-----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, CBfU84/K0//LoW+mpIvr/1tFxUm1OfKuiBd3Xg8LL27Slfrq6IquZQf+353Fvluz 56flB7RN2IQJlL0Fe8xr2g== 0000017797-95-000036.txt : 19951118 0000017797-95-000036.hdr.sgml : 19951118 ACCESSION NUMBER: 0000017797-95-000036 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951109 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAROLINA POWER & LIGHT CO CENTRAL INDEX KEY: 0000017797 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [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: 95588818 BUSINESS ADDRESS: STREET 1: 411 FAYETTEVILLE ST CITY: RALEIGH STATE: NC ZIP: 27601 BUSINESS PHONE: 9195466111 10-Q 1 FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 1995 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 September 30, 1995 __________________ 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 October 31, 1995: 153,889,022 PART I. FINANCIAL INFORMATION Item 1. Financial Statements ______ ____________________ Reference is made to the attached Appendix containing the Consolidated Interim Financial Statements for the periods ended September 30, 1995. 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, Nine and Twelve Months Ended September 30, 1995, As Compared With the Corresponding Periods One Year Earlier _______________________________________________________________ Operating Revenues: For the three, nine and twelve months ended September 30, 1995, operating revenues increased due to the following factors (in millions): Three Months Nine Months Twelve Months ____________ ___________ _____________ Customer Growth/Changes In Usage Patterns $33 $88 $118 Weather 31 7 (25) Price (6) (55) (73) Sales to North Carolina Eastern Municipal Power Agency 1 (21) (27) Sales to Other Utilities 11 29 36 ___ ___ ____ Total $ 70 $ 48 $ 29 ==== ==== ==== The increase in the weather component of revenue for the three months ended September 30, 1995, is the result of warmer weather in the current period as compared to the prior period. The decrease in the price component of revenue for the nine- and twelve-month periods is due primarily to the expiration in July 1994 of a North Carolina rate rider under which the Company was allowed recovery of abandoned plant costs. The reduction in revenue did not significantly impact net income due to a corresponding decrease in amortization expense. In addition, approximately $15 million of the price component decrease for the nine-month period and approximately $20 million for the twelve- month period is attributable to a decrease in the fuel cost component of revenue. Sales to North Carolina Eastern Municipal Power Agency (Power Agency) decreased for the nine- and twelve- month periods due to greater availability of the jointly-owned generating units. Sales to other utilities increased for the nine- and twelve-month periods due to greater availability of the Company's generating units. In addition, the Company was more active in the bulk power market, contributing to the increase in sales to other utilities for all periods. Operating Expenses: The increase in fuel for generation for the three and nine months ended September 30, 1995, is primarily the result of 9% and 7% increases in total generation, respectively. Also contributing to the increase for the three- month period is a decrease in lower-cost nuclear generation primarily attributable to a nuclear plant outage during the current period. Despite a 6% increase in total generation, fuel for generation decreased for the twelve months ended September 30, 1995, due to greater availability of the Company's nuclear generating units in the current period. During this period, lower-cost nuclear generation, as a percentage of total generation, increased and higher-cost fossil generation correspondingly decreased. For the three months ended September 30, 1995, deferred fuel cost decreased primarily due to higher fuel costs resulting from a nuclear plant outage in the current period. In addition, greater demand in the current period resulted in increased generation at the higher-cost fossil plants. Purchased power decreased for the nine and twelve months ended September 30, 1995, due to reduced purchases from Power Agency in accordance with the Harris Plant buyback agreement that stipulates a decrease in the buyback percentage from 50% in 1993 and 1994 to 33% in 1995. For the twelve-month period, the decrease also reflects lower purchases from other utilities, as a result of greater availability of Company generating facilities in the current period. For the three-month period, purchased power increased due to increased purchases from other utilities as a result of warmer weather and a nuclear plant outage in the current period. For the nine and twelve months ended September 30, 1995, maintenance expense decreased due to shorter nuclear outages in the current periods as compared to the prior periods. The increase in the three-month period is primarily due to a nuclear plant outage during the current period. For all periods, the decreases in depreciation and amortization reflect the completion of the amortization of abandoned plant costs for Harris Unit No. 2. For the nine- and twelve-month periods, the decrease also reflects the completion of amortization of costs associated with the North Carolina rate rider. The increase in income tax expense for all periods is primarily due to an increase in operating income. Additionally, contributing to the increase for the nine- and twelve-month periods is a reduction of expense in the prior periods related to certain Internal Revenue Service (IRS) audit issues. Other Income (Expense): The increase in the income tax credit for all periods ended September 30, 1995, is primarily attributable to lower non-operating income in the current periods. The decrease in Harris Plant carrying costs for the twelve months ended September 30, 1995, is primarily related to the Company's settlement with North Carolina Electric Membership Corporation in 1993. The decrease in interest income for the nine- and twelve- month periods is primarily due to the June 1994 recording of interest income related to certain IRS audit issues. Interest Charges: Other interest charges increased for all periods ended September 30, 1995, primarily due to a $6 million interest accrual related to the 1995 North Carolina Utilities Commission Fuel Order. Due to the improved performance of the Company's nuclear facilities during the test year ended March 31, 1995, the fuel component of customer rates exceeded actual fuel costs incurred. As a result, the Company must refund this over- recovery of fuel cost with interest over the twelve month period beginning September 15, 1995. Material Changes in Capital Resources and Liquidity From December 31, 1994, to September 30, 1995 and From September 30, 1994, to September 30, 1995 __________________________________________________ During the nine and twelve months ended September 30, 1995, the Company issued long-term debt of $185 million and $235 million, respectively. The proceeds of these issuances, along with the issuance of short-term debt and internally generated funds, financed the redemption or retirement of long-term debt totaling $252 million during the nine and twelve months ended September 30, 1995. In order to provide flexibility in the timing and amounts of long-term financing, the Company uses short-term financing in the form of commercial paper backed by revolving credit agreements. As of September 30, 1995, the Company's credit facilities total $285 million, consisting of long-term agreements totaling $185 million and a $100 million short-term agreement. The Company had $17 million of commercial paper outstanding at September 30, 1995. The Company's capital structure as of September 30 was as follows: 1995 1994 ____ ____ Common Stock Equity 48.22% 49.82% Long-term Debt 49.15% 47.46% Preferred Stock 2.63% 2.72% The Company's First Mortgage Bonds are currently rated "A2" by Moody's Investors Service, "A" by Standard & Poors and "A+" by Duff & Phelps. Moody's Investors Service, Standard & Poors and Duff & Phelps have rated the Company's commercial paper "P-1", "A- 1" and "D-1" respectively. In 1994, the Board of Directors of the Company authorized the Executive Committee of the Board to repurchase up to 10 million shares of the Company's common stock on the open market. Under this stock repurchase program, the Company has purchased approximately 6.8 million shares from July 1994 through September 1995. The decrease in average common shares outstanding resulted in an increase in earnings per common share of approximately $.04, $.07 and $.07 for the three, nine and twelve months ended September 30, 1995, respectively. Impact of New Accounting Standard _________________________________ The Financial Accounting Standards Board has issued Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of." The provisions of the Statement, which must be implemented by the Company for the year beginning January 1, 1996, require a review of long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. If such a review indicates that the carrying amount of an asset is not recoverable, an impairment loss must be recognized. The Company's initial review indicates that the implementation of this Statement will not have a material impact on the results of operations. In accordance with the requirements of the Statement, the Company will periodically review its long- lived assets to determine if an impairment loss exists. 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 September 30, 1995. ) ) Item 4. Submission of Matters to a Vote ) of Security Holders ) ______ _______________________________ ) Item 5. Other Information ______ _________________ 1. (Reference is made to the Company's 1994 Form 10-K General, page 3, paragraph 4.a.). A 60-minute system peak demand record of 10,156 megawatts (MW) was reached on August 14, 1995. At the time of this peak demand, the Company's capacity margin based on installed capacity (less unavailable capacity) and scheduled firm purchases and sales was approximately 5.45%. 2. (Reference is made to the Company's 1994 Form 10- K, Generating Capability, page 4, paragraph 3.) With regard to the Company's plan to construct ten new combustion turbine generating units adjacent to the Company's Lee Steam Electric Plant in Wayne County, North Carolina, on September 27, 1995, the Company filed an Application for a Certificate of Public Convenience and Necessity with the North Carolina Utilities Commission (NCUC) seeking permission to construct combustion turbines with a combined capacity of 500 MW at the Wayne County site. The units are scheduled to begin commercial service in 1998. The NCUC hearing in this matter is scheduled for January 9, 1996. Although the Company's resource addition plans have not changed, the Company elected not to seek permission at the present time to construct the entire amount of capacity as set forth in its preliminary plans so that it can evaluate other resource options. The Company cannot predict the outcome of this matter. 