
OF FPL GROUP, INC.:
We have audited the accompanying statements of net assets available for
benefits of the Employee Thrift and Retirement Savings Plan for Bargaining Unit
Employees of Florida Power & Light Company (the "Plan") as of December 31, 1997
and 1996, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1997. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1997 and 1996 and the changes in net assets available for benefits for the year
ended December 31, 1997 in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1)
assets held for investment as of December 31, 1997, and (2) transactions in
excess of five percent of the current value of plan assets for the year ended
December 31, 1997, are presented for the purpose of additional analysis and are
not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules are the responsibility of the Plan's
management. Such schedules have been subjected to the auditing procedures
applied in our audit of the basic 1997 financial statements and, in our
opinion, are fairly stated in all material respects when considered in relation
to the basic financial statements taken as a whole.
DELOITTE & TOUCHE LLP
Miami, Florida
June 26, 1998
EMPLOYEE THRIFT AND RETIREMENT SAVINGS PLAN FOR
BARGAINING UNIT EMPLOYEES OF FLORIDA POWER & LIGHT COMPANY
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31,
----------------------------
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
Accrued interest receivable - ESOP Account ....................................... $ 807 $ 1,222
General investments, at fair value:
Interest-bearing cash .......................................................... 3,392,253 2,741,024
Loans to participants - other .................................................. 20,486,666 20,993,023
Value of interest in master trusts ............................................. 104,949,313 92,390,507
Value of interest in registered investment companies ........................... 162,689,431 108,860,516
Total general investments .................................................. 291,517,663 224,985,070
Employer securities, at fair value:
Employer securities held by the Plan ........................................... 172,496,768 158,156,716
Leveraged ESOP employer securities ............................................. 167,941,739 133,589,892
Total employer securities .................................................. 340,438,507 291,746,608
Total assets ..................................................................... 631,956,977 516,732,900
LIABILITIES
Interest payable - ESOP Account .................................................. 349,987 346,716
Acquisition indebtedness of leveraged ESOP ....................................... 108,355,178 107,342,468
Total liabilities ................................................................ 108,705,165 107,689,184
NET ASSETS AVAILABLE FOR BENEFITS ................................................ $523,251,812 $409,043,716
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
EMPLOYEE THRIFT AND RETIREMENT SAVINGS PLAN FOR
BARGAINING UNIT EMPLOYEES OF FLORIDA POWER & LIGHT COMPANY
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
Year Ended December 13, 1997
----------------------------
<S> <C> <C>
INCOME
Contributions:
Received from employer ......................................................... $ 2,273,662
Received from participants ..................................................... 14,397,474
Noncash contributions (from employer) .......................................... 3,964,443
Total contributions .......................................................... $ 20,635,579
Earnings on investments:
Interest:
Interest-bearing cash ........................................................ 177,916
Other loans (participant loans) .............................................. 1,793,730
Total interest ............................................................. 1,971,646
Common stock dividends ......................................................... 5,303,230
Net appreciation in fair value of investments:
Employer securities .......................................................... 39,531,224
Master trusts ................................................................ 10,073,984
Registered investment companies .............................................. 25,929,442
Total net appreciation in fair value of investments ........................ 75,534,650
Total income ..................................................................... 103,445,105
EXPENSES
Benefit payments to participants or beneficiaries ................................ 21,117,916
Administrative expenses .......................................................... 53,272
Total expenses ................................................................. 21,171,188
NET INCOME ....................................................................... 82,273,917
TRANSFERS
Transfers from the Plan - net .................................................... (1,401,272)
Effect of current year Leveraged ESOP activity ................................... 33,335,451
Total transfers to the Plan ...................................................... 31,934,179
NET ASSETS AT DECEMBER 31, 1996 .................................................. 409,043,716
NET ASSETS AT DECEMBER 31, 1997 .................................................. $523,251,812
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
EMPLOYEE THRIFT AND RETIREMENT SAVINGS PLAN FOR
BARGAINING UNIT EMPLOYEES OF FLORIDA POWER & LIGHT COMPANY
NOTES TO FINANCIAL STATEMENTS
For the year ended December 31, 1997
1. Description of the Plan and Significant Accounting Policies
The Plan
The following description of the Employee Thrift and Retirement Savings Plan
for Bargaining Unit Employees of Florida Power & Light Company (Plan) provides
only general information. Participating employees (Members) should refer to
the Summary Plan Description in their employee handbook for a more complete
description of the Plan. Fidelity Management Trust Company (Trustee)
administers the trust (Trust) established under the Plan and the FPL Group
Employee Thrift Plan (Group Plan).
The Plan is a defined contribution plan subject to the provisions of the
Employee Retirement Income Securities Act of 1974, as amended (ERISA).
