-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lna5LIPBoN+1qpPOGKzbIMBWwbOK+dvNgkPUMKyV9UZZiQhJ0R70mjVReFKOblrD qjLKOruMA9QFNN8AZYMBBg== 0000753308-99-000021.txt : 19990629 0000753308-99-000021.hdr.sgml : 19990629 ACCESSION NUMBER: 0000753308-99-000021 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FPL GROUP INC CENTRAL INDEX KEY: 0000753308 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 592449419 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-08841 FILM NUMBER: 99653827 BUSINESS ADDRESS: STREET 1: 700 UNIVERSE BLVD CITY: JUNO BEACH STATE: FL ZIP: 33408 BUSINESS PHONE: 5616944000 MAIL ADDRESS: STREET 1: P O BOX 14000 CITY: JUNO BEACH STATE: FL ZIP: 33408 11-K 1 EMPLOYEE THRIFT AND RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES OF FPL FISCAL YEAR ENDED 12/31/98 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 11-K [ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-8841 Employee Thrift and Retirement Savings Plan for Bargaining Unit Employees of Florida Power & Light Company (Full title of the plan) FPL GROUP, INC. (Name of issuer of the securities held pursuant to the plan) 700 Universe Boulevard Juno Beach, Florida 33408 (Address of principal executive office) INDEPENDENT AUDITORS' REPORT EMPLOYEE BENEFITS COMMITTEE OF THE BOARD OF DIRECTORS OF FPL GROUP, INC.: We have audited the accompanying statements of net assets available for benefits of the Employee Thrift and Retirement Savings Plan for Bargaining Unit Employees of Florida Power & Light Company (the "Plan") as of December 31, 1998 and 1997, and the related statement of changes in net assets available for benefits for the year ended December 31, 1998. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1998 and 1997 and the changes in net assets available for benefits for the year ended December 31, 1998 in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of (1) assets held for investment as of December 31, 1998, and (2) transactions in excess of five percent of the current value of plan assets for the year ended December 31, 1998, are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules are the responsibility of the Plan's management. Such schedules have been subjected to the auditing procedures applied in our audit of the basic 1998 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. DELOITTE & TOUCHE LLP Miami, Florida June 25 , 1999 EMPLOYEE THRIFT AND RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES OF FLORIDA POWER & LIGHT COMPANY STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1998 1997 ---------------------------- ASSETS Accrued interest receivable - ESOP Account ....................................... $ 451 $ 807 General investments, at fair value: Interest-bearing cash .......................................................... 4,168,512 3,392,253 Loans to participants - other .................................................. 17,932,309 20,486,666 Value of interest in master trusts ............................................. 94,209,191 104,949,313 Value of interest in registered investment companies ........................... 173,431,782 162,689,431 Total general investments .................................................. 289,741,794 291,517,663 Employer securities, at fair value: Employer securities held by the Plan ........................................... 169,000,743 172,496,768 Leveraged ESOP employer securities ............................................. 151,938,149 167,941,739 Total employer securities .................................................. 320,938,892 340,438,507 Total assets ..................................................................... 610,681,137 631,956,977 LIABILITIES Interest payable - ESOP Account .................................................. 314,032 349,987 Acquisition indebtedness of Leveraged ESOP ....................................... 97,223,558 108,355,178 Total liabilities ................................................................ 97,537,590 108,705,165 NET ASSETS AVAILABLE FOR BENEFITS ................................................ $513,143,547 $523,251,812
The accompanying Notes to Financial Statements are an integral part of these statements. EMPLOYEE THRIFT AND RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES OF FLORIDA POWER & LIGHT COMPANY STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, 1998 ---------------------------- INCOME Contributions: Received from participants ..................................................... $13,020,464 Noncash contributions (from employer) .......................................... 5,499,153 Total contributions .......................................................... $ 18,519,617 Earnings on investments: Interest: Interest-bearing cash ........................................................ 180,032 Other loans (participant loans) .............................................. 1,566,110 Total interest ............................................................. 1,746,142 Common stock dividends ......................................................... 4,748,297 Net appreciation in fair value of investments: Employer securities .......................................................... 5,154,826 Master trusts ................................................................ 11,111,896 Registered investment companies .............................................. 38,019,625 Total net appreciation in fair value of investments ........................ 54,286,347 Total income ..................................................................... 79,300,403 EXPENSES Benefit payments to participants or beneficiaries ................................ 79,859,000 Administrative expenses .......................................................... 58,915 Total expenses ................................................................. 79,917,915 NET LOSS.......................................................................... (617,512) TRANSFERS Transfers from the Plan - net .................................................... (4,654,382) Effect of current year Leveraged ESOP activity ................................... (4,836,371) Total transfers to the Plan ...................................................... (9,490,753) NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 ........................... 523,251,812 NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1998 ........................... $513,143,547
