FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-8841
FPL GROUP, INC.
(Exact name of registrant as specified in its charter)
Florida 59-2449419
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
700 Universe Boulevard
Juno Beach, Florida 33408
(Address of principal executive offices)
(Zip Code)
(407) 694-3509
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $.01 Par Value, outstanding at July 31, 1994:
187,957,852 shares
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
FPL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
(In thousands, except per share amounts)
OPERATING REVENUES:
Utility ........................................ $1,418,573 $1,321,504 $2,574,362 $2,425,040
Non-utility .................................... 24,474 28,362 47,586 57,202
Total operating revenues ..................... 1,443,047 1,349,866 2,621,948 2,482,242
OPERATING EXPENSES:
Utility operations:
Fuel, purchased power and interchange ........ 473,587 475,047 838,401 850,588
Other operations and maintenance ............. 354,394 340,264 624,146 602,650
Non-Utility operations ......................... 21,717 22,014 41,949 46,468
Depreciation and amortization .................. 170,196 147,269 337,191 290,000
Taxes other than income taxes .................. 134,275 129,666 256,138 251,005
Total operating expenses ..................... 1,154,169 1,114,260 2,097,825 2,040,711
OPERATING INCOME ................................. 288,878 235,606 524,123 441,531
OTHER (INCOME) DEDUCTIONS:
Interest expense ............................... 79,679 95,822 161,642 190,081
Allowance for funds used during construction ... (4,874) (18,657) (15,724) (39,992)
Preferred stock dividend requirements of
Florida Power & Light Company ................ 9,879 10,643 19,808 21,919
Other - net .................................... 682 (15,947) 3,454 (28,064)
Total other deductions - net ................. 85,366 71,861 169,180 143,944
INCOME BEFORE INCOME TAXES ....................... 203,512 163,745 354,943 297,587
INCOME TAXES ..................................... 77,669 53,199 134,661 95,091
NET INCOME ....................................... $ 125,843 $ 110,546 $ 220,282 $ 202,496
Average number of common shares outstanding ...... 179,170 185,480 179,248 184,634
Earnings per share of common stock ............... $ .70 $ .60 $ 1.23 $ 1.10
Dividends per share of common stock .............. $ .42 $ .62 $ 1.04 $ 1.23
This report should be read in conjunction with the Notes to Condensed
Consolidated Financial Statements on Pages 5 through 7 herein and the
Notes to Consolidated Financial Statements appearing in FPL Group,
Inc.'s (FPL Group) 1993 Annual Report on Form 10-K (Form 10-K).
FPL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30,
1994 December 31,
(Unaudited) 1993
(Thousands of Dollars)
ASSETS
PROPERTY, PLANT AND EQUIPMENT:
Electric utility plant - at original cost,
including nuclear fuel under capital lease ........................... $15,680,038 $ 14,838,160
Construction work in progress .......................................... 278,106 781,435
Other .................................................................. 242,156 261,125
Less accumulated depreciation and amortization ......................... 5,908,808 5,591,265
Total property, plant and equipment - net ............................ 10,291,492 10,289,455
INVESTMENTS .............................................................. 931,164 984,992
CURRENT ASSETS:
Cash and cash equivalents .............................................. 66,138 152,014
Marketable securities - at market value (cost
of $76,109 and $169,607, respectively) ............................... 73,138 171,988
Receivables - net ...................................................... 548,254 504,597
Materials, supplies and fossil fuel stock - at average cost ............ 309,072 329,599
Other .................................................................. 101,539 93,159
Total current assets ................................................. 1,098,141 1,251,357
OTHER ASSETS AND DEFERRED DEBITS:
Unamortized debt reacquisition costs of FPL ............................ 296,946 302,561
Deferred litigation items of FPL ....................................... 110,859 110,859
Other .................................................................. 140,135 138,788
Total other assets and deferred debits ............................... 547,940 552,208
TOTAL ASSETS ............................................................... $12,868,737 $ 13,078,012
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock ........................................................... $ 1,884 $ 1,901
Other shareholders' equity ............................................. 4,099,345 4,098,706
Preferred stock of Florida Power & Light Company:
Without sinking fund requirements .................................... 451,250 451,250
With sinking fund requirements ....................................... 94,000 97,000
Long-term debt ......................................................... 3,906,702 3,748,983
Total capitalization ................................................. 8,553,181 8,397,840
CURRENT LIABILITIES:
Commercial paper ....................................................... 124,511 349,600
Current maturities of long-term debt and preferred stock ............... 169,564 279,680
