-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, bzIp6qMJtrZUgIa5Kd+hqQCJBJtjCyQB1PleUpA3iP0pdKF2WNr3UTYyfw/zZYSo p54BgOyotsZSb2oDhGIsRA== 0000753308-94-000016.txt : 19941111 0000753308-94-000016.hdr.sgml : 19941111 ACCESSION NUMBER: 0000753308-94-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941110 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FPL GROUP INC CENTRAL INDEX KEY: 0000753308 STANDARD INDUSTRIAL CLASSIFICATION: 4911 IRS NUMBER: 592449419 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08841 FILM NUMBER: 94558464 BUSINESS ADDRESS: STREET 1: 700 UNIVERSE BLVD CITY: JUNO BEACH STATE: FL ZIP: 33408 BUSINESS PHONE: 4076944647 MAIL ADDRESS: STREET 1: P O BOX 14000 CITY: JUNO BEACH STATE: FL ZIP: 33408 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-8841 FPL GROUP, INC. (Exact name of registrant as specified in its charter) Florida 59-2449419 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 700 Universe Boulevard Juno Beach, Florida 33408 (Address of principal executive offices) (Zip Code) (407) 694-4647 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $.01 Par Value, outstanding at October 31, 1994: 186,803,199 shares PART I - FINANCIAL INFORMATION Item 1. Financial Statements FPL GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, 1994 1993 1994 1993 (In thousands, except per share amounts) OPERATING REVENUES: Utility ........................................ $1,501,896 $1,586,141 $4,076,258 $4,011,181 Non-utility .................................... 11,004 16,544 58,590 73,534 Total operating revenues ..................... 1,512,900 1,602,685 4,134,848 4,084,715 OPERATING EXPENSES: Utility operations: Fuel, purchased power and interchange ........ 470,319 533,799 1,308,720 1,384,387 Other operations and maintenance ............. 253,416 322,727 877,562 925,377 Cost reduction program charge ................ - 138,000 - 138,000 Non-utility operations ......................... 9,868 10,389 51,815 56,645 Depreciation and amortization .................. 206,186 152,694 543,378 442,694 Taxes other than income taxes .................. 144,986 150,223 401,124 401,228 Total operating expenses ..................... 1,084,775 1,307,832 3,182,599 3,348,331 OPERATING INCOME ................................. 428,125 294,853 952,249 736,384 OTHER (INCOME) DEDUCTIONS: Interest expense ............................... 79,430 91,690 241,072 281,771 Allowance for funds used during construction ... (3,939) (12,673) (19,662) (52,666) Preferred stock dividend requirements of Florida Power & Light Company ................ 9,879 10,712 29,687 32,631 Other - net .................................... (13,296) (27,612) (9,842) (55,675) Total other deductions - net ................. 72,074 62,117 241,255 206,061 INCOME BEFORE INCOME TAXES ....................... 356,051 232,736 710,994 530,323 INCOME TAXES ..................................... 133,807 92,214 268,467 187,305 NET INCOME ....................................... $ 222,244 $ 140,522 $ 442,527 $ 343,018 Average number of common shares outstanding ...... 177,203 188,133 178,558 185,813 Earnings per share of common stock ............... $ 1.25 $ 0.75 $ 2.48 $ 1.85 Dividends per share of common stock .............. $ 0.42 $ 0.62 $ 1.46 $ 1.85
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
September 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 ........................... $15,706,907 $14,838,160 Construction work in progress .......................................... 274,143 781,435 Other .................................................................. 245,363 261,125 Less accumulated depreciation and amortization ......................... 6,050,699 5,591,265 Total property, plant and equipment - net ............................ 10,175,714 10,289,455 INVESTMENTS .............................................................. 1,014,199 984,992 CURRENT ASSETS: Cash and cash equivalents .............................................. 210,405 152,014 Marketable securities - at market value (cost of $40,906 and $169,328, respectively) ............................... 39,006 171,988 Receivables - net ...................................................... 613,047 504,597 Materials, supplies and fossil fuel stock - at average cost ............ 310,894 329,599 Other .................................................................. 71,402 93,159 Total current assets ................................................. 1,244,754 1,251,357 OTHER ASSETS AND DEFERRED DEBITS: Unamortized debt reacquisition costs of Florida Power & Light Company .. 292,464 302,561 Deferred litigation items of Florida Power & Light Company ............. 110,859 110,859 Other .................................................................. 130,417 138,788 Total other assets and deferred debits ............................... 