-----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, SGVxrvNPb9EqyrwwRZNXM7NFfu7L40OzwRCjxrRfDLDzNMzebeD5xcBhka0s8CEN oSwADPMnntpneeWkfWL3ZA== 0001021408-02-013339.txt : 20021106 0001021408-02-013339.hdr.sgml : 20021106 20021106162808 ACCESSION NUMBER: 0001021408-02-013339 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20021016 ITEM INFORMATION: Other events FILED AS OF DATE: 20021106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROGRESS ENERGY INC CENTRAL INDEX KEY: 0001094093 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 562155481 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15929 FILM NUMBER: 02811374 BUSINESS ADDRESS: STREET 1: 410 S WILMINGTON ST CITY: RALEIGH STATE: NC ZIP: 27601 BUSINESS PHONE: 9195466463 MAIL ADDRESS: STREET 1: 410 S WILMINGTON ST CITY: RALEIGH STATE: NC ZIP: 27601 FORMER COMPANY: FORMER CONFORMED NAME: CP&L HOLDINGS INC DATE OF NAME CHANGE: 19990830 FORMER COMPANY: FORMER CONFORMED NAME: CP&L ENERGY INC DATE OF NAME CHANGE: 20000314 8-K 1 d8k.txt PROGRESS ENERGY FORM 8-K As filed with the Securities and Exchange Commission on November 6, 2002 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (date of earliest event reported): October 16, 2002 Commission File Exact name of registrant as specified in its charter, state I.R.S. Employer Number of incorporation, address of principal executive offices, Identification and telephone number Number 1-15929 Progress Energy, Inc. 56-2155481 410 S. Wilmington Street Raleigh, North Carolina 27601-1748 Telephone: (919) 546-6111 State of Incorporation: North Carolina
The address of the registrant has not changed since the last report. ITEM 5. OTHER EVENTS On October 16, 2002, Progress Energy, Inc. issued a press release announcing an agreement to sell North Carolina Natural Gas, its natural gas distribution subsidiary, to Piedmont Natural Gas Company, Inc. for $425 million in cash. The sale is expected to close by mid-2003, and net proceeds from the sale are expected to be used to pay down debt. Portions of such press release, as revised are filed herewith as Exhibit 99.1 and incorporated herein by reference. On October 18, 2002, Progress Energy, Inc. issued a press release announcing its 2002 third quarter earnings. Portions of such press release, as revised, are filed herewith as Exhibit 99.2 and incorporated herein by reference. Progress Energy, Inc. has historically reclassified as long-term debt portions of its outstanding commercial paper that were supported by long-term credit lines. Effective with the quarter ended September 30, 2002, Progress Energy, Inc. will no longer reclassify any of its commercial paper as long-term debt. The revised press release reflects this new presentation. 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 hereunto duly authorized. PROGRESS ENERGY, INC. Registrant By: /s/ Peter M. Scott III --------------------------------- Peter M. Scott III Executive Vice President and Chief Financial Officer Date: November 6, 2002 EXHIBIT INDEX 99.1 Portions of the press release of Progress Energy, Inc. dated October 16, 2002 announcing an agreement to sell North Carolina Natural Gas, its natural gas distribution subsidiary, to Piedmont Natural Gas Company, Inc. for $425 million in cash. 99.2 Portions of the press release, as revised, of Progress Energy, Inc. dated October 18, 2002 announcing its 2002 third quarter earnings. EX-99.1 3 dex991.txt PRESS RELEASE EXHIBIT 99.1 NEWS RELEASE Progress Energy to sell NCNG to Piedmont Natural Gas for $425 million RALEIGH, NC (October 16, 2002) - Progress Energy [NYSE: PGN] announced today an agreement with Piedmont Natural Gas to sell the stock of North Carolina Natural Gas (NCNG), its natural gas distribution subsidiary, for approximately $425 million in cash. Progress Energy plans to use the net proceeds from the sale to pay down debt. The sale includes Progress Energy's investment in EasternNC, a joint venture with the Albemarle Pamlico Economic Development Corporation (APEC) to bring natural gas service to 14 counties in eastern North Carolina. EasternNC is Progress Energy's only other retail natural gas distribution holding. "Since our acquisition of NCNG in 1999, the industry landscape, and the opportunities for retail competition that existed then, have changed dramatically," said William Cavanaugh, chairman and CEO, Progress Energy. "At that time we envisioned a consolidation opportunity in retail natural gas distribution in advance of deregulation. That direction was altered by our strategic acquisition of Florida Progress and the changing regulatory climate. The divestiture of our natural gas distributor is a response to these changes--one that enables us to further strengthen our balance sheet, while redoubling our commitment to our core electric business." "Selling NCNG will improve our balance sheet by lowering our debt to equity ratio, which is critical in today's environment," Cavanaugh continued. "Progress Energy remains committed to a diversified strategy that includes regulated and non-regulated energy businesses, electric and natural gas reserves. Additionally, we were pleased to reach an agreement with a company like Piedmont with its successful track record in the retail natural gas business and long-standing commitment to the Carolinas." The Boards of Directors of both companies have approved the transaction. The acquisition requires approval from the North Carolina Utilities Commission (NCUC), the U.S. Securities & Exchange Commission (SEC) and the U.S. Department of Justice under