-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, bGfJRpc56BOm3mG+OMfkLI0kAu+hOFP5uGTFde8+g3VVTUnqCY48bCmrEBkcmM0u T9e1dvQ02cQIRJ+N3GMSxw== 0000017797-94-000010.txt : 19940525 0000017797-94-000010.hdr.sgml : 19940525 ACCESSION NUMBER: 0000017797-94-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAROLINA POWER & LIGHT CO CENTRAL INDEX KEY: 0000017797 STANDARD INDUSTRIAL CLASSIFICATION: 4911 IRS NUMBER: 560165465 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03382 FILM NUMBER: 94528757 BUSINESS ADDRESS: STREET 1: 411 FAYETTEVILLE ST CITY: RALEIGH STATE: NC ZIP: 27601 BUSINESS PHONE: 9195466111 10-Q 1 FIRST QUARTER 1994 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission file number 1-3382 CAROLINA POWER & LIGHT COMPANY ______________________________ (Exact name of registrant as specified in its charter) North Carolina 56-0165465 _________________________________________________________________ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 411 Fayetteville Street, Raleigh, North Carolina 27601-1748 _________________________________________________________________ (Address of principal executive offices) (Zip Code) 919-546-6111 _________________________________ (Registrant's telephone number, including area code) _________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock (Without Par Value) shares outstanding at April 30, 1994: 160,736,522 PART I. FINANCIAL INFORMATION Item 1. Financial Statements ______________________________ Reference is made to the attached Appendix containing the Interim Financial Statements for the periods ended March 31, 1994. The amounts are unaudited but, in the opinion of management, reflect all adjustments necessary to fairly present the Company's financial position and results of operations for the interim periods. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ___________________________________________________________ Results of Operations For the Three and Twelve Months Ended March 31, 1994, As Compared With the Corresponding Periods One Year Earlier ______________________________________________________________ Operating Revenues and Expense: Revenues increased for the three and twelve months ended March 31, 1994, reflecting higher energy sales due primarily to increased usage. For the three month period, energy sales did not increase proportionately with revenues due to higher demand-related charges. A portion of the decrease in the deferred fuel credit for the twelve months ended March 31, 1994, reflects settlement agreements reached with the Company's regulators in the North Carolina and South Carolina jurisdictions in July and September 1993, respectively. As part of these settlements, the Company agreed to forgo recovery of a total of $41.1 million of deferred fuel expense related to the Brunswick Plant outage. Excluding the effect of these settlements, the remaining $47 million decrease in the deferred fuel credit was primarily due to lower fuel costs associated with an increase in the use of nuclear generation. Purchased power increased for the three and twelve months ended March 31, 1994, due to increased purchases from Duke Power Company (Duke) and North Carolina Eastern Municipal Power Agency (Power Agency). The increased purchases from Duke of $16.5 million and $39.7 million for the three and twelve months, respectively, are due primarily to an agreement under which the Company began purchasing 400 megawatts of generating capacity in July 1993. The increased purchases from Power Agency of $11.6 million and $27.3 million for the three and twelve months, respectively, are due primarily to the increased buyback provisions of the Company's April 1993 agreement with Power Agency. Other operating expenses increased for the twelve months ended March 31, 1994, as a result of the recognition of increased expense for postretirement benefits other than pensions due to new accounting requirements effective in 1993 and as a result of adjustments made in 1992 that decreased expense in the prior period. Maintenance expense decreased in the three and twelve months ended March 31, 1994, due to a decrease in costs associated with the Brunswick Plant of approximately $19 million and $44 million, respectively. In the prior periods, significant costs were incurred at the Brunswick Plant as a result of the Plant's extended outage. The remaining fluctuation for the current twelve month period is attributable to a decrease in expense due to the capitalization of costs associated with plant modifications as compared to the prior period. The change in Harris Plant deferred costs for the twelve months ended March 31, 1994, is primarily due to an adjustment made in the prior period in order to better match these costs with the associated revenue recovery. This adjustment decreased prior period operating expenses by $13.4 million, net of tax. Adjustments related to a 1993 settlement between the Company and North Carolina Electric Membership Corporation (NCEMC) primarily account for the remaining increase for the twelve month period. Other Income: The increase in the income tax credit for the three months ended March 31, 1994, is partially attributable to the adoption of a new accounting standard applicable to the Company's leveraged employee stock ownership plan (ESOP). See New Accounting Standard. _______________________ The increase in Harris Plant carrying costs for the twelve months ended March 31, 1994, is primarily related to the 1993 settlement between the Company and NCEMC. The Harris Plant disallowance - Power Agency line item reflects a write-off recorded as a result of the 1993 settlement with Power Agency. The write-off represents a portion of the Company's Harris Plant costs that will not be recoverable through sales of supplemental power to Power Agency. The decrease in interest income and other income for the three month period ended March 31, 1994, is primarily