UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission File No. 1-3545
FLORIDA POWER & LIGHT COMPANY
(Exact name of registrant as specified in its charter)
Florida 59-0247775
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 Universe Boulevard
Juno Beach, Florida 33408
Address of principal executive office)
(Zip Code)
(407) 694-3509
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: $2.00 No Par
Preferred Stock, Series A
Securities registered pursuant to Section 12(g) of the Act: Preferred
Stock, $100 Par Value
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ X ]
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of February 28, 1994 was zero.
As of February 28, 1994 there were issued and outstanding 1,000 shares of the
registrant's common stock, without par value,
all of which were held, beneficially and of record, by FPL Group, Inc.
DOCUMENTS INCORPORATED BY REFERENCE
None
DEFINITIONS
Acronyms and defined terms used in the text include the following:
Term Meaning
AFUDC Allowance for funds used during construction
capacity clause Capacity Cost Recovery Clause
charter Restated Articles of Incorporation, as amended
common stock Common Stock of FPL Group, Inc.
conservation clause Energy Conservation Cost Recovery Clause
DOE United States Department of Energy
EMF Electric and magnetic fields
Energy Act Energy Policy Act of 1992
EWG Exempt Wholesale Generator
FDEP Florida Department of Environmental Protection
FERC Federal Energy Regulatory Commission
FGT Florida Gas Transmission Company
FMPA Florida Municipal Power Agency
FPL Florida Power & Light Company
FPL Group FPL Group, Inc.
FPSC Florida Public Service Commission
fuel clause Fuel and Purchased Power Cost Recovery Clause
Holding Company Act Public Utility Holding Company Act of 1935,
as amended
JEA Jacksonville Electric Authority
kv Kilovolt
kva Kilovolt-ampere
kwh Kilowatt-hour
Management's Discussion Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations
mortgage FPL's Mortgage and Deed of Trust dated as of
January 1, 1944, as supplemented and amended
mw Megawatt(s)
Note Note ___ to Consolidated Financial Statements
NRC United States Nuclear Regulatory Commission
oil-backout clause Oil-Backout Cost Recovery Clause
qualifying facilities Non-utility power production facilities meeting
the requirements of a Qualifying Facility under
the Public Utility Regulatory Policies Act of
1978, as amended
ROE Return on equity
SJRPP St. Johns River Power Park
Southern Companies Alabama Power Company, Georgia Power Company,
Gulf Power Company, Mississippi Power Company
and Savannah Electric & Power Company
PART I
Item 1. Business
General. FPL supplies electric service throughout most of the east and lower
west coasts of Florida. This service territory contains 27,650 square miles
with a population of approximately 6.5 million. During 1993, FPL served
approximately 3.4 million customer accounts. Operating revenues amounted to
approximately $5.2 billion, of which about 56% was derived from residential
customers, 37% from commercial customers, 4% from industrial customers and
3% from other sources.
FPL was incorporated in 1925 under the laws of Florida. All of its common
stock is owned by FPL Group; all of its preferred stock is held by
non-affiliated persons.
Holding Company Act. FPL Group is a public utility holding company as
defined in the Holding Company Act, but is exempt from substantially all of the
provisions thereof on the basis that FPL Group's and FPL's businesses are
predominantly intrastate in character and carried on substantially in a single
state, in which both are incorporated.
Regulation. The retail operations of FPL represent approximately 98% of
operating revenues and are regulated by the FPSC, which has jurisdiction over
retail rates, service territory, issuances of securities, planning, siting and
construction of facilities and other matters. FPL is also subject to regulation
by the FERC in various respects, including the acquisition and disposition of
certain facilities, interchange and transmission services and wholesale
purchases and sales of electric energy.
FPL is subject to the jurisdiction of the NRC with respect to its nuclear power
plants. NRC regulations govern the granting of licenses for the construction
and operation of nuclear power plants and subject such power plants to
continuing review and regulation.
Federal, state and local environmental laws and regulations cover air and water
quality, land use, power plant and transmission line siting, electric and
magnetic fields from power lines and substations, noise and aesthetics, solid
waste and other environmental matters. Compliance with these laws and
regulations increases the cost of electric service by requiring, among other
things, changes in the design and operation of existing facilities and changes
or delays in the location, design, construction and operation of new facilities.
FPL estimates that capital expenditures for improvements needed to comply with
environmental laws and regulations will be approximately $10 million to $30
million annually for the years 1994 through 1998. These amounts are included
in FPL's projected capital expenditures set forth in Item 1. Capital
Expenditures.
FPL holds franchises with varying expiration dates to provide electric service
in various municipalities and seven counties in Florida. FPL considers its
franchises to be adequate for the conduct of its business.
Retail Ratemaking. The underlying concept of utility ratemaking is to set rates
at a level that allows the utility to collect total revenues (revenue
requirements) equal to its cost of providing service, including a reasonable
return on invested capital. To accomplish this, the FPSC uses various
ratemaking mechanisms.
The basic costs of providing electric service, other than fuel and certain other
costs, are recovered through base rates, which are designed to recover the costs
of constructing, operating and maintaining the utility system. These costs
include operations and maintenance expenses, depreciation and taxes, as well as
a rate of return on FPL's investment in assets used and useful in providing
electric service (rate base). The rate of return on rate base approximates
FPL's weighted cost of capital, which includes its costs for debt and preferred
stock and an allowed ROE. Base rates are determined in rate proceedings which
occur at irregular intervals at the initiative of FPL, the FPSC or a
substantially affected party.
Fuel costs are recovered through levelized monthly charges established pursuant
to the fuel clause. These charges, which are calculated semi-annually, are
based on estimated costs of fuel and estimated customer usage for the ensuing
six-month period, plus or minus a true-up adjustment to reflect the variance
of actual costs and usage from the estimates used in setting the fuel
adjustment charges for prior periods.
Capacity payments to other utilities and generators for purchased power are
recovered primarily through the capacity clause. Costs associated with
implementing energy conservation programs are recovered through rates
established pursuant to the conservation clause. Certain other non-fuel costs
and the accelerated recovery of the costs of certain projects that displace
oil-fired generation are recovered through the oil-backout clause.
Beginning in April 1994, costs of complying with new federal, state and local
environmental regulations will be recovered through the environmental
compliance cost recovery clause. In the past such costs would have been
recoverable through base rates.
The FPSC has the power to disallow recovery of costs which it considers
excessive or imprudently incurred. Such costs may include operations and
maintenance expenses, the cost of replacing power lost when fossil and nuclear
units are unavailable and costs associated with the construction or acquisition
of new facilities. Also, the FPSC does not provide any assurance that the
allowed ROE will be achieved.
System Capability and Load. FPL's resources for serving load as of January 1,
1994 consist of 16,708 mw of firm electric power generated by FPL-owned
facilities (see Item 2. Properties) and obtained through purchased power
contracts (see table below).
On August 4, 1993, FPL reached an all-time energy peak demand of
approximately 15,266 mw. At that time, FPL had total installed generating
capability of about 14,643 mw, 2,054 mw of firm purchased power and the
capability to reduce peak demand by 520 mw through the implementation of load
management, resulting in a reserve margin of approximately 13%.
Compound annual growth rates for the five years ending 1998 are projected to
be 2.7% for kwh sales and 2.6% for customers. To meet this growth, FPL plans
to add 1,090 mw of new plant capacity to its system by the summer of 1995 as
shown below. No new plant additions are expected for the years 1996 through
1998.
Capacity Additions 1994 1995 Total
(mw)
Scherer Unit No. 4 (Acquisition) . . . . . . . . 140 90 230
Martin Unit Nos. 3 and 4 (New Construction). . . 860 - 860
Total. . . . . . . . . . . . . . . . . . . . . . 1,000 90 1,090
In addition to the capacity additions listed above, FPL plans by 1998 to
increase purchased power from other utilities and qualifying facilities by
325 mw (see table below).
The total amount of purchased power available under existing long-term
contracts with other utilities and qualifying facilities through 1998 is
presented in the table below. See Note 10 - Contracts.
Southern Qualifying
Period Companies JEA Facilities Total
(mw)
January 1994 . . . . . . . . . . . . . . 1,406 374 285 2,065
February 1994 - May 1994 . . . . . . . . 1,406 374 535 2,315
June 1994 - December 1994. . . . . . . . 1,007 374 535 1,916
January 1995 - May 1995. . . . . . . . . 1,007 374 543 1,924
June 1995 - December 1995. . . . . . . . 913 374 543 1,830
January 1996 - March 1996. . . . . . . . 913 374 913 2,200
April 1996 - May 1996. . . . . . . . . . 913 374 955 2,242
June 1996 - December 1996. . . . . . . . 913 374 1,010 2,297
January 1997 - December 1998 . . . . . . 913 374 1,031 2,318
Capital Expenditures. FPL's capital expenditures, including AFUDC, totaled
approximately $1.1 billion in 1993, $1.3 billion in 1992 and $1.2 billion in
1991. Capital expenditures for the 1994-98 period are estimated as follows
(see Management's Discussion):
1994 1995 1996 1997 1998 Total
(Millions of Dollars)
Construction:
Generation . . . . . . . . . . . $230 $190 $160 $240 $130 $ 950
Transmission . . . . . . . . . . 120 150 180 130 90 670
Distribution . . . . . . . . . . 280 270 280 290 290 1,410
General and other. . . . . . . . 120 110 100 90 80 500
Total construction . . . . . . 750 720 720 750 590 3,530
Scherer acquisition payments . . . . . 129 82 - - - 211
Total. . . . . . . . . . . . . . . . . $879 $802 $720 $750 $590 $3,741
All of these estimates are subject to continuing review and adjustment and
actual capital expenditures may vary from estimates.
Nuclear Operations. FPL owns and operates four nuclear units, two at St.
Lucie and two at Turkey Point. The operating licenses for St. Lucie Units
Nos. 1 and 2 expire in 2016 and 2023, respectively. The operating licenses
for both Turkey Point units expire in 2007. The nuclear units are
periodically removed from service to accommodate normal refueling and
maintenance outages, repairs and certain other modifications.
Indications of degradation have been found in the pressurized water
circulation tubes of the St. Lucie Units Nos. 1 and 2 steam generators.
Despite implementation of remedial measures, degradation of the Unit No. 1
steam generators has continued and FPL has determined that they will need to
be replaced. FPL has ordered the replacement steam generators for Unit
No. 1, which are scheduled to be installed and in service by the end of 1998,
the cost of which is included in FPL's projected capital expenditures set
forth above. The degradation in the Unit No. 2 steam generators appears to
be primarily a mechanical-wear problem and should not affect their useful
life.
Fuel. FPL's generating plants are fueled by residual and distillate oil,
natural gas, coal and nuclear fuel. The diverse fuel options, along with
purchased power, enable FPL to shift between sources of generation to achieve
the most economical fuel mix. FPL's oil requirements are obtained under
short-term contracts and in the spot market.
FPL obtains most of its natural gas requirements under a take-or-pay
transportation contract with FGT, the sole interstate pipeline in Florida,
and a related take-or-pay natural gas supply contract with an affiliate of
FGT. These contracts will expire in 2005. In 1992, FPL entered into an
additional take-or-pay transportation contract with FGT and a related
take-or-pay natural gas supply contract with another affiliate of FGT. The
new contracts will begin on the in-service date of FGT's pipeline expansion,
which is scheduled for late 1994, and expire in 2014 and 2009, respectively.
These contracts will provide an additional firm supply of natural gas under
competitive pricing terms to meet FPL's future gas requirements. See
Note 10 - Contracts.
FPL has, through its joint ownership interest in SJRPP Units Nos. 1 and 2 and
Scherer Unit No. 4, long-term coal supply contracts for those units. The
remaining coal requirements will be obtained under additional contracts or in
the open market.
FPL leases nuclear fuel for all four of its nuclear units. See Note 5.
Under the Nuclear Waste Policy Act of 1982, the DOE is required to construct
permanent storage facilities and will take title to and provide
transportation and storage for spent nuclear fuel for a specified fee.
Although the DOE estimates that its storage facilities will be completed by
the year 2010, there is considerable doubt within the utility industry that
this schedule will be met. Currently, FPL is storing spent fuel on site and
plans to provide adequate storage capacity for all of its spent nuclear fuel
up to and beyond the year 2010, pending its removal by the DOE.
Competition. FPL faces increasing competition in the wholesale and industrial
energy markets. Recent changes in governmental regulation are encouraging
the growth of non-regulated energy suppliers, such as EWGs, and an increased
interest in self-generation, which has provided customers with alternative
sources to meet their electric needs. Competition exists particularly with
respect to self-generation by large industrial, commercial and governmental
energy users. See Item 1.
Business - General. Regulatory law and policy limit FPL's flexibility in
pricing its services to these customers. To date, loss of customers to such
alternatives has not materially reduced FPL's sales, revenues or net income.