Hart-Scott-Rodino. It is expected to close by mid-2003. This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve estimates, projections, goals, forecasts, assumptions, risk and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. These risk factors are detailed from time to time in the companies' SEC reports. All such factors are difficult to predict, contain uncertainties that may materially affect actual results, and may be beyond the ability of the company to control or estimate precisely. EX-99.2 4 dex992.txt PRESS RELEASE EXHIBIT 99.2 NEWS RELEASE Progress Energy Announces Third Quarter Results RALEIGH, N.C. (October 18, 2002) - Progress Energy [NYSE: PGN] today reported consolidated ongoing earnings of $1.53 per share for the third quarter compared with $1.34 per share for third quarter 2001. Reported GAAP consolidated net income was $151.9 million, or $0.71 per share, for the quarter compared with $366.4 million, or $1.78 per share, for the third quarter of 2001. The one-time after-tax charge impacting 2002 was $224.8 million, or $1.04 per share, resulting from the writedown of the company's telecommunications investments in Progress Telecom, CaroNet and Interpath. The company's synthetic fuel investments create intra-period tax allocations that increased reported GAAP earnings per share by $0.18 for the quarter and CVO mark-to-market adjustments that increased earnings per share by $0.04. Year-to-date, ongoing earnings were $3.12 per share compared with $2.96 per share for 2001. Reported GAAP earnings for the first nine months of 2002 were $1.89 per share compared with $3.13 per share for 2001. A number of factors drove the year-over-year increase in ongoing earnings of $0.19 per share for the third quarter. First, customer growth and usage and improved weather resulted in higher sales. Second, depreciation expense and interest charges were lower. Third, goodwill amortization has been eliminated. Partially offsetting these positive factors were higher O&M expenses related to increased benefit costs and decreased pension credits. Also, the common stock issued in August 2001 and in April 2002 as part of the Westchester Gas acquisition resulted in dilution.
- ---------------------------------------------------------------------------------------- Progress Energy, Inc. Reconciliation of Ongoing EPS September 30, 2002 - ---------------------------------------------------------------------------------------- Q3 2002 Q3 2001 YTD 2002 YTD 2001 - ---------------------------------------------------------------------------------------- Ongoing earnings $ 1.53 $ 1.34 $ 3.12 $ 2.96 Intra-period tax allocation 0.18 0.36 (0.19) 0.13 CVO mark-to-market 0.04 0.08 0.10 0.04 One-time charge /(1)/ (1.04) (1.04) One-time retroactive revenue impact /(2)/ -- -- (0.10) -- ------- --------- -------- -------- Reported earnings $ 0.71 $ 1.78 $ 1.89 $ 3.13 ======= ========= ======== ======== Average shares outstanding (000s) 216,079 205,866 214,700 201,925 - ---------------------------------------------------------------------------------------- /(1)/ Writedown of Progress Telecom, CaroNet, and Interpath investments. /(2)/ Due to Florida Power's rate settlement. - ----------------------------------------------------------------------------------------
SIGNIFICANT DEVELOPMENTS Progress Energy Announces Sale of NCNG Progress Energy announced an agreement to sell North Carolina Natural Gas (NCNG) to Piedmont Natural Gas for approximately $425 million in cash. The company plans to use the net proceeds from the sale to pay down debt. The deal is expected to close by mid-2003. Progress Ventures Secures Long-term Contracts Progress Ventures signed two long-term contracts to provide peaking generation capacity to load-serving wholesale customers. One contract, beginning June 1, 2004, and ending May 31, 2008, includes 153 MW of capacity and energy from a Rowan County simple-cycle natural-gas-fired plant. The other contract includes 100 MW of capacity and energy for 2003 and 150 MW for 2004. Progress Ventures will meet the terms of this agreement through a combination of resources, including the Rowan County plant. These agreements support the company's strategy of securing long-term contracts for its non-regulated generation. For 2002, 2003 and 2004, Progress Ventures has 90 percent, 68 percent and 74 percent, respectively, of its non-regulated generation capacity under contract. North Carolina Franchise Tax The North Carolina legislature adopted a provision that prevents cities and counties from levying local franchise taxes on electric utilities. Progress Energy sought this protection in response to a flurry of local ordinances adopted when the state withheld utility franchise tax payments to local governments. The provision protects customers from paying two franchise taxes. Cavanaugh Extends Term as Chairman and CEO In September, Progress Energy announced that William Cavanaugh would continue his term as chairman and CEO through February 1, 2005. Cavanaugh has served as president and CEO since 1996 and chairman since 1999. The company also announced that Robert B. McGehee has been named chief operating officer and will assume the title of president from Cavanaugh. Progress Energy Recognized for Transparency and Disclosure Progress Energy was one of three companies - and the only one representing the energy sector - to be recognized by Standard & Poor's for providing investors with the most detailed and complete information regarding its finances, operations and corporate governance practices according to