due to the new ESOP accounting standard. See New Accounting Standard. _______________________ Interest Charges: Interest charges on long-term debt decreased for the three and twelve months ended March 31, 1994, primarily due to long-term debt refinancings that allowed the Company to take advantage of lower interest rates. Material Changes in Capital Resources and Liquidity From December 31, 1993, to March 31, 1994 and From March 31 1993, to March 31, 1994 ______________________________________________________________ During the three and twelve months ended March 31, 1994, the Company issued long-term debt totaling $150 million and $487.3 million, respectively. These issuances of debt, debt issued in March 1993 and internally generated funds financed the retirement or redemption of long-term debt totaling $94.8 million and $786.9 million, respectively. The Company uses short-term financing in the form of commercial paper backed by revolving credit agreements to provide flexibility in the timing and amounts of long-term financing. At March 31, 1994, these revolving credit agreements amounted to $208.1 million. A portion of the facilities totaling $23.1 million expired on April 30, 1994. The Company intends to renew or replace these facilities in the second quarter of 1994. At March 31, 1994, the Company had $6.7 million in commercial paper outstanding. The Company's First Mortgage Bonds are currently rated "A2" by Moody's Investors Service, "A" by Standard & Poors and "A+" by Duff & Phelps. Standard & Poors and Moody's Investors Service have rated the Company's commercial paper "A-1" and "P-1", respectively. The Company's capital structure at March 31, 1994, was 50.06% common stock equity, 47.24% long-term debt and 2.7% preferred stock. New Accounting Standard _______________________ In January 1994, the Company implemented Statement of Position (SOP) 93-6, "Employers' Accounting for Stock Ownership Plans," on a prospective basis. This SOP requires the following changes in accounting for the Company's leveraged employee stock ownership plan: 1) ESOP shares that have not been committed to be released are no longer considered outstanding for the determination of earnings per common share; 2) dividends on unallocated ESOP shares are no longer recognized for financial statement purposes; 3) all tax benefits of ESOP dividends are now recorded directly to non-operating income tax expense, whereas previously a portion of the tax benefits was recorded directly to retained earnings; 4) interest income related to the qualified ESOP loan is no longer recognized; and 5) the difference between the acquisition and allocation prices of ESOP shares, which was previously recorded as other income, net, is now recorded directly to common stock. In addition, ESOP loan transactions between the Company and the Stock Purchase-Savings Plan Trustee are no longer reflected in the Statements of Cash Flows. The implementation of SOP 93-6 resulted in an increase in earnings per common share of approximately $.01 for the three months ended March 31, 1994. Competition ___________ In February 1994, the Company entered into a contract with E. I. duPont de Nemours (duPont), its largest industrial customer, that will enable the Company to retain the electrical load it now serves at duPont's three plants in the Company's North Carolina service area. The parties also signed an agreement regarding the two duPont plants the Company serves in South Carolina. The agreements provide for the payment by duPont of a lower co-generation deferral rate for electricity in exchange for a seven-year commitment by duPont to purchase its electricity requirements from the Company. The annual reduction in revenues is not material to the results of operations of the Company. PART II. OTHER INFORMATION Item 1. Legal Proceedings Legal aspects of certain matters are set forth in Item 5 below. Item 2. Changes in Securities ) ) ) Item 3. Defaults upon Senior Securities ) Not applicable ) for the quarter ) ended March 31, ) 1994. ) ) Item 4. Submission of Matters to a Vote ) of Security Holders ) Item 5. Other Information 1. (Reference is made to the Company's 1993 10-K, Generating Capability, paragraph 4, page 5.) With regard to the Walters Hydroelectric Plant relicensing proceeding (Project Nos. 432-004 and 2748-000), on March 21, 1994 the Administrative Law Judge certified the settlement agreement regarding various environmental issues to the Federal Energy Regulatory Commission (FERC) for its decision. Additionally, by order dated April 19, 1994, the FERC approved the Power Coordination Agreement (PCA) and the Interchange Agreement (IA) entered into by the Company and North Carolina Electric Membership Corporation (NCEMC), and filed with the FERC on September 17, 1993, provided the parties agreed to certain modifications. The FERC also stated that unless the parties agreed to the modifications by May 4, 1994, the FERC would reject the PCA, the IA, and the settlement agreement that resolves the Walters relicensing proceeding, and certain issues related to NCEMC's objections to the Company's purchase power contract with Duke Power Company (Duke) and NCEMC's interest in transferring base load capacity from its ownership in Duke's Catawba Nuclear Station (Docket Nos. ER 89-106-000, EL 91-55-000 and ER 92-199-000). By letter dated May 4, 1994, the parties notified the FERC that they had reached an agreement, subject to approval by NCEMC's Board of Directors, which allows them to accept the FERC's modifications, and still implement the intent of the PCA. On May 11, 1994, the parties notified the FERC that they had obtained the approval of NCEMC's Board of Directors, and filed with the FERC the First Amendment to the PCA which implements the changes necessary to accept the FERC's modifications. 