The FERC has exercised its enhanced power under the Energy Act over wholesale
transmission to encourage competition. In 1993, FPL filed with the FERC a
comprehensive revision and expansion of its service offerings in the
wholesale market. FPL has proposed changes to its wholesale sales tariffs
for service to municipal and cooperatively-owned electric utilities, its
power sharing (interchange) agreements with other utilities and expanded its
transmission offerings for new services by switching from individually
negotiated contracts to three tariffs of general applicability. These
revised offerings are intended to meet wholesale customer needs in the new
competitive marketplace, while protecting the interests of FPL's customers
and shareholders by eliminating the potential for subsidies to competitors.
The FERC accepted FPL's proposal for filing and scheduled an August 1994
hearing on issues raised. FPL began collecting the proposed rates in late
February 1994 subject to refund based on the outcome of the hearing. A final
decision by the FERC in this case is not expected until sometime in 1995.
Also in 1993, the Florida Municipal Power Agency (FMPA) requested the FERC,
under the FERC's new authority under the Energy Act, to order FPL to provide
the FMPA members with network transmission service. FPL currently provides
point-to-point transmission service to the FMPA. Network transmission
service would permit the FMPA to vary the receipt and delivery points for
power without the prior agreement of FPL. In late 1993, the FERC ordered the
FMPA to provide FPL with certain updated information and for the parties to
negotiate for 60 days towards a network service agreement. Because no
agreement was reached, FPL and the FMPA filed their respective positions and
proposals for the FERC's consideration. An initial FERC decision on this
matter is expected in late 1994.
FPL is presently a defendant in two antitrust suits. In each suit, the
complaint includes an alleged inability to utilize FPL's transmission
facilities to wheel power to facilities in order to displace the existing
retail electric service from FPL. See Item 3. Legal Proceedings.
Electric and Magnetic Fields. In recent years, increasing public, scientific
and regulatory attention has been focused on possible adverse health effects
of EMF. These fields are created whenever electricity flows through a power
line or an appliance. Several epidemiological (i.e., statistical) studies
have suggested a linkage between EMF and certain types of cancer, primarily
childhood leukemia; other studies have been inconclusive or have shown no
such linkage. Neither these epidemiological studies nor clinical studies
have produced any conclusive evidence that EMF does or does not cause adverse
health effects.
The FDEP has promulgated regulations setting standards for EMF levels within
and at the edge of the rights of way for transmission lines, and FPL is in
compliance with these regulations. The FDEP reviewed its EMF standards in
1992 and confirmed the field limits previously established. Future changes
in the standards could require additional capital expenditures by FPL for
such things as increasing the right of way corridors or relocating or
reconfiguring transmission facilities. At present it is not known whether
any such expenditures will be required.
In addition, litigation seeking damages for diminution of property value or
personal injury is likely. FPL is presently a defendant in one suit alleging
personal injury and wrongful death.
Employees. FPL had approximately 12,000 employees at December 31, 1993.
Approximately 37% of the employees are represented by the International
Brotherhood of Electrical Workers whose collective bargaining agreement with
FPL expires October 31, 1994.
Item 2. Properties
General. FPL considers that its properties are well maintained and in good
operating condition. The electric generating, transmission, distribution and
general facilities represent approximately 48%, 12%, 33% and 7%,
respectively, of FPL's gross investment in electric utility plant in service.
Generating Facilities. As of December 31, 1993, FPL had the following
generating facilities:
Net Warm
No. of Weather
Facility Location Units Fuel Capability
(mw)
STEAM TURBINES (continuous capability)
Cape Canaveral Cocoa, FL 2 Oil/Gas 734
Cutler Miami, FL 2 Gas 207
Fort Myers Fort Myers, FL 2 Oil 504
Manatee Parrish, FL 2 Oil 1,566
Martin Indiantown, FL 2 Oil/Gas 1,566
Port Everglades Port Everglades, FL 4 Oil/Gas 1,142
Riviera Riviera Beach, FL 2 Oil/Gas 544
St. Johns River Power Park Jacksonville, FL 2 Coal 250(1)
St. Lucie Hutchinson Island, FL 2 Nuclear 1,553(2)
Sanford Lake Monroe, FL 3 Oil/Gas 861
Scherer Monroe County, GA 1 Coal 416(3)
Turkey Point Florida City, FL 2 Oil/Gas 754
2 Nuclear 1,332
COMBINED CYCLE (continuous capability)
Lauderdale Dania, FL 2 Gas/Oil 782
Putnam Palatka, FL 2 Gas/Oil 478
COMBUSTION TURBINES (peak capability)
Fort Myers Fort Myers, FL 12 Oil 626
Lauderdale Dania, FL 24 Oil/Gas 876
Port Everglades Port Everglades, FL 12 Oil/Gas 438
DIESEL UNITS (peak capability)
Turkey Point Florida City, FL 5 Oil 14
Total 14,643
(1) Represents FPL's 20% ownership of SJRPP Units Nos. 1 and 2, which are
jointly owned with the JEA.
(2) Excludes Orlando Utilities Commission's and FMPA's combined share of
approximately 15% of St. Lucie Unit No. 2.
(3) Represents FPL's 49% ownership of Scherer Unit No. 4, which is jointly
owned with the JEA and Georgia Power Company. FPL has contracted to
purchase an additional 27% undivided ownership interest in Scherer Unit
No. 4 in stages through 1995, including 17% (140 mw) in June 1994.
Transmission and Distribution. FPL owns and operates 451 substations with a
total capacity of 100,054,470 kva. Electric transmission and distribution
lines owned and in service as of December 31, 1993 are as follows:
Trench
Overhead Lines and Submarine
Nominal Voltage Pole Miles Cable Miles
500 kv . . . . . . . . . . . . . . . . . . . . 985(1) -
230 kv . . . . . . . . . . . . . . . . . . . . 2,176 31
138 kv . . . . . . . . . . . . . . . . . . . . 1,340 45
115 kv . . . . . . . . . . . . . . . . . . . . 631 -
69 kv . . . . . . . . . . . . . . . . . . . . 167 15
Less than 69 kv. . . . . . . . . . . . . . . . 38,499 17,351
Total. . . . . . . . . . . . . . . . . . . . . 43,798 17,442
(1) Includes approximately 80 miles owned jointly with the JEA.
Character of Ownership. Substantially all of FPL's properties are subject to
the lien of its mortgage, which secures debt securities issued by FPL. The
principal properties of FPL are held by it in fee and are free from other
encumbrances, subject to minor exceptions, none of which is of such a nature
as to substantially impair the usefulness to FPL of such properties. Some of
the electric lines are located on land not owned in fee but are covered by
necessary consents of governmental authorities or rights obtained from owners
of private property.
Item 3. Legal Proceedings
In October 1988, Union Carbide Corporation, the corporate predecessor of
Praxair, Inc. (Praxair), filed suit against FPL and Florida Power Corporation
(Florida Power) in the United States District Court for the Middle District
of Florida. Praxair requested that Florida Power sell power to its facility
located within FPL's service territory, and that FPL transport the power to
the facility. Florida Power and FPL denied the request as being
inconsistent with Florida law and public policy. The FPSC has issued a
declaratory statement that FPL's denial of Praxair's request was proper and
ordered FPL not to wheel power under such circumstances. The suit alleges
that through a territorial agreement, FPL and Florida Power have conspired to
eliminate competition for the sale of electric power to retail customers,
thereby unreasonably restraining trade and commerce in violation of federal
antitrust laws as contained in Section 1 of the Sherman Antitrust Act
(Sherman Act). The suit seeks an award of three times Praxair's alleged
damages in an unspecified amount based on alleged higher prices paid for
electricity and product sales lost by Praxair. Cross motions for summary
judgment were denied. Both parties are appealing the denials.
In November 1988, TEC Cogeneration, Inc., its affiliate Thermo Electron
Corporation, RRD Corp. and its affiliate Rolls Royce Inc. filed suit in the
United States District Court for the Southern District of Florida against FPL
and FPL Group on behalf of South Florida Cogeneration Associates (SFCA), a
joint venture which since 1986 has operated a cogeneration facility for
Metropolitan Dade County within FPL's service territory in Miami, Florida.
The suit alleges that the defendants have engaged in anti-competitive conduct
intended to prevent and defeat competition from cogenerators within FPL's
service territory, and from SFCA's Metropolitan Dade County facility in
particular. It alleges that the defendants' actions constitute
monopolization and attempts to monopolize in violation of Section 2 of the
Sherman Act; conspiracy in restraint of trade in violation of Section 1 of
the Sherman Act; unlawful discrimination in prices, services or facilities in
violation of Section 2 of the Clayton Act; and intentional interference with
SFCA's contractual relationship with Metropolitan Dade County in violation of
Florida law. The suit seeks damages in excess of $100 million, to be trebled
under the Sherman and Clayton Acts, as well as compensatory and punitive
damages under Florida law, and injunctive relief. FPL's motion for summary
judgment has been denied.
FPL believes that it has 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's financial statements.
Item 4. Submission of Matters to a Vote of Security Holders
None
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
All of FPL's common stock is owned by FPL Group. For information regarding
dividends paid to FPL Group, see Management's Discussion and Note 7.
Item 6. Selected Financial Data
Years Ended December 31,
1993 1992 1991 1990 1989
(Thousands of Dollars)
SELECTED FINANCIAL DATA:
Operating revenues $ 5,224,299 $ 5,100,463 $ 5,158,766 $4,987,690 $4,946,291
Net income available to FPL Group $ 425,297(1) $ 470,899 $ 376,261(1) $ 381,204 $ 393,103
Total assets $11,911,342 $11,348,626 $10,515,808 $9,820,551 $9,182,012
Long-term debt, excluding
current maturities $3,463,065 $ 3,404,404 $ 3,186,828 $3,109,360 $2,962,004
Obligations under capital leases,
excluding current maturities $ 271,498 $ 324,198 $ 279,657 $ 74,887 $ 84,609
Preferred stock with sinking
fund requirements, excluding
current maturities $ 97,000 $ 130,150 $ 150,150 $ 165,950 $ 164,250
SELECTED OPERATING STATISTICS:
Energy sales (millions of kwh) 72,455 69,290 68,712 66,763 66,018
Energy sales:
Residential 50.2% 49.3% 50.4% 50.2% 48.9%
Commercial 39.3 39.0 39.6 39.7 38.9
Industrial 5.4 5.9 5.9 6.1 6.4
Interchange power sales 2.6 2.4 1.6 1.6 2.1
Other (2) 2.5 3.4 2.5 2.4 3.7
Total 100.0% 100.0% 100.0% 100.0% 100.0%
Approximate 60-minute net
peak served (mw):
Summer season 15,266 14,661 14,123 13,754 13,425
Winter season(3) 12,964 13,112 11,868 13,988 12,876
Average number of customer accounts:
Residential 2,973,677 2,911,812 2,863,203 2,801,210 2,715,993
Commercial 358,377 350,271 343,837 337,134 327,279
Industrial 14,853 14,791 15,350 16,659 17,643
Other 3,261 4,376 4,079 3,820 3,531
Total 3,350,168 3,281,250 3,226,469 3,158,823 3,064,446
Average price per kwh sold (cents)(4) 7.10 7.25 7.39 7.37 7.39
(1) Reduced by after-tax effect of cost reduction program or
restructuring charge. See Note 2.
(2) Includes unbilled sales.
(3) The winter season generally represents November and December of
the prior year and January through March of the current year.
(4) Includes unbilled and deferred cost recovery clause revenues.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
For the three periods presented, net income benefitted from increased energy
sales, primarily from customer growth, and the effects of cost control
measures. Charges associated with a cost reduction program in 1993 and a
corporate restructuring in 1991 reduced net income in those years. In
addition, 1992 net income was adversely affected by Hurricane Andrew. In the
following discussion, all comparisons are with the corresponding items in the
prior year.
Operating Income - FPL's retail operations are regulated by the FPSC. Energy
sales to retail customers, which represent over 96% of total energy sales,
increased 4.0%, 0.1% and 3.3% in 1993, 1992 and 1991, respectively. Retail
customer growth for those years was 2.1%, 1.7% and 2.1%, respectively.
Revenues from base rates, which represented 61%, 57% and 56% of operating
revenues for 1993, 1992 and 1991, respectively, increased for the three years
presented due to higher energy sales. Revenues derived from cost recovery
clauses (including fuel) 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.
With increasing competition in the utility industry, FPL is continuing its
efforts to reduce its operating and capital costs and avoid filing for rate
increases, the traditional response to increased rate base and cost
pressures. In connection with these efforts, a major cost reduction program
was implemented during 1993, resulting in a $138 million pretax charge. The
charge consisted primarily of severance pay and employee retirement benefits
related to a workforce reduction of approximately 1,700 positions.
Approximately 45% of the charge relates to retirement benefits.
Substantially all of the balance represents severance costs, of which about
$60 million remains to be paid in 1994. In addition, substantial reductions
were reflected in FPL's 1994-98 capital expenditure forecast, including a
$210 million reduction from the previous capital expenditure forecast for
1994. The majority of the reductions in the 1994-97 period reflect a
decrease in transmission and distribution expenditures through more efficient
use of existing plant and more cost effective designs for new facilities. In
1991, FPL implemented a corporate restructuring that eliminated approximately
1,400 FPL positions and about 900 contractor positions. See Note 2.