Participation in the Plan, which is voluntary, is open to any employee of
Florida Power & Light Company (FPL or Company) whose compensation is
established under a collective bargaining agreement between the Company and the
International Brotherhood of Electrical Workers AFL-CIO through its System
Council U-4 (Bargaining Unit). Bargaining Unit employees are eligible to
participate in the Plan on the first day of the month coincident with the
completion of six continuous full months of service. The Plan includes a cash
or deferred compensation arrangement (Tax Saver Option) permitted by
Section 401(k) of the Internal Revenue Code of 1986, as amended (Code). The
Tax Saver Option permits a Member to elect to defer federal income taxes on all
or a portion of their contributions (Tax Saver Contributions) until they are
distributed from the Plan. Tax Saver Contributions were limited in 1997 to a
maximum of $9,500 per Member and may be increased or decreased in future years
for cost-of-living adjustments.
The Plan also includes leveraged employee stock ownership plan (Leveraged ESOP)
provisions. The Leveraged ESOP is a stock bonus plan within the meaning of
Treasury Regulation Section 1.401-1(b)(1)(iii) that is qualified under Section
401(a) of the Code and is designed to invest primarily in common stock of FPL
Group, Inc. (Common Stock). The Trust purchased Common Stock from FPL Group,
Inc. (FPL Group) using the proceeds of a loan (Acquisition Indebtedness) from
FPL Group Capital Inc (FPL Group Capital), a subsidiary of FPL Group (see
Note 3). The Common Stock acquired by the Trust is initially held in a
separate account (ESOP Account). As the Acquisition Indebtedness (including
interest) is repaid, each Member's account is allocated its portion of Common
Stock released from the ESOP Account.
The Company has in place a Flexible Dividend Program which enables participants
to choose how their dividends on certain shares of Common Stock held in the
Plan are to be paid. Dividends on Common Stock acquired through the Leveraged
ESOP do not qualify under this program. The options available to participants
include reinvestment of dividends in Company Stock; distribution of dividends
in cash; distribution of dividends in cash and contribution of an equivalent
amount of their compensation to their thrift plan account; or a partial
distribution with the balance reinvested in Common Stock.
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100 percent vested in their accounts.
Contributions, Loans, Withdrawals and Transfers to (from) the Plan
The Plan provides for basic contributions by eligible employees in whole
percentages from 1% to 7% of their base compensation (Earnings), which is
matched in part by the Company with shares of Common Stock. For basic Tax
Saver or After Tax Contributions, the Company match is 100% on the first 3% of
a Member's Earnings, 50% on the next 3% and 25% on the last 1%. The Plan also
provides for supplemental contributions by Members to be made in whole
percentages from 1% to 9% of their Earnings, bringing the total maximum
contributions to 16%. Supplemental contributions are not matched by the
Company.
The value of a Member's contributions (including all income, gains and losses)
is at all times 100% vested. Company contributions vest at a rate of 20% each
year and are fully vested upon a Member attaining five years of service as a
Member of the Plan. An employee may also receive vesting credit for prior
years of service as a member of the Group Plan.
The Plan's investment options include fourteen investment choices: eleven core
investment options and three investment strategy options. The core investment
options include various mutual funds, a separately managed portfolio of short-
and long-term investment contracts and Common Stock. The strategy options
combine portions of the individual core investment options available through
the Plan providing various combinations of stocks and fixed income investments.
The Plan allows Members, at any time, to change their contribution percentage,
to change their investment option allocation for future contributions or to
transfer their account balance attributable to Member contributions from one
investment option to another. At year end, the number of Members contributing
to the Plan was 3,358. Company contributions are primarily made from Common
Stock shares released from the ESOP Account. Forfeitures of non-vested Company
contributions due to termination of Plan participation are used to reduce the
amount of future Company contributions to the Plan. A Member who has attained
at least the age of fifty and completed five years of service while a Member
will be permitted to transfer all or any portion of Company contributions made
to his or her account and any earnings thereon to one or more of the other
investment options. Any future Company contributions will continue to be
invested in Common Stock. Company contributions made on behalf of business
managers and others employed by the Bargaining Unit and serving on Company
property while on a leave of absence from the Company will be reimbursed by the
Bargaining Unit.
A Member may borrow from his or her account during his or her employment under
certain conditions. At December 31, 1997, the loan interest rate was 8.5%.
Withdrawals by Members from certain of their accounts during their employment
are permitted with certain penalties and restrictions. The penalties limit a
Member's contributions to the Plan for varying periods following a withdrawal.
Transfers to (from) the Plan generally represent net transfers between the Plan
and the Group Plan. The transfers arise as a result of members transferring
between bargaining unit and non-bargaining unit status while employed at FPL.
Basis of Accounting
The financial statements of the Plan are prepared under the accrual basis of
accounting. Investment income and interest income on loans to Members is
recognized when earned. Contributions by Members and Company contributions are
accrued on the basis of amounts withheld through payroll deductions.