3. (Reference is made to the Company's 1994 Form 10- K, Competition and Franchises, page 8, paragraph 1.b. Reference is also made to the Company's Form 10-Q for the quarter ended March 31, 1995, Item 5, paragraph 1.) With regard to the Notice of Proposed Rulemaking (Proposal) issued by the Federal Energy Regulatory Commission (FERC) on March 29, 1995, that would establish guidelines for wholesale wheeling of electric power, the Company filed comments regarding the Proposal with the FERC on August 7, 1995. In those comments, the Company disagreed with the FERC's approach to regulating wholesale wheeling, and indicated that in issuing the proposed guidelines the FERC exceeded its authority. The Company also suggested ways to improve the proposed guidelines, in the event that they are enacted. On August 11, 1995, the Company filed comments concerning the FERC's inquiry regarding the potential environmental impact of the Proposal. In those comments, the Company questioned whether the FERC had complied with the requirements of the National Environmental Policy Act. On October 4, 1995, the Company filed reply comments which addressed a number of specific points made in the initial comments other parties filed regarding the Proposal. The Company cannot predict the outcome of this matter. 4. (Reference is made to the Company's 1994 Form 10- K, Competition and Franchises, page 8, paragraph 1.b. Reference is also made to the Company's Form 10-Q for the quarter ended June 30, 1995, Item 5, paragraph 1.) With regard to the petition filed with the NCUC on February 8, 1995 by the Carolina Utility Customers Association, Inc. requesting that the NCUC hold a generic hearing to address various retail wheeling issues, in an order dated July 21, 1995, the NCUC requested that interested parties suggest specific issues for further consideration. On September 19, 1995, the Company filed with the NCUC a list of specific issues it believes should be addressed prior to any form of retail wheeling being allowed in the state of North Carolina. The issues include, but are not limited to, (i) concerns about system planning and service reliability; (ii) the drastic changes to the laws governing utility regulation that would need to be implemented before retail wheeling could be allowed; (iii) whether retail choice promotes cost reduction rather than cost shifting; and (iv) how will stranded costs be determined and recovered. The Company cannot predict the outcome of this matter. 5. (Reference is made to the Company's 1994 Form 10- K, Competition and Franchises, page 8, paragraph 1.d. Reference is also made to the Company's Form 10-Q for the quarter ended June 30, 1995, Item 5, paragraph 3.) With regard to the bids submitted by the Company in response to North Carolina Electric Membership Corporation's (NCEMC) two requests for proposals, on September 13, 1995, NCEMC notified the Company that it had decided to suspend negotiations regarding the Company's bids at this time, but requested that the Company leave its bids open for future consideration. Under the terms of the Power Coordination Agreement, dated August 27, 1993, between the Company and NCEMC, reductions in the baseload capacity NCEMC purchases from the Company beyond the year 2000 are subject to specific limits and require five years notice. NCEMC has not officially notified the Company that the baseload power to be supplied to NCEMC by the Company beginning in 2001 will be provided by another entity. The Company cannot predict the outcome of this matter. 6. (Reference is made to the Company's 1994 Form 10- K, Financing Program, page 10, paragraph 5.) As of September 30, 1995, the Company's credit facilities total $285 million, consisting of long- term agreements totaling $185 million and a $100 million short-term agreement. 7. (Reference is made to the Company's 1994 Form 10- K, Retail Rate Matters, page 12, paragraph 3. Reference is also made to the Company's Form 10-Q for the quarter ended June 30, 1995, Item 5, paragraph 7.) With regard to the Company's 1995 Integrated Resource Plan (IRP), which was filed with the NCUC on April 28, 1995, by order dated September 8, 1995, the NCUC revised the filing and hearing schedule in this proceeding. The NCUC has indefinitely postponed the hearing that was scheduled for October 10, 1995, in order to better identify and refine the evidentiary issues so that the hearing can be more clearly focused and efficiently managed. The order also required all parties not previously filing testimony to file comments on the utilities' prefiled testimony by October 10, 1995, and allowed all parties to file reply comments by October 23, 1995. In a subsequent order, the NCUC established November 7, 1995 as the deadline for intervenors to respond to the reply comments, and allowed the electric utilities to file rebuttal comments by November 14, 1995. The Company cannot predict the outcome of this matter. 8. (Reference is made to the Company's 1994 Form 10- K, Retail Rate Matters, page 12, paragraph 5. Reference is also made to the Company's Form 10-Q for the quarter ended June 30, 1995, Item 5, paragraph 8.) With regard to the Company's annual North Carolina fuel case proceeding, by order dated September 6, 1995, the NCUC approved the Company's request for a reduction in the fuel expense portion of the Company's rates, reflecting the Company's improved nuclear performance, and refunding approximately $44 million in fuel-related revenues, which exceeded actual costs for the test period, and $6 million in related interest. The new fuel factor became effective on September 15, 1995, and will remain in effect for one year. With regard to the South Carolina jurisdiction, the Company's fall 1995 fuel case hearing was held on September 13, 1995, and by order dated September 25, 1995, the South Carolina Public Service Commission (SCPSC) approved the continuation of the existing fuel factor of 1.34 cents/kwh for the six month period October 1, 1995 through March 31, 1996, as requested by the Company. 