Accounts payable ....................................................... 271,741 323,282
Customers' deposits .................................................... 218,284 216,140
Accrued interest and taxes ............................................. 318,561 204,086
Other .................................................................. 316,317 465,829
Total current liabilities ............................................ 1,418,978 1,838,617
OTHER LIABILITIES AND DEFERRED CREDITS
Accumulated deferred income taxes ...................................... 1,568,681 1,512,067
Deferred regulatory credit - income taxes............................... 204,349 216,546
Unamortized investment tax credits ..................................... 313,396 323,791
Capital lease obligations .............................................. 237,422 271,498
Other .................................................................. 572,730 517,653
Total other liabilities and deferred credits ......................... 2,896,578 2,841,555
COMMITMENTS AND CONTINGENCIES
TOTAL CAPITALIZATION AND LIABILITIES ....................................... $12,868,737 $ 13,078,012
This report should be read in conjunction with the Notes to Condensed
Consolidated Financial Statements on Pages 5 through 7 herein and the
Notes to Consolidated Financial Statements appearing in FPL Group's
1993 Form 10-K.
FPL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
1994 1993
(Thousands of Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ................................................................ $ 220,282 $ 202,496
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ......................................... 337,191 290,000
Increase in deferred income taxes and related regulatory credit ....... 44,417 32,171
Deferrals under cost recovery clauses (1) ............................. (61,823) (20,360)
Other - net ........................................................... 96,486 (45,951)
Net cash provided by operating activities ............................... 636,553 458,356
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2) .................................................. (442,865) (788,059)
Other - net ............................................................... 126,158 59,431
Net cash used in investing activities ................................... (316,707) (728,628)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of bonds and other long-term debt ................................ 86,350 1,405,600
Issuance of preferred stock of Florida Power & Light Company .............. - 125,000
Retirement of long-term debt and preferred stock .......................... (253,769) (1,349,544)
Issuance of common stock .................................................. 16,685 144,946
Repurchase of common stock ................................................ (63,977) -
(Decrease) increase in commercial paper ................................... (25,089) 350,100
Dividends on common stock ................................................. (186,289) (227,431)
Other - net................................................................ 20,367 57,885
Net cash (used in) provided by financing activities ..................... (405,722) 506,556
Net (decrease) increase in cash and cash equivalents ........................ (85,876) 236,284
Cash and cash equivalents at beginning of period ............................ 152,014 78,156
Cash and cash equivalents at end of period .................................. $ 66,138 $ 314,440
Supplemental disclosures of cash flow information:
Cash paid for interest (net of amount capitalized) ........................ $ 160,057 $ 172,638
Cash paid for income taxes ................................................ $ 66,250 $ 21,927
Supplemental schedule of noncash investing and financing activities:
Additions to capital lease obligations .................................... $ 17,759 $ 33,153
(1) Represents the effect on cash flows from operating activities of the net amounts deferred or recovered under the fuel
and purchased power, oil-backout, energy conservation, capacity and environmental cost recovery clauses.
(2) Capital expenditures exclude allowance for equity funds used during construction.
This report should be read in conjunction with the Notes to Condensed
Consolidated Financial Statements on Pages 5 through 7 herein and the
Notes to Consolidated Financial Statements appearing in FPL Group's
1993 Form 10-K.
FPL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The accompanying condensed consolidated financial statements should
be read in conjunction with FPL Group's 1993 Form 10-K, also see Note
1 to FPL Group's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1994 for a discussion of the changes in accounting for
Employee Stock Ownership Plans. In the opinion of FPL Group, all
adjustments (consisting only of normal recurring accruals) necessary to
present fairly the financial position as of June 30, 1994, the results of
operations for the three and six months ended June 30, 1994 and 1993
and the cash flows for the six months ended June 30, 1994 and 1993
have been made. Certain amounts included in the prior year's
condensed consolidated financial statements have been reclassified to
conform to the current year's presentation. The results of operations for
an interim period may not give a true indication of results for the year.
