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, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-8841
FPL Energy Operating Services, Inc.
Employee Savings Plan
(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 FPL Energy Operating Services, Inc. Employee Savings Plan
(the "Plan") as of December 31, 1999 and 1998, and the related statement
of changes in net assets available for benefits for the year ended December
31, 1999. 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 audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. 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 audit provides 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, 1999 and 1998, and the changes in net assets available for benefits for
the year ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes as of December 31, 1999 is presented for the
purpose of additional analysis and is not a required part of the basic
financial statements, but is 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. This schedule is
the responsibility of the Plan's management. Such schedule has been
subjected to the auditing procedures applied in our audit of the basic 1999
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken
as a whole.
DELOITTE & TOUCHE LLP
Certified Public Accountants
Miami, Florida
June 26, 2000
FPL ENERGY OPERATING SERVICES, INC.
EMPLOYEE SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31,
1999 1998
<S> <C> <C>
ASSETS
Receivables:
Employer contributions ........................................................... $ 18,495 $ 17,107
Participant contributions ........................................................ 34,060 31,474
Total receivables .............................................................. 52,555 48,581
General investments, at fair value ................................................. 10,521,470 4,839,550
Employer securities, at fair value ................................................ 267,024 -
Total assets ....................................................................... 10,841,049 4,888,131
LIABILITIES
Other liabilities .................................................................. 526 9,792
Total liabilities .................................................................. 526 9,792
NET ASSETS AVAILABLE FOR BENEFITS .................................................. $10,840,523 $4,878,339
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
FPL ENERGY OPERATING SERVICES, INC.
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
Year Ended December 31, 1999
<S> <C> <C>
INCOME
Contributions:
Received from employer ........................................................... $ 742,814
Received from participants ....................................................... 1,471,642
Other contributions (including rollovers)......................................... 2,227,880
Total contributions ............................................................. $ 4,442,336
Earnings on investments:
Interest on participant loans..................................................... 41,141
Common stock dividends ........................................................... 2,206
Net appreciation (depreciation) in fair value of investments:
Employer securities ............................................................ (37,741)
Registered investment companies ................................................ 1,755,152
Total net appreciation in fair value of investments........................... 1,717,411
Total income ....................................................................... 6,203,094
EXPENSES
Benefit payments to participants or beneficiaries .................................. 224,154
Deemed distributions of participant loans .......................................... 16,756
Total expenses ................................................................... 240,910
NET INCOME ......................................................................... 5,962,184
NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1998 ............................. 4,878,339
NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1999 ............................. $10,840,523
</TABLE>
The accompanying Notes to Financial Statements are an integral part of these
statements.
FPL ENERGY OPERATING SERVICES, INC.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
For the year ended December 31, 1999
1. Description of the Plan and Significant Accounting Policies
The Plan
The following description of the FPL Energy Operating Services, Inc. Employee
Savings Plan (Plan) provides only general information. Participating
employees (Members) should refer to the Plan agreement for a more complete
description of the Plan. Fleet Bank of Connecticut (Trustee) administers the
trust (Trust) established under the 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 is voluntary. Effective February 1, 1999,
employees are eligible to participate in the Plan on the first day of the
month coincident with the completion of one full month of service with FPL
Energy Operating Services, Inc. or on the first day of any payroll period
thereafter. 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 1999 to a maximum of $10,000 per Member and may
be increased or decreased in future years for cost-of-living adjustments.
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 and Withdrawals
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 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.
Contributions are subject to certain limitations.
The Plan's investment options include fourteen funds; various mutual funds,
as well as common stock of FPL Group, Inc. (FPL Group). 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 with predecessor employers.
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 from one investment option
to another. At year end, the number of Members contributing to the Plan was
498. 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 or may be applied to administrative expenses.
A Member may borrow from his or her account a minimum of $1,000 up to a
maximum of $50,000 or 50% of the vested value of the member's account,
whichever is less. The loans are secured by the balance in the members'
account and bear interest at rates ranging from 7% to 11.75%, which are
commensurate with prevailing rates as determined annually by the Plan
administrator.
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.