9. (Reference is made to the Company's 1994 Form 10- K, Nuclear Matters, page 19, paragraph 7.b.) With regard to the Individual Plant Examinations (IPEs) required by the Nuclear Regulatory Commission, in June 1995, the Company completed and submitted the results of the second phase of the IPEs (for externally initiated events) for the Company's three nuclear plants. The results of the IPEs indicated that some procedural changes may be required for the Harris and Brunswick Plants. Those results also indicated that both minor procedural changes and minor plant modifications may be required for the Robinson Plant. Although the Company cannot predict at this time the exact magnitude of the financial and operational impacts of the second phase of the IPEs, it does not expect those impacts to be material to the results of operations of the Company. 10. (Reference is made to the Company's 1994 Form 10- K, Other Matters, page 27, paragraph 2. Reference is also made to the Company's Forms 10-Q for the quarter ended March 31, 1995, Item 5, paragraph 6, and for the quarter ended June 30, 1995, Item 5, paragraph 17.) With regard to the independent safety inspection report for the Marshall Hydroelectric Project, on August 17, 1995, a meeting was held between the Company and the FERC to discuss the FERC's June 15, 1995, request for further analyses. As a result of that meeting, the Company submitted the first phase of the requested analyses to the FERC by letter dated September 15, 1995. The Company cannot predict the outcome of this matter. 11. (Reference is made to the Company's 1994 Form 10- K, Other Matters, page 27, paragraph 4. Reference is also made to the Company's Form 10-Q for the quarter ended June 30, 1995, Item 5, paragraph 18.) With regard to the tax refund dispute (Civil Action No. 5:94-CV-313-BR3) in which the Company is seeking a refund of certain tax and interest related to the Harris Plant depreciation deductions that were previously disallowed by the Internal Revenue Service, on August 31, 1995, the U.S. Government (Government) filed a Motion for Summary Judgment. The Company filed a response in opposition to the Government's Motion. By Order dated October 18, 1995, the court denied the Government's Motion for Summary Judgment. It is anticipated that a trial in this matter will begin in late 1995 or early 1996. The Company cannot predict the outcome of this matter. 12. (Reference is made to the Company's 1994 Form 10- K, Other Matters, page 27, paragraph 6. Reference is also made to the Company's Form 10-Q for the quarter ended March 31, 1995, Item 5, paragraph 9.) With regard to the Company's wholly-owned subsidiary, CaroNet, Inc. (CaroNet), in addition to participating in the regional partnership that will operate a personal communications services system, CaroNet plans to provide intrastate and interstate telecommunications services as a wholesaler. On May 15, 1995 and May 22, 1995, CaroNet filed applications with the NCUC and the SCPSC, respectively, for a Certificate of Public Convenience and Necessity, seeking permission to provide wholesale intrastate telecommunications services in North Carolina and South Carolina. By order dated November 3, 1995, the NCUC stated that it will no longer regulate the provision of wholesale intrastate telecommunications services. As a result of this order, the application CaroNet filed with the NCUC will be withdrawn. The hearing regarding the application filed with the SCPSC was held on November 1, 1995, but the SCPSC has not yet issued its decision. 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 None. 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: /s/ Glenn E. Harder Executve Vice President and Chief Financial Officer Date: November 9, 1995 EX-99 2 INCOME STATEMENT
Carolina Power & Light Company (ORGANIZED UNDER THE LAWS OF NORTH CAROLINA) CONSOLIDATED INTERIM FINANCIAL STATEMENTS (NOT AUDITED BY INDEPENDENT AUDITORS) SEPTEMBER 30, 1995 STATEMENTS OF INCOME Three Months Ended Nine Months Ended Twelve Months Ended (In thousands September 30 September 30 September 30 except per share amounts) 1995 1994 1995 1994 1995 1994 - -------------------------------------------------------------------------------------------------------------------------------- Operating Revenues $ 875,500 $ 805,552 $ 2,285,703 $ 2,237,323 $ 2,924,969 $ 2,895,880 - -------------------------------------------------------------------------------------------------------------------------------- Operating Expenses Operation - fuel for generation 163,459 126,692 401,577 378,109 495,436 501,291 deferred fuel cost (credit), net (8,683) 28,626 7,117 20,411 24,876 13,965 purchased power 110,538 102,483 309,334 319,838 403,796 415,615 other 133,841 130,305 400,025 400,375 539,609 534,913 Maintenance 45,206 38,719 143,314 149,455 200,591 210,962 Depreciation and amortization 91,415 97,025 272,586 311,227 359,094 417,892 Taxes other than on income 38,686 36,997 112,886 109,264 142,162 147,416 Income tax expense 99,424 82,433 193,782 163,743 228,574 184,345 Harris Plant deferred costs, net 7,174 6,476 20,957 19,648 27,638 30,515 - -------------------------------------------------------------------------------------------------------------------------------- Total Operating