533,740 552,208 TOTAL ASSETS ............................................................... $12,968,407 $13,078,012 CAPITALIZATION AND LIABILITIES CAPITALIZATION: Common stock ........................................................... $ 1,868 $ 1,901 Other shareholders' equity ............................................. 4,201,632 4,098,706 Preferred stock of Florida Power & Light Company: Without sinking fund requirements .................................... 451,250 451,250 With sinking fund requirements ....................................... 94,000 97,000 Long-term debt ......................................................... 3,909,063 3,748,983 Total capitalization ................................................. 8,657,813 8,397,840 CURRENT LIABILITIES: Commercial paper ....................................................... 16,511 349,600 Current maturities of long-term debt and preferred stock ............... 254,277 279,680 Accounts payable ....................................................... 276,328 323,282 Customers' deposits .................................................... 222,045 216,140 Accrued interest and taxes ............................................. 416,981 204,086 Other .................................................................. 240,135 465,829 Total current liabilities ............................................ 1,426,277 1,838,617 OTHER LIABILITIES AND DEFERRED CREDITS Accumulated deferred income taxes ...................................... 1,596,484 1,512,067 Deferred regulatory credit - income taxes............................... 199,772 216,546 Unamortized investment tax credits ..................................... 308,227 323,791 Capital lease obligations .............................................. 204,959 271,498 Other .................................................................. 574,875 517,653 Total other liabilities and deferred credits ......................... 2,884,317 2,841,555 COMMITMENTS AND CONTINGENCIES TOTAL CAPITALIZATION AND LIABILITIES ....................................... $12,968,407 $13,078,012
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)
Nine Months Ended September 30, 1994 1993 (Thousands of Dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net income ................................................................ $ 442,527 $ 343,018 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ......................................... 543,378 442,694 Increase (decrease) in deferred income taxes and related regulatory credit ................................................... 67,643 (18,250) (Deferrals) recoveries under cost recovery clauses (1) ................ (75,681) 68,987 Other - net ........................................................... 113,788 174,189 Net cash provided by operating activities ............................... 1,091,655 1,010,638 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (2) .................................................. (542,599) (901,201) Other - net ............................................................... 65,599 (7,853) Net cash used in investing activities ................................... (477,000) (909,054) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of bonds and other long-term debt ................................ 172,850 2,026,485 Issuance of preferred stock of Florida Power & Light Company .............. - 190,000 Retirement of long-term debt and preferred stock .......................... (254,281) (2,116,530) Issuance of common stock .................................................. 16,685 257,892 Repurchase of common stock ................................................ (114,590) - (Decrease) increase in commercial paper ................................... (133,089) 120,000 Dividends on common stock ................................................. (260,645) (344,124) Other - net................................................................ 16,806 40,436 Net cash (used in) provided by financing activities ..................... (556,264) 174,159 Net increase in cash and cash equivalents ................................... 58,391 275,743 Cash and cash equivalents at beginning of period ............................ 152,014 78,156 Cash and cash equivalents at end of period .................................. $ 210,405 $ 353,899 Supplemental disclosures of cash flow information: Cash paid for interest (net of amount capitalized) ........................ $ 255,984 $ 288,080 Cash paid for income taxes ................................................ $ 122,350 $ 91,627 Supplemental schedule of noncash investing and financing activities: Additions to capital lease obligations .................................... $ 61,055 $ 34,294 (1) Represents the effect on cash flows from operating activities of the net amounts deferred or recovered under the fuel and purchased power, oil-backout, energy conservation, capacity and environmental cost recovery clauses. (2) Capital expenditures exclude allowance for equity funds used during construction.