2. (Reference is made to the Company's 1993 Form 10-K, Competition and Franchises, paragraph 1.b., page 7.) In February 1994, the Company entered into a contract with E. I. duPont de Nemours (duPont), its largest industrial customer, that will enable the Company to retain the electrical load it now serves at duPont's three plants in the Company's North Carolina service a area. The parties also signed an agreement regarding the two duPont plants the Company serves in South Carolina. The agreements provide for the payment by duPont of a lower co-generation deferral rate for electricity in exchange for a seven-year commitment by duPont to purchase its electricity requirements from the Company. The annual reduction in revenues is not material to the results of operations of the Company. The agreements were approved by the South Carolina Public Service Commission on April 14, 1994 and by the North Carolina Utilities Commission (NCUC) on April 26, 1994. In a related matter, the North Carolina Public Staff, which represents the using and consuming public in matters before the NCUC, filed a petition with the NCUC requesting that interim guidelines be established for consideration of any future special rate requests and that a generic proceeding be instituted to address the issues raised by such rate reductions. The Company cannot predict the outcome of these matters. 3. (Reference is made to the Company's 1993 Form 10-K, Financing Program, paragraph 3, page 9.) External financings in 1994 consist of the following: - The issuance on January 19, 1994, of $150 million principal amount of First Mortgage Bonds, 5 7/8% Series due January 15, 2004, for net proceeds of approximately $148 million. The proceeds from the issuance were used to reduce the outstanding balance of commercial paper and other short-term debt, to redeem outstanding long-term debt and for other general corporate purposes. - The issuance on May 12, 1994, of $72.6 million principal amount of First Mortgage Bonds, Pollution Control Series L, Wake County Pollution Control Revenue Refunding Bonds (Carolina Power & Light Company Project) Series 1994A due May 1, 2024 and $50 million principal amount of First Mortgage Bonds, Pollution Control Series M, Wake County Pollution Control Revenue Refunding Bonds (Carolina Power & Light Company Project) Series 1994B due May 1, 2024, for a total net proceeds of $122.6 million. The proceeds will be used for the proposed redemption on June 15, 1994 of $122.6 million First Mortgage Bonds, Pollution Control Series G, Wake County Pollution Control Revenue Bonds Series 1984A due June 15, 2014, at 100% of the principal amount of such bonds plus accrued interest to the date of redemption. 4. (Reference is made to the Company's 1993 Form 10-K, Financing Program, paragraph 4, page 10.) Redemptions and retirements in 1994 consist of the following: - The redemption on March 24, 1994, of $17.5 million principal amount of First Mortgage Bonds, 8 1/2% Series due October 1, 2007, at 100.25% of the principal amount of such bonds plus accrued interest to the date of redemption. - The redemption on March 24, 1994, of $77.4 million principal amount of First Mortgage Bonds, 8 1/8% Series, due November 1, 2003, at 100.61% of the principal amount of such bonds plus accrued interest to the date of redemption. - The retirement on April 15, 1994, of $50 million principal amount of First Mortgage Bonds, 5.85% Secured Medium-Term Notes, Series B, which matured on that date. 5. (Reference is made to the Company's 1993 Form 10-K, Retail Rate Matters, page 13.) The NCUC has opened two additional dockets. The first docket will address the proper interpretation of North Carolina General Statute Section 62-140(c) which involves the offer or payment of consideration by a public utility to secure the installation or adoption of the use of the utility's services. The second docket will further explore the issue of what factors the NCUC should consider when evaluating the reasonableness of proposed Demand Side Management programs. The Company cannot predict the outcome of these matters. 6. (Reference is made to the Company's 1993 Form 10-K, Environmental Matters, paragraph 3.c., page 17). With regard to the Elliot's Auto Parts superfund site located in Benton, Arkansas, the Elliot's Auto Parts Potentially Responsible Party (PRP) Committee has completed remedial activities at the site and will soon submit a final report to the Environmental Protection Agency (EPA). Once the Elliot's Auto Parts PRP Committee receives final approval from the EPA for its final report, the Company has agreed to (i) pay $90,000 to the Elliot's Auto Parts PRP Committee towards the $2.7 million previously expended to remediate the site; (ii) pay 3.4% toward any future expense incurred in connection with the site; and (iii) execute an Administrative Order on Consent with the EPA. Although the Company cannot predict the outcome of this matter, it does not anticipate that costs associated with this site will be material to the results of operations of the Company. 7. (Reference is made to the Company's 1993 Form 10-K, Environmental Matters, paragraph 3.f, page 18.) With regard to the Macon-Dockery superfund site located near Cordova, North Carolina, on April 13, 1994, Crown Cork & Seal Company, Inc. and Clark Equipment Co. filed a motion to add the Company as a defendant in an ongoing lawsuit that was filed in the United States District Court for the Middle District of North Carolina in Greensboro, North Carolina (Civil Action No. 3:92CV00744) on December 4, 1992. The lawsuit seeks to recover costs incurred in undertaking the Remedial Investigation Feasibility Study and the Remedial Design for the site. No ruling has been made on this motion. The Company cannot predict the outcome of this matter. 