Expenses 681,060 649,756 1,861,578 1,872,070 2,421,776 2,456,914 - -------------------------------------------------------------------------------------------------------------------------------- Operating Income 194,440 155,796 424,125 365,253 503,193 438,966 - -------------------------------------------------------------------------------------------------------------------------------- Other Income (Expense) Allowance for equity funds used during construction 774 1,660 2,671 5,761 2,984 8,330 Income tax credit 4,036 2,886 10,533 5,375 14,582 8,575 Harris Plant carrying costs 2,027 2,398 6,374 7,443 8,685 22,904 Interest income 2,058 2,329 7,427 13,731 8,265 18,990 Other income, net 5,523 5,586 13,794 19,601 19,786 32,115 - -------------------------------------------------------------------------------------------------------------------------------- Total Other Income 14,418 14,859 40,799 51,911 54,302 90,914 - -------------------------------------------------------------------------------------------------------------------------------- Income Before Interest Charges 208,858 170,655 464,924 417,164 557,495 529,880 - -------------------------------------------------------------------------------------------------------------------------------- Interest Charges Long-term debt 46,993 45,828 140,834 139,793 184,932 186,563 Other interest charges 11,288 5,655 22,327 13,392 25,055 17,163 Allowance for borrowed funds used during construction (1,328) (1,081) (4,137) (3,313) (4,267) (5,010) - -------------------------------------------------------------------------------------------------------------------------------- Net Interest Charges 56,953 50,402 159,024 149,872 205,720 198,716 - -------------------------------------------------------------------------------------------------------------------------------- Net Income 151,905 120,253 305,900 267,292 351,775 331,164 Preferred Stock Dividend Requirements (2,402) (2,402) (7,206) (7,206) (9,609) (9,609) - -------------------------------------------------------------------------------------------------------------------------------- Earnings for Common Stock $ 149,503 $ 117,851 $ 298,694 $ 260,086 $ 342,166 $ 321,555 ================================================================================================================================ Average Common Shares Outstanding (Note 3) 146,161 149,416 146,867 150,426 146,952 153,025 Earnings per Common Share (Note 3) $ 1.02 $ 0.79 $ 2.03 $ 1.73 $ 2.33 $ 2.10 Dividends Declared per Common Share $ 0.440 $ 0.425 $ 1.320 $ 1.275 $ 1.760 $ 1.700 ................................................................................................................................ See Supplemental Data and Notes to Financial Statements.
EX-99 3 BALANCE SHEET
Carolina Power & Light Company BALANCE SHEETS September 30 December 31 (In thousands) 1995 1994 1994 - ------------------------------------------------------------------------------------------------------ ASSETS Electric Utility Plant Electric utility plant in service $ 9,354,427 $ 9,076,667 $ 9,190,874 Accumulated depreciation (3,413,489) (3,132,176) (3,196,139) - ------------------------------------------------------------------------------------------------------ Electric utility plant in service, net 5,940,938 5,944,491 5,994,735 Held for future use 13,304 13,222 13,195 Construction work in progress 177,606 193,286 170,390 Nuclear fuel, net of amortization 181,720 181,399 171,164 - ------------------------------------------------------------------------------------------------------ Total Electric Utility Plant, Net 6,313,568 6,332,398 6,349,484 - ------------------------------------------------------------------------------------------------------ Current Assets Cash and cash equivalents 14,868 48,419 80,239 Accounts receivable 345,894 314,790 302,218 Fuel 58,137 71,439 96,136 Materials and supplies 127,385 121,934 122,720 Prepayments 56,577 41,233 52,988 Other current assets 31,844 26,896 24,129 - ------------------------------------------------------------------------------------------------------ Total Current Assets 634,705 624,711 678,430 - ------------------------------------------------------------------------------------------------------ Deferred Debits and Other Assets Income taxes recoverable through future rates 386,581 381,981 384,375 Abandonment costs 60,528 75,237 71,079 Harris Plant deferred costs 113,240 132,194 127,824 Unamortized debt expense 59,599 64,567 63,302 Miscellaneous other property and investments 439,992 313,766 360,611 Other assets and deferred debits 170,061 190,651 176,058 - ------------------------------------------------------------------------------------------------------ Total Deferred Debits and Other Assets 1,230,001 1,158,396 1,183,249 - ------------------------------------------------------------------------------------------------------ Total Assets $ 8,178,274 $ 8,115,505 $ 8,211,163 ====================================================================================================== CAPITALIZATION AND LIABILITIES Capitalization Common stock equity $ 2,633,751 $ 2,627,338 $ 2,586,179 Preferred stock - redemption not required 143,801 143,801 143,801 Long-term debt, net 2,684,408 2,502,893 2,530,773 - ------------------------------------------------------------------------------------------------------ Total Capitalization 5,461,960 5,274,032 5,260,753 - ------------------------------------------------------------------------------------------------------ Current Liabilities Current portion of long-term debt 53,000 252,050 275,050 Notes