a new study issued in October. LINE OF BUSINESS FINANCIAL INFORMATION CP&L Electric CP&L electric energy operations contributed earnings of $179.3 million for the quarter compared with $165.8 million for the same period last year. This quarter's earnings were positively affected by warmer weather, increased revenues from customer growth and usage, lower depreciation expenses and a decrease in interest charges. These factors were partially offset by higher O&M expenses. Please see the table that follows for a breakdown of energy sales by customer class. CP&L electric operations include $11.3 million in earnings related primarily to wholesale energy marketing activities for the third quarter of 2002 compared with $11.7 million for the same period last year. These activities are managed on behalf of the utility by the Progress Ventures business unit, and the earnings are also included in the Progress Ventures business unit's earnings. Florida Power Florida Power electric energy operations had earnings of $123.8 million ($110.4 million excluding the tax benefit reallocation) for the quarter compared with $114.1 million for the same period last year. Details on the tax benefit reallocation are included in the "Corporate" line of business section of this release. Other factors impacting quarter-over-quarter results were higher O&M expenses related to decreased pension credits, increased benefit costs and Florida Power's investments to improve service and reliability. These factors were partially offset by warmer weather and increased revenues from customer growth and usage. Please see the table that follows for a breakdown of energy sales by customer class. Florida Power electric operations include $3.3 million in earnings related primarily to wholesale energy marketing activities for the third quarter of 2002 compared with $6.7 million for the same period last year. These activities are managed on behalf of the utility by the Progress Ventures business unit, and the earnings are also included in the Progress Ventures business unit's earnings. Electric Utility Kilowatt Hour Sales by Class
- ----------------------------------------------------------------------------------------------- CP&L Sales Florida Power Sales for the Quarter Ended September 30, 2002 for the Quarter Ended September 30, 2002 - ----------------------------------------------------------------------------------------------- Sales % Change from Sales % Change from (in billions of kWh) Q3 2002 Q3 2001 (in billions of kWh) Q3 2002 Q3 2001 - ----------------------------------------------------------------------------------------------- Residential 4.5 11.7% Residential 5.5 2.5% - ----------------------------------------------------------------------------------------------- Commercial 3.7 7.0% Commercial 3.2 1.4% - ----------------------------------------------------------------------------------------------- Industrial 3.6 0.8% Industrial 1.0 5.3% - ----------------------------------------------------------------------------------------------- Government 0.4 2.7% Government 0.8 1.2% - ----------------------------------------------------------------------------------------------- Wholesale 4.5 20.3% Wholesale 1.0 (22.8)% - ----------------------------------------------------------------------------------------------- Unbilled (0.2) -- Unbilled 0.2 -- - ----------------------------------------------------------------------------------------------- Total 16.5 9.8% Total 11.7 2.9% - -----------------------------------------------------------------------------------------------
NCNG NCNG reported a net loss of $5.3 million in the third quarter compared with a net loss of $3.2 million in the same period last year. This quarter's earnings were negatively impacted by a decrease in margins. Progress Ventures The Progress Ventures business unit had net income of $87.6 million in the third quarter compared with $80.1 million for the same period last year. The difference was primarily due to sales from the new plants that became operational this summer. Total synthetic fuel sales were 3.0 million tons for the quarter and 9.4 million tons year-to-date compared with 4.1 million tons in third quarter 2001 and 10.3 million tons in the first nine months of 2001. The company anticipates total synthetic fuel production of approximately 12 million tons for the year. In September 2002, all of Progress Energy's majority-owned synthetic fuel entities were accepted into the Internal Revenue Service's (IRS) Pre-Filing Agreement (PFA) program. The PFA program allows taxpayers to accelerate voluntarily the IRS exam process in order to seek resolution of specific issues. Both the company and the IRS can withdraw from the program at any time, and issues not resolved through the program may proceed to the next level of the IRS exam process. While the ultimate outcome is uncertain, the company believes that participation in the PFA program will likely shorten the tax exam process. In the company's opinion, it is complying with all the necessary requirements to be allowed synthetic fuel tax credits and believes it is likely, although it cannot be certain, that it will prevail if challenged by the IRS on any credits taken. Other Diversified Progress Rail reported revenues of $195.9 million and net income of $0.7 million for the quarter compared with revenues of $220.0 million and a net loss of $2.2 million in third quarter 2001. The earnings improvement was primarily due to a decrease in O&M expenses. Progress Telecom, including CaroNet's