Other operations and maintenance expenses reflect cost savings from the 1991
restructuring, partially offset by the effects of an increasing customer
base, changes in prices and operating activities, as well as the
implementation of two new accounting standards relating to postretirement and
postemployment benefits. See Note 4. As a result of FPL's recent cost
reduction measures, other operations and maintenance expense is expected to
decline in 1994, despite projected sales growth, additional generating units
in service and two additional nuclear refueling outages. Higher utility
plant balances, reflecting facilities added to meet customer growth, resulted
in increased depreciation expense. FPL filed new depreciation studies with
the FPSC in December 1993. Changes in depreciation rates, when adopted, will
be retroactive to January 1994 and, together with increases in utility plant,
will increase depreciation expense in 1994. In addition, FPL is scheduled to
file updated nuclear decommissioning studies with the FPSC in December 1994.
Changes, if any, in the accrual for nuclear decommissioning costs will be
effective January 1995. See Note 1.
Non-Operating Income and Deductions - AFUDC increased in 1993 and 1992 due to
higher construction activity in the generation area. In future periods AFUDC
is expected to decrease because the repowered Lauderdale units were placed in
service in the second quarter of 1993, the Martin units are scheduled to be
in service by June 1994 and no new generating capacity is under construction.
During the three year period, FPL has been refunding existing debt and
preferred stock with lower rate instruments. The reduction in interest due
to these refundings has been offset by the interest on new debt issued to
fund growth in electric plant. Premiums paid on the redemption of FPL debt
are amortized over the remaining life of the respective debt securities,
consistent with the ratemaking treatment. See Note 1.
LIQUIDITY AND CAPITAL RESOURCES
Capital Requirements and Resources - FPL's primary capital requirements
consist of expenditures under its construction program. Total capital
expenditures for the period 1994-98, including AFUDC, are expected to be $3.7
billion, including $879 million in 1994. Internally generated funds are
expected to fund an increasing percentage of capital expenditures. The
balance will be provided primarily through the issuance of long-term debt,
preferred stock and commercial paper. See Note 7.
Debt maturities and minimum sinking fund requirements will require cash
outflows of approximately $376 million through 1998, including $2 million in
1994. See Note 8. Bank lines of credit currently available to FPL aggregate
$800 million.
Financial Covenants - FPL's charter and mortgage contain provisions which,
under certain conditions, restrict the payment of dividends and other
distributions to FPL Group. Given FPL's current financial condition and
level of earnings, these restrictions do not currently limit FPL's ability to
pay dividends to FPL Group. FPL's charter limits the amount of unsecured
debt and FPL's mortgage limits the amount of secured debt FPL can issue. At
December 31, 1993, the charter and mortgage provisions would allow issuance
of approximately $1.3 billion of additional unsecured debt and $5.5 billion
of additional first mortgage bonds, respectively. The amount of additional
first mortgage bonds that are permitted to be issued will increase as the
amount of unfunded property additions increases. FPL's charter also
prohibits the issuance of preferred stock unless the preferred stock coverage
ratio, as prescribed, is at least 1.5; for the twelve months ended December
31, 1993 it was 2.24.
Item 8. Financial Statements and Supplementary Data
INDEPENDENT AUDITORS' REPORT
FLORIDA POWER & LIGHT COMPANY:
We have audited the consolidated financial statements of Florida Power &
Light Company and its subsidiaries, listed in the accompanying index as Item
14(a)1 of this Annual Report (Form 10-K) to the Securities and Exchange
Commission for the year ended December 31, 1993. Our audits also
comprehended the financial statement schedules of Florida Power & Light
Company and its subsidiaries, listed in the accompanying index as Item
14(a)2. These financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial statement schedules
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 consolidated financial statements present fairly, in all
material respects, the financial position of Florida Power & Light Company
and its subsidiaries at December 31, 1993 and 1992 and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1993 in conformity with generally accepted accounting
principles. Also, in our opinion, such financial statement schedules, when
considered in relation to the basic consolidated financial statements taken
as a whole, present fairly in all material respects the information shown
therein.
As discussed in Notes 3 and 4 to the consolidated financial statements,
Florida Power & Light Company and its subsidiaries changed their method of
accounting for income taxes and postretirement benefits other than pensions
effective January 1, 1993.
DELOITTE & TOUCHE
Certified Public Accountants
Miami, Florida
February 11, 1994
FLORIDA POWER & LIGHT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands of Dollars)
Years Ended December 31,
1993 1992 1991
OPERATING REVENUES $5,224,299 $5,100,463 $5,158,766
OPERATING EXPENSES:
Fuel, purchased power and interchange 1,758,298 1,829,908 1,932,637
Other operations and maintenance 1,251,284 1,203,474 1,276,244
Depreciation and amortization 586,543 542,129 507,101
Income taxes 243,022 264,974 182,889
Cost reduction program and restructuring charges 138,000 - 90,008
Taxes other than income taxes 523,724 495,587 483,731
Total operating expenses 4,500,871 4,336,072 4,472,610
OPERATING INCOME 723,428 764,391 686,156
OTHER INCOME (DEDUCTIONS):
Allowance for other funds used during construction 35,464 30,567 16,814
Income taxes 3,132 386 (475)
Other - net 2,247 8,041 8,944
Other income - net 40,843 38,994 25,283
INCOME BEFORE INTEREST CHARGES 764,271 803,385 711,439
INTEREST CHARGES:
Interest on first mortgage bonds and medium-term notes 286,244 281,873 275,914
Other interest 40,841 33,926 35,238
Allowance for borrowed funds used during construction (30,774) (27,214) (17,230)
Interest charges - net 296,311 288,585 293,922
NET INCOME 467,960 514,800 417,517
PREFERRED STOCK DIVIDEND REQUIREMENTS 42,663 43,901 41,256
NET INCOME AVAILABLE TO FPL GROUP, INC. $ 425,297 $ 470,899 $ 376,261
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
FLORIDA POWER & LIGHT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(Thousands of Dollars)
December 31,
1993 1992
ELECTRIC UTILITY PLANT:
At original cost $14,612,036 $13,256,988
Less accumulated depreciation 5,541,164 5,058,241
Net 9,070,872 8,198,747
Construction work in progress 781,435 1,158,688
Nuclear fuel under capital lease 226,124 277,803
Electric utility plant - net 10,078,431 9,635,238
INVESTMENTS:
Nuclear decommissioning reserve funds 325,238 270,506
Storm and property insurance reserve fund 53,536 48,292
Other 9,890 8,152
Total investments 388,664 326,950
CURRENT ASSETS:
Cash and cash equivalents 7,316 3,002
Receivables:
Customers, net of allowance for uncollectible
accounts of $13,612 and $14,558, respectively 439,473 403,914
Miscellaneous 53,255 93,069
Materials and supplies - at average cost 235,132 278,057
Fossil fuel stock - at average cost 78,337 85,063
Recoverable storm costs 44,945 72,500
Prepaid expenses 34,879 35,992
Other 11,653 20,725
Total current assets 904,990 992,322
DEFERRED DEBITS AND OTHER ASSETS:
Unamortized debt reacquisition costs 302,561 175,320
Deferred litigation items 110,859 110,859
Other 125,837 107,937
Total deferred debits and other assets 539,257 394,116
TOTAL ASSETS $11,911,342 $11,348,626
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
FLORIDA POWER & LIGHT COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
CAPITALIZATION AND LIABILITIES
(Thousands of Dollars)
December 31,
1993 1992
CAPITALIZATION:
Common shareholder's equity $ 3,979,425 $3,778,481
Preferred stock without sinking fund requirements 451,250 421,250
Preferred stock with sinking fund requirements 97,000 130,150
Long-term debt 3,463,065 3,404,404
Total capitalization 7,990,740 7,734,285
CURRENT LIABILITIES:
Commercial paper 349,600 -
Current maturities of long-term debt and preferred stock 1,500 160,546
Accounts payable - trade 204,874 288,510
Customers' deposits 215,492 214,985
Deferred clause revenues 130,786 175
Income and other taxes 105,425 89,655
Interest accrued 94,940 109,227
Tax collections payable 55,999 54,261
Purchased power and interchange 50,090 62,860
Other 229,247 159,262
Total current liabilities 1,437,953 1,139,481
DEFERRED CREDITS AND OTHER LIABILITIES:
Accumulated deferred income taxes 1,260,587 1,489,615
Deferred regulatory credit - income taxes 216,546 -
Unamortized investment tax credits 323,791 345,438
Capital lease obligations 271,498 324,198
Storm and property insurance reserve 81,769 72,122
Other deferred credits 179,340 173,834
Other liabilities 149,118 69,653
Total deferred credits and other liabilities 2,482,649 2,474,860
COMMITMENTS AND CONTINGENCIES
TOTAL CAPITALIZATION AND LIABILITIES $11,911,342 $11,348,626
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
FLORIDA POWER & LIGHT COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
Years Ended December 31,
1993 1992 1991
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 467,960 $ 514,800 $ 417,517
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 586,543 542,129 507,101
Increase (decrease) in deferred income taxes and
related regulatory credit (12,482) 84,491 (19,983)
(Increase) decrease in recoverable storm costs 12,184 (57,130) -
Deferrals under cost recovery clauses (1) 138,949 (102,977) 120,772
(Increase) decrease in fossil fuel stock 6,726 (2,593) 80,129
Increase (decrease) in accounts payable - trade (83,636) 16,785 41,090
Increase (decrease) in other current liabilities 69,985 (9,935) 53,695
Increase in other liabilities 79,465 48,079 357
Other (21,840) (2,800) (21,098)
Net cash provided by operating activities 1,243,854 1,030,849 1,179,580
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2) (1,077,590) (1,269,610) (1,186,678)
Other (15,727) (27,836) (20,506)
Net cash used in investing activities (1,093,317) (1,297,446) (1,207,184)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of first mortgage bonds
and other long-term debt 2,082,993 725,570 265,246
Issuance of preferred stock 190,000 125,000 -
Increase (decrease) in commercial paper 349,600 - (3,000)
Capital contributions from FPL Group, Inc. 255,000 335,000 260,000
Sale of nuclear fuel - - 235,972
Retirement of long-term debt and preferred stock (2,518,571) (487,552) (190,336)
Dividends to FPL Group, Inc. (472,617) (451,616) (396,994)
Dividends on preferred stock (42,663) (43,619) (41,394)
Other 10,035 (22,085) (15,726)
Net cash provided (used) by financing activities (146,223) 180,698 113,768
Net increase (decrease) in cash and cash equivalents 4,314 (85,899) 86,164
Cash and cash equivalents at beginning of year 3,002 88,901 2,737
Cash and cash equivalents at end of year $ 7,316 $ 3,002 $ 88,901
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest (net of amount capitalized) $ 310,598 $ 269,492 $ 283,483
Cash paid for income taxes $ 260,920 $ 197,752 $ 196,212
Supplemental Schedule of Noncash Investing and Financing Activities:
Additions to capital lease obligations $ 57,579 $ 152,833 $ 274,966
(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) Excludes allowance for other funds used during construction.
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
FLORIDA POWER & LIGHT COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1993, 1992 and 1991
1. Summary of Significant Accounting and Reporting Policies
Basis of Presentation - The consolidated financial statements include the
accounts of Florida Power & Light Company (FPL) and its subsidiaries. All
significant intercompany balances and transactions have been eliminated in
consolidation. FPL is a wholly-owned subsidiary of FPL Group, Inc. (FPL
Group). Certain amounts included in prior years' consolidated financial
statements have been reclassified to conform to the current year's
presentation.
Regulation - FPL's accounting practices are subject to regulation by the
Florida Public Service Commission (FPSC) and the Federal Energy Regulatory
Commission (FERC). As a result of such regulation, FPL follows the
accounting practices set forth in Statement of Financial Accounting Standard
(SFAS) No. 71, "Accounting for the Effects of Certain Types of Regulation."
Revenues and Rates - Retail and wholesale utility rate schedules are approved
by the FPSC and the FERC, respectively. FPL records the estimated amount of
base revenues for energy delivered to customers but not billed. Such
unbilled revenues are included in receivables - customers and amounted to
approximately $112 million and $120 million at December 31, 1993 and 1992,
respectively.
Revenues include amounts resulting from cost recovery clauses, which are
designed to permit full recovery of certain costs and provide a return on
certain assets utilized by these programs, and franchise fees. Such revenues
represent a pass-through of costs and include substantially all fuel,
purchased power and interchange expenses, conservation-related expenses,
revenue taxes and franchise fees. Revenues from cost recovery clauses are
recorded when billed; FPL achieves matching of costs and related revenues by
deferring the net under or over recovery.
Electric Utility Plant, Depreciation and Amortization - The cost of additions
to units of utility property is added to electric utility plant. The cost of
units of property retired, less net salvage, is charged to accumulated
depreciation. Maintenance and repairs of property as well as replacements
and renewals of items determined to be less than units of property are
charged to other operations and maintenance expense.