The accompanying Notes to Financial Statements are an integral part of these statements. EMPLOYEE THRIFT AND RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES OF FLORIDA POWER & LIGHT COMPANY NOTES TO FINANCIAL STATEMENTS For the year ended December 31, 1998 1. Description of the Plan and Significant Accounting Policies The Plan The following description of the Employee Thrift and Retirement Savings Plan for Bargaining Unit Employees of Florida Power & Light Company (Plan) provides only general information. Participating employees (Members) should refer to the Summary Plan Description in their employee handbook for a more complete description of the Plan. Fidelity Management Trust Company (Trustee) administers the trust (Trust) established under the Plan and the FPL Group Employee Thrift Plan (Group Plan). The Plan is a defined contribution plan subject to the provisions of the Employee Retirement Income Securities Act of 1974, as amended (ERISA). The Plan has been designated as an Employee Stock Ownership Plan. Participation in the Plan, which is voluntary, is open to any employee of Florida Power & Light Company (FPL or Company) whose compensation is established under a collective bargaining agreement between the Company and the International Brotherhood of Electrical Workers AFL-CIO through its System Council U-4 (Bargaining Unit). Bargaining Unit employees are eligible to participate in the Plan on the first day of the month coincident with the completion of six continuous full months of service or on the first day of any payroll period thereafter. The Plan includes a cash or deferred compensation arrangement (Tax Saver Option) permitted by Section 401(k) of the Internal Revenue Code of 1986, as amended (Code). The Tax Saver Option permits a Member to elect to defer federal income taxes on all or a portion of their contributions (Tax Saver Contributions) until they are distributed from the Plan. Tax Saver Contributions were limited in 1998 to a maximum of $10,000 per Member and may be increased or decreased in future years for cost-of-living adjustments. The Plan also includes leveraged employee stock ownership plan (Leveraged ESOP) provisions. The Leveraged ESOP is a stock bonus plan within the meaning of Treasury Regulation Section 1.401-1(b)(1)(iii) that is qualified under Section 401(a) of the Code and is designed to invest primarily in common stock of FPL Group, Inc. (Common Stock). The Trust purchased Common Stock from FPL Group, Inc. (FPL Group) using the proceeds of a loan (Acquisition Indebtedness) from FPL Group Capital Inc (FPL Group Capital), a subsidiary of FPL Group (see Note 3). The Common Stock acquired by the Trust is initially held in a separate account (ESOP Account). As the Acquisition Indebtedness (including interest) is repaid, each Member's account is allocated its portion of Common Stock released from the ESOP Account. The Company has in place a Flexible Dividend Program which enables participants to choose how their dividends on certain shares of Common Stock held in the Plan are to be paid. Dividends on Common Stock acquired through the Leveraged ESOP do not qualify under this program. The options available to participants include reinvestment of dividends in Company Stock; distribution of dividends in cash; distribution of dividends in cash and contribution of an equivalent amount of their compensation to their thrift plan account; or a partial distribution with the balance reinvested in Common Stock. Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their accounts. Contributions, Loans, Withdrawals and Transfers to (from) the Plan The Plan provides for basic contributions by eligible employees in whole percentages from 1% to 7% of their base compensation (Earnings), which is matched in part by the Company with shares of Common Stock. For basic Tax Saver or After Tax Contributions, the Company match is 100% on the first 3% of a Member's Earnings, 50% on the next 3% and 25% on the last 1%. The Plan also provides for supplemental contributions by Members to be made in whole percentages from 1% to 9% of their Earnings, bringing the total maximum contributions to 16%. Supplemental contributions are not matched by the Company. The value of a Member's contributions (including all income, gains and losses) is at all times 100% vested. Company contributions vest at a rate of 20% each year and are fully vested upon a Member attaining five years of service as a Member of the Plan. An employee may also receive vesting credit for prior years of service as a member of the Group Plan. Effective April 1999, the Plan was amended to add special eligibility and vesting rules, as well as a separate company matching benefit, applicable to employees of FPL Energy Maine Operating Services, LLC. Employees of FPL Energy Maine, other than certain transition employees, become eligible to join the plan only upon completion of twelve full calendar months of service. Company matching contributions equal to 60% of the first 5 percent of compensation contributed by an FPL Energy Maine employee, and 50% of the sixth and seventh percentage of compensation contributed, are provided. Company matching contributions are, at all times fully vested. The Plan's investment options include fourteen core funds: eleven "mix your own" investment options and three "pre-mixed" investment strategies. The "mix your own" investment options include various mutual funds, a separately managed portfolio of short- and long-term investment contracts and Common Stock. The "pre-mixed" investment strategy options are made up of different allocations of the "mix your own" investment options providing various combinations of stocks and fixed income investments. The Plan allows Members, at any time, to change their contribution percentage, to change their investment option allocation for future contributions or to transfer their account