1. Capitalization
Preferred Stock - The 1994 sinking fund requirements for the 6.84%
Preferred Stock, Series Q, $100 Par Value were met by redeeming and
retiring 30,000 shares in April 1994. There are no sinking fund
requirements for the remainder of 1994.
Long-Term Debt - In January 1994, FPL Group Capital Inc (FPL Group
Capital) redeemed $150 million of its 8 7/8% Debentures using proceeds
from an advance from FPL Group and internally generated funds. In
March 1994, Florida Power & Light Company (FPL) sold a total of
$86.35 million principal amount of Pollution Control Revenue Refunding
Bonds, maturing in September 2024, at variable interest rates that
initially ranged from 2.10% to 2.75%. The proceeds were used to
redeem and retire in March and May 1994 a total of approximately
$86.35 million principal amount of Pollution Control Revenue Bonds,
maturing in 2007 through 2019, at interest rates ranging from 5.90% to
11 3/8%.
In July 1994, FPL sold a total of $86.5 million principal amount of
Pollution Control Revenue Refunding Bonds, maturing in July 2029, at
variable interest rates that initially ranged from 2.00% to 3.20%. The
proceeds will be used to redeem and retire in October 1994 a total of
$86.5 million of Pollution Control Revenue Bonds, maturing in 2019 at an
interest rate of 11%.
At June 30, 1994, $200 million of commercial paper has been included in
long-term debt pursuant to financing agreements which allow FPL to
refinance these amounts for periods extending beyond June 30, 1995.
2. Commitments and Contingencies
Commitments - FPL has made commitments in connection with a portion
of its projected capital expenditures. Capital expenditures for the
construction or acquisition of additional facilities and equipment to meet
customer demand are estimated to be $3.7 billion, including allowance
for funds used during construction (AFUDC), for the years 1994 through
1998. Capital expenditures for 1994 are estimated to be $879 million, of
which $424 million had been spent through June 30, 1994.
FPL Group Capital has committed to invest approximately $5 million in,
and lend approximately $3 million to, partnerships and joint ventures
entered into through ESI Energy, Inc. (ESI), all of which are expected to
be funded in the remainder of 1994. Additionally, FPL Group Capital
and its subsidiaries, primarily ESI, have guaranteed up to approximately
$99 million of lease obligations, debt service payments and other
payments subject to certain contingencies.
FPL Group, through a consolidated limited partnership, has entered into
forward commitments at June 30, 1994 to sell short approximately $30
million of U.S. Treasury Notes on various dates in July 1994 at specified
prices. At June 30, 1994, the amounts committed approximated the
market value of the related securities.
Insurance - Liability for accidents at nuclear power plants is governed by
the Price-Anderson Act, which limits the liability of nuclear reactor
owners to the amount of the insurance available from private sources
and under an industry retrospective payment plan. In accordance with
this Act, FPL maintains $200 million of private liability insurance, which is
the maximum obtainable, and participates in a secondary financial
protection system under which it is subject to retrospective assessments
of up to $317 million per incident at any nuclear utility reactor in the
United States, payable at a rate not to exceed $40 million per incident
per year.
FPL participates in insurance pools and other arrangements that provide
$2.75 billion of limited insurance coverage for property damage,
decontamination and premature decommissioning risks at its nuclear
plants. The proceeds from such insurance, however, must first be used
for reactor stabilization and site decontamination before they can be
used for plant repair. FPL also participates in an insurance program that
provides limited coverage for replacement power costs if a plant is out of
service because of an accident. In the event of an accident at one of
FPL's or another participating insured's nuclear plants, FPL could be
assessed up to $58 million in retrospective premiums, and in the event
of a subsequent accident at such nuclear plants during the policy period,
the maximum aggregate assessment is $72 million under the programs
in effect at June 30, 1994. This contingent liability would be partially
offset by a portion of FPL's storm and property insurance reserve (storm
fund), which totaled $88 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 Group's and FPL's financial condition.