operations, recorded revenues of $14.7 million and net income of $1.7 million, excluding the writedown, for the quarter compared with revenues of $14.6 million and a net loss of $2.4 million for the same period last year. The company initiated a valuation study to assess the recoverability of Progress Telecom's and CaroNet's long-lived assets. Based on this assessment, the company recorded an after-tax writedown and one-time charge of $208.5 million of Progress Telecom's and CaroNet's assets in the third quarter. This writedown constitutes a significant reduction in the book value of these assets, and the ongoing operations are expected to have a negligible impact on Progress Energy's net income. Progress Telecom has successfully implemented sizeable cost reduction measures that are benefiting operational results. Further, Progress Telecom has achieved self-funding status in 2002, which it expects to sustain into the future. Progress Energy also wrote off the remaining amount of its investment in Interpath and recorded an after-tax writedown of $16.3 million in the third quarter. Corporate Corporate results, which primarily include interest expense on holding company debt, posted an operating loss of $52.8 million for the quarter, compared with an operating loss of $54.9 million for the same period last year. Corporate results were positively impacted by the elimination of goodwill amortization, which was $23.1 million in third quarter 2001. Negatively impacting this quarter's results was a $10.8 million tax benefit reallocation from the holding company to the profitable subsidiary companies. Recent guidance in an SEC order states that Progress Energy, Inc.'s tax benefit not related to acquisition interest expense is to be allocated to the profitable subsidiary companies. This allocation has no impact on consolidated tax expense; however, it does decrease the tax expense on the profitable subsidiary results. NON-OPERATING ADJUSTMENTS ASSOCIATED WITH SYNTHETIC FUELS Intra-period Tax Allocation Generally accepted accounting principles require companies to apply an effective tax rate to interim periods that is consistent with a company's estimated annual tax rate. The tax credits generated from synthetic fuel operations reduce Progress Energy's overall effective tax rate. The company's synthetic fuel sales are not subject to seasonal fluctuation to the same extent as the electric utility earnings. The company projects the effective tax rate for the year and then, based upon projected operating income for each quarter, raises or lowers the credits recorded in that quarter to reflect the projected tax rate. On the other hand, operating losses incurred to produce the tax credits are included in the current quarter. The estimated annual tax rate was affected by the telecommunications writedown in this quarter. The resulting tax adjustment increased earnings per share by $0.18 for the quarter and decreased earnings per share by $0.19 for the year. These adjustments will reverse over the balance of the year, resulting in no impact to the company's annual earnings. Contingent Value Obligation (CVO) Mark-to-Market In connection with the acquisition of Florida Progress Corporation, Progress Energy issued 98.6 million CVOs. Each CVO represents the right to receive contingent payments based on production above certain levels of the four synthetic fuel facilities purchased by subsidiaries of Florida Progress Corporation in October 1999. The payments, if any, will be based on the net after-tax cash flows the facilities generate. The CVOs are debt instruments and are valued at market value. Unrealized gains and losses from changes in market value are recognized in earnings each quarter. The CVO mark-to-market increased earnings per share by $0.04 for the quarter and $0.10 for the year. Since the company does not have any control over the market price of the CVOs, it does not consider the mark-to-market adjustment a component of ongoing earnings. * * * * This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve estimates, projections, goals, forecasts, assumptions, risk and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Examples of factors that you should consider with respect to any forward looking statements made in this press release include, but are not limited to, the following: the impact of fluid and complex government laws and regulations, including those relating to the environment; the impact of recent events in the energy markets that have increased the level of public and regulatory scrutiny in our industry and in the capital markets; deregulation or restructuring in the electric industry that may result in increased competition and unrecovered (stranded) costs; the uncertainty regarding the timing, creation and structure of regional transmission organizations; weather conditions that directly influence the demand for electricity and natural gas; fluctuations in the price of energy commodities; economic fluctuations and the corresponding impact on our commercial and industrial customers; seasonal fluctuations in demand for electricity and natural gas; the ability of our subsidiaries to pay upstream dividends or distributions to us; the impact on our facilities and our business from a terrorist attack; the inherent risks associated with the operation of nuclear facilities, including environmental, health, regulatory and financial risks; our ability to successfully access capital markets on favorable terms; the impact that increases in our leverage may have on us; our ability to maintain