balance attributable to Member contributions from one investment option to another. At year end, the number of Members contributing to the Plan was 3,597. Company contributions are primarily made from Common Stock shares released from the ESOP Account. Forfeitures of non-vested Company contributions due to termination of Plan participation are used to reduce the amount of future Company contributions to the Plan or may be applied to administrative expenses. A Member who has attained at least the age of fifty and completed five years of service while a Member will be permitted to transfer all or any portion of Company contributions made to his or her account and any earnings thereon to one or more of the other investment options. Any future Company contributions will continue to be invested in Common Stock. Company contributions made on behalf of business managers and others employed by the Bargaining Unit and serving on Company property while on a leave of absence from the Company will be reimbursed by the Bargaining Unit. A Member may borrow from his or her account during his or her employment under certain conditions. At December 31, 1998, the loan interest rate was 8.5%. Withdrawals by Members from certain of their accounts during their employment are permitted with certain penalties and restrictions. The penalties limit a Member's contributions to the Plan for varying periods following a withdrawal. Transfers to (from) the Plan generally represent net transfers between the Plan and the Group Plan. The transfers arise as a result of members transferring between bargaining unit and non-bargaining unit status while employed at FPL. Basis of Accounting The financial statements of the Plan are prepared using the accrual basis of accounting. Investment income and interest income on loans to Members is recognized when earned. Contributions by Members and Company contributions are accrued on the basis of amounts withheld through payroll deductions. Distributions to Members are recorded when paid. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Investment Valuation and Income Recognition The Plan's investments are stated at fair value, except insurance and financial institution investment contracts which are stated at contract value (see Investment Contracts below). Shares of registered investment companies are valued at quoted market prices, which represent the net asset value of shares held by the Plan at year end. The FPL Group Company stock is valued at its quoted market price. Loans to participants are valued at cost, which approximates fair value. Purchases and sales of investment securities are recorded on the trade date. Gains or losses on sales of investment securities are determined using the carrying amount of the securities. The carrying amounts of securities held in Member accounts are adjusted daily; securities held in the ESOP Account (see Note 2) are adjusted annually. Unrealized appreciation or depreciation is recorded to recognize changes in market value. Investment Contracts The Plan has entered into investment contracts with various insurance companies and financial institutions. The contracts are fully benefit responsive and are included in the financial statements at contract value (which represents contributions made under the contract, plus earnings, less withdrawals and administrative expenses). There are no reserves against contract values for credit risk of the contract issuer or otherwise. The contract value of investment contracts at December 31, 1998, which are held in the Conservative Investment Strategy, Moderate Growth Investment Strategy, Long-Term Growth Investment Strategy, and FPL Managed Income Portfolio was $2,101,000, $5,032,000, $1,710,000 and $44,160,000, respectively. As of the same date, the fair value of investment contracts in these funds was $2,066,000, $4,949,000, $1,682,000, and $43,434,000, respectively. At December 31, 1997 the contract value of investment contracts for these funds was $2,515,000, $5,325,000, $1,729,000 and $55,453,000, respectively, with fair values of $2,538,000, $5,372,000, $1,745,000 and $55,947,000, respectively. The average yield for the portfolio of investment contracts was 6.58% and 6.67% for 1998 and 1997, respectively. The crediting interest rate at December 31, 1998 and 1997 was 5.61% and 6.43%, respectively. The crediting interest rate is based on an agreed-upon formula with the issuer, but cannot be less than zero. 2. Employee Stock Ownership Plan Account Allocation The assets, liabilities and net income of the ESOP Account are not considered plan assets but are for the joint benefit of the Plan and the Group Plan. The ESOP Account is allocated for financial reporting purposes based on each plan's relative net assets. The Plan's allocation of Common Stock held in the ESOP Account (employer securities), Acquisition Indebtedness and interest payable have been reflected in the Statements of Net Assets Available for Benefits, but are not available for, or the obligation of, Plan Members. The employer securities will be released from the ESOP Account and distributed to Members' accounts in satisfaction of part or all of the Company's matching contribution obligation under the Plan as the Acquisition Indebtedness is repaid (see Note 3). ESOP shares allocated to date are classified as employer securities held by the Plan on the Statements of Net Assets Available for Benefits. The Acquisition Indebtedness will be repaid from dividends on the shares acquired by the ESOP Account, as well as from cash contributions from FPL Group. The net effect of a change in the allocation percentage from year to year is reported as a transfer to or from the Plan. The value of the shares distributed to Member accounts is not affected by these allocations. Condensed financial statements of the ESOP Account are presented below, indicating the allocations made to each plan. The effect of current year Leveraged ESOP activity on net assets is included in transfers to (from) the plan in the financial statements of each plan. Distributions of shares to the plans are presented as noncash contributions in the financial statements of each plan.