In 1993, FPL replaced its transmission and distribution (T&D) property
insurance coverage with a self-insurance program due to the high cost
and limited coverage available from third-party insurers. Costs incurred
under the self-insurance program will be charged against FPL's storm
fund. Recovery of any losses in excess of the storm fund from
ratepayers will require the approval of the Florida Public Service
Commission (FPSC). FPL's available lines of credit include $300 million
to provide additional liquidity in the event of a T&D property loss.
Contracts - FPL has take-or-pay contracts with the Jacksonville Electric
Authority (JEA) for 374 megawatts (mw) of power through 2022 and with
subsidiaries of the Southern Company to purchase 1,007 mw of power
through May 1995, and declining amounts thereafter through mid-2010.
FPL also has various firm pay-for-performance contracts to purchase
approximately 1,000 mw from certain cogenerators and small power
producers (qualifying facilities) with expiration dates ranging from 2002
through 2026. These contracts provide for capacity and energy
payments. Energy payments are based on the actual power taken under
these contracts. Capacity payments for the pay-for-performance
contracts are subject to the qualifying facilities meeting certain contract
obligations.
The required capacity payments through 1998 under these contracts are
estimated to be as follows:
1994 1995 1996 1997 1998
(Millions of Dollars)
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 were as
follows:
Three Months Ended June 30, Six Months Ended June 30,
1994 Charges 1993 Charges 1994 Charges 1993 Charges
Capacity Energy(1) Capacity Energy(1) Capacity Energy(1) Capacity Energy(1)
(Millions of Dollars)
JEA .................... $21(2) $12 $22(2) $13 $ 42(2) $22 $ 43(2) $ 26
Southern Companies ..... 52(3) 36 73(3) 60 108(3) 69 150(3) 116
Qualifying Facilities... 37(3) 16 15(3) 10 65(3) 31 29(3) 20
(1) Recovered through the fuel and purchased power cost recovery clause.
(2) Recovered through base rates and the capacity cost recovery clause (capacity clause).
(3) Recovered through the capacity clause.
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 $270 million for 1994, $430 million for 1995, $460 million for
1996, $480 million for 1997 and $500 million for 1998. Total
payments made under these contracts for the three and six months
ended June 30, 1994 were $69 million and $115 million, respectively.
Total payments made under these contracts for the three and six
months ended June 30, 1993 were $59 million and $135 million,
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 Group, FPL and ESI have
engaged in anti-competitive conduct intended to eliminate competition
from cogenerators generally, and from their facility in particular,
in violation of federal antitrust laws and have wrongfully interfered
with the cogeneration project's contractual relationship with
Metropolitan Dade County. The suit seeks damages in excess of $100
million, before trebling under antitrust law, plus other unspecified
compensatory and punitive damages. A motion for summary judgment by
FPL Group, FPL and ESI has been denied. FPL Group, FPL and ESI are
appealing the denial.
FPL Group believes that it and its subsidiaries have meritorious
defenses to the litigation described above and is vigorously
defending these suits. Accordingly, the liabilities, if any, arising
from this litigation are not anticipated to have a material adverse
effect on FPL Group's financial statements.
A former cable installation contractor for Telesat Cablevision, Inc.
(Telesat) sued FPL Group, FPL Group Capital and Telesat for breach of
contract, fraud, violation of racketeering statutes and several other
claims. The trial court entered a judgment in favor of FPL Group and
Telesat on nine of twelve counts, including all of the racketeering
and fraud claims, and in favor of FPL Group Capital on all counts.