8. (Reference is made to the Company's 1993 Form 10-K, Nuclear Matters, paragraph 8.e., page 24.) The Company recently received a letter from the Nuclear Regulatory Commission (NRC) regarding an apparent violation of NRC requirements related to inattention to licensed duties which was identified at the Company's H. B. Robinson Plant. An enforcement conference between the Company and the NRC to discuss this apparent violation has been scheduled for May 16, 1994. The Company cannot predict the outcome of this matter. 9. (Reference is made to the Company's 1993 Form 10-K, Other Matters, page 27.) On April 20, 1994, the Company filed a Complaint with the FERC (Docket No. EL-94-62-000 and QF85-102-005) and in the United States District Court for the Eastern District of North Carolina in Raleigh, North Carolina (Civil Action No. 5:94-CV-285-DI) claiming that the rate the Company pays for power it purchases from Stone Container Corporation (Stone Container) is invalid. The Company entered into a twenty-year purchase power agreement with Stone Container in 1984, and in 1987 began receiving power from a cogeneration facility operated by Stone Container in Florence, South Carolina. It is the Company's position that when Stone Container elected to sell the facility's gross output under a "buy all/sell all" option in 1991, the facility lost its status as a "qualified facility" under the Public Utility Regulatory Policies Act and became a public utility. As a result, the contract rate the Company pays for power purchased from the facility is no longer valid and a just and reasonable rate should be established by the FERC under the Federal Power Act. The Company will continue to purchase electricity from Stone Container at the current contract rate pending the outcome of this litigation. The Company cannot predict the outcome of this matter. 10. (Reference is made to the Company's 1993 Form 10-K, Other Matters, page 27.) On April 28, 1994, the Company filed a Complaint against the U.S. Government in the United States District Court for the Eastern District of North Carolina in Raleigh, North Carolina (Civil Action No. 5:94-CV-313-BR3) seeking a refund of approximately $188 million representing tax and interest related to depreciation deductions the Internal Revenue Service (IRS) previously disallowed for the years 1986 and 1987 on the Company's Harris Plant, a nuclear facility located in Wake County, North Carolina. The Company maintains that under applicable laws and regulations the Harris Plant was ready and available for operation in 1 1986. The IRS has previously denied some of the depreciation deductions on the Company's tax returns for the years in question on the ground that in its view the plant was not placed in service until 1987. The Company cannot predict the outcome of this matter. Item 6. Exhibits and Reports on Form 8-K __________________________________________ (a) Exhibits None. (b) Reports on Form 8-K filed during or with respect to the quarter: Date of Report (Earliest Event Reported) Date of Signature Items Reported ________________________________________________________________ January 19, 1994 January 19, 1994 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits SIGNATURES Pursuant to requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CAROLINA POWER & LIGHT COMPANY (Registrant) By: Charles D. Barham, Jr. Executive Vice President By: Paul S. Bradshaw Vice President and Controller (and Principal Accounting Officer) Date: May 16, 1994 EX-99 2 INCOME STATEMENTS
Carolina Power & Light Company (ORGANIZED UNDER THE LAWS OF NORTH CAROLINA) INTERIM FINANCIAL STATEMENTS (NOT AUDITED BY INDEPENDENT AUDITORS) MARCH 31, 1994 STATEMENTS OF INCOME (In thousands Three Months Ended Twelve Months Ended except per share amounts) March 31 March 31 1994 1993 1994 1993 ---- ---- ---- ---- Operating Revenues...............................................$ 744,461 $707,485 $2,932,358 $2,816,036 -------- -------- ---------- ---------- Operating Expenses Operation - fuel for generation................................ 129,912 126,619 527,659 545,111 deferred fuel cost (credit), net................... (2,251) (1,257) 26,370 (61,887) purchased power.................................... 111,541 77,702 401,931 342,781 other.............................................. 130,804 115,588 513,549 443,703 Maintenance.................................................... 46,959 63,534 218,874 273,785 Depreciation and amortization.................................. 105,057 103,281 415,422 401,663 Taxes other than on income..................................... 35,436 33,902 144,404 132,349 Income tax expense............................................. 57,498 51,786 195,029 199,993 Harris Plant deferred costs, net............................... 6,478 6,207 27,846 4,755 -------- -------- ---------- ---------- Total Operating Expenses................................. 621,434 577,362 2,471,084 2,282,253 -------- -------- ---------- ---------- Operating Income................................................. 123,027 130,123 461,274 533,783 -------- -------- ---------- ---------- Other Income (Expense) Allowance for equity funds used during construction............ 2,263 1,665 9,597 8,186 Income tax credit (expense) (Note 2)........................... 3,583 (902) 4,093 (5,068) Harris Plant carrying costs.................................... 2,563 2,596 27,111 11,361 Harris Plant disallowance - Power Agency....................... - - (20,645) - Interest income (Note 2)....................................... 1,294 7,736 29,753 26,112 Other income, net (Note 2)..................................... 6,490 11,557 37,399 38,548 -------- -------- ---------- ---------- Total Other Income....................................... 16,193 22,652 87,308 79,139 -------- -------- ---------- ---------- Income Before Interest Charges................................... 139,220 152,775 548,582 612,922 -------- -------- ---------- ---------- Interest Charges Long-term debt................................................. 47,376 54,222 198,336 219,720 Other interest charges......................................... 