Distributions to Members are recorded when paid.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, and changes therein,
and disclosure of contingent assets and liabilities. Actual results could
differ from those estimates.
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value, except insurance and financial
institution investment contracts which are stated at contract value (see
Investment Contracts below). Shares of registered investment companies are
valued at quoted market prices, which represent the net asset value of shares
held by the Plan at year end. The FPL Group Company stock is valued at its
quoted market price. Loans to participants are valued at cost, which
approximates fair value.
Purchases and sales of investment securities are recorded on the trade date.
Gains or losses on sales of investment securities are determined using the
carrying amount of the securities. The carrying amounts of securities held in
Member accounts are adjusted daily; securities held in the ESOP Account (see
Note 2) are adjusted annually. Unrealized appreciation or depreciation is
recorded to recognize changes in market value.
Investment Contracts
The Plan has entered into investment contracts with various insurance companies
and financial institutions. The contracts are fully benefit responsive and are
included in the financial statements at contract value (which represents
contributions made under the contract, plus earnings, less withdrawals and
administrative expenses). There are no reserves against contract values for
credit risk of the contract issuer or otherwise. The contract value of
investment contracts at December 31, 1997, which are held in the Conservative
Investment Strategy, Moderate Growth Investment Strategy, Long-Term Growth
Investment Strategy, and FPL Managed Income Portfolio was $2,515,000,
$5,325,000, $1,729,000 and $55,453,000, respectively. As of the same date, the
fair value of investment contracts in these funds was $2,538,000, $5,372,000,
$1,745,000 and $55,947,000, respectively. At December 31, 1996, the contract
value of investment contracts for these funds was $2,387,000, $3,859,000,
$1,211,000 and $48,523,000, respectively, with fair values of $2,401,000,
$3,882,000, $1,218,000 and $48,806,000, respectively. The average yield for
the portfolio of investment contracts was 6.67% and 6.68% for 1997 and 1996,
respectively. The crediting interest rate at December 31, 1997 and 1996 was
6.43% and 6.24%, respectively. The crediting interest rate is based on an
agreed-upon formula with the issuer, but cannot be less than zero.
2. Employee Stock Ownership Plan Account Allocation
The assets, liabilities and net income of the ESOP Account are not considered
plan assets but are for the joint benefit of the Plan and the Group Plan. The
ESOP Account is allocated for financial reporting purposes based on each plan's
relative net assets. The Plan's allocation of Common Stock held in the ESOP
Account (employer securities), Acquisition Indebtedness and interest payable
have been reflected in the Statements of Net Assets Available for Benefits, but
are not available for, or the obligation of, Plan Members. The employer
securities will be released from the ESOP Account and distributed to Members'
accounts in satisfaction of part or all of the Company's matching contribution
obligation under the Plan as the Acquisition Indebtedness is repaid (see
Note 3). ESOP shares allocated to date are classified as employer securities
held by the Plan on the Statements of Net Assets Available for Benefits. The
Acquisition Indebtedness will be repaid from dividends on the shares acquired
by the ESOP Account, as well as from cash contributions from FPL Group. The
net effect of a change in the allocation percentage from year to year is
reported as a transfer to or from the Plan. The value of the shares
distributed to Member accounts is not affected by these allocations.
Condensed financial statements of the ESOP Account are presented below,
indicating the allocations made to each plan. The effect of current year
Leveraged ESOP activity on net assets is included in transfers to (from) the
plan in the financial statements of each plan. Distributions of shares to the
plans are presented as noncash contributions in the financial statements of
each plan.
<TABLE>
<CAPTION>
Total ESOP The
Account Group Plan The Plan
------------ ------------ ------------
<S> <C> <C> <C>
Allocation percentage ............................................. 100% 68% 32%
Accrued interest .................................................. $ 2,537 $ 1,730 $ 807
Employer securities ............................................... 528,105,440 360,163,701 167,941,739
Total assets .................................................... 528,107,977 360,165,431 167,942,546
Interest payable .................................................. 1,100,561 750,574 349,987
Acquisition indebtedness .......................................... 340,731,013 232,375,835 108,355,178
Total liabilities ............................................... 341,831,574 233,126,409 108,705,165
Net assets at December 31, 1997 ................................... $186,276,403 $127,039,022 $ 59,237,381
Contributions received from employer .............................. $ 13,612,372
Interest income ................................................... 5,668
Dividends ......................................................... 17,393,116
Net appreciation in fair value of investments ..................... 117,994,417
Total income .................................................... 149,005,573
Interest expense .................................................. 33,114,393
Net income ........................................................ $115,891,180 $ 79,036,860 $ 36,854,320
Distribution of shares to plans ................................... (12,474,438) (8,509,995) (3,964,443)
Transfers to (from) the plan ...................................... - (445,574) 445,574
Effect of current year Leveraged ESOP activity on net assets ...... 103,416,742 70,081,291 33,335,451
Net assets at December 31, 1996 .................................. 82,859,661 56,957,731 25,901,930
Net assets at December 31, 1997 ................................... $186,276,403 $127,039,022 $ 59,237,381
</TABLE>
3. Acquisition Indebtedness
In December 1990, the Trust, which holds plan assets for both the Plan and the
Group Plan, borrowed $360 million from FPL Group Capital to purchase
approximately 12.4 million shares of Common Stock. The Acquisition Indebtedness
matures in 2019, bears interest at a fixed rate of 9.69% per year and is to be
repaid using dividends received on both Common Stock held by the ESOP Account
and ESOP shares distributed to Member accounts, along with cash contributions
from FPL Group. For those dividends on shares allocated to Member accounts
used to repay the loan, additional shares, equal in value to those dividends,
will be allocated to Member accounts. In 1997, dividends received from shares
held by the ESOP and shares distributed to Member accounts totaled
approximately $17,393,000 and $4,765,000, respectively. Cash contributed in
1997 by FPL Group for the debt service shortfall totaled approximately
$13,612,000.