However, the jury in the case awarded the contractor damages totaling
approximately $6 million against FPL Group and Telesat for breach of
contract and tortious interference. FPL Group believes that the jury
award is without merit, and FPL Group and Telesat have filed a motion
for the entry of a judgment in their favor as a matter of law. The
contractor has filed a motion for a new trial. A ruling by the trial
court on both motions is pending. The resulting liability, if any,
is not anticipated to have a material adverse effect on FPL Group's
financial statements.
3. Summarized Financial Information
Summarized financial information of FPL Group Capital, a consolidated
wholly-owned subsidiary whose debentures are guaranteed by FPL Group,
is provided below:
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
(Thousands of Dollars)
Operating revenues ............................... $24,556 $28,247 $47,757 $57,202
Operating expenses ............................... 24,707 25,197 46,922 52,868
Income (loss) before extraordinary item .......... (1,760) 3,616 (1,799) 3,407
Net loss ......................................... (1,760) (1,756) (1,799) (1,965)
June 30, December 31,
1994 1993
(Thousands of Dollars)
Current assets .............................................................. $ 104,364 $ 96,387
Noncurrent assets ........................................................... 1,046,987 1,169,552
Current liabilities ......................................................... 186,735 313,605
Noncurrent liabilities ...................................................... 633,918 619,818
/TABLE
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This discussion should be read in conjunction with the Notes to
Condensed Consolidated Financial Statements contained herein and
Management's Discussion and Analysis of Financial Condition and
Results of Operations appearing in FPL Group's 1993 Form 10-K. The
results of operations for an interim period may not give a true indication
of results for the year. In the following discussion, all comparisons are
with the corresponding items in the prior year.
RESULTS OF OPERATIONS
For the three and six months ended June 30, 1994, net income was
favorably affected by higher energy sales, resulting from increased
energy usage per retail customer and customer growth, and the benefits
of ongoing cost reduction measures. Partially offsetting these factors,
was higher depreciation expense and lower AFUDC.
Revenues from base rates, which represented 62% of total utility
operating revenues for the three and six months ended June 30, 1994
and 59% and 60% for the respective periods in 1993, are derived
primarily from retail operations regulated by the FPSC. Such revenues
increased for the three and six months ended June 30, 1994 mainly due
to an 11.9% and 10.0% increase in energy sales primarily due to
increased usage per retail customer resulting from warmer weather, as
well as an improved economy and customer growth of 2.3%. Revenues
derived from cost recovery clause rates and franchise fees comprise
substantially all of the remaining portion of operating revenues. These
revenues represent a pass-through of costs and do not significantly
affect net income.
Excluding amounts recovered through cost recovery clauses, utility other
operations and maintenance expenses increased slightly mainly due to
costs associated with consolidation of facilities and inventory reductions,
costs relating to additional generating units placed in service after the
first quarter in 1993 and customer growth. Partially offsetting these
items were cost savings from ongoing cost reduction efforts. Higher
electric utility plant balances, reflecting facilities added to meet customer
growth, and new depreciation rates implemented on an interim basis in
January 1994 resulted in increased depreciation expense for the three
and six months ended June 30, 1994. The FPSC's pending decision to
approve or modify interim depreciation rates, which is scheduled to occur
in September 1994, could affect 1994 depreciation expense since any
changes would be retroactive to January 1994.
AFUDC decreased for the three and six months ended June 30, 1994 as
a result of the placement in service of the repowered Lauderdale units in
the second quarter of 1993 and Martin Unit Nos. 3 and 4 in the first and
second quarter of 1994, respectively. Interest and preferred stock
dividend requirements declined for the three and six months ended June
30, 1994 due to the refunding of higher cost debt and preferred stock
during 1993 with lower rate instruments. Income taxes increased for the
three and six months ended June 30, 1994 due to higher income, the
increase in the federal income tax rate and an adjustment to prior year
taxes in the first quarter of 1994.