Depreciation of utility property is provided primarily on a straight-line
average remaining life basis. Depreciation studies are performed at least
every four years for substantially all utility property. The weighted annual
composite depreciation rate was approximately 3.9%, 3.5% and 3.8% for the
years 1993, 1992 and 1991, respectively. These rates exclude decommissioning
expense and certain accelerated depreciation under cost recovery clauses.
All depreciation methods and rates are approved by the FPSC.
Nuclear fuel costs, including a charge for spent nuclear fuel disposal, is
accrued in fuel expense on a unit of production method.
Substantially all electric utility plant is subject to the lien of the
Mortgage and Deed of Trust, as supplemented, securing FPL's first mortgage
bonds.
Allowance for Funds Used During Construction (AFUDC) - FPL recognizes AFUDC
as a noncash item which represents the allowed cost of capital used to
finance a portion of its construction work in progress. AFUDC is capitalized
as an additional cost of utility plant and is recorded as an addition to
income. The capitalization rate used in computing AFUDC was 8.67% from
January 1993 through June 1993, 8.26% from July 1993 through December 1993,
8.61% in 1992 and 8.46% in 1991.
Nuclear Decommissioning - FPL accrues nuclear decommissioning costs over the
expected service life of each plant. Nuclear decommissioning studies are
performed at least every five years for FPL's four nuclear units. A
provision for nuclear decommissioning of $38 million for each of the years
1993, 1992 and 1991 is included in depreciation expense. The accumulated
provision for nuclear decommissioning totaled $445 million and $390 million
at December 31, 1993 and 1992, respectively, and is included in accumulated
depreciation.
Amounts equal to decommissioning expense are deposited in either qualified
funds on a pretax basis or in a non-qualified fund on a net of tax basis.
Fund earnings, net of taxes, are reinvested in the funds. Both fund earnings
and the charge resulting from reinvestment of the earnings are included in
other income (deductions). The related income tax effects are included in
deferred taxes. The decommissioning reserve funds may be used only for the
payment of the cost of decommissioning FPL's nuclear units. Securities held
in the funds consist primarily of tax-exempt obligations and are carried at
cost. See Note 9.
The most recent decommissioning studies assume prompt dismantlement for the
Turkey Point nuclear units commencing in the year 2005 and for St. Lucie Unit
No. 2 commencing in 2021. St. Lucie Unit No. 1 will be mothballed in 2016
until St. Lucie Unit No. 2 is ready for dismantlement. FPL's portion of the
cost of decommissioning these units, including dismantlement and reclamation,
expressed in 1993 dollars, is currently estimated to aggregate $935 million.
Storm and Property Insurance Reserve Fund - The storm and property insurance
reserve fund provides coverage toward storm damage costs and possible
retrospective premium assessments stemming from a nuclear incident under the
various insurance programs covering FPL's nuclear generating plants. The
storm and property insurance reserve represents amounts accumulated to date
net of expenditures for storm damages. The related income tax effects are
included in accumulated deferred income taxes. Securities held in the fund
consist primarily of tax-exempt obligations and are carried at cost. In
1992, $21 million of the storm fund was used for storm damage costs
associated with Hurricane Andrew. See Note 9.
Cash Equivalents - Cash equivalents consist of short-term, highly liquid
investments with original maturities of three months or less. The carrying
amount of these investments approximates their market value.
Retirement of Long-Term Debt - The excess of reacquisition cost over the book
value of long-term debt is deferred and amortized to expense ratably over the
remaining life of the original issue, which is consistent with its treatment
in the ratemaking process.
Rate Matters - Deferred litigation items at December 31, 1993 and 1992,
represent costs approved by the FPSC for recovery over five years commencing
with the effective date of new base rates to be established in the next
general rate proceeding.
Income Taxes - Deferred income taxes are provided on all significant temporary
differences between the financial statement and tax bases of assets and
liabilities. Investment tax credits are used to reduce current federal income
taxes and are deferred and amortized to income over the approximate lives of
the related property. FPL is included in the consolidated federal income tax
return filed by FPL Group. FPL determines its income tax provision on the
"separate return method." See Note 3.
2. Cost Reduction Program and Restructuring Charge
In 1993, FPL implemented a major cost reduction program, which resulted in a
$138 million charge and reduced net income by approximately $85 million. The
program consisted primarily of a Voluntary Retirement Plan (VRP) and a
Special Severance Plan (SSP). The VRP was offered to all employees who were
at least 54 years of age and had at least 10 years of service. The plan,
among other things, added five years to age and service for the determination
of plan benefits to be received by eligible employees. Approximately 700
employees, or 75% of those eligible, elected to retire under this program.
The impact on pension cost resulting from the two programs as determined
under the provisions of SFAS No. 88, "Employers' Accounting for Settlements
and Curtailments of Defined Benefit Pension Plans and for Termination
Benefits," was approximately $34 million. The impact on postretirement
benefits as determined under SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" was approximately $29 million.
These amounts are included as part of the total charge of $138 million. See
Note 4.
In 1991, FPL recorded a $90 million restructuring charge in connection with
a company-wide restructuring which reduced net income by $56 million. The
charge included severance pay for departing employees, as well as relocation
and facility modification expenditures.
3. Income Taxes
In 1993, FPL adopted SFAS No. 109, "Accounting for Income Taxes," which
requires the use of the liability method in accounting for income taxes.
Under the liability method, the tax effect of temporary differences between
the financial statement and tax bases of assets and liabilities are reported
as deferred taxes measured at current tax rates. The principal effect of
adopting SFAS No. 109 was the reclassification of the revenue equivalent of
deferred taxes in excess of the amount required to be reported as a liability
under SFAS No. 109 from accumulated deferred income taxes to a newly-
established deferred regulatory credit - income taxes. This amount will be
amortized over the estimated lives of the assets or liabilities which
resulted in the initial recognition of the deferred tax amount. Adoption of
this standard had no effect on results of operations. The net result of
amortizing the deferred regulatory credit and the related deferred taxes
established under SFAS No. 109 is to yield comparable amounts to those
included in the tax provision under accounting rules applicable to prior
periods.
The components of income taxes are as follows:
Years Ended December 31,
1993 1992 1991
(Thousands of Dollars)
Federal:
Charged to operating expenses:
Current. . . . . . . . . . . . . . . . . $ 238,208 $ 171,571 $ 186,134
Deferred:
Loss on reacquired debt. . . . . . . . 41,606 7,401 691
Cost reduction program/restructuring . (28,995) 191 (7,909)
Depreciation and related items . . . . 13,598 37,749 67,285
Cost recovery clauses. . . . . . . . . (45,873) 33,334 (39,045)
Nuclear decommissioning reserve. . . . (2,016) (1,959) (12,459)
Other. . . . . . . . . . . . . . . . . 9,109 (3,481) (8,639)
Deferred investment tax credits. . . . . (503) (2,817) (634)
Amortization of investment tax credits . (21,143) (20,082) (37,280)
Total. . . . . . . . . . . . . . . . 203,991 221,907 148,144
Charged to other income:
Current. . . . . . . . . . . . . . . . . (311) 1,369 (516)
Deferred:
Amortization of tax settlement interest. . . . 3,229 3,156 3,251
Other. . . . . . . . . . . . . . . . . (6,189) (5,364) (2,960)
Total federal. . . . . . . . . . . . 200,720 221,068 147,919
State:
Charged to operating expenses:
Current. . . . . . . . . . . . . . . . . 41,780 29,224 33,642
Deferred:
Loss on reacquired debt. . . . . . . . 6,992 1,358 209
Cost reduction program/restructuring . (4,810) 33 (1,354)
Depreciation and related items . . . . 2,207 8,110 12,249
Cost recovery clauses. . . . . . . . . (7,645) 5,706 (6,684)
Other. . . . . . . . . . . . . . . . . 507 (1,364) (3,317)
Total. . . . . . . . . . . . . . . . 39,031 43,067 34,745
Charged to other income:
Current. . . . . . . . . . . . . . . . . 616 832 585
Deferred:
Amortization of tax settlement interest. . . . 553 540 556
Other. . . . . . . . . . . . . . . . . (1,030) (919) (441)
Total state. . . . . . . . . . . . . 39,170 43,520 35,445
Total income taxes . . . . . . . . . . . . . . . $239,890 $264,588 $183,364
A reconciliation between income tax expense and the expected income tax
expense at the applicable statutory rates is as follows:
Years Ended December 31,
1993 1992 1991
(Thousands of Dollars)
Computed at statutory federal income tax rate. . . . . . . . . . . $247,747 $264,992 $204,300
Increases (reductions) resulting from:
State income taxes - net of federal income tax benefit . . . 25,461 28,723 23,394
Amortization of investment tax credits . . . . . . . . . . . (21,143) (20,082) (37,280)
Allowance for other funds used during construction . . . . . (14,177) (11,801) (6,700)
Other - net. . . . . . . . . . . . . . . . . . . . . . . . . 2,002 2,756 (350)
Total income taxes . . . . . . . . . . . . . . . . . . . . . . . . $239,890 $264,588 $183,364
The income tax effects of temporary differences giving rise to FPL's deferred
income tax assets and liabilities after adoption of SFAS No. 109 are as
follows:
December 31, 1993 January 1, 1993
(Thousands of Dollars)
Deferred tax liabilities:
Property related . . . . . . . . . . . . . $1,634,808 $1,609,900
Unamortized debt reacquisition costs . . . 116,556 65,900
Other. . . . . . . . . . . . . . . . . . . 29,674 8,500
Total deferred tax liabilities. . . . . . 1,781,038 1,684,300
Deferred tax assets:
Unamortized investment tax credits . . . . 124,913 130,000
Deferred regulatory credit - income taxes. 83,524 110,100
Storm and decommissioning reserves . . . . 133,754 119,100
Other. . . . . . . . . . . . . . . . . . . 178,260 128,100
Total deferred tax assets . . . . . . . . 520,451 487,300
Accumulated deferred income taxes. . . . . . . . $1,260,587 $1,197,000
4. Employee Retirement Benefits
Pension Benefits - Substantially all employees of FPL are covered by FPL
Group's noncontributory defined benefit pension plan. Plan benefits are
generally based on employees' years of service and compensation during the
last years of employment. Participants are vested after five years of
service. Plan assets consist primarily of bonds, common stocks and short-
term investments. Any pension cost recognized by FPL Group is allocated to
FPL on a pro rata basis.
For 1993, 1992 and 1991 the components of pension cost which were allocated
to FPL, a portion of which has been capitalized, are as follows:
Years Ended December 31,
1993 1992 1991
(Thousands of Dollars)
Benefits earned during the year. . . . . . . . . . . . . . . . . . $ 35,672 $ 39,076 $ 36,268
Interest cost on projected benefit obligation. . . . . . . . . . . 77,854 61,974 59,971
Actual return on plan assets . . . . . . . . . . . . . . . . . . . (233,732) (75,823) (249,773)
Net amortization and deferral. . . . . . . . . . . . . . . . . . . 105,614 (30,448) 147,812
Negative pension cost. . . . . . . . . . . . . . . . . . . . . . . (14,592) (5,221) (5,722)
Effect of cost reduction program (see Note 2). . . . . . . . . . . 34,463 - -
Regulatory adjustment. . . . . . . . . . . . . . . . . . . . . . . - 5,221 5,722
Pension cost recognized in the Consolidated Statements of Income . $ 19,871 $ - $ -
Prior to 1993, an adjustment was made to reflect in the results of operations
the pension cost calculated under the actuarial cost method used for
ratemaking purposes. In 1993, FPL adopted consistent pension measurements
for ratemaking and financial reporting. The accumulated regulatory
adjustment is being amortized to income over five years. At December 31,
1993 and 1992, the cumulative amounts of these regulatory adjustments
included in other deferred credits were approximately $16 million and $20
million, respectively.
During 1992, the method used for valuing plan assets in the calculation of
pension cost was changed from fair value to a calculated market-related
value. The new method was adopted to reduce the volatility in annual pension
expense that results from short-term fluctuations in the securities markets.
The cumulative effect of the change was to reduce prepaid pension cost and
the related accumulated regulatory adjustment by approximately $37 million,
with no effect on earnings.
During 1993, the effect of a prior plan amendment that changed the manner in
which benefits accrue was recognized and included as part of prior service
cost to be amortized over the remaining service life of the employees.
FPL funds the pension cost calculated under the entry age normal level
percentage of pay actuarial cost method, provided that this amount satisfies
the Employee Retirement Income Security Act minimum funding standards and is
not greater than the maximum tax deductible amount for the year. No
contributions to the plan were required for 1993, 1992 or 1991.
In 1993, the FPL pension plan and the FPL Group pension plan were combined.