The unallocated shares of Common Stock acquired with the proceeds of the
Acquisition Indebtedness are collateral for the Acquisition Indebtedness. As
principal payments are made, a percentage of Common Stock is released as
collateral and becomes available to satisfy matching contributions, as well as
to repay dividends on ESOP shares distributed to Member accounts for debt
service. During 1997, 367,653 shares of Common Stock were released as
collateral for the Acquisition Indebtedness. The scheduled principal
repayments of the Acquisition Indebtedness for the next five years and
thereafter are as follows: 1998 - $1,672,000; 1999 - $1,825,000; 2000 -
$1,873,000; 2001 - $3,883,000; 2002 - $4,452,000 and thereafter - $327,026,000.
See Note 2 for information on the Plan's allocation percentage of the
Acquisition Indebtedness.
4. Parties-In-Interest Transactions
Company contributions are primarily made in Common Stock released from the ESOP
Account or in cash which is used to purchase Common Stock by the Trustee. Such
amounts are reported as noncash contributions (from employer) and
contributions received from employer, respectively.
Dividend income earned by the Plan results from dividends on Common Stock.
Dividends on shares held in the ESOP Account were used to repay the Acquisition
Indebtedness (see Note 3). Certain dividends on shares held in Members'
accounts are reinvested in Common Stock for the benefit of its Members pursuant
to FPL Group's Dividend Reinvestment and Common Share Purchase Plan in which
the Trustee participates.
5. Statement of Net Assets Available for Benefits Information by Investment
Fund Option
Information about the Statements of Net Assets Available for Benefits by
investment fund option is as follows:
<TABLE>
<CAPTION>
December 31,
----------------------------
1997 1996
------------ ------------
<S> <C> <C>
Interest-bearing cash:
Fidelity Retirement Government Money Market Portfolio ........................... $ 3,392,253 $ 2,741,024
Value of interest in master trusts:
Conservative Investment Strategy ................................................ $ 4,534,809 $ 4,590,887
Moderate Growth Investment Strategy ............................................. 22,450,113 18,268,513
Long-term Growth Investment Strategy ............................................ 21,003,320 16,695,052
Short-term liquid investments maintained in FPL Group Company Stock Fund ........ 1,508,412 1,894,833
FPL Managed Income Portfolio .................................................... 55,452,659 50,941,222
$104,949,313 $ 92,390,507
Value of interest in registered investment companies:
Fidelity U.S. Bond Index Fund ................................................... $ 5,290,064 $ 5,198,187
Spartan U.S. Equity Index Fund .................................................. 63,480,060 40,489,976
T. Rowe Price Equity Income Fund ................................................ 4,151,308 -
Fidelity Magellan Fund .......................................................... 45,005,559 33,013,422
Fidelity OTC Portfolio .......................................................... 23,911,787 20,105,651
Brandywine Fund, Inc. .......................................................... 8,922,266 -
Fidelity Overseas Fund .......................................................... 11,212,001 10,053,280
Templeton Foreign Fund I ........................................................ 716,386 -
$162,689,431 $108,860,516
FPL Group Company Stock Fund ...................................................... $172,496,768 $158,156,716
Loan Fund ......................................................................... $ 20,486,666 $ 20,993,023
</TABLE>
6. Statement of Changes in Net Assets Available for Benefits Information by
Investment Fund Option
Information about the Statement of Changes in Net Assets Available for Benefits
by investment fund option is as follows:
<TABLE>
<CAPTION>
Fidelity
Retirement Moderate Long-term
Government Conservative Growth Growth
Money Mkt. Investment Investment Investment
Portfolio Strategy Strategy Strategy
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
INCOME
Contributions ........................................... $ 105,353 $ 141,469 $ 910,966 $ 1,199,720
Interest ................................................ 177,916 - - -
Net appreciation in fair value of investments in
master trusts........................................ - 534,290 2,897,310 3,267,750
Total income .......................................... 283,269 675,759 3,808,276 4,467,470
EXPENSES
Benefit payments to participants or beneficiaries ....... 153,388 496,932 705,573 878,366
Administrative expenses ................................. 1,577 621 1,451 1,441
Total expenses ........................................ 154,965 497,553 707,024 879,807
NET INCOME .............................................. 128,304 178,206 3,101,252 3,587,663
TRANSFERS
Net transfers to (from) the Plan ........................ (8,552) - (147,831) (164,038)
Net exchanges between investment funds .................. 528,438 (236,773) 1,147,635 680,080
Net participant loan activity ........................... 3,039 2,489 80,544 204,563
Total transfers ....................................... 522,925 (234,284) 1,080,348 720,605
NET ASSETS AT DECEMBER 31, 1996 ......................... 2,741,024 4,590,887 18,268,513 16,695,052