payable (principally commercial paper) 17,000 15,000 68,100 Accounts payable 122,635 133,691 285,610 Taxes accrued 168,696 155,901 4,650 Interest accrued 49,785 50,969 54,569 Dividends declared 69,103 70,207 70,658 Deferred fuel credit 35,460 10,584 28,344 Other current liabilities 72,006 65,696 67,161 - ------------------------------------------------------------------------------------------------------ Total Current Liabilities 587,685 754,098 854,142 - ------------------------------------------------------------------------------------------------------ Deferred Credits and Other Liabilities Accumulated deferred income taxes 1,640,364 1,586,643 1,628,430 Accumulated deferred investment tax credits 244,393 254,935 252,051 Other liabilities and deferred credits 243,872 245,797 215,787 - ------------------------------------------------------------------------------------------------------ Total Deferred Credits and Other Liabilities 2,128,629 2,087,375 2,096,268 - ------------------------------------------------------------------------------------------------------ Commitments and Contingencies (Note 4) Total Capitalization and Liabilities $ 8,178,274 $ 8,115,505 $ 8,211,163 ====================================================================================================== SCHEDULES OF COMMON STOCK EQUITY (In thousands) Common stock (Note 3) $ 1,439,814 $ 1,534,029 $ 1,510,956 Unearned ESOP common stock (191,526) (206,654) (204,947) Capital stock issuance expense (790) (790) (790) Retained earnings 1,386,253 1,300,753 1,280,960 - ------------------------------------------------------------------------------------------------------ Total Common Stock Equity $ 2,633,751 $ 2,627,338 $ 2,586,179 ====================================================================================================== ...................................................................................................... See Supplemental Data and Notes to Financial Statements.
EX-99 4 STATEMENT OF CASH FLOWS
Carolina Power & Light Company STATEMENTS OF CASH FLOWS (In thousands) Three Months Ended Nine Months Ended Twelve Months Ended September 30 September 30 September 30 1995 1994 1995 1994 1995 1994 - ----------------------------------------------------------------------------------------------------------------------------------- Operating Activities Net income $ 151,905 $ 120,253 $ 305,900 $ 267,292 $ 351,775 $ 331,164 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 111,958 119,547 334,706 363,174 445,012 487,725 Harris Plant deferred costs 5,147 4,078 14,583 12,205 18,953 7,611 Deferred income taxes 12,499 (5,578) 4,988 (4,771) 46,999 32,993 Investment tax credit adjustments (2,553) (2,884) (7,658) (8,653) (10,542) (11,612) Allowance for equity funds used during construction (774) (1,660) (2,671) (5,761) (2,984) (8,330) Deferred fuel cost (credit) (8,683) 28,626 7,117 20,411 24,876 13,965 Net (increase) decrease in receivables, inventories and prepaid expenses 5,147 19,246 (73,818) (50,068) (97,641) 19,103 Net increase (decrease) in payables and accrued expenses 37,425 25,565 30,622 (1,234) (14,915) (50,608) Miscellaneous 7,300 2,983 34,526 18,428 11,168 1,479 - ----------------------------------------------------------------------------------------------------------------------------------- Net Cash Provided by Operating Activities 319,371 310,176 648,295 611,023 772,701 823,490 - ----------------------------------------------------------------------------------------------------------------------------------- Investing Activities Gross property additions (52,629) (63,935) (191,361) (191,876) (274,262) (302,609) Nuclear fuel additions (31,933) (2,894) (67,243) (15,322) (77,771) (34,834) Contributions to external decommissioning trust (6,899) (4,746) (33,515) (18,461) (36,679) (28,253)
EX-99 5 SUPPLEMENTAL DATA
Carolina Power & Light Company SUPPLEMENTAL DATA Three Months Ended Nine Months Ended Twelve Months Ended September 30 September 30 September 30 1995 1994 1995 1994 1995 1994 - --------------------------------------------------------------------------------------------------------------------------- Operating Revenues (in thousands) Residential $ 292,830 $ 263,677 $ 737,448 $ 716,067 $ 937,367 $ 927,361 Commercial 178,531 165,008 469,387 458,325 606,635 598,245 Industrial 201,202 197,282 553,360 556,828 738,194 744,165 Government and municipal 21,650 20,815 59,215 59,913 77,619 78,813 Power Agency contract requirements 34,242 33,565 80,650 101,330 94,582 121,421 NCEMC 89,585 79,191 231,949 212,863 285,819 258,957 Other wholesale 21,136 20,469 61,661 69,460 76,975 95,126 Other utilities 24,343 14,121 58,012 29,762 62,040 32,186 Miscellaneous revenue 11,981 11,424 34,021 32,775 45,738 39,606 - --------------------------------------------------------------------------------------------------------------------------- Total Operating Revenues $ 875,500 $ 805,552 $ 2,285,703 $ 2,237,323 $ 2,924,969 $ 2,895,880 =========================================================================================================================== Energy Sales (millions of kWh) Residential 3,413 3,029 9,095 8,675 11,567 11,251 Commercial 2,678 2,453 7,016 6,671 9,034 8,672 Industrial 3,676 3,585 10,676 10,378 14,327 13,872 Government and municipal 373 359 973 969 1,266 1,263 Power Agency contract requirements 802 664 1,767 2,115 2,241 2,777 NCEMC 1,702 1,536 4,186 3,811 5,260 4,895 Other wholesale 487 436 1,422 1,488 1,916 2,035 Other utilities 831 465 2,307 799 2,497 879 - --------------------------------------------------------------------------------------------------------------------------- Total