Total ESOP The Account Group Plan The Plan ------------ ----------- ------------ Allocation percentage ............................................. 100% 71% 29% Accrued interest .................................................. $ 1,561 $ 1,110 $ 451 Employer securities ............................................... 526,385,960 374,447,811 151,938,149 Total assets .................................................... 526,387,521 374,448,921 151,938,600 Interest payable .................................................. 1,087,957 773,925 314,032 Acquisition indebtedness .......................................... 336,828,613 239,605,055 97,223,558 Total liabilities ............................................... 337,916,570 240,378,980 97,537,590 Net assets at December 31, 1998 ................................... $188,470,951 $134,069,941 $ 54,401,010 Contributions received from employer .............................. $ 14,449,150 Interest income ................................................... 5,856 Dividends ......................................................... 17,463,713 Net appreciation in fair value of investments ..................... 22,169,901 Total income .................................................... 54,088,620 Interest expense .................................................. 32,951,116 Net income ........................................................ 21,137,504 $ 15,036,291 $ 6,101,213 Distribution of shares to plans ................................... (18,942,956) (13,443,803) (5,499,153) Transfers to (from) the plan ...................................... - 5,438,431 (5,438,431) Effect of current year Leveraged ESOP activity on net assets ...... 2,194,548 7,030,919 (4,836,371) Net assets at December 31, 1997 ................................... 186,276,403 127,039,022 59,237,381 Net assets at December 31, 1998 ................................... $188,470,951 $134,069,941 $ 54,401,010
3. Acquisition Indebtedness In December 1990, the Trust, which holds plan assets for both the Plan and the Group Plan, borrowed $360 million from FPL Group Capital to purchase approximately 12.4 million shares of Common Stock. The Acquisition Indebtedness matures in 2019, bears interest at a fixed rate of 9.69% per year and is to be repaid using dividends received on both Common Stock held by the ESOP Account and ESOP shares distributed to Member accounts, along with cash contributions from FPL Group. For those dividends on shares allocated to Member accounts used to repay the loan, additional shares, equal in value to those dividends, will be allocated to Member accounts. In 1998, dividends received from shares held by the ESOP and shares distributed to Member accounts totaled approximately $17,464,000 and $4,946,000, respectively. Cash contributed in 1998 by FPL Group for the debt service shortfall totaled approximately $14,449,000. The unallocated shares of Common Stock acquired with the proceeds of the Acquisition Indebtedness are collateral for the Acquisition Indebtedness. As principal payments are made, a percentage of Common Stock is released as collateral and becomes available to satisfy matching contributions, as well as to repay dividends on ESOP shares distributed to Member accounts for debt service. During 1998, 380,824 shares of Common Stock were released as collateral for the Acquisition Indebtedness. The scheduled principal repayments of the Acquisition Indebtedness for the next five years and thereafter are as follows: 1999 - $1,825,100; 2000 - $1,872,600; 2001 - $3,883,000; 2002 - $4,451,600; 2003 - $5,023,600 and thereafter - $319,773,000. See Note 2 for information on the Plan's allocation percentage of the Acquisition Indebtedness. 4. Parties-In-Interest Transactions Company contributions are primarily made in Common Stock released from the ESOP Account or in cash which is used to purchase Common Stock by the Trustee. Such amounts are reported as noncash contributions (from employer) and contributions received from employer, respectively. For 1998, all Company contributions were made in Common Stock released from the ESOP Account. Dividend income earned by the Plan results from dividends on Common Stock. Dividends on shares held in the ESOP Account were used to repay the Acquisition Indebtedness (see Note 3). Certain dividends on shares held in Members' accounts are reinvested in Common Stock for the benefit of its Members pursuant to FPL Group's Dividend Reinvestment and Common Share Purchase Plan in which the Trustee participates. 5. Statement of Net Assets Available for Benefits Information by Investment Fund Option Information about the Statements of Net Assets Available for Benefits by investment fund option is as follows:
December 31, 1998 1997 ------------ ------------ Interest-bearing cash: Fidelity Retirement Government Money Market Portfolio ........................... $ 4,168,512 $ 3,392,253 Value of interest in master trusts: Conservative Investment Strategy ................................................ $ 3,755,156 $ 4,534,809 Moderate Growth Investment Strategy ............................................. 21,430,677 22,450,113 Long-term Growth Investment Strategy ............................................ 23,347,959 21,003,320 Short-term liquid investments maintained in FPL Group Company Stock Fund ........ 1,515,743 1,508,412 FPL Managed Income Portfolio .................................................... 44,159,656 55,452,659 $ 94,209,191 $104,949,313 Value of interest in registered investment companies: Fidelity U.S. Bond Index Fund ................................................... $ 5,393,535 $ 5,290,064 Spartan U.S. Equity Index Fund .................................................. 66,615,475 63,480,060 T. Rowe Price Equity Income Fund ................................................ 4,507,930 4,151,308 Fidelity Magellan Fund .......................................................... 51,044,588 45,005,559 Fidelity OTC Portfolio .......................................................... 29,550,426 23,911,787 Brandywine Fund, Inc. .......................................................... 5,381,375 8,922,266 Fidelity Overseas Fund .......................................................... 10,111,241 11,212,001 Templeton Foreign Fund I ........................................................ 827,212 716,386 $173,431,782 $162,689,431 FPL Group Company Stock Fund ...................................................... $169,000,743 $172,496,768 Loan Fund ......................................................................... $ 17,932,309 $ 20,486,666