NET ASSETS AT DECEMBER 31, 1997 ......................... $3,392,253 $4,534,809 $22,450,113 $21,003,320
</TABLE>
<TABLE>
<CAPTION>
FPL Managed Fidelity Spartan T. Rowe Price
Income U.S. Bond U.S. Equity Equity
Portfolio Index Fund Index Fund Income Fund
----------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
INCOME
Contributions .......................................... $ 2,086,537 $ 313,628 $ 2,472,996 $ 31,352
Net appreciation in fair value of investments in
master trusts ........................................ 3,374,634 - - -
Net appreciation in fair value of investments in
registered investment companies ...................... - 476,300 14,415,952 163,231
Total income ....................................... 5,461,171 789,928 16,888,948 194,583
EXPENSES
Benefit payments to participants or beneficiaries ...... 4,216,059 261,073 2,164,613 -
Administrative expenses ................................ 4,012 6,164 21,858 -
Total expenses ..................................... 4,220,071 267,237 2,186,471 -
NET INCOME ............................................. 1,241,100 522,691 14,702,477 194,583
TRANSFERS
Net transfers to (from) the Plan ....................... 885,554 (15,628) (279,756) 3,549
Net exchanges between investment funds ................. 2,380,855 (487,922) 8,486,772 3,959,055
Net participant loan activity .......................... 3,928 72,736 80,591 (5,879)
Total transfers .................................... 3,270,337 (430,814) 8,287,607 3,956,725
NET ASSETS AT DECEMBER 31, 1996 ........................ 50,941,222 5,198,187 40,489,976 -
NET ASSETS AT DECEMBER 31, 1997 ........................ $55,452,659 $5,290,064 $63,480,060 $4,151,308
</TABLE>
<TABLE>
<CAPTION>
Fidelity Fidelity Fidelity
Magellan OTC Brandywine Overseas
Fund Portfolio Fund, Inc. Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCOME
Contributions .......................................... $ 2,369,733 $ 1,446,728 $ 103,435 $ 912,987
Net appreciation (depreciation) in fair value
of investments in registered investment companies ... 8,856,261 1,913,743 (959,950) 1,077,149
Total income (loss) ................................ 11,225,994 3,360,471 (856,515) 1,990,136
EXPENSES
Benefit payments to participants or beneficiaries ...... 2,045,082 717,240 92 305,372
Administrative expenses ................................ 8,206 630 - 446
Total expenses ..................................... 2,053,288 717,870 92 305,818
NET INCOME (LOSS) ...................................... 9,172,706 2,642,601 (856,607) 1,684,318
TRANSFERS
Net transfers to (from) the Plan ....................... (246,830) (196,047) - (147,662)
Net exchanges between investment funds ................. 2,784,729 1,128,418 9,773,933 (626,778)
Net participant loan activity .......................... 281,532 231,164 4,940 248,843
Total transfers .................................... 2,819,431 1,163,535 9,778,873 (525,597)
NET ASSETS AT DECEMBER 31, 1996 ........................ 33,013,422 20,105,651 - 10,053,280
NET ASSETS AT DECEMBER 31, 1997 ........................ $45,005,559 $23,911,787 $8,922,266 $11,212,001
</TABLE>
<TABLE>
<CAPTION>
FPL Group
Templeton Company Loan
Foreign Fund I Stock Fund Fund
-------------- ------------ -----------
<S> <C> <C> <C>
INCOME
Contributions .......................................... $ 7,981 $ 8,532,694 -
Interest and dividends ................................. - 5,303,230 $ 1,793,730
Net appreciation in fair value of investments in
employer securities .................................. - 39,531,224 -
Net depreciation in fair value of investments
in registered investment companies ................... (13,244) - -
Total income (loss) .................................. (5,263) 53,367,148 1,793,730
EXPENSES
Benefit payments to participants or beneficiaries ...... - 8,450,715 723,411
Administrative expenses ................................ - 6,866 -
Total expenses ....................................... - 8,457,581 723,411
NET INCOME (LOSS) ...................................... (5,263) 44,909,567 1,070,319
TRANSFERS
Net transfers to (from) the Plan ....................... - (931,430) -
Net exchanges between investment funds ................. 717,928 (30,236,370) -
Net participant loan activity .......................... 3,721 211,864 (1,576,676)
Total transfers ...................................... 721,649 (30,955,936) (1,576,676)
NET ASSETS AT DECEMBER 31, 1996 ........................ - 160,051,549 20,993,023
NET ASSETS AT DECEMBER 31, 1997 ........................ $716,386 $174,005,180 $20,486,666
</TABLE>
7. Income Taxes
In June 1996, FPL received from the Internal Revenue Service (IRS) a favorable
determination that the Plan, as amended and restated through January 1, 1995,
met the requirements of Section 401 of the Code. The Trust established under
the Plan will generally be exempt from federal income taxes under
Section 501(a) of the Code; Company contributions paid to the Trust under the
Plan will be allowable federal income tax deductions of the Company subject to
the conditions and limitations of Section 404 of the Code; and the Plan will
meet the requirements of Section 401(k) of the Code allowing Tax Saver
Contributions to be exempt from federal income tax at the time such
contributions are made, provided that in operation the Plan and Trust meet the
applicable provisions of the Code. In addition, FPL Group will be able to