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 September 30, 1994 and December 31, 1993, the results of operations for the three and nine months ended September 30, 1994 and 1993 and the cash flows for the nine months ended September 30, 1994 and 1993 have been made. The results of operations for an interim period may not give a true indication of results for the year. 1. Capitalization Preferred Stock - The 1994 sinking fund requirement for the 6.84% Preferred Stock, Series Q, $100 Par Value was met by redeeming and retiring 30,000 shares in April 1994. There are no other sinking fund requirements for the remainder of 1994. Long-Term Debt - In January 1994, FPL Group Capital Inc (FPL Group Capital) redeemed $150 million of its 8 7/8% Debentures using an advance from FPL Group and internally generated funds. In March and July 1994, Florida Power & Light Company (FPL) sold a total of $172.85 million principal amount of Pollution Control Revenue Refunding Bonds, maturing in September 2024 and July 2029, at variable interest rates that initially ranged from 2.00% to 3.20%. The proceeds were used to redeem and retire in March, May and October 1994 a total of approximately $172.85 million principal amount of Pollution Control Revenue Bonds, maturing in 2007 through 2019, at interest rates ranging from 5.90% to 11 3/8%. At September 30, 1994, $200 million of commercial paper has been included in long-term debt pursuant to financing agreements which allow FPL to refinance these amounts for periods extending beyond September 30, 1995. 2. Commitments and Contingencies Commitments - FPL has made commitments in connection with a portion of its projected capital expenditures. Capital expenditures for the construction or acquisition of additional facilities and equipment to meet customer demand are estimated to be $3.7 billion, including allowance for funds used during construction (AFUDC), for the years 1994 through 1998. Included in the five-year forecast are capital expenditures for 1994 of $879 million, of which $561 million had been spent through September 30, 1994. Cost control efforts may significantly reduce the amount originally projected for the full year 1994. FPL Group Capital has committed to invest approximately $2 million in, and lend approximately $1 million to, partnerships and joint ventures entered into through ESI Energy, Inc. (ESI), all of which are expected to be funded in the remainder of 1994. Additionally, FPL Group Capital and its subsidiaries, primarily ESI, have guaranteed up to approximately $98 million of lease obligations, debt service payments and other payments subject to certain contingencies. FPL Group, through a consolidated limited partnership, has entered into forward commitments at September 30, 1994 to sell short approximately $14 million of U.S. Treasury Notes on various dates in October 1994 at specified prices. At September 30, 1994, the amounts committed approximated the market value of the related securities. Insurance - Liability for accidents at nuclear power plants is governed by the Price-Anderson Act, which limits the liability of nuclear reactor owners to the amount of the insurance available from private sources and under an industry retrospective payment plan. In accordance with this Act, FPL maintains $200 million of private liability insurance, which is the maximum obtainable, and participates in a secondary financial protection system under which it is subject to retrospective assessments of up to $317 million per incident at any nuclear utility reactor in the United States, payable at a rate not to exceed $40 million per incident per year. FPL participates in insurance pools and other arrangements that provide $2.75 billion of limited insurance coverage for property damage, decontamination and premature decommissioning risks at its nuclear plants. The proceeds from such insurance, however, must first be used for reactor stabilization and site decontamination before they can be used for plant repair. FPL also participates in an insurance program that provides limited coverage for replacement power costs if a plant is out of service because of an accident. In the event of an accident at one of FPL's or another participating insured's nuclear plants, FPL could be assessed up to $58 million in retrospective premiums, and in the event of a subsequent accident at such nuclear plants during the policy period, the maximum aggregate assessment is $72 million under the programs in effect at September 30, 1994. Effective January 1995, FPL could be assessed up to $76 million in the event of one nuclear accident, and in the event of a subsequent accident during the policy period, the maximum