6. Statement of Changes in Net Assets Available for Benefits Information by Investment Fund Option Information about the Statement of Changes in Net Assets Available for Benefits by investment fund option is as follows:
Fidelity Retirement Moderate Long-term Government Conservative Growth Growth Money Mkt. Investment Investment Investment Portfolio Strategy Strategy Strategy ---------- ------------ ---------- ---------- INCOME Contributions .......................................... $ 157,073 $ 73,836 $ 642,183 $ 1,150,769 Interest ............................................... 180,032 - - - Net appreciation in fair value of investments in master trusts....................................... - 385,558 3,618,350 4,470,157 Total income ......................................... 337,105 459,394 4,260,533 5,620,926 EXPENSES Benefit payments to participants or beneficiaries ...... 1,379,608 1,543,692 4,092,190 2,458,835 Administrative expenses ................................ 1,284 657 1,628 1,566 Total expenses ....................................... 1,380,892 1,544,349 4,093,818 2,460,401 NET INCOME (LOSS)....................................... (1,043,787) (1,084,955) 166,715 3,160,525 TRANSFERS Net transfers to (from) the Plan ....................... (5,539) (36,224) (284,753) (206,495) Net exchanges between investment funds ................. 1,845,952 330,780 (973,292) (804,442) Net participant loan activity .......................... (20,367) 10,746 71,894 195,051 Total transfers ...................................... 1,820,046 305,302 (1,186,151) (815,886) NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 . 3,392,253 4,534,809 22,450,113 21,003,320 NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1998 . $4,168,512 $3,755,156 $21,430,677 $23,347,959
FPL Managed Fidelity Spartan T. Rowe Price Income U.S. Bond U.S. Equity Equity Portfolio Index Fund Index Fund Income Fund ----------- ---------- ------------ ------------- INCOME Contributions .......................................... $ 1,485,331 $ 239,284 $ 2,390,622 $ 267,948 Net appreciation in fair value of investments in master trusts ........................................ 2,637,831 - - - Net appreciation in fair value of investments in registered investment companies ...................... - 422,850 14,880,588 414,503 Total income ....................................... 4,123,162 662,134 17,271,210 682,451 EXPENSES Benefit payments to participants or beneficiaries ...... 21,183,277 894,794 10,393,948 954,747 Administrative expenses ................................ - 5,870 27,656 - Total expenses ..................................... 21,183,277 900,664 10,421,604 954,747 NET INCOME (LOSS)....................................... (17,060,115) (238,530) 6,849,606 (272,296) TRANSFERS Net transfers to (from) the Plan ....................... 1,231,875 (97,743) (1,146,364) (20,567) Net exchanges between investment funds ................. 4,356,804 377,156 (2,927,781) 645,099 Net participant loan activity .......................... 178,433 62,588 359,954 4,386 Total transfers .................................... 5,767,112 342,001 (3,714,191) 628,918 NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 . 55,452,659 5,290,064 63,480,060 4,151,308 NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1998 . $44,159,656 $5,393,535 $66,615,475 $4,507,930
Fidelity Fidelity Fidelity Magellan OTC Brandywine Overseas Fund Portfolio Fund, Inc. Fund ----------- ----------- ----------- ----------- INCOME Contributions .......................................... $ 2,139,575 $ 1,281,833 $ 566,086 $ 686,301 Net appreciation (depreciation) in fair value of investments in registered investment companies .... 12,976,154 8,384,246 (129,695) 1,125,841 Total income ....................................... 15,115,729 9,666,079 436,391 1,812,142 EXPENSES Benefit payments to participants or beneficiaries ...... 7,543,611 3,648,099 649,795 2,085,234 Administrative expenses ................................ 8,691 614 - 405 Total expenses ..................................... 7,552,302 3,648,713 649,795 2,085,639 NET INCOME (LOSS) ...................................... 7,563,427 6,017,366 (213,404) (273,497) TRANSFERS Net transfers to (from) the Plan ....................... (797,673) (384,174) (60,298) (342,855) Net exchanges between investment funds ................. (1,060,686) (272,483) (3,409,323) (645,453) Net participant loan activity .......................... 333,961 277,930 142,134 161,045 Total transfers .................................... (1,524,398) (378,727) (3,327,487) (827,263) NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 . 45,005,559 23,911,787 8,922,266 11,212,001 NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1998 . $51,044,588 $29,550,426 $5,381,375 $10,111,241