4,251 5,649 15,022 17,808 Allowance for borrowed funds used during construction.......................................... (1,231) (1,094) (6,098) (3,999) -------- -------- ---------- ---------- Net Interest Charges.................................... 50,396 58,777 207,260 233,529 -------- -------- ---------- ---------- Net Income....................................................... 88,824 93,998 341,322 379,393 Preferred Stock Dividend Requirements............................ (2,402) (2,402) (9,609) (11,679) Tax Benefit of ESOP Dividends.................................... - - - 10,656 -------- -------- ---------- ---------- Earnings for Common Stock........................................$ 86,422 $ 91,596 $ 331,713 $ 378,370 ======== ======== ========== ========== Average Common Shares Outstanding (Note 2)....................... 150,820 160,737 158,291 160,737 Earnings per Common Share (Note 2)...............................$ 0.57 $ 0.57 $ 2.10 $ 2.35 Dividends Declared per Common Share..............................$ 0.425 $ 0.410 $ 1.670 $ 1.610 --------------------- See Supplemental Data and Notes to Financial Statements.
EX-99 3 BALANCE SHEETS
Carolina Power & Light Company BALANCE SHEETS March 31 December 31 (In thousands) 1994 1993 1993 ---- ---- ---- ASSETS Electric Utility Plant Electric utility plant in service......................$ 8,881,884 $ 8,675,584 $ 8,789,518 Accumulated depreciation............................... (2,974,558) (2,704,077) (2,897,832) ------------ ------------ ------------ Electric utility plant in service, net.......... 5,907,326 5,971,507 5,891,686 Held for future use.................................... 13,195 13,284 13,300 Construction work in progress.......................... 260,887 206,766 309,713 Nuclear fuel, net of amortization...................... 211,702 217,114 217,488 ------------ ------------ ------------ Total Electric Utility Plant, Net............... 6,393,110 6,408,671 6,432,187 ------------ ------------ ------------ Current Assets Cash and cash equivalents.............................. 33,444 169,602 23,607 Accounts receivable.................................... 292,473 310,702 321,309 Fuel................................................... 69,595 94,902 62,029 Materials and supplies................................. 119,238 110,667 111,052 Deferred fuel cost..................................... 12,078 38,448 9,827 Prepayments............................................ 46,308 47,762 46,869 Other current assets................................... 16,437 19,283 18,591 ------------ ------------ ------------ Total Current Assets............................ 589,573 791,366 593,284 ------------ ------------ ------------ Deferred Debits and Other Assets Income taxes recoverable through future rates.................................. 382,224 378,185 385,515 Abandonment costs...................................... 106,450 194,338 125,361 Harris Plant deferred costs............................ 140,484 140,081 144,399 Unamortized debt expense............................... 63,260 49,281 63,898 Miscellaneous other property and investments........... 276,424 151,488 264,165 Other assets and deferred debits....................... 188,821 157,194 185,209 ------------ ------------ ------------ Total Deferred Debits and Other Assets.......... 1,157,663 1,070,567 1,168,547 ------------ ------------ ------------ Total Assets.................................$ 8,140,346 $ 8,270,604 $ 8,194,018 ============ ============ ============ CAPITALIZATION AND LIABILITIES Capitalization Common stock equity....................................$ 2,664,101 $ 2,570,533 $ 2,632,116 Preferred stock - redemption not required.............. 143,801 143,801 143,801 Long-term debt, net.................................... 2,514,047 2,716,709 2,584,903 ------------ ------------ ------------ Total Capitalization............................ 5,321,949 5,431,043 5,360,820 ------------ ------------ ------------ Current Liabilities Current portion of long-term debt...................... 287,630 396,800 162,630 Notes payable (principally commercial paper)........... 6,700 - 76,000 Accounts payable....................................... 166,025 159,266 293,093 Taxes accrued.......................................... 95,132 67,171 20,913 Interest accrued....................................... 51,206 62,991 54,770 Dividends declared (Note 2)............................ 70,022 70,706 74,111 Other current liabilities.............................. 69,369 75,383 67,510 ------------ ------------ ------------ Total Current Liabilities....................... 746,084 832,317 749,027 ------------ ------------ ------------ Deferred Credits and Other Liabilities Accumulated deferred income taxes...................... 1,574,761 1,511,270 1,585,490 Accumulated deferred investment tax credits............ 260,704 273,501 263,588 Other liabilities and deferred credits................. 236,848 222,473 235,093 ------------ ------------ ------------ Total Deferred Credits and Other Liabilities.... 2,072,313 2,007,244 2,084,171 ------------ ------------ ------------ Commitments and Contingencies (Note 3) Total Capitalization and Liabilities.........$ 8,140,346 $ 8,270,604 $ 8,194,018 ============ ============ ============ SCHEDULES OF COMMON STOCK EQUITY (In thousands) Common stock...........................................$ 1,624,114 $ 1,622,277 $ 1,622,277 Unearned ESOP common stock............................. (214,908) (232,498) (220,725) Capital stock issuance expense......................... (790) (334) (790) Retained earnings...................................... 1,255,685 1,181,088 1,231,354 ------------ ------------ ------------ Total Common Stock Equity.......................$ 2,664,101 $ 2,570,533 $ 2,632,116 ============ ============ ============ --------------------- See Supplemental Data and Notes to Financial Statements.