Accordingly, the 1992 amounts have been restated to present the position of
the combined plans. Any pension cost recognized by FPL Group has been
allocated to FPL on a pro rata basis. At December 31, 1993, the portion of
prepaid pension cost recognized in FPL's statement of position was a
liability of approximately $.3 million. A reconciliation of the funded
status of the combined FPL Group Plan is presented below:
December 31,
1993 1992
(Thousands of Dollars)
Fair market value of plan assets . . . . . . . . . . . . . . . . . . . . . $1,662,051 $1,549,294
Actuarial present value of benefits for services rendered to date:
Accumulated benefits based on salaries to date,
including vested benefits of $689.2 million and
$870.6 million for 1993 and 1992, respectively . . . . . . . . . . 740,959 883,487
Additional benefits based on estimated future salary levels. . . . . 325,582 235,908
Projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . 1,066,541 1,119,395
Plan assets in excess of projected benefit obligation. . . . . . . . . . . 595,510 429,899
Prior service cost not recognized in net periodic pension cost . . . . . . 212,908 79,584
Unrecognized net asset at January 1, 1986, being amortized
primarily over 19 years - net of accumulated amortization. . . . . . (256,914) (280,270)
Unrecognized net gain. . . . . . . . . . . . . . . . . . . . . . . . . . . (548,741) (206,755)(1)
Prepaid pension cost . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,763 $ 22,458
(1) Includes $37 million effect of changing to calculated market-related
method of valuing plan assets.
As of December 31, 1993 and 1992, the weighted-average discount rate used in
determining the actuarial present value of the projected benefit obligation
was 7.0% and 6.0%, respectively. The assumed rate of increase in future
compensation levels at those respective dates was 5.5% and 6.0%. The
expected long-term rate of return on plan assets used in determining pension
cost was 7.75% for 1993 and 7.0% for 1992 and 1991.
Other Postretirement Benefits - Substantially all employees of FPL are covered
by FPL Group's defined benefit postretirement plans for health care and life
insurance benefits. Eligibility for health care benefits is based upon age
plus years of service at retirement. The plans are contributory, and contain
cost-sharing features such as deductibles and coinsurance. FPL Group has
capped company contributions for postretirement health care at a defined
level which, depending on actual claims experience, may be reached by the
year 2000. Generally, life insurance benefits for retirees are capped at
$50,000. FPL Group's policy is to fund postretirement benefits in amounts
determined at the discretion of management. Benefit payments in 1993 and
1992 totaled $13 million and $12 million, respectively, and were paid out of
existing plan assets.
In 1993, FPL adopted SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other than Pensions." For the year ended December 31, 1993, the
components of net periodic postretirement benefit cost allocated to FPL, a
portion of which has been capitalized, are as follows:
Year Ended
December 31, 1993
(Thousands of Dollars)
Service cost . . . . . . . . . . . . . . . . . . . . . $ 5,094
Interest cost. . . . . . . . . . . . . . . . . . . . . 14,303
Return on plan assets. . . . . . . . . . . . . . . . . (7,935)
Amortization of transition obligation . . . . . . . . 4,017
Net periodic postretirement benefit cost . . . . . . . 15,479
Effect of cost reduction program (see Note 2). . . . . 29,008
Postretirement benefit cost recognized in the
Consolidated Statement of Income . . . . . . . . . . $44,487
A reconciliation of the funded status of the combined FPL Group Plan is
presented below. The portion of accrued postretirement benefit cost
recognized in the statement of position of FPL is approximately $44 million.
December 31, 1993
(Thousands of Dollars)
Plan assets at fair value, primarily listed stocks and bonds . . . . $109,372
Accumulated postretirement benefit obligation:
Retirees . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,788
Fully eligible active plan participants. . . . . . . . . . . . 68,823
Other active plan participants . . . . . . . . . . . . . . . . 177,419
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . 253,030
Accumulated postretirement benefit obligation
in excess of plan assets . . . . . . . . . . . . . . . . . . . (143,658)
Unrecognized net transition obligation (amortized over 20 years) . . 66,217
Unrecognized net loss. . . . . . . . . . . . . . . . . . . . . . . . 32,633
Accrued postretirement benefit cost. . . . . . . . . . . . . . . . . $44,808
The weighted-average annual assumed rate of increase in the per capita cost
of covered benefits (i.e., health care cost trend rate) for 1993 is 10.5% for
retirees under age 65 and 6.5% for retirees over age 65. These rates are
assumed to decrease gradually to 6.0% by the year 2000, which is when it is
anticipated that benefit costs will reach the defined level at which FPL
Group's contributions will be capped. The cap on FPL Group's contributions
mitigates the potential significant increase
in costs resulting from an increase in the health care cost trend rate.
Increasing the assumed health care cost trend rate by one percentage point
would increase the plan's accumulated postretirement benefit obligation as of
December 31, 1993 by $8 million, and the aggregate of the service and
interest cost components of net periodic postretirement benefit cost of the
plan for 1993 by approximately $1 million.
The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.0% at December 31, 1993. The
expected long-term rate of return on plan assets was 7.75% at December 31,
1993.
Postemployment Benefits - In 1993, FPL adopted SFAS No. 112, "Employers'
Accounting for Postemployment Benefits," which requires a change from
recognizing expenses when paid to recording the benefits as the liability is
incurred. Implementation of this pronouncement did not have a material
effect on FPL's results of operations.
5. Leases
In 1991, FPL expanded its nuclear fuel lease program to include all four of
its nuclear units. In connection with this expansion, FPL sold to a
non-affiliated lessor and leased back approximately $220 million of nuclear
fuel held in reactors of these units, as well as nuclear fuel in various
stages of enrichment. The fuel was sold at book value. Nuclear fuel
payments, which are based on energy production and are charged to fuel
expense, were $122 million, $120 million and $81 million for the years ended
December 31, 1993, 1992 and 1991, respectively. Included in these payments
was an interest component of $11 million, $13 million and $9 million in 1993,
1992 and 1991, respectively. Under certain circumstances of lease
termination, FPL is required to purchase all nuclear fuel in whatever form at
a purchase price designed to allow the lessor to recover its net investment
cost in the fuel, which totaled $226 million at December 31, 1993. For
ratemaking purposes, the leases encompassed within this lease arrangement are
classified as operating leases. For financial reporting purposes, the
capital lease obligation is recorded at the amount due in the event of lease
termination.
In 1992, FPL entered into a noncancellable capital lease arrangement for an
office building whose net book value at December 31, 1993 and 1992 was
approximately $46 million and $48 million, respectively. The present value
of future minimum lease payments at December 31, 1993 totaled $49 million.
Future minimum annual lease payments under this lease arrangement, which
expires in 2016, are estimated to be $4 million.
Excluding these leases, the amount of assets and capitalized lease
obligations for other capital leases is not material.
FPL leases automotive, computer, office and other equipment through rental
agreements with various terms and expiration dates. Rental expense totaled
$31 million, $53 million and $50 million for 1993, 1992 and 1991,
respectively. Minimum annual rental commitments for noncancellable operating
leases are $21 million for 1994, $18 million for 1995, $12 million for 1996,
$6 million for 1997, $5 million for 1998 and $13 million thereafter.
6. Jointly-Owned Facilities
FPL owns approximately 85% of the St. Lucie Nuclear Unit No. 2, 20% of the
St. Johns River Power Park (SJRPP) units and coal terminal and a 49%
undivided interest in Scherer Unit No. 4. FPL expects to purchase an
additional 27% undivided ownership interest in Scherer Unit No. 4 in two
stages through 1995. At December 31, 1993, FPL's investment in St. Lucie
Unit No. 2 was $768 million, net of accumulated depreciation of $397 million;
the investment in the SJRPP units and coal terminal was $221 million, net of
accumulated depreciation of $110 million; the investment in Scherer Unit No.
4 was $296 million, net of accumulated depreciation of $54 million.
FPL is responsible for its share of the operating costs, as well as providing
its own financing. At December 31, 1993, there was no significant balance of
construction work in progress on these facilities.
7. Common Shareholder's Equity
The changes in common shareholder's equity accounts are as follows:
Additional Common
Common Paid-in Retained Shareholder's
Stock(1) Capital Earnings Equity
(Thousands of Dollars)
Balances, December 31, 1990. . . . . . . . . . . . . . $1,373,069 $ 895,128 $921,456
Contributions from FPL Group . . . . . . . . . - 260,000 -
Net income available to FPL Group. . . . . . . - - 376,261
Dividends to FPL Group . . . . . . . . . . . . - - (396,994)
Other. . . . . . . . . . . . . . . . . . . . . - 28 (209)
Balances, December 31, 1991. . . . . . . . . . . . . . 1,373,069 1,155,156 900,514
Contributions from FPL Group . . . . . . . . . - 335,000 -
Net income available to FPL Group. . . . . . . - - 470,899
Dividends to FPL Group . . . . . . . . . . . . - - (451,616)
Preferred stock issuance costs and other . . . - (2,689) (1,852)
Balances, December 31, 1992. . . . . . . . . . . . . . 1,373,069 1,487,467 917,945 $3,778,481
Contributions from FPL Group . . . . . . . . . - 255,000 -
Net income available to FPL Group. . . . . . . - - 425,297
Dividends to FPL Group . . . . . . . . . . . . - - (472,617)
Preferred stock issuance costs and other . . . - (1,031) (5,705)
Balances, December 31, 1993. . . . . . . . . . . . . . $1,373,069 $1,741,436 $864,920 $3,979,425
(1) Common stock, no par value, 1,000 shares authorized, issued and
outstanding.
FPL's charter and mortgage contain provisions that, under certain conditions,
restrict the payment of dividends and other distributions to FPL Group.
Given FPL's current financial condition and level of earnings, these
restrictions do not currently limit FPL's ability to pay dividends to FPL
Group.
In 1993, 1992 and 1991 FPL paid, as dividends to FPL Group, its net income
available to FPL Group on a one-month lag basis.
8. Preferred Stock and Long-Term Debt
Preferred Stock (1)
December 31, 1993
Shares Redemption December 31,
Outstanding Price 1993 1992
(Thousands of Dollars)
Preferred stock without sinking fund requirements:
Cumulative, No Par Value, authorized 10,000,000
shares at December 31, 1993 and December 31, 1992
$2.00 No Par Value, Series A (Involuntary
Liquidation Value $25 Per Share) 5,000,000 $ 27.00 $125,000 $125,000
Cumulative, $100 Par Value, authorized
15,822,500 shares at December 31, 1993
and 17,842,000 shares at December 31, 1992
4 1/2% Series 100,000 101.00 10,000 10,000
4 1/2% Series A 50,000 101.00 5,000 5,000
4 1/2% Series B 50,000 101.00 5,000 5,000
4 1/2% Series C 62,500 103.00 6,250 6,250
4.32% Series D 50,000 103.50 5,000 5,000
4.35% Series E 50,000 102.00 5,000 5,000
7.28% Series F 600,000 102.93 60,000 60,000
7.40% Series G 400,000 102.53 40,000 40,000
8.70% Series K - - - 75,000
8.84% Series L - - - 50,000
8.50% Series P - - - 35,000
6.98% Series S 750,000 -(2) 75,000 -
7.05% Series T 500,000 -(2) 50,000 -
6.75% Series U 650,000 -(2) 65,000 -
Total preferred stock without sinking fund requirements 8,262,500 $451,250 $421,250
Preferred stock with sinking fund requirements(3):
10.08% Series J - - - $ 3,746
8.70% Series M - - - 30,200
11.32% Series O - - - 6,500
6.84% Series Q (4) 485,000 104.10 $ 48,500 48,500
8.625% Series R (5) 500,000 108.63 50,000 50,000
Total preferred stock with sinking fund requirements 985,000 98,500 138,946
Less current maturities 1,500 8,796
Preferred stock with sinking fund requirements, excluding current maturities $ 97,000 $130,150
(1) FPL's charter authorizes the issuance of 5 million shares of subordinated
preferred stock, no par value. No shares of subordinated preferred stock
are outstanding. In 1993, FPL issued 1,900,000 shares of $100 par value
preferred stock. In 1992, FPL issued 5,000,000 shares of $2.00 No Par
Value, Series A, preferred stock. There were no issuances of preferred
stock in 1991.
(2) Not redeemable prior to 2003.
(3) Minimum annual sinking fund requirements on preferred stock are
approximately $2 million for each of the years 1994 and 1995 and $4
million for each of the years 1996, 1997 and 1998. In the event that FPL
should be in arrears on its sinking fund obligations, FPL may not pay
dividends on common stock.
(4) Entitled to a sinking fund to retire a minimum of 15,000 shares and a
maximum of 30,000 shares annually from 1994 through 2026 at $100 per
share plus accrued dividends. FPL redeemed and retired 15,000 shares in
1992, satisfying the 1993 minimum annual sinking fund requirement.
(5) Entitled to a sinking fund to retire a minimum of 25,000 shares and a
maximum of 50,000 shares annually from 1996 through 2015 at $100 per
share plus accrued dividends.