FPL Group Templeton Company Loan Foreign Fund I Stock Fund Fund -------------- ------------ ----------- INCOME Contributions .......................................... $ 72,079 $ 7,366,697 - Interest and dividends ................................. - 4,748,297 $ 1,566,110 Net appreciation in fair value of investments in employer securities .................................. - 5,154,826 - Net depreciation in fair value of investments in registered investment companies ................... (54,862) - - Total income ......................................... 17,217 17,269,820 1,566,110 EXPENSES Benefit payments to participants or beneficiaries ...... 73,181 21,131,271 1,826,718 Administrative expenses ................................ - 10,544 - Total expenses ....................................... 73,181 21,141,815 1,826,718 NET INCOME (LOSS) ...................................... (55,964) (3,871,995) (260,608) TRANSFERS Net transfers to (from) the Plan ....................... (16,704) (2,195,378) - Net exchanges between investment funds ................. 176,435 2,361,234 - Net participant loan activity .......................... 7,059 217,445 (2,293,749) Total transfers ...................................... 166,790 383,301 (2,293,749) NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 . 716,386 174,005,180 20,486,666 NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1998 . $827,212 $170,516,486 $17,932,309
7. Income Taxes In June 1996, FPL received from the Internal Revenue Service (IRS) a favorable determination that the Plan, as amended and restated through January 1, 1995, met the requirements of Section 401 of the Code. The Trust established under the Plan will generally be exempt from federal income taxes under Section 501(a) of the Code; Company contributions paid to the Trust under the Plan will be allowable federal income tax deductions of the Company subject to the conditions and limitations of Section 404 of the Code; and the Plan will meet the requirements of Section 401(k) of the Code allowing Tax Saver Contributions to be exempt from federal income tax at the time such contributions are made, provided that in operation the Plan and Trust meet the applicable provisions of the Code. In addition, FPL Group will be able to claim an income tax deduction for dividends used to repay the Acquisition Indebtedness and for dividends distributed directly to members. Company contributions to the Plan on a Member's behalf, the Member's Tax Saver Contributions, and the earnings thereon generally are not taxable to the Member until such Company contributions, Tax Saver Contributions, and earnings from investments are distributed or withdrawn. A loan from a Member's account generally will not represent a taxable distribution if the loan is repaid in a timely manner and does not exceed certain limitations. 8. Expenses Certain fees such as annual account maintenance and investment management fees are paid by Plan participants. Trustee's fees and expenses are paid by FPL Group (which may charge each company under the Plan its allocated share) and, therefore, are not reflected in the financial statements. 9. Master Trusts A summary of participating interest in and financial statements for the Master Trusts follow.
Percent of Interest in Master Trust December 31, 1998 1997 ------------------------ FPL MANAGED INCOME PORTFOLIO FPL Group Employee Thrift Plan EIN 59-0247775 PN 002 ............................................................................... 79.5% 73.5% Employee Thrift and Retirement Savings Plan for Bargaining Unit Employees of Florida Power & Light Company EIN 59-0247775 PN 003 ............................................................................... 20.5% 26.5% CONSERVATIVE INVESTMENT STRATEGY FPL Group Employee Thrift Plan EIN 59-0247775 PN 002 ............................................................................... 83.3% 78.8% Employee Thrift and Retirement Savings Plan for Bargaining Unit Employees of Florida Power & Light Company EIN 59-0247775 PN 003 ............................................................................... 16.7% 21.2% MODERATE GROWTH INVESTMENT STRATEGY FPL Group Employee Thrift Plan EIN 59-0247775 PN 002 ............................................................................... 73.3% 69.9% Employee Thrift and Retirement Savings Plan for Bargaining Unit Employees of Florida Power & Light Company EIN 59-0247775 PN 003 ............................................................................... 26.7% 30.1% LONG-TERM GROWTH INVESTMENT STRATEGY FPL Group Employee Thrift Plan EIN 59-0247775 PN 002 ............................................................................... 74.1% 72.2% Employee Thrift and Retirement Savings Plan for Bargaining Unit Employees of Florida Power & Light Company EIN 59-0247775 PN 003 ............................................................................... 25.9% 27.8%
FPL MANAGED INCOME PORTFOLIO STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1998 1997 ------------ ------------ ASSETS General investments: Value of unallocated insurance and financial institution contracts ............... $215,032,918 $209,333,382 Total assets ....................................................................... 215,032,918 209,333,382 LIABILITIES ........................................................................ - - NET ASSETS AVAILABLE FOR BENEFITS .................................................. $215,032,918 $209,333,382
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, 1998 ------------ INCOME Contributions received from participants .......................................................... $ 5,084,319 Earnings on investments: Interest ........................................................................................ 12,692,170 Total income ...................................................................................... 17,776,489 EXPENSES Benefit payments to participants or beneficiaries ................................................. 36,079,386 Account maintenance fees .......................................................................... 7,506 Total expenses .................................................................................... 36,086,892 NET INCOME (LOSS) ................................................................................. (18,310,403) TRANSFERS Transfers into fund ............................................................................... 258,681,796 Transfers out of fund ............................................................................. (234,671,857) Net transfers ..................................................................................... 24,009,939 NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 ............................................ 209,333,382 NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1998 ............................................ $215,032,918