EX-99 4 STATEMENT OF CASH FLOW
Carolina Power & Light Company STATEMENTS OF CASH FLOWS (In thousands) Three Months Ended Twelve Months Ended March 31 March 31 1994 1993 1994 1993 ---- ---- ---- ---- Operating Activities Net income............................................... $ 88,824 $ 93,998 $ 341,322 $ 379,393 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization.......................... 123,641 112,929 470,806 428,983 Harris Plant deferred costs............................ 3,915 3,611 736 (6,606) Harris Plant disallowance - Power Agency............... - - 20,645 - Deferred income taxes.................................. (8,821) 9,825 52,706 102,316 Investment tax credit adjustments...................... (2,884) (2,894) (12,797) (11,086) Allowance for equity funds used during construction.... (2,263) (1,665) (9,597) (8,186) Deferred fuel cost (credit)............................ (2,251) (1,257) 26,370 (61,887) Uncollectible accounts expense......................... 818 805 4,955 3,759 Net (increase) decrease in receivables, inventories and prepaid expenses................................. (23,901) (34,643) (2,003) (90,627) Net increase (decrease) in payables and accrued expenses............................................. 7,157 (50,843) (4,013) 2,989 Miscellaneous.......................................... 16,705 19,468 8,120 (31,182) ------- ------- ------- ------- Net Cash Provided by Operating Activities............. 200,940 149,334 897,250 707,866 --------- --------- --------- --------- Investing Activities Gross property additions................................. (72,313) (81,611) (331,824) (283,201) Nuclear fuel additions................................... (15,391) (5,930) (57,462) (58,341) Contributions to external decommissioning trust.......... (6,328) (3,667) (23,539) (14,756) Contributions to retiree benefit trusts.................. (16,000) - (19,750) (6,667) Loan transactions with SPSP Trustee, net (Note 2)........ - 1,365 19,769 29,505 Allowance for equity funds used during construction...... 2,263 1,665 9,597 8,186 ------- ------- ------- ------- Net Cash Used in Investing Activities................. (107,769) (88,178) (403,209) (325,274) ------- ------- ------- ------- Financing Activities Proceeds from issuance of long-term debt................. 147,986 295,251 434,765 844,628 Net decrease in pollution control bond escrow............ - 327 1,800 9,116 Net increase (decrease) in short-term notes payable (maturity less than 90 days)................... (69,300) (46,800) 6,700 (112,200) Retirement of long-term debt............................. (95,623) (82,851) (803,148) (560,152) Retirement of preferred stock............................ - - - (134,625) Dividends paid on common stock (Note 2).................. (63,986) (65,902) (260,833) (256,375) Dividends paid on preferred stock........................ (2,411) (2,402) (9,483) (16,849) ------- ------- ------- ------- Net Cash Provided by (Used in) Financing Activities... (83,334) 97,623 (630,199) (226,457) --------- --------- ------- ------- Net Increase (Decrease) in Cash and Cash Equivalents....... 9,837 158,779 (136,158) 156,135 Cash and Cash Equivalents at Beginning of the Period....... 23,607 10,823 169,602 13,467 ------- ------- ------- ------- Cash and Cash Equivalents at End of the Period............. $ 33,444 $ 169,602 $ 33,444 $ 169,602 ======= ======= ======= ======= Supplemental Disclosures of Cash Flow Information Cash paid during the period - interest................... $ 52,247 $ 55,897 $ 215,151 $ 226,148 income taxes............... 2,050 (288) 115,861 94,943 ______________________ See Supplemental Data and Notes to Financial Statements.