claim an income tax deduction for dividends used to repay the Acquisition
Indebtedness and for dividends distributed directly to members.
Company contributions to the Plan on a Member's behalf, the Member's Tax Saver
Contributions, and the earnings thereon generally are not taxable to the Member
until such Company contributions, Tax Saver Contributions, and earnings from
investments are distributed or withdrawn. A loan from a Member's account
generally will not represent a taxable distribution if the loan is repaid in a
timely manner and does not exceed certain limitations.
8. Expenses
Certain fees such as annual account maintenance and investment management fees
are paid by Plan participants. Trustee's fees and expenses are paid by FPL
Group (which may charge each company under the Plan its allocated share) and,
therefore, are not reflected in the financial statements.
9. Master Trusts
A summary of participating interest in and financial statements for the Master
Trusts follow.
<TABLE>
<CAPTION>
Percent of
Interest in Master Trust
December 31,
------------------------
1997 1996
------- -------
<S> <C> <C>
FPL MANAGED INCOME PORTFOLIO
FPL Group Employee Thrift Plan
EIN 59-0247775
PN 002 ............................................................................... 73.5% 75.3%
Employee Thrift and Retirement Savings Plan for Bargaining Unit Employees of
Florida Power & Light Company
EIN 59-0247775
PN 003 ............................................................................... 26.5% 24.7%
CONSERVATIVE INVESTMENT STRATEGY
FPL Group Employee Thrift Plan
EIN 59-0247775
PN 002 ............................................................................... 78.8% 78.5%
Employee Thrift and Retirement Savings Plan for Bargaining Unit Employees of
Florida Power & Light Company
EIN 59-0247775
PN 003 ............................................................................... 21.2% 21.5%
MODERATE GROWTH INVESTMENT STRATEGY
FPL Group Employee Thrift Plan
EIN 59-0247775
PN 002 ............................................................................... 69.9% 72.8%
Employee Thrift and Retirement Savings Plan for Bargaining Unit Employees of
Florida Power & Light Company
EIN 59-0247775
PN 003 ............................................................................... 30.1% 27.2%
LONG-TERM GROWTH INVESTMENT STRATEGY
FPL Group Employee Thrift Plan
EIN 59-0247775
PN 002 ............................................................................... 72.2% 73.2%
Employee Thrift and Retirement Savings Plan for Bargaining Unit Employees of
Florida Power & Light Company
EIN 59-0247775
PN 003 ............................................................................... 27.8% 26.8%
</TABLE>
FPL MANAGED INCOME PORTFOLIO
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31,
----------------------------
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
General investments:
Value of unallocated insurance and financial institution contracts ............... $209,333,382 $205,997,972
Total assets ....................................................................... 209,333,382 205,997,972
LIABILITIES ........................................................................ - -
NET ASSETS AVAILABLE FOR BENEFITS .................................................. $209,333,382 $205,997,972
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
Year Ended
December 31,
1997
------------
<S> <C>
INCOME
Contributions received from participants .......................................................... $ 5,594,289
Earnings on investments:
Interest ........................................................................................ 13,246,947
Total income ...................................................................................... 18,841,236
EXPENSES
Benefit payments to participants or beneficiaries ................................................. 18,543,665
Account maintenance fees .......................................................................... 11,180
Total expenses .................................................................................... 18,554,845
NET INCOME ........................................................................................ 286,391
TRANSFERS
Transfers into fund ............................................................................... 3,822,002
Transfers out of fund ............................................................................. (772,983)
Net transfers ..................................................................................... 3,049,019
NET ASSETS AT DECEMBER 31, 1996 ................................................................... 205,997,972
NET ASSETS AT DECEMBER 31, 1997 ................................................................... $209,333,382
</TABLE>
CONSERVATIVE INVESTMENT STRATEGY
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31,
---------------------------
1997 1996
----------- ------------
<S> <C> <C>
ASSETS
Receivables:
Income ........................................................................... $ 94,080 $ 92,010
Other ........................................................................... 25,847 -
Total receivables ............................................................ 119,927 92,010
General investments:
Value of unallocated insurance and financial institution contracts ............... 11,853,200 11,130,733