In the first quarter of 1994, FPL Group adopted AICPA Statement of
Position (SOP) 93-6, "Employers' Accounting for Employee Stock
Ownership Plans." Under the new accounting rules, the 10.5 million
unallocated shares currently held by the Trust for the Employee Thrift
Plans of FPL Group and FPL are no longer considered outstanding for
earnings per share purposes. These shares will be included as
outstanding when allocated to employee accounts over the next 15
years. The effect of adopting SOP 93-6, primarily reflected in Other -
net, was to reduce net income for the three and six months ended
June 30, 1994 by approximately $5 million and $11 million, respectively.
FINANCIAL CONDITION
On May 9, 1994, the board of directors of FPL Group announced a
change in financial strategy. The key elements of the new strategy
include a revised dividend payout ratio and a common stock repurchase
program. The targeted dividend payout ratio will be 60-65% of prior
year's earnings, equating to a current quarterly common stock dividend
of 42 cents per share ($1.68 annually), a 32% reduction from the
previous quarterly dividend of 62 cents per share. The FPL Group board
of directors authorized the repurchase of 10 million shares of common
stock over the next three years. An effort is being made to repurchase a
total of four million shares by year-end. Through June 1994, 2.2 million
shares have been repurchased.
For information concerning commitments, see Note 2. For a discussion
of changes in capitalization, see Note 1.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of FPL Group's shareholders was held on
May 9, 1994. Of the 190,065,570 shares of common stock
outstanding on the record date of February 28, 1994, a total of
162,102,533 shares were represented in person or by proxy.
(b) The following directors were elected effective May 9, 1994:
Votes Cast
Against or
For Withheld
H. Jesse Arnelle ......................................................... 158,062,850 4,039,683
Robert M. Beall, II ...................................................... 158,318,498 3,784,035
David Blumberg ........................................................... 157,756,816 4,345,717
James L. Broadhead ....................................................... 155,636,956 6,465,577
J. Hyatt Brown ........................................................... 158,172,651 3,929,882
Marshall M. Criser ....................................................... 158,217,453 3,885,080
Jean McArthur Davis ...................................................... 157,968,817 4,133,716
B. F. Dolan .............................................................. 158,297,059 3,805,474
Willard D. Dover ......................................................... 158,327,908 3,774,625
Alfonso Fanjul ........................................................... 156,788,980 5,313,553
Stephen E. Frank ......................................................... 156,954,906 5,147,627
Drew Lewis ............................................................... 158,188,967 3,913,566
Frederic V. Malek ........................................................ 158,063,914 4,038,619
Paul R. Tregurtha ........................................................ 158,054,430 4,048,103
(c)(i) The vote to ratify the appointment of Deloitte & Touche as
independent auditors for 1994 was 158,214,236 for, 2,561,628
against and 1,326,669 abstaining.
(ii) A vote on approval of the Annual Incentive Plan was
143,681,948 for, 15,489,582 against and 2,931,003 abstaining.
(iii) A vote on approval of the Long Term Incentive Plan was
137,683,010 for, 21,213,057 against and 3,206,466 abstaining.
(iv) The vote on a shareholder proposal requesting that FPL Group
adopt cumulative voting for the election of directors was
34,558,739 for, 96,744,608 against, 3,408,327 abstaining and
27,390,858 broker non-votes.
(v) The vote on a shareholder proposal requesting that FPL Group
adopt the Coalition for Environmentally Responsible Economies'
Principles for corporate environmental accountability was
18,316,867 for, 108,863,023 against, 7,531,784 abstaining and
27,390,858 broker non-votes.
Item 5. Other Information
(1) Reference is made to Item 1. Business - Utility
Operations - System Capability and Load in FPL Group's 1993
Form 10-K.
In June 1994, under a 1991 agreement with Georgia Power
Company, FPL purchased an additional 17% (140 mw) ownership
interest in Scherer Unit No. 4 for approximately $129 million.
(2) Reference is made to Item 1. Business - Utility
Operations - Fuel in FPL Group's 1993 Form 10-K.
In May 1994, FPL combined and restructured both of its
existing take-or-pay natural gas supply contracts with
affiliates of Florida Gas Transmission Company, the main
interstate pipeline in Florida. The new contract, which
expires in 2009, will provide a firm supply of natural gas
under competitive pricing terms to meet FPL's future gas
requirements.