EX-99 5 SUPPLEMENTAL DATA
Carolina Power & Light Company SUPPLEMENTAL DATA Three Months Ended Twelve Months Ended March 31 March 31 1994 1993 1994 1993 ---- ---- ---- ---- Operating Revenues (in thousands) Residential............................. $ 262,373 $ 248,368 $ 957,702 $ 893,645 Commercial.............................. 143,797 136,642 600,128 566,962 Industrial.............................. 166,860 161,456 749,420 719,134 Government and municipal................ 19,516 18,669 79,463 76,753 Wholesale - standard rate schedules..... 101,198 91,350 363,769 361,704 Power Agency contract requirements...... 35,947 38,983 131,223 154,408 Other utilities......................... 4,070 2,734 12,567 4,623 Miscellaneous revenue................... 10,700 9,283 38,086 38,807 --------- --------- ---------- ---------- Total Operating Revenues.......... $ 744,461 $ 707,485 $ 2,932,358 $2,816,036 ========= ========= ========== ========== Energy Sales (millions of kWh) Residential............................. 3,343 3,163 11,577 10,805 Commercial.............................. 2,051 1,908 8,692 8,103 Industrial.............................. 3,117 3,010 13,663 13,114 Government and municipal................ 306 297 1,257 1,216 Wholesale - standard rate schedules..... 1,700 1,724 6,898 6,545 Power Agency contract requirements...... 647 960 3,193 3,763 Other utilities......................... 118 105 340 177 --------- --------- ---------- ---------- Total Energy Sales................ 11,282 11,167 45,620 43,723 ========= ========= ========== ========== Energy Supply (millions of kWh) Generated - coal........................ 6,096 6,473 25,430 27,690 nuclear..................... 3,383 3,138 13,937 9,219 hydro....................... 304 346 741 1,009 combustion turbines......... 39 6 116 62 Purchased............................... 1,957 1,638 7,430 7,554 --------- --------- ---------- ---------- Total Energy Supply (Company Share)................. 11,779 11,601 47,654 45,534 ========= ========= ========== ========== Detail of Income Taxes (in thousands) Included in Operating Expenses Income tax expense - current............ $ 70,243 $ 46,985 $ 161,881 $ 120,427 Income tax expense - deferred........... (9,861) 7,695 44,751 90,652 Income tax expense - investment tax credit adjustments................ (2,884) (2,894) (11,603) (11,086) --------- --------- ---------- ---------- Subtotal.......................... 57,498 51,786 195,029 199,993 --------- --------- ---------- ---------- Harris Plant deferred costs - deferred... - - - 4,046 Harris Plant deferred costs - investment tax credit adjustments...... (74) (45) 188 (150) --------- --------- ---------- ---------- Subtotal.......................... (74) (45) 188 3,896 --------- --------- ---------- ---------- Total Included in Operating Expenses.... 57,424 51,741 195,217 203,889 --------- --------- ---------- ---------- Included in Other Income Income tax expense (credit) - current... (4,623) (1,228) (10,854) (6,596) Income tax expense (credit) - deferred 1,040 2,130 7,955 11,664 Income tax expense (credit) - investment tax credit adjustments...... - - (1,194) - --------- --------- ---------- ---------- Subtotal.......................... (3,583) 902 (4,093) 5,068 Harris Plant carrying costs - deferred.. - - - 1,601 Other income, net - deferred............ - - - 53 --------- --------- ---------- ---------- Total Included in Other Income.... (3,583) 902 (4,093) 6,722 --------- --------- ---------- ---------- Included in Interest Charges Allowance for borrowed funds used during construction - deferred....... - - - 1,837 --------- --------- ---------- ---------- Total Income Tax Expense...... $ 53,841 $ 52,643 $ 191,124 $ 212,448 ========= ========= ========== ========== FINANCIAL STATISTICS March 31, 1994 March 31, 1993 Actual Pro Forma Actual Pro Forma (Note 2) (Note 2) Ratio of earnings to fixed charges........ 3.28 3.46 3.31 3.50 Return on average common stock equity..... 12.97% 11.93% 15.14% 13.80% Book value per common share (Note 2)...... $ 17.65 N/A $ 17.44 N/A Capitalization ratios Common stock equity................... 50.06% 54.09% 47.33% 51.64% Preferred stock - redemption not required......................... 2.70 2.70 2.65 2.65 Long-term debt, net................... 47.24 43.21 50.02 45.71 -------- -------- -------- -------- Total......................... 100.00% 100.00% 100.00% 100.00% ======= ======== ======== ======== - - -------------------------- See Notes to Financial Statements.