aggregate assessment would be $90 million. This contingent liability would be partially offset by a portion of FPL's storm and property insurance reserve (storm fund), which totaled $91 million at September 30, 1994. In the event of a catastrophic loss at one of FPL's nuclear plants, the amount of insurance available may not be adequate to cover property damage and other expenses incurred. Uninsured losses, to the extent not recovered through rates, would be borne by FPL and could have a material adverse effect on FPL Group's and FPL's financial condition. In 1993, FPL replaced its transmission and distribution (T&D) property insurance coverage with a self-insurance program due to the high cost and limited coverage available from third-party insurers. Costs incurred under the self-insurance program will be charged against FPL's storm fund. Recovery of any losses in excess of the storm fund from ratepayers will require the approval of the Florida Public Service Commission (FPSC). FPL's available lines of credit include $300 million to provide additional liquidity in the event of a T&D property loss. Contracts - FPL has take-or-pay contracts with the Jacksonville Electric Authority (JEA) for 374 megawatts (mw) of power through 2022 and with subsidiaries of the Southern Company to purchase 1,007 mw of power through May 1995, and 913 mw thereafter through mid-2010. FPL also has various firm pay-for-performance contracts to purchase approximately 1,000 mw from certain cogenerators and small power producers (qualifying facilities) with expiration dates ranging from 2002 through 2026. These contracts provide for capacity and energy payments. Energy payments are based on the actual power taken under these contracts. Capacity payments for the pay-for-performance contracts are subject to the qualifying facilities meeting certain contract obligations. The required capacity payments through 1998 under these contracts are estimated to be as follows:
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 September 30, Nine Months Ended September 30, 1994 Charges 1993 Charges 1994 Charges 1993 Charges Capacity Energy(1) Capacity Energy(1) Capacity Energy(1) Capacity Energy(1) (Millions of Dollars) JEA .................... $19(2) $13 $22(2) $12 $ 62(2) $35 $ 65(2) $ 38 Southern Companies ..... 39(3) 30 58(3) 40 147(3) 99 209(3) 155 Qualifying Facilities... 35(3) 19 15(3) 10 101(3) 50 45(3) 30 (1) Recovered through the fuel and purchased power cost recovery clause. (2) Recovered through base rates and the capacity cost recovery clause (capacity clause). (3) Recovered through the capacity clause.
FPL has take-or-pay contracts for the supply and transportation of natural gas under which it is required to make payments estimated to be $250 million for 1994, $430 million for 1995, $460 million for 1996, $480 million for 1997 and $500 million for 1998. Total payments made under these contracts for the three and nine months ended September 30, 1994 were $71 million and $187 million, respectively. Total payments made under these contracts for the three and nine months ended September 30, 1993 were $86 million and $221 million, respectively. Litigation - Union Carbide Corporation sued FPL and Florida Power Corporation alleging that, through a territorial agreement approved by the FPSC, they conspired to eliminate competition in violation of federal antitrust laws. Praxair, Inc., an entity that was formerly a unit of Union Carbide, has been substituted as the plaintiff. The suit seeks treble damages of an unspecified amount based on alleged higher prices paid for electricity and product sales lost. Cross motions for summary judgment were denied. Both parties are appealing the denials. A suit brought by the partners in a cogeneration project located in Dade County, Florida, alleges that FPL Group, FPL and ESI have engaged in anti-competitive conduct intended to eliminate competition from cogenerators generally, and from their facility in particular, in violation of federal antitrust laws and have wrongfully interfered with the cogeneration project's contractual relationship with Metropolitan Dade County. The suit seeks damages in excess of $100 million, before trebling under antitrust law, plus other unspecified compensatory and punitive damages. A motion for summary judgment by FPL Group, FPL and ESI has been denied. FPL Group, FPL and ESI are appealing the denial. FPL Group believes that it and its subsidiaries have meritorious defenses to all of the litigation described above and is vigorously defending these suits. Accordingly, the liabilities, if any, arising from this litigation are not anticipated to have a material adverse effect on FPL Group's financial