(3) Reference is made to Item 1. Business - Utility Operations -
Competition in FPL Group's 1993 Form 10-K.
In May 1994, the Federal Energy Regulatory Commission (FERC)
ruled that FPL can recover its full cost of providing network
transmission service to the Florida Municipal Power Agency
(FMPA). The FMPA is seeking clarification of certain aspects
of the FERC's ruling.
In July 1994, hearings regarding FPL's comprehensive proposal
to revise its wholesale services, rates and tariffs were
deferred and are now scheduled to begin in January 1995. The
hearings were deferred to permit testimony addressing a new
comparability standard announced by the FERC which states that
new open access transmission tariffs should provide third
parties with access on the same basis as is available to the
owner of the transmission system. A final decision by the
FERC is expected in 1996.
(4) Effective August 1994, FPL Group has guaranteed the payment of
$275 million aggregate principal amount of FPL Group Capital's
outstanding debentures (which are entitled to the benefit of a
support agreement, dated December 18, 1985, between FPL Group
and FPL Group Capital). These debentures are included in
long-term debt. As long as the guarantee is in place, FPL
Group Capital's reporting obligations under the Securities
Exchange Act of 1934, as amended, will be suspended pursuant
to the rules and regulations of the Securities and Exchange
Commission.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
*4(a) Restated Articles of Incorporation of FPL Group
dated December 31, 1984, as amended through
December 17, 1990 (filed as Exhibit 4(a) to
Post-Effective Amendment No. 5 to Form S-8, File
No. 33-18669)
*4(b) Bylaws of FPL Group, as amended November 15, 1993
(filed as Exhibit 3(ii) to Form 10-K for the year
ended December 31, 1993)
*4(c) Rights Agreement dated as of June 16, 1986 between
FPL Group, Inc. and the First National Bank of
Boston (filed as Exhibit 4(e) to Post-Effective
Amendment No. 5 to Form S-8, File No. 33-18669)
*4(d) Mortgage and Deed of Trust dated as of January 1,
1944, and Ninety-five Supplements thereto between
FPL and Bankers Trust Company and The Florida
National Bank of Jacksonville (now First Union
National Bank of Florida) Trustees (as of
September 2, 1992, the sole trustee is Bankers
Trust Company) (filed as Exhibit B-3, File No.
2-4845; Exhibit 7(a), File No. 2-7126; Exhibit
7(a), File No. 2-7523; Exhibit 7(a), File
No. 2-7990; Exhibit 7(a), File No. 2-9217; Exhibit
4(a)-5, File No. 2-10093; Exhibit 4(c), File No.
2-11491; Exhibit 4(b)-1, File No. 2-12900; Exhibit
4(b)-1, File No. 2-13255; Exhibit 4(b)-1, File No.
2-13705; Exhibit 4(b)-1, File No. 2-13925;
Exhibit 4(b)-1, File No. 2-15088; Exhibit 4(b)-1,
File No. 2-15677; Exhibit 4(b)-1, File
No. 2-20501; Exhibit 4(b)-1, File No. 2-22104;
Exhibit 2(c), File No. 2-23142; Exhibit 2(c), File
No. 2-24195; Exhibit 4(b)-1, File No. 2-25677;
Exhibit 2(c), File No. 2-27612; Exhibit 2(c), File
No. 2-29001; Exhibit 2(c), File No. 2-30542;
Exhibit 2(c), File No. 2-33038; Exhibit 2(c), File
No. 2-37679; Exhibit 2(c), File No. 2-39006;
Exhibit 2(c), File No. 2-41312; Exhibit 2(c), File
No. 2-44234; Exhibit 2(c), File No. 2-46502;
Exhibit 2(c), File No. 2-48679; Exhibit 2(c), File
No. 2-49726; Exhibit 2(c), File No. 2-50712;