Long-Term Debt(1)(2)
December 31,
1993 1992
(Thousands of Dollars)
First Mortgage Bonds:
Maturing through 2000 - 4 5/8% to 9 5/8% $ 460,697 $ 500,000
Maturing 2001 through 2015 - 6 5/8% to 9 1/8% 700,000 725,000
Maturing 2016 through 2026 - 7% to 10 1/4% 1,126,223 1,425,000
Medium-Term Notes:
Maturing through 2000 - 4.85% to 9.5% 280,300 30,000
Maturing 2001 through 2015 - 5.79% to 9.4% 155,725 90,000
Maturing 2016 through 2022 - 8% to 9.45% 148,700 193,700
Pollution Control and Industrial Development Series:
Maturing 2008 through 2027 - 6.10% to 11 3/8% 412,565(3) 456,705
Pollution Control, Solid Waste Disposal and
Industrial Development Revenue Bonds:
Maturing 2021 through 2027 - variable, 2.6%
to 3.9% year-end interest rate 200,315 77,625
Installment Purchase and Security Contracts:
Maturing 2004 through 2007 - 5.40% to 6.15% 22,990 89,030
Promissory Note - 5% due 1993 - 1,750
Unamortized discount - net (44,450) (32,656)
Total long-term debt 3,463,065 3,556,154
Less current maturities - 151,750
Long-term debt, excluding current maturities $3,463,065 $3,404,404
(1) Minimum annual maturities and sinking fund requirements of long-term
debt are approximately $80 million for 1995, $100 million for 1996 and
$181 million for 1998.
(2) Available lines of credit aggregated approximately $800 million at
December 31, 1993, all of which were based on firm commitments.
(3) Excludes approximately $46 million principal amount of bonds removed
from the balance sheet in December 1993 as a result of an in-substance
defeasance. Such bonds were redeemed in January 1994 with funds
previously placed in an irrevocable trust.
9. Fair Value of Financial Instruments
The following estimates of the fair value of financial instruments have been
made using available market information and other valuation methodologies.
However, the use of different market assumptions or methods of valuation
could result in different estimated fair values.
December 31,
1993 1992
Carrying Estimated Carrying Estimated
Amount Fair Value(1) Amount Fair Value(1)
(Thousands of Dollars)
Nuclear decommissioning reserve funds $ 325,238 $ 348,352 $ 270,506 $ 281,789
Storm and property insurance reserve fund $ 53,536 $ 55,489 $ 48,292 $ 50,088
Preferred stock with sinking fund requirements(2) $ 98,500 $ 104,463 $ 138,946 $ 144,148
Long-term debt(2) $ 3,463,065 $3,618,822 $3,556,154 $3,711,632
(1) Based on the quoted market prices for these or similar issues.
(2) Includes current maturities.
10. Commitments and Contingencies
Capital Commitments - FPL has made certain commitments in connection with its
projected capital expenditures. These expenditures, for the construction or
acquisition of additional facilities and equipment to meet customer demand,
are estimated to be $3.7 billion, including AFUDC, for the years 1994 through
1998.
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 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 plant, 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 assessment is $72
million under the programs in effect at December 31, 1993. This contingent
liability would be partially offset by a portion of FPL's storm and property
insurance reserve (storm fund), which totaled $82 million at that date.
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'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 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) through 2023 and with the subsidiaries
of the Southern Company to purchase 1,406 mw of power through May 1994, and
declining amounts thereafter through mid-2010. FPL also has various firm
pay-for-performance contracts to purchase 1,031 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. Capacity payments for the pay-for-performance contracts are
subject to the qualifying facilities meeting certain contract obligations.
Energy payments are based on the actual power taken under these contracts.
The required capacity payments through 1998 under these contracts are
estimated to be as follows:
1994 1995 1996 1997 1998
(In Millions)
JEA. . . . . . . . . . . . . . . . . . $ 80 $ 80 $ 80 $ 80 $ 80
Southern Companies . . . . . . . . . . 200 150 140 140 140
Qualifying Facilities. . . . . . . . . 140 160 310 340 350
FPL's capacity and energy charges under these contracts for 1993, 1992 and
1991 were as follows:
1993 Charges 1992 Charges 1991 Charges
Capacity Energy(3) Capacity Energy(3) Capacity Energy(3)
(In Millions)
JEA. . . . . . . . . . . . . . $ 85(1) $ 51 $ 85(1) $ 48 $ 82(4) $ 53
Southern Companies . . . . . . 268(2) 183 377(2) 283 389(2) 311
Qualifying Facilities. . . . . 60(2) 40 44(2) 40 5(2) 36
(1) Recovered through base rates and the capacity cost recovery clause
(capacity clause).
(2) Recovered through the capacity clause.
(3) Recovered through the fuel and purchased power cost recovery clause.
(4) Recoverable through base rates.
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 $280 million
for 1994, $380 million for 1995 and $390 million for each of the years 1996,
1997 and 1998. Total payments made under these contracts were $270 million,
$269 million and $221 million for 1993, 1992 and 1991, respectively.
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 has 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. FPL's motion for summary judgment has
been denied.
FPL believes that it has 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's financial statements.
11. Transactions with Related Parties
FPL provides certain services to and receives services from FPL Group, or
other subsidiaries of FPL Group. The full cost of such services is charged
to the entity benefitting from the service. In addition, certain common
costs of FPL Group are allocated to all subsidiaries, including FPL, based
primarily on each subsidiary's equity. Neither current period amounts
charged or allocated, nor balances outstanding, were material for any year.
See Note 3 - Income Taxes.
12. Quarterly Data (Unaudited)
Condensed consolidated quarterly financial information for 1993 and 1992 is
as follows:
March 31(1) June 30(1) September 30(1) December 31(1)
(Thousands of Dollars)
1993
Operating revenues . . . . . . . $1,103,536 $ 1,321,504 $1,586,141 $1,213,118
Operating income . . . . . . . . $ 163,685 $ 180,633 $ 210,608(2) $ 168,502
Net income . . . . . . . . . . . $ 102,908 $ 115,679 $ 142,747(2) $ 106,626
Net income available to FPL Group. $ 91,631 $ 105,036 $ 132,035(2) $ 96,595
1992
Operating revenues . . . . . . . $1,064,693 $ 1,232,414 $1,556,083 $1,247,273
Operating income . . . . . . . . $ 150,305 $ 174,950 $ 264,668 $ 174,468
Net income . . . . . . . . . . . $ 85,683 $ 113,032 $ 201,971 $ 114,114
Net income available to FPL Group. $ 75,305 $ 101,625 $ 190,912 $ 103,057
(1) In the opinion of FPL, all adjustments, which consist of normal
recurring accruals necessary to present a fair statement of such
amounts for such periods, have been made. Results of operations
for an interim period may not give a true indication of results
for the calendar year.
(2) Charge resulting from cost reduction program reduced amount
shown by $85 million. See Note 2.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
DIRECTORS(1)
James L. Broadhead. Mr. Broadhead, 58, is chairman and chief executive
officer of FPL. He is also chairman, president and chief executive officer
of FPL Group and president and chief executive officer of FPL Group Capital
Inc. Mr. Broadhead is a director of FPL Group and its subsidiary FPL Group
Capital Inc, Barnett Banks, Inc., Delta Air Lines, Inc. and The Pittston
Company. He is also a board fellow of Cornell University. Mr. Broadhead has
been a director of FPL since 1989.
Dennis P. Coyle. Mr. Coyle, 55, is general counsel and secretary of FPL and
FPL Group. He is also secretary of FPL Group Capital Inc. Mr. Coyle was
formerly vice president of FPL Group and partner of the law firm Steel Hector
& Davis. Mr. Coyle has been a director of FPL since 1990.
Paul J. Evanson. Mr. Evanson, 52, is senior vice president, finance and chief
financial officer of FPL, vice president, finance and chief financial officer
of FPL Group and vice president and chief financial officer of FPL Group
Capital Inc. He is a director of FPL Group Capital Inc, Lynch Corporation
and Southern Energy Homes, Inc. Mr. Evanson was formerly president and chief
operating officer of the Lynch Corporation, a diversified holding company.
Mr. Evanson has been a director of FPL since 1992.
Stephen E. Frank. Mr. Frank, 52, is president and chief operating officer of
FPL. He was formerly executive vice president and chief financial officer of
TRW, Inc., a Cleveland-based diversified, high technology, multinational
company. He is a director of FPL Group, Arkwright Mutual Insurance Company
and Great Western Financial Corporation and a trustee of the University of
Miami. Mr. Frank has been a director of FPL since 1990.
Jerome H. Goldberg. Mr. Goldberg, 62, is president of FPL's nuclear division.
He was formerly executive vice president of FPL and group vice president-
nuclear of Houston Lighting & Power Company, an electric utility. Mr.
Goldberg has been a director of FPL since 1990.
Lawrence J. Kelleher. Mr. Kelleher, 46, is senior vice president, human
resources of FPL and vice president, human resources of FPL Group. He was
formerly chief human resources officer of FPL, director of corporate
development of FPL Group and director of management services of FPL. Mr.
Kelleher has been a director of FPL since 1990.
J. Thomas Petillo. Mr. Petillo, 49, is senior vice president, external
affairs of FPL. He was formerly group vice president of FPL. Mr. Petillo
has been a director of FPL since 1991.
C. O. Woody. Mr. Woody, 55, is senior vice president, power generation of
FPL. He was formerly executive vice president of FPL. Mr. Woody has been a
director of FPL since 1990.
Michael W. Yackira. Mr. Yackira, 42, is senior vice president, market and
regulatory services of FPL. He was formerly chief planning officer of FPL,
vice president of FPL Group and vice president of GTE Florida, a
telecommunications company, and assistant controller of GTE Service Corp., a
telecommunications company. Mr. Yackira has been a director of FPL since
1990.
(1) Directors are elected annually and serve until their resignation, removal
or until their respective successors are elected. Includes each
director's business experience during the past five years.
EXECUTIVE OFFICERS(1)
Name Age Position Effective Date
James L. Broadhead 58 Chairman of the Board and Chief Executive Officer January 15, 1990
Dennis P. Coyle 55 General Counsel and Secretary July 1, 1991
K. Michael Davis 47 Vice President, Accounting, Controller and July 1, 1991
Chief Accounting Officer
Paul J. Evanson 52 Senior Vice President, Finance and Chief December 5, 1992
Financial Officer
Stephen E. Frank 52 President and Chief Operating Officer August 13, 1990
Jerome H. Goldberg 62 President, Nuclear Division July 1, 1991
Lawrence J. Kelleher 46 Senior Vice President, Human Resources July 1, 1991
J. Thomas Petillo 49 Senior Vice President, External Affairs July 1, 1991
Dilek L. Samil 38 Treasurer July 1, 1991
C. O. Woody 55 Senior Vice President, Power Generation July 1, 1991
Michael W. Yackira 42 Senior Vice President, Market and Regulatory Services July 1, 1991
(1) Executive officers are elected annually by, and serve at the pleasure of,
FPL's Board of Directors.
The business experience of the above named executive officers is as follows:
Mr. Davis was previously comptroller of FPL.
Ms. Samil was previously assistant treasurer of FPL and FPL Group.
For the business experience of the remaining executive officers, see Item 10.
Directors and Executive Officers of the Registrant - Directors.
Item 11. Executive Compensation
The following table sets forth compensation paid during the past three years
to FPL's chief executive officer and the other four most highly-compensated
persons who served as executive officers of FPL at December 31, 1993.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards Payouts All
Other Restricted Long Term Other
Annual Stock Incentive Plan Compen-
Name and Principal Position Year Salary Bonus Compensation Awards(1) Payouts(2) sation(3)
James L. Broadhead 1993 $666,333 $505,747 $ 4,989 $ - $ 609,664 $ 9,182
Chairman of the Board and Chief 1992 643,800 424,483 3,342 - 647,772 8,576
Executive Officer of FPL 1991 592,059 378,450 3,313 -(4) - 8,175
and FPL Group
Stephen E. Frank 1993 476,100 282,803 3,278 - 273,836 10,554
President and Chief Operating 1992 460,000 245,916 3,064 - 286,000 9,858
Officer of FPL 1991 420,000 243,000 773 175,670(5) - 8,105
Jerome H. Goldberg 1993 445,100 204,468 9,702 - 148,432 10,554
President, Nuclear Division 1992 430,000 175,528 4,241 - 107,250 9,858
of FPL 1991 395,300 170,000 4,359 - - 8,802
Dennis P. Coyle 1993 270,135 116,648 - - 129,136 9,163
General Counsel and Secretary 1992 261,000 99,754 1,899 - 132,839 8,576
of FPL and FPL Group 1991 226,118 91,350 445 - - 5,470
C. O. Woody 1993 261,900 126,039 721 - 129,078 10,554
Senior Vice President, Power 1992 253,000 103,736 1,455 - 117,939 9,858
Generation of FPL 1991 237,400 97,000 1,602 - - 8,802
(1) Dividends at normal rates are paid on restricted common stock.
(2) Payouts were made 60% in shares of common stock, valued at $37.875 per
share, and 40% in cash.
(3) Employer matching contributions to employee thrift plans.