statements. A former cable installation contractor for Telesat Cablevision, Inc. (Telesat) sued FPL Group, FPL Group Capital and Telesat for breach of contract, fraud, violation of racketeering statutes and several other claims. Plaintiff claimed more than $24 million in compensatory damages, treble damages under racketeering statutes, punitive damages and attorneys' fees. The trial court entered a judgment in favor of FPL Group and Telesat on nine of twelve counts, including all of the racketeering and fraud claims, and in favor of FPL Group Capital on all counts. It also denied all parties' claims for attorneys' fees. However, the jury in the case awarded the contractor damages totaling approximately $6 million against FPL Group and Telesat for breach of contract and tortious interference. All parties have appealed. The final liability, if any, is not anticipated to have a material adverse effect on FPL Group's financial statements. 3. Cost Reduction Program In the third quarter of 1993, FPL implemented a major cost reduction program, which resulted in a $138 million charge and reduced net income by approximately $85 million. The charge consisted of costs associated with a workforce reduction of approximately 1,700 positions through early retirement and severance programs. 4. Summarized Financial Information Summarized financial information of FPL Group Capital, a consolidated wholly-owned subsidiary whose debentures are guaranteed by FPL Group, is provided below:
Three Months Ended Nine Months Ended September 30, September 30, 1994 1993 1994 1993 (Thousands of Dollars) Operating revenues ............................... $11,082 $16,650 $58,840 $73,853 Operating expenses ............................... 12,905 14,051 59,827 66,919 Income before extraordinary item ................. 6,257 7,837 4,458 11,245 Net income ....................................... 6,257 7,837 4,458 5,873
September 30, December 31, 1994 1993 (Thousands of Dollars) Current assets .............................................................. $ 185,155 $ 96,387 Noncurrent assets ........................................................... 1,020,364 1,169,552 Current liabilities ......................................................... 170,715 313,605 Noncurrent liabilities ...................................................... 697,849 619,818
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This discussion should be read in conjunction with the Notes to Condensed Consolidated Financial Statements contained herein and Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in FPL Group's 1993 Form 10-K. The results of operations for an interim period may not give a true indication of results for the year. In the following discussion, all comparisons are with the corresponding items in the prior year. RESULTS OF OPERATIONS For the three and nine months ended September 30, 1994, net income was favorably affected by the benefits of ongoing cost reduction measures and higher energy sales, resulting from customer growth. Higher energy sales for the nine months ended September 30, 1994 also benefitted from increased energy usage per retail customer. Partially offsetting these factors, were higher depreciation expense and lower AFUDC. Revenues from base rates, which were $921 million and $915 million for the three months ended September 30, 1994 and 1993 and $2.5 billion and $2.3 billion for the nine months ended September 30, 1994 and 1993, respectively, are derived primarily from retail operations regulated by the FPSC. Such revenues increased for both the three and nine months ended September 30, 1994 mainly due to higher energy sales. Retail energy sales increased 0.5% for the three months ended September 30, 1994 primarily due to customer growth of 2.0%, partially offset by lower usage per retail customer resulting from milder weather. Retail energy sales increased 6.2% for the nine months ended September 30, 1994 primarily due to increased usage per retail customer resulting from warmer weather in the first half of the year, and customer growth of 2.2%. Revenues derived from cost recovery clause rates and franchise fees comprise substantially all of the remaining portion of operating revenues. These revenues represent a pass-through of costs and do not significantly affect net income. Other operations and maintenance expenses of FPL decreased mainly due to cost savings from ongoing cost reduction efforts, despite additional costs relating to generating units placed in service after the first quarter in 1993 and the effects of customer growth. Higher electric utility plant balances, reflecting facilities added to meet customer growth, higher depreciation rates