Exhibit 2(c), File No. 2-52826; Exhibit 2(c), File
No. 2-53272; Exhibit 2(c), File No. 2-54242;
Exhibit 2(c), File No. 2-56228; Exhibits 2(c) and
2(d), File No. 2-60413; Exhibits 2(c) and 2(d),
File No. 2-65701; Exhibit 2(c), File No. 2-66524;
Exhibit 2(c), File No. 2-67239; Exhibit 4(c), File
No. 2-69716; Exhibit 4(c), File No. 2-70767;
Exhibit 4(b), File No. 2-71542; Exhibit 4(b), File
No. 2-73799; Exhibits 4(c), 4(d) and 4(e), File
No. 2-75762; Exhibit 4(c), File No. 2-77629;
Exhibit 4(c), File No. 2-79557; Exhibit 99(a) to
Post-Effective Amendment No. 5 to Form S-8, File
No. 33-18669; Exhibit 99(a) to Post-Effective
Amendment No. 1 to Form S-3, File No. 33-46076;
Exhibit 4(b) to Form 10-K for the year ended
December 31, 1993, File No. 1-3545; and Exhibit
4(i) to Form 10-Q for the quarter ended June 30,
1994, File No. 1-3545)
*10(a) Supplemental Executive Retirement Plan, as amended
and restated (filed as Exhibit 99(b) to
Post-Effective Amendment No. 5 to Form S-8, File
No. 33-18669)
*10(b) Benefit Restoration Plan of FPL Group and
affiliates, as amended and restated (filed as
Exhibit 99(c) to Post-Effective Amendment No. 5 to
Form S-8, File No. 33-18669)
*10(c) FPL Group Amended and Restated Supplemental
Executive Retirement Plan for J. L. Broadhead
(filed as Exhibit 99(d) to Post-Effective
Amendment No. 5 to Form S-8, File No. 33-18669)
*10(d) Employment Agreement between FPL Group and D. P.
Coyle dated June 12, 1989 (filed as Exhibit 99(e)
to Post-Effective Amendment No. 5 to Form S-8,
File No. 33-18669)
*10(e) Employment Agreement between FPL and Stephen E.
Frank dated July 31, 1990 (filed as Exhibit 99(f)
to Post-Effective Amendment No. 5 to Form S-8,
File No. 33-18669)
*10(f) Employment Agreement between FPL and Jerome H.
Goldberg dated August 9, 1989 (filed as
Exhibit 99(g) to Post-Effective Amendment No. 5 to
Form S-8, File No. 33-18669)
*10(g) FPL Group Long-Term Incentive Plan of 1985, as
amended (filed as Exhibit 99(h) to Post-Effective
Amendment No. 5 to Form S-8, File No. 33-18669)
*10(h) Director and Executive Compensation Deferral Plan
of FPL, as amended (filed as Exhibit 99(i) to
Post-Effective Amendment No. 5 to Form S-8, File
No. 33-18669)
*10(i) Employment Agreement between FPL Group and James
L. Broadhead dated February 13, 1989 (filed as
Exhibit 99(j) to Post-Effective Amendment No. 5 to
Form S-8, File No. 33-18669)
*10(j) Employment Agreement between FPL Group and James
L. Broadhead dated as of December 13, 1993 (filed
as Exhibit 10(j) to Form 10-K for the year ended
December 31, 1993)
*10(k) Annual Incentive Plan dated as of March 31, 1994
(filed as Exhibit 10(k) to Form 10-Q for the
quarter ended March 31, 1994)
*10(l) Long-Term Incentive Plan dated as of February 14,
1994 (filed as Exhibit 10(l) to Form 10-Q for the
quarter ended March 31, 1994)
10(m) Employment Agreement between FPL and Jerome H.
Goldberg dated July 25, 1994
* Incorporated herein by reference
(b) Reports on Form 8-K
None
The registrant agrees to furnish a copy of the guarantee referred to
in Part II - Other Information, Item 5(4) to the Securities and
Exchange Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
FPL GROUP, INC.
(Registrant)
Date: August 15, 1994 PAUL J. EVANSON
Paul J. Evanson
Vice President, Finance
and Chief Financial Officer
(Principal Financial Officer)