(4) At December 31, 1993, Mr. Broadhead held 96,800 shares of restricted
common stock with a value of $3,787,300. These shares were awarded in
1991 for the purpose of financing Mr. Broadhead's supplemental retirement
plan and will offset lump sum benefits that would otherwise be payable
to him in cash upon retirement. See Retirement Plans herein.
(5) At December 31, 1993, Mr. Frank held 1,882 shares of restricted common
stock with a value of $73,633. A total of 5,644 shares were awarded to
Mr. Frank in 1991 pursuant to an undertaking made to him when he was
initially employed by FPL and vested in equal installments on
February 15, 1992, 1993 and 1994.
Stock Options
The following table sets forth information with respect to the only executive
officer named in the Summary Compensation Table who held any stock options or
stock appreciation rights (SARs) during 1993.
December 31, 1993
Number of Shares Value of Unexercised
Shares Underlying Unexercised In-the-Money
Acquired Value Options/SARs Options/SARs
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
C. O. Woody - - 1,787 - $14,743 -
Long Term Incentive Plan Awards
In 1993 and 1994, awards of performance shares under FPL Group's Long Term
Incentive Plan were made to the executive officers named in the Summary
Compensation Table as set forth in the following table.
LONG TERM INCENTIVE PLAN AWARDS
Estimated Future Payouts
Under Non-Stock Price-Based Plans
Number of Shares
Performance
Number of Period
Name Year Shares Until Payout Threshold Target Maximum
James L. Broadhead 1993 21,883 1/1/93 - 12/31/96 - 21,883 21,883
1994 25,282 1/1/94 - 12/31/97 - 25,282 25,282
Stephen E. Frank 1993 8,656 1/1/93 - 12/31/96 - 8,656 8,656
1994 10,001 1/1/94 - 12/31/97 - 10,001 10,001
Jerome H. Goldberg 1993 6,937 1/1/93 - 12/31/96 - 6,937 6,937
1994 8,014 1/1/94 - 12/31/97 - 8,014 8,014
Dennis P. Coyle 1993 4,839 1/1/93 - 12/31/96 - 4,839 4,839
1994 5,590 1/1/94 - 12/31/97 - 5,590 5,590
C. O. Woody 1993 4,082 1/1/93 - 12/31/96 - 4,082 4,082
1994 4,743 1/1/94 - 12/31/97 - 4,743 4,743
The performance share awards shown above are payable at the end of the
four-year performance periods. The amount of the payout is determined by
multiplying the participant's target number of shares by his average level of
attainment, expressed as a percentage, which may not exceed 100%, of his
targeted awards under the Annual Incentive Plans for each of the years
encompassed by the award period. The incentive performance measures were
financial (weighted 50%), operating (weighted 30%) and major projects
(weighted 20%). The financial performance indicators were operations and
maintenance costs, capital expenditure levels, book and regulatory return on
equity and net income. The operating performance indicators were customer
satisfaction survey results, service reliability as measured by the frequency
and duration of service interruptions, system performance as measured by the
equivalent availability factors for the fossil and nuclear power plants,
unplanned trips of nuclear power plants, the NRC's systematic assessment of
licensee performance for the nuclear plants, employee staffing levels, number
of significant environmental violations and employee safety. The major
projects performance indicators were load management installed capability,
the adherence to schedules and budgets for the Lauderdale repowering project,
the Martin plant construction project, and customer information system
project, implementation of an integrated resource plan and conservation
programs annual installed capacity. If FPL Group shareholders approve the
Annual Incentive Plan and Long
Term Incentive Plan described in FPL Group's proxy statement for the 1994
Annual Meeting, future annual incentive payouts will be based on achieving
specific net income goals. Payouts under the current Long Term Incentive
Plan can range from zero to 100% of the target amount. Payouts under the
proposed new Long Term Incentive Plan can range from zero to 160%.
Retirement Plans
FPL Group maintains a non-contributory defined benefit pension plan and
supplemental executive retirement plans which cover FPL employees. The
following table shows the estimated annual benefits, calculated on a
straight-line annuity basis, payable upon retirement in 1993 at age 65 after
the indicated years of service.
PENSION PLAN TABLE
Eligible
Average Annual Years of Service
Compensation 10 20 30 40 50
$ 300,000 $ 70,837 $ 118,377 $ 147,572 $ 156,259 $ 158,647
400,000 95,757 158,377 197,572 208,759 211,147
500,000 120,677 198,377 247,572 261,259 263,647
600,000 145,597 238,377 297,572 313,759 316,147
700,000 170,516 278,377 347,572 366,259 368,647
800,000 195,436 318,377 397,572 418,759 421,147
900,000 220,356 358,377 447,572 471,259 473,647
1,000,000 245,276 398,377 497,572 523,759 526,147
1,100,000 270,196 438,377 547,572 576,259 578,647
1,200,000 295,116 478,377 597,572 628,759 631,147
1,300,000 320,036 518,377 647,572 681,259 683,647
1,400,000 344,956 558,377 697,572 733,759 736,147
1,500,000 369,876 598,377 747,572 786,259 788,647
The compensation covered by the plans includes annual salaries and bonuses of
officers of FPL Group and annual salaries of officers of FPL, as shown in the
Summary Compensation Table, but no other amounts shown in the Table. The
estimated credited years of service for the executive officers named in the
Summary Compensation Table are: Mr. Broadhead, 5 years; Mr. Frank, 3 years;
Mr. Goldberg, 4 years; Mr. Coyle, 4 years; and Mr. Woody, 37 years.
A supplemental retirement plan for Mr. Broadhead provides for a lump-sum
retirement benefit equal to the then present value of a joint and survivor
annuity providing annual payments to him equal to 61% to 65% of his average
annual compensation for the three years prior to his retirement between age
62 (1998) and age 65 (2001) and to his surviving beneficiary of 37.5% of such
average annual compensation, reduced by the then present value of the annual
amount of payments to which he is entitled under all other pension and
retirement plans of FPL Group and former employers. This benefit is further
reduced by the then value of 96,800 shares of restricted common stock which
vest as to 77,000 shares in 1998 and as to 19,800 shares in 2001. Upon a
change of control of FPL Group, (as defined below under Employment
Agreements), the restrictions on the restricted stock lapse and the full
retirement benefit becomes payable. Upon termination of Mr. Broadhead's
employment agreement (also described below) without cause, the restrictions
on the restricted stock lapse and he becomes fully vested under the
supplemental retirement plan. Absent any such change of control or
termination of employment, Mr. Broadhead will have no right to such shares of
restricted stock, and there will be no payments under the supplemental
retirement plan, unless he remains with the Corporation until at least age
62.
Mr. Goldberg's employment agreement with FPL provides for a retirement
benefit which, together with the amount received by him pursuant to his
former employer's deferred compensation program, equals the total
postretirement benefits he would have received if he had remained employed by
such employer until age 65. The terms of Mr. Frank's employment with FPL
provide for a benefit, upon retirement at age 62 or more, equal to the
difference between a pension benefit for 30 years of credited service and the
normal pension plan benefit. A supplemental retirement plan for Mr. Coyle
provides for benefits, upon retirement at age 62 or more, based on two times
his credited years of service.
FPL Group sponsors a split-dollar life insurance plan for certain of FPL and
FPL Group's senior officers. Benefits under the split-dollar plan are
provided by universal life insurance policies purchased by FPL Group. If the
officer dies prior to retirement, the officer's beneficiaries generally
receive two and one-half times the officer's annual salary at the time of
death. If the officer dies after retirement, the officer's beneficiaries
receive between 50% to 100% of the officer's final annual salary. Each
officer is taxable on the insurance carrier's one year term rate for his or
her life insurance coverage.
Employment Agreements
FPL Group has entered into an employment agreement with Mr. Broadhead for an
initial term ending December 1997, with automatic one-year extensions
thereafter unless either party elects not to extend. The agreement provides
for a base salary of $795,800 plus annual and long-term incentive
compensation opportunities at least equal to those currently in effect. If
FPL Group terminates Mr. Broadhead's employment without cause, he is entitled
to receive a lump sum payment of two years' compensation. Compensation is
measured by the then current base salary plus the average of the preceding
two years' annual incentive awards. He would also be entitled to receive all
amounts accrued under all performance share grants in progress, prorated for
the year of termination and assuming achievement of the targeted award, and
to full vesting of his benefits under his supplemental retirement plan.
FPL Group and FPL have entered into employment agreements with certain
officers, including the individuals named in the Summary Compensation Table
(other than Mr. Goldberg), to become effective in the event of a change of
control of FPL Group, which is defined as the acquisition of beneficial
ownership of 20% of the voting power of FPL Group, certain changes in FPL
Group's Board, or approval by the shareholders of the liquidation of FPL
Group or of certain mergers or consolidations or of certain transfers of FPL
Group's assets. These agreements are intended to assure FPL of the continued
services of key officers. The agreements provide that each officer shall be
employed by FPL Group or one of its subsidiaries in his or her then current
position, with compensation and benefits at least equal to the then current
base and incentive compensation and benefit levels, for an employment period
of four, and in certain cases five, years after a change of control occurs.
In the event that the officer's employment is terminated (except for death,
disability or cause) or if the officer terminates his or her employment for
good reason, as defined in the agreement, the officer is entitled to
severance benefits in the form of a lump sum payment equal to the
compensation due for the remainder of the employment period or for two years,
whichever is longer. Such benefits would be based on the officer's then base
salary plus an annual bonus at least equal to the average bonus for the two
years preceding the change of control. The officer is also entitled to the
maximum amount payable under all long-term incentive compensation grants
outstanding, continued coverage under all employee benefit plans,
supplemental retirement benefits and reimbursement for any tax penalties
incurred as a result of the severance payments.
An employment agreement between Mr. Goldberg and FPL, which expires in 1994,
provides for a base salary of at least $350,000 per year, targeted annual
incentive compensation equal to 35% of his base salary, and either the
retirement benefit described above under Retirement Plans plus a death
benefit to his beneficiary equal to 300% of his base salary, payable over 6
years, or, if he dies before his contract expires, a death benefit to his
beneficiary equal to 550% of his base salary, payable over 10 years.
Director Compensation
All of the directors of FPL are salaried employees of FPL and do not receive
any additional compensation for serving as a director.
Item 12. Security Ownership of Certain Beneficial Owners and Management
FPL Group owns 100% of FPL's common stock. FPL's directors and executive
officers beneficially own shares of common stock as follows:
Name Number of Shares
James L. Broadhead . . . . . . . . . . . . . . . . . . . . 131,840(1)
Dennis P. Coyle. . . . . . . . . . . . . . . . . . . . . . 7,204(2)
Paul J. Evanson. . . . . . . . . . . . . . . . . . . . . . 1,137(3)
Stephen E. Frank . . . . . . . . . . . . . . . . . . . . . 17,466(4)
Jerome H. Goldberg . . . . . . . . . . . . . . . . . . . . 7,506(5)
Lawrence J. Kelleher . . . . . . . . . . . . . . . . . . . 11,466(6)
J. Thomas Petillo. . . . . . . . . . . . . . . . . . . . . 8,991(7)
C. O. Woody. . . . . . . . . . . . . . . . . . . . . . . . 20,317(8)
Michael W. Yackira . . . . . . . . . . . . . . . . . . . . 8,409(9)
All directors and executive officers as a group. . . . . . 220,947(10)
(1) Includes 1,907 shares held in the Thrift Plans and 96,800 shares of
restricted stock as to which Mr. Broadhead has voting but not investment
power.
(2) Includes 1,864 shares held in the Thrift Plans.
(3) Includes 137 shares held in the Thrift Plans.
(4) Includes 884 shares held in the Thrift Plans and 1,882 shares of
restricted stock as to which Mr. Frank has voting but not investment power.
(5) Includes 2,051 shares held in the Thrift Plans.
(6) Includes 5,483 shares held in the Thrift Plans.
(7) Includes 5,178 shares held in the Thrift Plans and 38 shares held
beneficially by a relative of Mr. Petillo with whom he shares investment
power and to which he disclaims any beneficial ownership.
(8) Includes 12,868 shares held in the Thrift Plans and 1,787 shares subject
to exercisable stock options.
(9) Includes 2,856 shares held in the Thrift Plans.
(10) Less than 1% of the common stock outstanding. Includes 36,960 shares
held in the Thrift Plans and 1,787 shares subject to exercisable stock
options.
Item 13. Certain Relationships and Related Transactions
None
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements Page(s)
Independent Auditors' Report 12
Consolidated Statements of Income for the Years Ended
December 31, 1993, 1992 and 1991 13
Consolidated Balance Sheets at December 31, 1993 and
1992 14-15
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1993, 1992 and 1991 16
Notes to Consolidated Financial Statements
for the Years Ended December 31, 1993, 1992 and
1991 17-29
2. Financial Statement Schedules(1)
Schedule V Property, Plant and Equipment 39-40
Schedule VI Accumulated Depreciation, Depletion and
Amortization of Property, Plant and
Equipment 41-42
Schedule IX Short-Term Borrowings 43
Schedule X Supplementary Income Statement
Information 44
(1) All other schedules are omitted as not applicable
or not required.