Basis of Accounting
The financial statements of the Plan are prepared using 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 accounting
principles generally accepted in the United States of America 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. Shares of registered
investment companies are valued at market prices, which represent the
accumulated unit value of shares held by the Plan at year end. Common stock
of FPL Group 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. Unrealized appreciation or
depreciation is recorded to recognize changes in market value.
2. Parties-In-Interest Transactions
Effective July 1, 1999, Company matching contributions were made in shares of
FPL Group common stock purchased on the open market. Dividend income earned
by the Plan results from dividends on Common Stock.
3. Investments
Investments that represent five percent or more of the Plan's net assets
available for benefits are as follows:
December 31,
1999 1998
Aetna Money Market VP .................... $1,256,776 $579,335
Aetna Balanced VP ........................ 1,030,015 672,223
Aetna Growth and Income VP................ 1,125,034 597,839
Fidelity VIP Equity - Income ............. 912,952 503,169
Fidelity VIP Growth ...................... 1,618,504 658,399
Janus Aspen Series Worldwide Growth ...... 1,888,552 627,861
PPI MFS Emerging Equities ................ 577,822 262,570
Loans to participants .................... 650,355 285,724
4. Income Taxes
The Plan has not yet received a determination letter, but the Plan sponsor
believes that the Plan is qualified under Section 401(a) of the Code. The
Plan is based on a prototype plan which has been determined to be qualified
under code Section 401(a), and includes only minor variations from the terms
of the prototype plan. The Plan intends to file for a determination letter
in 2000. The Plan sponsor believes that 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.
Company contributions to the Plan on a Member's behalf, 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.
5. 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 Energy, LLP (which may charge FPL Energy Operating Services, Inc.) and,
therefore, are not reflected in the financial statements.
FORM 5500: Schedule H, 4i
FPL ENERGY OPERATING SERVICES, INC. EMPLOYEE SAVINGS PLAN
EIN 65-0471798
PLAN #001
PLAN YEAR: 1999
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT YEAR END
<TABLE>
<CAPTION>
Historic Current
Units/Shares Fund Name Price Cost Value
<S> <C> <C> <C> <C>
465,927.000 Aetna Fixed Account $ 1.00 $ 455,284 $ 465,927
96,151.087 Aetna Money Market VP $ 13.07 1,115,617 1,256,776
13,308.898 Aetna Bond VP $ 13.17 172,760 175,248
44,393.958 Aetna Balanced VP $ 23.20 933,134 1,030,015
40,504.377 Aetna Growth and Income VP $ 27.78 1,050,113 1,125,034
37,936.256 Fidelity VIP Equity-Income $ 24.07 933,952 912,952
44,987.938 Fidelity VIP Growth $ 35.98 1,324,862 1,618,504
6,193.394 Fidelity VIP Overseas $ 20.52 91,260 127,113
47,745.746 Janus Aspen Series Worldwide Growth $ 39.55 1,298,252 1,888,552
8,191.219 PPI T. Rowe Price Growth Equity $ 25.01 169,390 204,847
14,433.582 PPI MFS Research Growth $ 18.20 177,588 262,643
16,514.505 PPI MFS Emerging Equities $ 34.99 460,980 577,822
8,732.587 PPI Scudder International Growth $ 25.84 172,548 225,682
6,237.421 FPL Company Stock Fund* $ 42.81 292,972 267,024
Participant Loan Balances (7.00% to 11.75%;
maturing 2000-2004) 650,355 650,355
Total Assets Held for Investment Purposes $9,299,067 $10,788,494
*Party-in-interest
</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, 2000
FPL Energy Operating Services, Inc.
Employee Savings Plan
(Name of Plan)
By: JAMES K. PETERSON
--------------------------
James K. Peterson
Director, Human Resources Centers of Expertise
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Post-Effective Amendment
No. 1 to Registration Statement No. 333-79305 on Form S-8 of FPL Group,
Inc. of our report dated June 26, 2000, appearing in this Annual Report on
Form 11-K of FPL Energy Operating Services, Inc. Employee Savings Plan for
the year ended December 31, 1999.
DELOITTE & TOUCHE LLP
Miami, Florida
June 26, 2000