CONSERVATIVE INVESTMENT STRATEGY STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1998 1997 ----------- ----------- ASSETS Receivables: Income ........................................................................... $ 87,211 $ 94,080 Other ........................................................................... - 25,847 Total receivables ............................................................ 87,211 119,927 General investments: Value of unallocated insurance and financial institution contracts ............... 12,608,477 11,853,200 Mutual funds ..................................................................... 9,839,133 9,388,949 Total general investments .................................................... 22,447,610 21,242,149 Total assets ....................................................................... 22,534,821 21,362,076 LIABILITIES ........................................................................ 161 176 NET ASSETS AVAILABLE FOR BENEFITS .................................................. $22,534,660 $21,361,900
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, 1998 ------------ INCOME Contributions received from participants .......................................................... $ 365,513 Earnings on investments: Interest ........................................................................................ 757,539 Dividends ....................................................................................... 466,062 Net appreciation in fair value of investments ................................................... 1,165,450 Total income ...................................................................................... 2,754,564 EXPENSES Benefit payments to participants or beneficiaries ................................................. 2,510,489 Account maintenance fees .......................................................................... 1,518 Total expenses .................................................................................... 2,512,007 NET INCOME ........................................................................................ 242,557 TRANSFERS Transfers into fund ............................................................................... 7,449,081 Transfers out of fund ............................................................................. (6,518,878) Net transfers ..................................................................................... 930,203 NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 ............................................ 21,361,900 NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1998 ............................................ $22,534,660
MODERATE GROWTH INVESTMENT STRATEGY STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1998 1997 ----------- ----------- ASSETS Receivables: Income ........................................................................... $ 187,945 $ 205,402 Other ............................................................................ - 686 Total receivables .............................................................. 187,945 206,088 General investments: Value of unallocated insurance and financial institution contracts ............... 18,811,810 17,684,993 Mutual funds ..................................................................... 61,272,710 56,678,220 Total general investments .................................................... 80,084,520 74,363,213 Total assets ....................................................................... 80,272,465 74,569,301 LIABILITIES ........................................................................ 150,829 9,549 NET ASSETS AVAILABLE FOR BENEFITS .................................................. $80,121,636 $74,559,752
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, 1998 ------------ INCOME Contributions received from participants .......................................................... $ 2,672,061 Earnings on investments: Interest ........................................................................................ 1,138,493 Dividends ....................................................................................... 2,811,446 Net appreciation in fair value of investments ................................................... 10,090,030 Total income ...................................................................................... 16,712,030 EXPENSES Benefit payments to participants or beneficiaries ................................................. 6,884,091 Account maintenance fees .......................................................................... 4,766 Total expenses .................................................................................... 6,888,857 NET INCOME ........................................................................................ 9,823,173 TRANSFERS Transfers into fund ............................................................................... 13,432,457 Transfers out of fund ............................................................................. (17,693,746) Net transfers ..................................................................................... (4,261,289) NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 ............................................ 74,559,752 NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1998 ............................................ $ 80,121,636