our current credit ratings; the impact of derivative contracts used in the normal course of our business; our continued ability to use Section 29 tax credits related to our coal and synthetic fuels businesses; the continued depressed state of the telecommunications industry and our ability to realize future returns from our Progress Telecom and Caronet, Inc.; our ability to successfully integrate newly acquired businesses, including Westchester Gas Company, into our operations as quickly or as profitably as expected; our ability to successfully complete the sale of North Carolina Natural Gas and apply the proceeds therefrom to reduce outstanding indebtedness; our ability to manage the risks involved with the construction and operation of our wholesale plants, including construction delays, dependence on third parties and related counter-party risks, and a lack of operating history; our ability to manage the risks associated with our energy marketing and trading operations; the extent to which we are able to reduce our capital expenditures through the utilization of the natural gas expansion fund established by the North Carolina Utilities Commission; and unanticipated changes in operating expenses and capital expenditures. Most of these risks similarly impact our subsidiaries. These and other risk factors are detailed from time to time in the our SEC reports. We urge you to read closely these SEC reports, including, particularly, our Current Report on Form 8-K filed with the SEC on August 9, 2002. All such factors are difficult to predict, contain uncertainties that may materially affect actual results, and may be beyond the ability of the company to control or estimate precisely. PROGRESS ENERGY, INC. UNAUDITED CONSOLIDATED INTERIM FINANCIAL INFORMATION STATEMENTS OF INCOME
Three Months Ended Nine Months Ended September 30 September 30 (In thousands except per share amounts) 2002 2001 2002 2001 - ----------------------------------------------------------------------------------------------------------------------------- Operating Revenues Electric $1,908,817 $1,879,934 $5,007,321 $5,077,928 Natural gas 60,568 51,671 211,171 258,820 Diversified businesses 383,141 398,942 1,060,613 1,217,532 - ----------------------------------------------------------------------------------------------------------------------------- Total Operating Revenues 2,352,526 2,330,547 6,279,105 6,554,280 Operating Expenses Fuel used in electric generation 459,293 446,309 1,205,731 1,194,453 Purchased power 269,108 268,794 675,066 698,218 Gas purchased for resale 47,505 36,282 150,277 203,060 Other operation and maintenance 324,880 290,651 1,011,096 890,148 Depreciation and amortization 211,088 268,475 642,979 849,395 Taxes other than on income 106,144 105,125 297,775 298,716 Diversified businesses 737,243 461,393 1,536,229 1,372,840 - ----------------------------------------------------------------------------------------------------------------------------- Total Operating Expenses 2,155,261 1,877,029 5,519,153 5,506,830 - ----------------------------------------------------------------------------------------------------------------------------- Operating Income 197,265 453,518 759,952 1,047,450 - ----------------------------------------------------------------------------------------------------------------------------- Other Income (Expense) Interest income 3,002 5,549 11,317 24,997 Other, net (13,394) 16,671 (8,505) 7,214 - ----------------------------------------------------------------------------------------------------------------------------- Total Other Income (Expense) (10,392) 22,220 2,812 32,211 - ----------------------------------------------------------------------------------------------------------------------------- Income before Interest Charges and Income Taxes 186,873 475,738 762,764 1,079,661 - ----------------------------------------------------------------------------------------------------------------------------- Interest Charges Net interest charges 149,431 170,044 498,475 530,259 Allowance for borrowed funds used during construction (3,721) (4,206) (11,064) (9,559) - ----------------------------------------------------------------------------------------------------------------------------- Total Interest Charges, Net 145,710 165,838 487,411 520,700 - ----------------------------------------------------------------------------------------------------------------------------- Income before Income Taxes 41,163 309,900 275,353 558,961 Income Taxes (110,771) (56,543) (129,728) (73,187) - ----------------------------------------------------------------------------------------------------------------------------- Net Income $ 151,934 $ 366,443 $ 405,081 $ 632,148 ============================================================================================================================= Average Common Shares Outstanding 216,079 205,866 214,700 201,925 Basic Earnings per Common Share $ 0.71 $ 1.78 $ 1.89 $ 3.13 Diluted Earnings per Common Share $ 0.70 $ 1.77 $ 1.88 $ 3.12 Dividends Declared per Common Share $ 0.545 $ 0.530 $ 1.635 $ 1.590 - -----------------------------------------------------------------------------------------------------------------------------
This financial information should be read in conjunction with the Company's 2001 Annual Report to shareholders. These statements have been prepared for the purpose of providing information concerning the Company and not in connection with any sale, offer for sale, or solicitation of an offer to buy any securities.