Energy Sales 13,962 12,527 37,442 34,906 48,108 45,644 =========================================================================================================================== Energy Supply (millions of kWh) Generated - coal 7,231 5,492 17,671 17,341 21,331 23,611 nuclear 5,010 5,730 14,901 12,782 20,630 15,698 hydro 145 192 599 728 753 846 combustion turbines 55 2 55 68 54 66 Purchased 2,082 1,764 5,626 5,580 7,086 7,459 - --------------------------------------------------------------------------------------------------------------------------- Total Energy Supply (Company Share) 14,523 13,180 38,852 36,499 49,854 47,680 =========================================================================================================================== Detail of Income Taxes (in thousands) Included in Operating Expenses Income tax expense - current $ 90,522 $ 96,224 $ 200,692 $ 185,305 $ 198,034 $ 169,572 Income tax expense (credit) - deferred 11,455 (10,907) 748 (12,909) 41,082 25,191 Income tax credit - investment tax credit adjustments (2,553) (2,884) (7,658) (8,653) (10,542) (10,418) - --------------------------------------------------------------------------------------------------------------------------- Subtotal 99,424 82,433 193,782 163,743 228,574 184,345 - --------------------------------------------------------------------------------------------------------------------------- Harris Plant deferred costs - investment tax credit adjustments (74) (74) (223) (223) (297) 21 - --------------------------------------------------------------------------------------------------------------------------- Total Included in Operating Expenses 99,350 82,359 193,559 163,520 228,277 184,366 - --------------------------------------------------------------------------------------------------------------------------- Included in Other Income Income tax credit - current (5,080) (8,215) (14,773) (13,513) (20,499) (15,183) Income tax expense - deferred 1,044 5,329 4,240 8,138 5,917 7,802 Income tax credit - investment tax credit adjustments - - - - - (1,194) - --------------------------------------------------------------------------------------------------------------------------- Total Included in Other Income (4,036) (2,886) (10,533) (5,375) (14,582) (8,575) - --------------------------------------------------------------------------------------------------------------------------- Total Income Tax Expense $ 95,314 $ 79,473 $ 183,026 $ 158,145 $ 213,695 $ 175,791 =========================================================================================================================== FINANCIAL STATISTICS Ratio of earnings to fixed charges 3.49 3.29 Return on average common stock equity 12.91 % 12.07 % Book value per common share $ 18.14 $ 17.77 Capitalization ratios Common stock equity 48.22 % 49.82 % Preferred stock - redemption not required 2.63 2.72 Long-term debt, net 49.15 47.46 - --------------------------------------------------------------------------------------------------------------------------- Total 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. These interim financial statements are prepared in conformity with the accounting principles reflected in the financial statements included in the Company's 1994 Annual Report to Shareholders and the 1994 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 1994 have been reclassified to conform to the 1995 presentation. 2. In 1994, the Company established a wholly-owned subsidiary, CaroNet, Inc., which owns a ten percent interest in BellSouth Carolinas PCS, a limited partnership, led by BellSouth Personal Communications, Inc. (BellSouth). In March 1995, BellSouth won its bid for a Federal Communications Commission license for the limited partnership to operate a personal communications services (PCS) system covering most of North Carolina and South Carolina, as well as a small portion of Georgia. PCS, a wireless communications technology, is expected to provide high-quality mobile communications. BellSouth will transfer the PCS license to the limited partnership. BellSouth is the general partner and handles day-to-day management of the business. In April 1995, the Company invested $50 million in CaroNet, Inc. in anticipation of infrastructure construction. Construction of the system infrastructure began in the spring of 1995 and service start-up is expected by mid-1996. 3. In 1994, the Board of Directors of the Company authorized the Executive Committee of the Board to repurchase up to 10 million shares of the Company's common stock on the open market. In accordance with the stock repurchase program, the Company has purchased approximately 6.8 million shares through September 30, 1995. The decrease in average common shares outstanding resulted in an increase in earnings per common share of approximately $.04, $.07 and $.07 for the three, nine and twelve month periods ended September 30, 1995, respectively. 