EX-99 6 NOTES TO FINANCIAL STATEMENTS Carolina Power & Light Company NOTES TO FINANCIAL STATEMENTS 1. Except as described in Note 2 below, these interim financial statements are prepared in conformity with the accounting principles reflected in the financial statements included in the Company's 1993 Annual Report to Shareholders and the 1993 Annual Report on Form 10-K. These are interim financial statements, and because of temperature variations between seasons of the year and the timing of outages of electric generating units, especially nuclear-fueled units, the amounts reported in the Statements of Income for periods of less than twelve months are not necessarily indicative of amounts expected for the year. Certain amounts for 1993 have been reclassified to conform to the 1994 presentation. 2. In January 1994, the Company implemented Statement of Position (SOP) 93-6, "Employers' Accounting for Employee Stock Ownership Plans," on a prospective basis. This SOP requires the following changes in accounting for the Company's leveraged employee stock ownership plan (ESOP): 1) ESOP shares that have not been committed to be released are no longer considered outstanding for the determination of earnings per common share; 2) dividends on unallocated ESOP shares are no longer recognized for financial statement purposes; 3) all tax benefits of ESOP dividends are now recorded to non-operating income tax expense, whereas previously a portion of the tax benefits was recorded directly to retained earnings; 4) interest income related to the qualified ESOP loan is no longer recognized; and 5) the difference between the acquisition and allocation prices of ESOP shares, which was previously recorded as other income, net, is now recorded directly to common stock. In addition, ESOP loan transactions between the Company and the Stock Purchase-Savings Plan (SPSP) Trustee are no longer reflected in the Statements of Cash Flows. The implementation of SOP 93-6 resulted in an increase in earnings per common share of approximately $.01 for the first quarter of 1994. Selected pro forma statistics, which eliminate the significant capital structure-related impacts of the ESOP feature of the SPSP, are included in Financial Statistics. 3. Contingencies existing as of the date of these statements are described below. No significant changes have occurred since December 31, 1993, with respect to the commitments discussed in Note 9 of the financial statements included in the Company's 1993 Annual Report to Shareholders. a) In the Company's retail jurisdictions, provisions for nuclear decommissioning costs are approved by the North Carolina Utilities Commission and the South Carolina Public Service Commission and are based on site-specific estimates that included the costs for removal of all radioactive and other structures at the site. In the wholesale jurisdiction, the provisions for nuclear decommissioning cost are based on amounts agreed upon in applicable rate settlements. Accumulated decommissioning cost provisions, which are included in accumulated depreciation, were $230.2 million at March 31, 1994, and $193.8 million at March 31, 1993, and include amounts funded internally and amounts funded in an external decommissioning trust. Based on current earnings and inflation rate assumptions, provisions for nuclear decommissioning costs are currently adequate to provide for decommissioning of the Company's nuclear facilities. The Company's most recent site-specific estimates of decommissioning costs were developed in 1993 and are based on prompt dismantlement decommissioning, which reflects the cost of removal of all radioactive and other structures currently at the site. These estimates, in 1993 dollars, are $257.7 million for Robinson Unit No. 2, $284.3 million for the Harris Plant, $235.4 million for Brunswick Unit No. 1 and $221.4 million for Brunswick Unit No. 2. These estimates are subject to change based on a variety of factors including, but not limited to, inflation, changes in technology applicable to nuclear decommissioning, and changes in federal, state or local regulations. The cost estimates exclude the portion attributable to North Carolina Eastern Municipal Power Agency, which holds an undivided ownership interest in certain of the Company's generating facilities. b) There are several manufactured gas plant (MGP) sites to which the Company and certain entities that were later merged into the Company may have had some connection. In this regard, the Company is participating in the North Carolina MGP Group (Group), a group of entities alleged to be former owners or operators of MGP sites. The Group was formed in response to an initiative launched by the North Carolina Department of Environment, Health and Natural Resources, Division of Solid Waste Management (DSWM), to encourage the voluntary assessment and, where necessary, the remediation of MGP sites. The Group and DSWM have entered into a Memorandum of Understanding relative to the establishment of a uniform program and framework for addressing MGP sites for which DSWM has contended that members of the Group have potential responsibility. It is anticipated that the investigation and remediation of specific MGP sites will be addressed pursuant to one or more Administrative Orders on Consent between DSWM and individual potentially responsible parties. In addition, a current owner of property that was the site of one MGP site owned by Tidewater Power Company, which merged into the Company in 1952, and the Company have entered into an agreement to share the cost of investigation and remediation of this site. Due to the lack of information with respect to the operation of MGP sites and the uncertainty concerning questions of liability and potential environmental harm, the extent and cost of required remedial action, if any, and the extent to which liability may be asserted against the Company or against others are not currently determinable. The Company cannot predict the outcome of these matters or the extent to which other former MGP sites may become the subject of inquiry. PAUL S. BRADSHAW Vice President and Controller RALEIGH, N.C. 27602 April 20, 1994 -----END PRIVACY-ENHANCED MESSAGE-----