Progress Energy, Inc. BALANCE SHEETS September 30 December 31 (In thousands) 2002 2001 - ------------------------------------------------------------------------------------------------------------------- ASSETS Utility Plant Electric utility plant in service $ 19,764,622 $ 19,176,021 Gas utility plant in service 540,693 491,903 Accumulated depreciation (10,522,018) (10,096,412) - ------------------------------------------------------------------------------------------------------------------- Utility plant in service, net 9,783,297 9,571,512 Held for future use 15,027 15,380 Construction work in progress 806,922 1,065,154 Nuclear fuel, net of amortization 215,493 262,869 - ------------------------------------------------------------------------------------------------------------------- Total Utility Plant, Net 10,820,739 10,914,915 - ------------------------------------------------------------------------------------------------------------------- Current Assets Cash and cash equivalents 58,940 54,419 Accounts receivable 794,659 723,807 Unbilled accounts receivable 231,393 199,593 Taxes receivable - 32,325 Inventory 918,297 893,971 Deferred fuel cost 183,942 146,652 Prepayments 62,740 49,056 Other current assets 190,358 224,409 - ------------------------------------------------------------------------------------------------------------------- Total Current Assets 2,440,329 2,324,232 - ------------------------------------------------------------------------------------------------------------------- Deferred Debits and Other Assets Regulatory assets 403,168 448,631 Nuclear decommissioning trust funds 790,858 822,821 Diversified business property, net 1,768,477 1,073,046 Miscellaneous other property and investments 515,613 464,589 Goodwill, net 3,785,073 3,690,210 Prepaid pension assets 503,357 489,600 Restricted cash 73,821 - Other assets and deferred debits 479,321 513,099 - ------------------------------------------------------------------------------------------------------------------- Total Deferred Debits and Other Assets 8,319,688 7,501,996 - ------------------------------------------------------------------------------------------------------------------- Total Assets $ 21,580,756 $ 20,741,143 =================================================================================================================== CAPITALIZATION AND LIABILITIES Capitalization Common stock (without par value, authorized 500,000,000, issued and outstanding $ 4,278,913 $ 4,107,493 221,933,138 and 218,725,352 shares, respectively) Unearned ESOP common stock (101,560) (114,385) Accumulated other comprehensive loss (39,102) (32,180) Retained earnings 2,094,639 2,042,605 - ------------------------------------------------------------------------------------------------------------------- Total Common Stock Equity 6,232,890 6,003,533 Preferred stock of subsidiary - redemption not required 92,831 92,831 Long-term debt, net 9,735,025 8,618,960 - ------------------------------------------------------------------------------------------------------------------- Total Capitalization 16,060,746 14,715,324 - ------------------------------------------------------------------------------------------------------------------- Current Liabilities Current portion of long-term debt 375,202 688,052 Accounts payable 657,572 725,977 Taxes accrued 123,645 - Interest accrued 153,903 212,387 Dividends declared 120,001 117,857 Short-term obligations 1,060,267 942,314 Customer deposits 159,920 154,343 Other current liabilities 391,470 419,398 - ------------------------------------------------------------------------------------------------------------------- Total Current Liabilities 3,041,980 3,260,328 - ------------------------------------------------------------------------------------------------------------------- Deferred Credits and Other Liabilities Accumulated deferred income taxes 1,157,446 1,434,506 Accumulated deferred investment tax credits 211,446 226,382 Regulatory liabilities 292,544 287,239 Other liabilities and deferred credits 816,594 817,364 - ------------------------------------------------------------------------------------------------------------------- Total Deferred Credits and Other Liabilities 2,478,030 2,765,491 - ------------------------------------------------------------------------------------------------------------------- Total Capitalization and Liabilities $ 21,580,756 $ 20,741,143 ===================================================================================================================