Mutual funds ..................................................................... 9,388,949 10,114,440
Total general investments .................................................... 21,242,149 21,245,173
Total assets ....................................................................... 21,362,076 21,337,183
LIABILITIES ........................................................................ 176 10,000
NET ASSETS AVAILABLE FOR BENEFITS .................................................. $21,361,900 $21,327,183
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
Year Ended
December 31,
1997
------------
<S> <C>
INCOME
Contributions received from participants ............................................ $ 438,893
Earnings on investments:
Interest .......................................................................... 729,081
Dividends ......................................................................... 582,847
Net appreciation in fair value of investments ..................................... 1,198,859
Total income ........................................................................ 2,949,680
EXPENSES
Benefit payments to participants or beneficiaries ................................... 2,227,602
Account maintenance fees ............................................................ 1,313
Total expenses ...................................................................... 2,228,915
NET INCOME .......................................................................... 720,765
TRANSFERS
Transfers into fund ................................................................. 4,608,355
Transfers out of fund ............................................................... (5,294,403)
Net transfers ....................................................................... (686,048)
NET ASSETS AT DECEMBER 31, 1996 ..................................................... 21,327,183
NET ASSETS AT DECEMBER 31, 1997 ..................................................... $21,361,900
</TABLE>
MODERATE GROWTH INVESTMENT STRATEGY
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Receivables:
Income ........................................................................... $ 205,402 $ 189,105
Other ............................................................................ 686 289,362
Total receivables .............................................................. 206,088 478,467
General investments:
Value of unallocated insurance and financial institution contracts ............... 17,684,993 16,619,701
Mutual funds ..................................................................... 56,678,220 50,206,139
Total general investments .................................................... 74,363,213 66,825,840
Total assets ....................................................................... 74,569,301 67,304,307
LIABILITIES ........................................................................ 9,549 160,161
NET ASSETS AVAILABLE FOR BENEFITS .................................................. $74,559,752 $67,144,146
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
Year Ended
December 31,
1997
------------
<S> <C>
INCOME
Contributions received from participants ............................................ $ 2,874,440
Earnings on investments:
Interest .......................................................................... 1,078,866
Dividends ......................................................................... 3,090,215
Net appreciation in fair value of investments ..................................... 6,265,853
Total income ........................................................................ 13,309,374
EXPENSES
Benefit payments to participants or beneficiaries ................................... 2,652,618
Account maintenance fees ............................................................ 4,204
Total expenses ...................................................................... 2,656,822
NET INCOME .......................................................................... 10,652,552
TRANSFERS
Transfers into fund ................................................................. 12,159,118
Transfers out of fund ............................................................... (15,396,064)
Net transfers ....................................................................... (3,236,946)
NET ASSETS AT DECEMBER 31, 1996 ..................................................... 67,144,146
NET ASSETS AT DECEMBER 31, 1997 ..................................................... $ 74,559,752
</TABLE>
LONG-TERM GROWTH INVESTMENT STRATEGY
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Receivables:
Income ........................................................................... $ 93,471 $ 84,421
Other ............................................................................ 21,324 144,682
Total receivables .............................................................. 114,795 229,103
General investments:
Value of unallocated insurance and financial institution contracts ............... 6,214,020 5,841,951
Mutual funds ..................................................................... 69,328,846 56,400,940
Total general investments .................................................... 75,542,866 62,242,891
Total assets ....................................................................... 75,657,661 62,471,994