approved by the FPSC in September 1994, and a nonrecurring third quarter charge related to assets replaced during plant modifications resulted in increased depreciation expense for the three and nine months ended September 30, 1994. AFUDC decreased for the three and nine months ended September 30, 1994 as a result of the placement in service of the repowered Lauderdale units in the second quarter of 1993 and Martin Units Nos. 3 and 4 in the first and second quarter of 1994, respectively. Interest and preferred stock dividend requirements declined for the three and nine months ended September 30, 1994 due to the refunding of higher cost debt and preferred stock during 1993 with lower rate instruments. In the first quarter of 1994, FPL Group adopted AICPA Statement of Position (SOP) 93-6, "Employers' Accounting for Employee Stock Ownership Plans." Under the new accounting rules, the 10.375 million unallocated shares currently held by the Trust for the Employee Thrift Plans of FPL Group and FPL are no longer considered outstanding for earnings per share purposes. These shares will be included as outstanding when allocated to employee accounts over the next 15 years. The effect of adopting SOP 93-6, primarily reflected in Other - net, was to reduce net income for the three and nine months ended September 30, 1994 by approximately $5 million and $16 million, respectively. FINANCIAL CONDITION FPL Group's primary capital requirements consist of expenditures under FPL's construction program. Internally generated funds are expected to fund virtually all of these expenditures. The balance, if any, will be temporarily provided by commercial paper. In May 1994, the board of directors of FPL Group announced a change in financial strategy. The key elements of the new strategy include a revised dividend payout ratio and a common stock repurchase program. The targeted dividend payout ratio will be 60-65% of prior year's earnings, equating to a current quarterly common stock dividend of 42 cents per share ($1.68 annually). The FPL Group board of directors authorized the repurchase of 10 million shares of common stock over the next three years. An effort is being made to repurchase a total of four million shares by year-end. Through September 1994, 3.7 million shares have been repurchased. For information concerning capital commitments, see Note 2. For a discussion of changes in capitalization, see Note 1. PART II - OTHER INFORMATION Item 5. Other Information (1) Reference is made to Item 1. Business - Utility Operations - Employees in FPL Group's 1993 Form 10-K. FPL's collective bargaining agreement with the International Brotherhood of Electrical Workers (IBEW), which expired October 31, 1994, has been automatically extended for a period of one year. However, the FPL and the IBEW negotiating committees have agreed on a contract proposal, which is subject to ratification by the membership in late November 1994. The IBEW negotiating committee has unanimously recommended the approval of the contract proposal. (2) Reference is made to Item 1. Business - Utility Operations - Fuel in FPL Group's 1993 Form 10-K and Item 5(3) in FPL Group Form 10-Q for the quarter ended March 31, 1994. In August 1994, the FPSC approved the accelerated recovery of the costs required to convert Manatee Units Nos. 1 and 2 to burn Orimulsion, a low cost fuel oil substitute. The FPSC also found that FPL's decision to convert the Manatee units to burn Orimulsion was prudent and reasonable. FPL is seeking environmental approvals. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit Number Description *4(a) Restated Articles of Incorporation of FPL Group dated December 31, 1984, as amended through December 17, 1990 (filed as Exhibit 4(a) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *4(b) Bylaws of FPL Group, as amended November 15, 1993 (filed as Exhibit 3(ii) to Form 10-K for the year ended December 31, 1993, File No. 1-8841) *4(c) Rights Agreement dated as of June 16, 1986 between FPL Group, Inc. and the First National Bank of Boston (filed as Exhibit 4(e) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *4(d) Mortgage and Deed of Trust dated as of January 1, 1944, and Ninety-five Supplements thereto between FPL and Bankers Trust Company and The Florida National Bank of Jacksonville (now First Union National Bank of Florida) Trustees (as of September 2, 1992, the sole trustee is Bankers Trust Company) (filed as Exhibit B-3, File No. 2-4845; Exhibit 7(a), File No. 2-7126; Exhibit 7(a), File No. 2-7523; Exhibit 7(a), File No. 2-7990; Exhibit 7(a), File No. 2-9217; Exhibit 4(a)-5, File No. 2-10093; Exhibit 4(c), File No. 2-11491; Exhibit 4(b)-1, File No. 2-12900; Exhibit 