Progress Energy, Inc. SUPPLEMENTAL DATA Three Months Ended Nine Months Ended September 30 September 30 2002 2001 2002 2001 - ---------------------------------------------------------------------------------------------------------------------- Operating Revenues (in thousands) Electric Retail $ 1,602,600 $ 1,591,713 $ 4,176,454 $ 4,214,165 Wholesale 251,797 254,054 659,316 729,608 Unbilled 2,542 (7,493) 28,769 (54,272) Miscellaneous revenue 51,878 41,660 142,782 188,427 - --------------------------------------------------------------------------------------------------------------------- Total Electric 1,908,817 1,879,934 5,007,321 5,077,928 Natural gas 60,568 51,671 211,171 258,820 Diversified businesses 383,141 398,942 1,060,613 1,217,532 - --------------------------------------------------------------------------------------------------------------------- Total Operating Revenues $ 2,352,526 $ 2,330,547 $ 6,279,105 $ 6,554,280 ===================================================================================================================== Energy Sales Electric (millions of kWh) Retail Residential 9,988 9,385 25,810 25,310 Commercial 6,881 6,597 18,012 17,553 Industrial 4,552 4,473 12,776 13,068 Other retail 1,185 1,164 3,183 3,135 - --------------------------------------------------------------------------------------------------------------------- Total Retail 22,606 21,619 59,781 59,066 Unbilled (3) (350) 716 (893) Wholesale 5,550 5,087 14,331 13,946 - --------------------------------------------------------------------------------------------------------------------- Total Electric 28,153 26,356 74,828 72,119 - --------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------- Natural Gas (thousands of dt) 19,965 13,080 52,463 39,022 ===================================================================================================================== Energy Supply (millions of kWh) Generated - steam 14,529 13,451 37,628 37,242 nuclear 7,720 7,553 22,640 21,503 hydro 51 83 297 200 combustion turbines 3,121 2,461 6,868 5,270 Purchased 4,142 3,945 10,991 11,330 - --------------------------------------------------------------------------------------------------------------------- Total Energy Supply (Company Share) 29,563 27,493 78,424 75,545 ===================================================================================================================== Detail of Income Taxes (in thousands) Income tax expense (credit) - current $ 163,024 $ (4,197) $ 197,212 $ 24,279 deferred (269,087) (47,082) (312,020) (78,987) investment tax (4,708) (5,264) (14,920) (18,479) - --------------------------------------------------------------------------------------------------------------------- Total Income Tax Expense $ (110,771) $ (56,543) $ (129,728) $ (3,187) ===================================================================================================================== FINANCIAL STATISTICS Ratio of earnings to fixed charges 1.10 1.74 Return on average common stock equity 5.10% 11.98% Book value per common share $ 28.78 $ 29.14 Capitalization ratios Common stock equity 35.62% 38.04% Preferred stock of subsidiary- redemption not required 0.53 0.57 Total debt 63.85 61.39 - --------------------------------------------------------------------------------------------------------------------- Total 100.00% 100.00% =====================================================================================================================
Progress Energy, Inc. Segment Earnings Variance Analysis Third Quarter September 2002 vs 2001
Florida CP&L Power Progress Other ($ per share) (Electric) (Electric) Ventures Businesses Corporate Consolidated ---------- ---------- -------- ---------- --------- ------------ Reported 2001 Earnings 0.80 0.55 0.30 (0.03) 0.16 1.78 CVO Mark-to-Market - 2001 (0.08) (A) (0.08) Intra-period tax levelization - 2001 (0.36) (B) (0.36) ---------- ---------- -------- ---------- --------- ------------ Ongoing 2001 Earnings 0.80 0.55 0.30 (0.03) (0.28) 1.34 Weather 0.06 0.03 0.09 Florida Rate Reduction (0.09) (C) (0.09) Other Margin 0.02 0.03 (D) 0.05 Depreciation 0.04 0.06 (E) 0.10 Goodwill Amortization 0.11 (E) 0.11 O&M (0.04) (0.06) (F) (0.10) Interest Charges 0.04 0.01 0.03 (G) 0.08 Diversified Businesses 0.03 0.03 Other Income/Expense (0.04) 0.01 (0.01) 0.04 0.00 Share Dilution (0.04) (0.03) (0.02) 0.01 (H) (0.08) Tax Reallocation (0.01) 0.06 (0.05) (I) 0.00 ---------- ---------- -------- ---------- --------- ------------ Ongoing 2002 Earnings 0.83 0.57 0.34 (0.04) (0.17) 1.53 PTC Impairment (1.04) (J) (1.04) CVO Mark-to-Market - 2002 0.04 (A) 0.04 Intra-period tax levelization - 2002 0.18 (B) 0.18 ---------- ---------- -------- ---------- --------- ------------ Reported 2002 Earnings 0.83 0.57 0.34 (1.08) 0.05 0.71 ---------- ---------- -------- ---------- --------- ------------ Segment View: ---------- ---------- -------- ---------- --------- ------------ Third Quarter 2002 0.77 0.56 0.41 (1.08) 0.05 (K) 0.71 ---------- ---------- -------- ---------- --------- ------------ ---------- ---------- -------- ---------- --------- ------------ Third Quarter 2001 0.74 0.52 0.39 (0.03) 0.16 1.78 ---------- ---------- -------- ---------- --------- ------------