LONG-TERM GROWTH INVESTMENT STRATEGY STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1998 1997 ----------- ----------- ASSETS Receivables: Income ........................................................................... $ 100,298 $ 93,471 Other ............................................................................ - 21,324 Total receivables .............................................................. 100,298 114,795 General investments: Value of unallocated insurance and financial institution contracts ............... 6,610,050 6,214,020 Mutual funds ..................................................................... 83,547,773 69,328,846 Total general investments .................................................... 90,157,823 75,542,866 Total assets ....................................................................... 90,258,121 75,657,661 LIABILITIES ........................................................................ 578 192,276 NET ASSETS AVAILABLE FOR BENEFITS .................................................. $90,257,543 $75,465,385
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, 1998 ------------ INCOME Contributions received from participants .......................................................... $ 4,755,798 Earnings on investments: Interest ........................................................................................ 408,612 Dividends ....................................................................................... 3,091,085 Net appreciation in fair value of investments ................................................... 13,844,596 Total income ...................................................................................... 22,100,091 EXPENSES Benefit payments to participants or beneficiaries ................................................. 5,009,291 Account maintenance fees .......................................................................... 5,506 Total expenses .................................................................................... 5,014,797 NET INCOME ........................................................................................ 17,085,294 TRANSFERS Transfers into fund ............................................................................... 16,283,866 Transfers out of fund ............................................................................. (18,577,002) Net transfers ..................................................................................... (2,293,136) NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 ............................................ 75,465,385 NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1998 ............................................ $ 90,257,543
ATTACHMENT: Schedule 1 FORM 5500: Line 27 (a) FLORIDA POWER & LIGHT COMPANY EIN 59-0247775 EMPLOYEE THRIFT AND RETIREMENT SAVINGS PLAN FOR THE BARGAINING UNIT EMPLOYEES OF FLORIDA POWER & LIGHT COMPANY PLAN #003 PLAN YEAR: 1998 ASSETS HELD FOR INVESTMENT AS OF DECEMBER 31, 1998
Historic Current Units/Shares Fund Name Price Cost Value - -------------- ----------------------------------------------------- ------- ------------ ------------ 4,168,511.970 Fidelity Retirement Government Money Market Portfolio $ 1.00 $ 4,168,512 $ 4,168,512 234,990.995 Conservative Investment Strategy $ 15.98 2,622,483 3,755,156 1,112,126.461 Moderate Growth Investment Strategy $ 19.27 13,755,462 21,430,677 1,096,148.313 Long-Term Growth Investment Strategy $ 21.30 14,672,555 23,347,959 44,159,655.760 FPL Managed Income Portfolio $ 1.00 44,159,656 44,159,656 489,431.472 Fidelity U.S. Bond Index Fund $ 11.02 5,234,248 5,393,535 1,515,365.672 Spartan U.S. Equity Index Fund $ 43.96 39,028,647 66,615,475 171,339.051 T. Rowe Price Equity Income Fund $ 26.31 4,573,797 4,507,930 422,484.588 Fidelity Magellan Fund $120.82 36,922,872 51,044,588 677,296.030 Fidelity OTC Portfolio $ 43.63 21,860,918 29,550,426 177,720.444 Brandywine Fund, Inc. $ 30.28 5,735,151 5,381,375 281,023.918 Fidelity Overseas Fund $ 35.98 8,909,384 10,111,241 98,595.006 Templeton Foreign Fund I $ 8.39 968,388 827,212 7,446,528.639 FPL Company Stock Fund $ 16.55 71,867,863 123,240,049 2,841,132.023 FPL Company Stock Fund - LESOP $ 16.64 31,570,735 47,276,437 2,465,528.000 Leveraged ESOP Employer Securities $ 61.63 71,500,312 151,938,149 Outstanding Loan Balances (7.5% to 9.75%; 17,932,309 17,932,309 maturing 1999-2003) Total Assets Held for Investment $395,483,292 $610,680,686
ATTACHMENT: Schedule 2 FORM 5500: Line 27 (d) FLORIDA POWER & LIGHT COMPANY EIN 59-0247775 EMPLOYEE THRIFT AND RETIREMENT SAVINGS PLAN FOR THE BARGAINING UNIT EMPLOYEES OF FLORIDA POWER & LIGHT COMPANY PLAN #003 PLAN YEAR: 1998 TRANSACTIONS IN EXCESS OF FIVE PERCENT OF THE CURRENT VALUE OF PLAN ASSETS FOR THE YEAR ENDED DECEMBER 31, 1998
Transaction by Total Total Number of Number Realized Fund or Carrier Purchases Sales Purchases of Sales Gain (Loss) - ------------------------------- ----------- ----------- --------- -------- ------------ FPL Managed Income Portfolio $46,412,960 $57,705,963 254 252 - FPL Group Company Stock Fund $28,360,978 $36,651,977 252 252 $ 9,537,115 Fidelity Magellan Fund $18,533,866 $23,082,924 252 248 $ 2,466,538 Fidelity OTC Portfolio $18,642,503 $19,832,421 252 247 $ 785,594 Spartan U.S. Equity Index Fund $23,485,758 $33,870,485 252 249 $ 6,580,415
SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Employee Benefits Plan Administrative Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. DATE: June 25, 1999 Employee Thrift and Retirement Savings Plan ------------------------------------------- for Bargaining Unit Employees of Florida Power & Light Company (Name of Plan) By: JAMES K. PETERSON ----------------- James K. Peterson Director, Human Resources Centers of Expertise INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Post-Effective Amendment No. 2 to Registration Statement No. 33-33215 on Form S-8 and Registration Statement No. 333-30695 on Form S-8 of our report dated June 25, 1999 on the financial statements of the Employee Thrift and Retirement Savings Plan for Bargaining Unit Employees of Florida Power & Light Company for the year ended December 31, 1998 appearing in this Annual Report on Form 11-K of FPL Group, Inc. for the year ended December 31, 1998. DELOITTE & TOUCHE LLP Miami, Florida June 25, 1999 -----END PRIVACY-ENHANCED MESSAGE-----