4(b)-1, File No. 2-13255; Exhibit 4(b)-1, File No. 2-13705; Exhibit 4(b)-1, File No. 2-13925; Exhibit 4(b)-1, File No. 2-15088; Exhibit 4(b)-1, File No. 2-15677; Exhibit 4(b)-1, File No. 2-20501; Exhibit 4(b)-1, File No. 2-22104; Exhibit 2(c), File No. 2-23142; Exhibit 2(c), File No. 2-24195; Exhibit 4(b)-1, File No. 2-25677; Exhibit 2(c), File No. 2-27612; Exhibit 2(c), File No. 2-29001; Exhibit 2(c), File No. 2-30542; Exhibit 2(c), File No. 2-33038; Exhibit 2(c), File No. 2-37679; Exhibit 2(c), File No. 2-39006; Exhibit 2(c), File No. 2-41312; Exhibit 2(c), File No. 2-44234; Exhibit 2(c), File No. 2-46502; Exhibit 2(c), File No. 2-48679; Exhibit 2(c), File No. 2-49726; Exhibit 2(c), File No. 2-50712; Exhibit 2(c), File No. 2-52826; Exhibit 2(c), File No. 2-53272; Exhibit 2(c), File No. 2-54242; Exhibit 2(c), File No. 2-56228; Exhibits 2(c) and 2(d), File No. 2-60413; Exhibits 2(c) and 2(d), File No. 2-65701; Exhibit 2(c), File No. 2-66524; Exhibit 2(c), File No. 2-67239; Exhibit 4(c), File No. 2-69716; Exhibit 4(c), File No. 2-70767; Exhibit 4(b), File No. 2-71542; Exhibit 4(b), File No. 2-73799; Exhibits 4(c), 4(d) and 4(e), File No. 2-75762; Exhibit 4(c), File No. 2-77629; Exhibit 4(c), File No. 2-79557; Exhibit 99(a) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669; Exhibit 99(a) to Post-Effective Amendment No. 1 to Form S-3, File No. 33-46076; Exhibit 4(b) to Form 10-K for the year ended December 31, 1993, File No. 1-3545; and Exhibit 4(i) to Form 10-Q for the quarter ended June 30, 1994, File No. 1-3545) *10(a) Supplemental Executive Retirement Plan, as amended and restated (filed as Exhibit 99(b) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(b) Benefit Restoration Plan of FPL Group and affiliates, as amended and restated (filed as Exhibit 99(c) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(c) FPL Group Amended and Restated Supplemental Executive Retirement Plan for J. L. Broadhead (filed as Exhibit 99(d) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(d) Employment Agreement between FPL Group and D. P. Coyle dated June 12, 1989 (filed as Exhibit 99(e) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(e) Employment Agreement between FPL and Stephen E. Frank dated July 31, 1990 (filed as Exhibit 99(f) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(f) Employment Agreement between FPL and Jerome H. Goldberg dated August 9, 1989 (filed as Exhibit 99(g) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(g) FPL Group Long-Term Incentive Plan of 1985, as amended (filed as Exhibit 99(h) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(h) Director and Executive Compensation Deferral Plan of FPL, as amended (filed as Exhibit 99(i) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(i) Employment Agreement between FPL Group and James L. Broadhead dated February 13, 1989 (filed as Exhibit 99(j) to Post-Effective Amendment No. 5 to Form S-8, File No. 33-18669) *10(j) Employment Agreement between FPL Group and James L. Broadhead dated as of December 13, 1993 (filed as Exhibit 10(j) to Form 10-K for the year ended December 31, 1993, File No. 1-8841) *10(k) Annual Incentive Plan dated as of March 31, 1994 (filed as Exhibit 10(k) to Form 10-Q for the quarter ended March 31, 1994, File No. 1-8841) *10(l) Long-Term Incentive Plan dated as of February 14, 1994 (filed as Exhibit 10(l) to Form 10-Q for the quarter ended March 31, 1994, File No. 1-8841) *10(m) Employment Agreement between FPL and Jerome H. Goldberg dated July 25, 1994 (filed as Exhibit 10(m) to Form 10-Q for the quarter ended June 30, 1994, File No. 1-8841) 27 Financial Data Schedule * Incorporated herein by reference (b) Reports on Form 8-K None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FPL GROUP, INC. (Registrant) PAUL J. EVANSON Paul J. Evanson Vice President, Finance and Chief Financial Officer (Principal Financial Officer) Date: November 10, 1994 EX-27 2 FINANCIAL DATA SCHEDULE
UT This schedule contains summary financial information extracted from FPL Group's condensed consolidated balance sheet as of September 30, 1994 and condensed consolidated statements of income and cash flows for the nine months ended September 30, 1994 and is qualified in its entirety by reference to such financial statements. 1,000 DEC-31-1994 SEP-30-1994 9-MOS PER-BOOK $9,985,216 $1,204,698 $1,244,754 $403,323 $130,417 $12,968,407 $1,868 $3,189,945 $1,011,687 $4,203,500 $94,000 $451,250 $3,909,063 $0 $0 $16,511 $252,777 $1,500 $204,959 $0 $3,834,847 $12,968,407 $4,134,848 $268,467 $3,182,599 $3,182,599 $952,249 ($29,504) $952,066 $241,072 $442,527 $29,687 $442,527 $260,645 $0 $1,091,655 $2.48 $2.48
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