Other includes NCNG, SRS, Progress Telecom, and Progress Rail. Progress Rail's EPS contribution is immaterial and, therefore, is not separately disclosed. Corporate includes eliminations, holding company interest expense, goodwill (in 2001), CVO mark-to-market, intra-period tax allocations, and purchase accounting transactions. (A) Impact of change in market value of outstanding CVO's. (B) Intra-period income tax leveling impact, related to cyclical nature of energy demand/earnings. (C) Florida rate reduction: 9.2% reduction effective 5-1-02. (D) CP&L - favorable retail growth/volume/pricing $0.05, unfavorable fuel/purchased power $0.02. FPC: favorable retail growth $0.03. (E) CP&L - Lower nuclear accelerated depreciation, FPC - rate case impact, Corporate - goodwill (F) CP&L: Increased salary and benefit costs, pre-staging costs for planned nuclear refueling outage. FPC: Lower pension credits, increased system and reliability enhancements and employee benefits. (G) Lower interest rates. (H) Primarily impact of issuance in August 2001 (12.7M shares) and purchase of Westchester Gas in April 2002 (2.5M shares). (I) Moving impact of tax favorability from Holding Company to business segments. (J) PTC impairment and one time charges. (K) Trading and marketing activities in CP&L ($0.06) and Florida Power ($0.01) that are managed by Progress Ventures Progress Energy, Inc. Segment Earnings Variance Analysis Year-to-Date September 2002 vs 2001
Florida CP&L Power Progress Other ($ per share) (Electric) (Electric) Ventures Businesses Corporate Consolidated ---------- ---------- -------- ---------- --------- ------------ Reported 2001 Earnings 1.82 1.34 0.79 (0.08) (0.74) 3.13 CVO Mark-to-Market - 2001 (0.04) (A) (0.04) Intra-period tax levelization - 2001 (0.13) (B) (0.13) ---------- ---------- -------- ---------- --------- ------------ Ongoing 2001 Earnings 1.82 1.34 0.79 (0.08) (0.91) 2.96 Weather 0.06 0.06 0.12 Florida Rate Reduction (0.15) (C) (0.15) Other Margin 0.08 0.07 (D) 0.15 Depreciation 0.05 0.18 (E) 0.23 Goodwill Amortization 0.33 (E) 0.33 O&M (0.15) (0.20) (0.01) (F) (0.36) Interest Charges 0.08 0.01 0.02 0.01 (G) 0.12 Diversified Businesses 0.01 (0.01) (0.00) Other Income/Expense (0.10) (0.02) 0.03 (H) (0.09) Share Dilution (0.11) (0.07) (0.05) 0.04 (I) (0.19) Tax Reallocation 0.12 0.06 0.01 (0.19) (J) 0.00 ---------- ---------- -------- ---------- --------- ------------ Ongoing 2002 Earnings 1.85 1.30 0.77 (0.09) (0.71) 3.12 Florida Retroactive Rate Refund (0.10) (K) (0.10) CVO Mark-to-Market - 2002 0.10 (A) 0.10 PTC Impairment (1.04) (L) (1.04) Intra-period tax levelization - 2002 (0.19) (B) (0.19) ---------- ---------- -------- ---------- --------- ------------ Reported 2002 Earnings 1.85 1.20 0.77 (1.13) (0.80) 1.89 ---------- ---------- -------- ---------- --------- ------------ Segment View: ---------- ---------- -------- ---------- --------- ------------ First Nine Months 2002 1.65 1.16 1.01 (1.13) (0.80) (M) 1.89 ---------- ---------- -------- ---------- --------- ------------ ---------- ---------- -------- ---------- --------- ------------ First Nine Months 2001 1.62 1.25 1.08 (0.08) (0.74) 3.13 ---------- ---------- -------- ---------- --------- ------------
Other includes NCNG, SRS, Progress Telecom, and Progress Rail. Progress Rail's EPS contribution is immaterial and, therefore, is not separately disclosed. Corporate includes eliminations, holding company interest expense, goodwill (in 2001), CVO mark-to-market, intra-period tax allocations, and purchase accounting transactions. (A) Impact of change in market value of outstanding CVO's. (B) Intra-period income tax leveling impact, related to cyclical nature of energy demand/earnings. (C) Florida rate reduction: 9.2% reduction effective 5-1-02. (D) CP&L - favorable retail growth/usage/pricing $0.12, unfavorable wholesale ($0.03) and industrial ($0.04), fuel/other $0.03. FPC: favorable retail growth $0.07, unfavorable wholesale ($0.03), fuel/purchased power/other $0.03. (E) CP&L - Lower nuclear accelerated depreciation, FPC - rate case impact, Corporate - goodwill (F) CP&L: Increased salary and benefit costs, boiler replacement costs, pre-staging costs for planned nuclear refueling outage. FPC: Lower pension credits, system reliability and enhancements, increased employee benefits. (G) Lower interest rates. (H) CP&L - Lower AFUDC credits in 2002, lower interest income, and other nonoperating charges. (I) Primarily impact of issuance in August 2001 (12.7M shares) and purchase of Westchester Gas in April 2002 (2.5M shares). (J) Moving impact of tax favorability from Holding Company to business segments. (K) Impact of $35M retroactive rate refund related to rate case settlement. (L) PTC impairment and one time charges. (M) Trading and marketing activities in CP&L ($0.20) and Florida Power ($0.04) that are managed by Progress Ventures. -----END PRIVACY-ENHANCED MESSAGE-----