3. Exhibits including those Incorporated by Reference
Exhibit
Number Description
1(a) Form of Proposal and attached Underwriting Agreement
dated December 6, 1993
1(b) Underwriting Agreement between the Dade County
Industrial Development Authority and Goldman, Sachs &
Co., Artemis Capital Group, Inc., First Equity
Corporation of Florida and Howard Gary & Company dated
December 20, 1993
3(i)a Restated Articles of Incorporation of FPL dated March
23, 1992
3(i)b Amendment to FPL's Restated Articles of Incorporation
dated March 23, 1992
3(i)c Amendment to FPL's Restated Articles of Incorporation
dated May 11, 1992
3(i)d Amendment to FPL's Restated Articles of Incorporation
dated March 12, 1993
3(i)e Amendment to FPL's Restated Articles of Incorporation
dated June 16, 1993
3(i)f Amendment to FPL's Restated Articles of Incorporation
dated August 31, 1993
3(i)g Amendment to FPL's Restated Articles of Incorporation
dated November 30, 1993
*3(ii) Bylaws of FPL dated May 11, 1992 (filed as Exhibit 3 to
Form 8-K dated May 1, 1992, File No. 1-3545)
*4(a) Mortgage and Deed of Trust dated as of January 1, 1944,
and Ninety-three 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. 2-6502; 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; and Exhibit 99(a) to Post-Effective Amendment No. 1 to Form
S-3, File No. 33-46076)
4(b) Ninety-fourth Supplemental Indenture dated as of
December 1, 1993 between FPL and Bankers Trust Company,
Trustee
12(a) Computation of Ratio of Earnings to Fixed Charges
12(b) Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividend Requirements
23 Independent Auditors' Consent
* Incorporated herein by reference
(b) Reports on Form 8-K
A Current report on Form 8-K dated October 22, 1993 was filed on
October 22, 1993 reporting one event under Item 5. Other Events.
SCHEDULE V
FLORIDA POWER & LIGHT COMPANY AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
Column A Column B Column C Column D Column E Column F
Other
Balance at Changes - Balance at
Beginning Additions Add End of
Classification of Year at Cost(1) Retirements(2) (Deduct) Year
(Thousands of Dollars)
Year Ended December 31, 1993
Electric utility plant, at original cost:
Electric plant:
Production plant:
Steam $2,400,151 $ 391,623 $ (50,295) $ (22,598) $2,718,881
Nuclear 3,365,244 40,407 (19,016) (192) 3,386,443
Other 338,611 483,230 (5,603) 23,081 839,319
Total production plant 6,104,006 915,260 (74,914) 291 6,944,643
Transmission plant 1,674,423 146,108 (15,052) (288) 1,805,191
Distribution plant 4,504,269 295,925 (48,856) 1,770 4,753,108
General plant 858,532 87,024 (34,462) 636 911,730
Intangible plant 46,265 87,143 - (56) 133,352
Total electric plant in service 13,187,495 1,531,460 (173,284) 2,353 14,548,024
Held for future use 69,493 (3,115) - (2,366) 64,012
Total electric plant 13,256,988 1,528,345 (173,284) (13) 14,612,036
Construction work in progress 1,158,688 (377,253) - - 781,435
Nuclear fuel 277,803 57,589 - (109,268) 226,124
Total electric utility plant $14,693,479 $1,208,681 $(173,284) $(109,281) $15,619,595
Year Ended December 31, 1992
Electric utility plant, at original cost:
Electric plant:
Production plant:
Steam $ 2,344,399 $ 83,322 $(27,136) $ (434) $ 2,400,151
Nuclear 3,355,766 52,916 (43,438) - 3,365,244
Other 305,601 45,741 (12,743) 12 338,611
Total production plant 6,005,766 181,979 (83,317) (422) 6,104,006
Transmission plant 1,605,823 75,226 (5,899) (727) 1,674,423
Distribution plant 4,227,135 324,065 (48,640) 1,709 4,504,269
General plant 695,311 186,984 (26,043) 2,280 858,532
Intangible plant 31,657 14,134 - 474 46,265
Total electric plant in service 12,565,692 782,388 (163,899) 3,314 13,187,495
Held for future use 73,385 1,156 - (5,048) 69,493
Total electric plant 12,639,077 783,544 (163,899) (1,734) 13,256,988
Construction work in progress 597,401 561,287 - - 1,158,688
Nuclear fuel 279,740 105,716 - (107,653) 277,803
Total electric utility plant $13,516,218 $1,450,547 $(163,899) $(109,387) $14,693,479
SCHEDULE V
FLORIDA POWER & LIGHT COMPANY AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT (Concluded)
Column A Column B Column C Column D Column E Column F
Other
Balance at Changes - Balance at
Beginning Additions Add End of
Classification of Year at Cost(1) Retirements(2) (Deduct) Year
(Thousands of Dollars)
Year Ended December 31, 1991
Electric utility plant, at original cost:
Electric plant:
Production plant:
Steam $2,142,443 $ 239,997 $(32,927) $ (5,114) $2,344,399
Nuclear 3,075,336 302,241 (21,500) (311) 3,355,766
Other 300,356 7,422 (2,176) (1) 305,601
Total production plant 5,518,135 549,660 (56,603) (5,426) 6,005,766
Transmission plant 1,546,047 63,291 (4,137) 622 1,605,823
Distribution plant 3,898,288 351,414 (25,508) 2,941 4,227,135
General plant 655,587 72,695 (32,695) (276) 695,311
Intangible plant 18,190 13,467 - - 31,657
Total electric plant in service 11,636,247 1,050,527 (118,943) (2,139) 12,565,692
Held for future use 59,801 12,611 - 973 73,385
Total electric plant 11,696,048 1,063,138 (118,943) (1,166) 12,639,077
Construction work in progress 476,279 121,122 - - 597,401
Nuclear fuel 488,128 53,497 (108,607) (153,278) 279,740
Total electric utility plant $12,660,455 $1,237,757 $(227,550) $(154,444) $13,516,218
(1) Substantially all additions are originally charged to
construction work in progress and transferred to electric plant
accounts upon completion. Additions at cost give effect to such
transfers.
(2) The installed cost of individual units of plant retired is not
always available. Plant accounts are credited for such
retirements on the basis of estimates when the original cost is
not available. Nuclear fuel materials sold are reflected as
retirements.
SCHEDULE VI
FLORIDA POWER & LIGHT COMPANY AND SUBSIDIARIES
ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
Column A Column B Column C Column D Column E Column F
Additions Charged to
Costs and Expenses Other
Balance at Clearing Changes - Balance at
Beginning Depre- and Other Retire- Add End of
Description of Year ciation Accounts(1) ments (Deduct) Year
(Thousands of Dollars)
Year Ended December 31, 19930
Accumulated depreciation of electric plant(2)(3):
Production plant:
Steam $1,022,517 $116,950 $ 197 $(50,295) $20,394 $1,109,763
Nuclear 1,350,309 187,057 - (19,016) 4,597 1,522,947
Other 207,163 21,039 397 (5,603) 3,506 226,502
Total production plant 2,579,989 325,046 594 (74,914) 28,497 2,859,212
Transmission plant 771,076 33,366 - (15,052) 2,608 791,998
Distribution plant 1,449,155 173,752 - (48,857) 1,087 1,575,137
General plant 239,479 56,339 13,490 (34,462) 3,821 278,667
Intangible plant 18,542 15,113 537 - 1,958 36,150
Total $5,058,241 $603,616 $14,621 $(173,285) $37,971 $5,541,164
Year Ended December 31, 1992
Accumulated depreciation of electric plant(2)(3):
Production plant:
Steam $962,585 $107,625 $ 31 $(41,211) $(6,513) $1,022,517
Nuclear 1,205,123 190,124 - (44,933) (5) 1,350,309
Other 204,853 9,287 - (13,327) 6,350 207,163
Total production plant 2,372,561 307,036 31 (99,471) (168) 2,579,989
Transmission plant 744,931 31,283 - (4,880) (258) 771,076
Distribution plant 1,335,068 161,466 - (47,248) (131) 1,449,155
General plant 188,899 49,864 12,790 (12,513) 439 239,479
Intangible plant 9,866 7,620 938 - 118 18,542
Total $4,651,325 $557,269 $13,759 $(164,112) $ - $5,058,241
SCHEDULE VI
FLORIDA POWER & LIGHT COMPANY AND SUBSIDIARIES
ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT (Concluded)
Column A Column B Column C Column D Column E Column F
Additions Charged to
Costs and Expenses Other
Balance at Clearing Changes - Balance at
Beginning Depre- and Other Retire- Add End of
Description of Year ciation Accounts(1) ments (Deduct) Year
(Thousands of Dollars)
Year Ended December 31, 1991
Accumulated depreciation of electric plant(2)(3):
Production plant:
Steam $883,237 $ 103,629 $ - $(44,417) $20,136 $ 962,585
Nuclear 1,050,026 178,789 - (23,602) (90) 1,205,123
Other 208,739 8,586 - (2,951) (9,521) 204,853
Total production plant 2,142,002 291,004 - (70,970) 10,525 2,372,561
Transmission plant 718,325 29,484 - (2,821) (57) 744,931
Distribution plant 1,223,635 144,119 - (33,108) 422 1,335,068
General plant 157,507 50,189 11,959 (30,776) 20 188,899
Intangible plant 4,328 5,537 - - 1 9,866
Total electric plant 4,245,797 520,333 11,959 (137,675) 10,911 4,651,325
Accumulated provision for amortization
of nuclear fuel assemblies 205,787 - (168,554) (37,233) - -
Total $4,451,584 $520,333 $(156,595) $(174,908) $10,911 $4,651,325
(1) Depreciation of transportation equipment is charged to various accounts
based on the use of such equipment. Amortization of nuclear fuel
assemblies is charged to fuel, purchased power and interchange expense.
(2) This reserve is maintained for all depreciable property. The amount in
the retirement column is net of removal costs and salvage.
(3) Includes fossil decommissioning reserves of $102 million, $92 million and
$83 million at December 31, 1993, 1992 and 1991, respectively.
SCHEDULE IX
FLORIDA POWER & LIGHT COMPANY AND SUBSIDIARIES
SHORT-TERM BORROWINGS
Column A Column B Column C Column D Column E Column F
Maximum Average Weighted
Weighted Amount Amount Average
Balance Average Outstanding Outstanding Interest Rate
Category of Aggregate at End Interest During the During the During the
Short-Term Borrowings of Year Rate Year (1) Year (2) Year (3)
(Thousands of Dollars)
Year Ended December 31, 1993
Commercial paper $349,600 3.4% $374,600 $164,331 3.2%
Year Ended December 31, 1992
Commercial paper - - - 4,317 3.4%
Year Ended December 31, 1991
Lines of credit - - 35,000 16,459 5.9%
Commercial paper - - 37,600 13,190 6.2%
(1) Represents the maximum amount outstanding at any month end.
(2) Computed by dividing the sum of the daily ending balances by the
number of days in the year.
(3) Computation is based upon the principal amounts weighted by the
number of days outstanding.
SCHEDULE X
FLORIDA POWER & LIGHT COMPANY AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION(1)
Column A Column B
Years Ended December 31,
1993 1992 1991
(Thousands of Dollars)
Maintenance expense $346,736 $358,375 $405,017
Taxes Other Than Income Taxes:
Federal and state payroll $55,136 $ 54,272 $ 53,836
Real and personal property 148,330 139,220 125,151
State gross receipts 127,086 113,725 106,545
Franchise charges 202,258 194,421 204,880
Miscellaneous 27,506 45,787 31,470
Total $560,316 $547,425 $521,882
Charged to:
Operating expenses - other taxes $523,724 $495,587 $483,731
Utility plant and other accounts 36,592 51,838 38,151
Total $560,316 $547,425 $521,882
(1) Other information required by Article 5, Schedule X - Supplementary
Income Statement Information is shown in the Consolidated Financial
Statements or notes thereto, or is not presented as such amounts are less
than 1% of total revenues.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Florida Power & Light Company
Date: March 21, 1994 By STEPHEN E. FRANK
Stephen E. Frank
(President and Chief Operating Officer
and Director)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
Signature Title Date
JAMES L. BROADHEAD Principal Executive
James L. Broadhead Officer and Director
(Chairman of the Board)
PAUL J. EVANSON Principal Financial Officer
Paul J. Evanson and Director
(Senior Vice President, Finance
and Chief Financial Officer)
K. MICHAEL DAVIS Principal Accounting Officer
K. Michael Davis
(Vice President, Accounting,
Controller and Chief Accounting Officer)
DENNIS P. COYLE March 21,1994
Dennis P. Coyle
JEROME H. GOLDBERG
Jerome H. Goldberg
LAWRENCE J. KELLEHER Directors
Lawrence J. Kelleher
J. THOMAS PETILLO
J. Thomas Petillo
C. O. WOODY
C. O. Woody
MICHAEL W. YACKIRA
Michael W. Yackira