LIABILITIES ........................................................................ 192,276 159,707
NET ASSETS AVAILABLE FOR BENEFITS .................................................. $75,465,385 $62,312,287
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
Year Ended
December 31,
1997
------------
<S> <C>
INCOME
Contributions received from participants ............................................ $ 4,619,550
Earnings on investments:
Interest .......................................................................... 383,520
Dividends ......................................................................... 3,342,428
Net appreciation in fair value of investments ..................................... 8,454,382
Total income ........................................................................ 16,799,880
EXPENSES
Benefit payments to participants or beneficiaries ................................... 2,997,391
Account maintenance fees ............................................................ 4,861
Total expenses ...................................................................... 3,002,252
NET INCOME .......................................................................... 13,797,628
TRANSFERS
Transfers into fund ................................................................. 19,963,254
Transfers out of fund ............................................................... (20,607,784)
Net transfers ....................................................................... (644,530)
NET ASSETS AT DECEMBER 31, 1996 ..................................................... 62,312,287
NET ASSETS AT DECEMBER 31, 1997 ..................................................... $ 75,465,385
</TABLE>
ATTACHMENT: Schedule 1
FORM 5500: Line 27 (a)
FLORIDA POWER & LIGHT COMPANY
EIN 59-0247775
EMPLOYEE THRIFT AND RETIREMENT SAVINGS PLAN
FOR THE BARGAINING UNIT EMPLOYEES OF
FLORIDA POWER & LIGHT COMPANY
PLAN #003
PLAN YEAR: 1997
ASSETS HELD FOR INVESTMENT AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
Historic Current
Units Fund Name Price Cost Value
- -------------- ----------------------------------------------------- ------ ------------ -------------
<S> <C> <C> <C> <C>
3,392,253.130 Fidelity Retirement Government Money Market Portfolio $ 1.00 $ 3,392,253 $ 3,392,253
317,119.537 Conservative Investment Strategy $14.30 3,609,880 4,534,809
1,404,009.589 Moderate Growth Investment Strategy $15.99 16,530,397 22,450,113
1,221,123.244 Long-Term Growth Investment Strategy $17.20 15,328,252 21,003,320
55,452,658.700 FPL Managed Income Portfolio $ 1.00 55,452,659 55,452,659
490,274.695 Fidelity U.S. Bond Index Fund $10.79 5,197,585 5,290,064
1,814,753.002 Spartan U.S. Equity Index Fund $34.98 42,832,958 63,480,060
159,236.988 T. Rowe Price Equity Income Fund $26.07 4,265,737 4,151,308
472,400.117 Fidelity Magellan Fund $95.27 39,005,392 45,005,559
714,851.630 Fidelity OTC Portfolio $33.45 22,265,243 23,911,787
288,839.963 Brandywine Fund, Inc. $30.89 9,825,348 8,922,266
344,560.564 Fidelity Overseas Fund $32.54 10,622,220 11,212,001
71,998.599 Templeton Foreign Fund I $ 9.95 746,127 716,386
8,040,758.530 FPL Company Stock Fund $15.89 70,621,747 127,767,653
2,893,462.233 FPL Company Stock Fund - LESOP $15.98 29,466,499 46,237,527
2,837,452.824 Leveraged ESOP Employer Securities $59.19 82,286,132 167,941,739
Outstanding Loan Balances (7.5% to 9.75%; 20,486,666 20,486,666
maturing 1998-2002)
Total Assets Held for Investment $431,935,095 $631,956,170
</TABLE>
ATTACHMENT: Schedule 2
FORM 5500: Line 27 (d)
FLORIDA POWER & LIGHT COMPANY
EIN 59-0247775
EMPLOYEE THRIFT AND RETIREMENT SAVINGS PLAN
FOR THE BARGAINING UNIT EMPLOYEES OF
FLORIDA POWER & LIGHT COMPANY
PLAN #003
PLAN YEAR: 1997
TRANSACTIONS IN EXCESS OF FIVE PERCENT OF THE
CURRENT VALUE OF PLAN ASSETS FOR THE
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Transaction by Total Total Number of Number Realized
Fund or Carrier Purchases Sales Purchases of Sales Gain (Loss)
- ---------------------------- ----------- ----------- --------- -------- ------------
<S> <C> <C> <C> <C> <C>
FPL Managed Income Portfolio $60,520,418 $56,008,981 255 251 -
FPL Group Company Stock Fund $22,631,518 $46,659,755 253 253 $11,752,528
Fidelity Magellan Fund $22,469,723 $16,494,266 252 244 $ 1,534,554
Fidelity OTC Portfolio $25,107,459 $21,511,421 252 252 $ 1,028,223
Spartan U.S. Equity Index Fund $39,120,337 $29,198,834 253 252 $ 3,510,636
</TABLE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Employee Benefits Plan Administrative Committee has duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
DATE: June 26, 1998 Employee Thrift and Retirement Savings Plan
for Bargaining Unit Employees of
Florida Power & Light Company
(Name of Plan)
By: JAMES K. PETERSON
--------------------------
James K. Peterson
Director, Human Resources Centers of Expertise
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Post-Effective Amendment No. 2
to Registration Statement No. 33-33215 on Form S-8 and Registration Statement
No. 333-30695 on Form S-8 of our report dated June 26, 1998 on the financial
statements of the Employee Thrift and Retirement Savings Plan for Bargaining
Unit Employees of Florida Power & Light Company for the year ended December 31,
1997 appearing in this Annual Report on Form 11-K of FPL Group, Inc. for the
year ended December 31, 1997.
DELOITTE & TOUCHE LLP
Miami, Florida
June 26, 1998