4. Contingencies existing as of the date of these statements are described below. No significant changes have occurred since December 31, 1994, with respect to the commitments discussed in Note 10 of the financial statements included in the Company's 1994 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 costs are based on amounts agreed upon in applicable rate settlements. Based on the site-specific estimates discussed below, and using an assumed after-tax earnings rate of 8.5% and an assumed cost escalation rate of 4%, current levels of rate recovery for nuclear decommissioning costs are 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, using 1993 cost factors, and are based on prompt dismantlement decommissioning, which reflects the cost of removal of all radioactive and other structures currently at the site, with such removal occurring shortly after operating license expiration. These estimates, in 1993 dollars, are $257.7 million for Robinson Unit No. 2, $235.4 million for Brunswick Unit No. 1, $221.4 million for Brunswick Unit No. 2 and $284.3 million for the Harris Plant. These estimates are subject to change based on a variety of factors including, but not limited to, cost escalation, 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. Operating licenses for the Company's nuclear units expire in the year 2010 for Robinson Unit No. 2, 2016 for Brunswick Unit No. 1, 2014 for Brunswick Unit No. 2 and 2026 for the Harris Plant. The Financial Accounting Standards Board has added a project to its agenda regarding the electric industry's current accounting practices related to decommissioning costs. Any changes to these practices could affect such items as: 1) when the decommissioning obligation is recognized, 2) where balances of accumulated decommissioning costs are recorded, 3) where income earned on external decommissioning trust balances is recorded and 4) the levels of annual decommissioning cost provisions. It is uncertain what impact, if any, this project may have on the Company's accounting for decommissioning costs. b) As required under the Nuclear Waste Policy Act of 1982, the Company entered into a contract with the U. S. Department of Energy (DOE) under which the DOE agreed to dispose of the Company's spent nuclear fuel. The Company cannot predict whether the DOE will be able to perform its contractual obligations and provide interim storage or permanent disposal repositories for spent nuclear fuel and/or high-level radioactive waste materials on a timely basis. With certain modifications, the Company's spent fuel storage facilities are sufficient to provide storage space for spent fuel generated on the Company's system through the expiration of the current operating licenses for all of the Company's nuclear generating units. Subsequent to the expiration of the licenses, dry storage may be necessary. c) The Company is subject to federal, state and local regulations addressing air and water quality, hazardous and solid waste management and other environmental matters. Various organic materials associated with the production of manufactured gas, generally referred to as coal tar, are regulated under various federal and state laws, and a liability may exist for their remediation. 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, along with other entities alleged to be former owners and operators of MGP sites in North Carolina, is participating in a cooperative effort with the North Carolina Department of Environment, Health and Natural Resources, Division of Solid Waste Management (DSWM) to establish a uniform framework for addressing those sites. 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. To date, the Company has not entered into any such orders. The Company has been approached by another North Carolina public utility concerning a possible cost-sharing arrangement with respect to the investigation and, if necessary, remediation of four MGP sites. The Company is currently engaged in discussions with the other utility regarding this matter. In addition, a current owner of property that was the site of one MGP owned by Tide Water Power Company (Tide Water Power), which merged into the Company in 1952, and the Company have entered into an agreement to share the cost of the investigation and, if necessary, the remediation of this site. The Company has also been approached by a North Carolina municipality that is the current owner of another MGP site that was formerly owned by Tide Water Power. The Company is engaged in discussions with that municipality concerning a possible cost-sharing arrangement with respect to the investigation and, if necessary, the remediation of that site. The Company is continuing its investigation regarding the identities of parties connected to several additional MGP sites, the relative relationships of the Company and other parties to those sites and the degree, if any, to which the Company should undertake shared voluntary efforts with others at individual sites. The Company has been notified by regulators of its involvement or potential involvement in several sites, other than MGP sites, that require remedial action. Although the Company cannot predict the outcome of these matters, it does not anticipate significant costs associated with these sites. The Company has accrued a liability for the estimated costs associated with investigation and remediation activities for certain MGP sites and for sites other than MGP sites. This accrual was not material to the results of operations of the Company. Due to the lack of information with respect to the operation of MGP sites for which a liability has not been accrued and due to the uncertainty concerning questions of liability and potential environmental harm, the extent and cost of required remedial action, if any, are not currently determinable. The Company cannot predict the outcome of these matters or the extent to which other MGP sites may become the subject of inquiry. EX-27 7 FINANCIAL DATA SCHEDULE
UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (INTERIM FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1995) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000017797 CAROLINA POWER & LIGHT COMPANY 9-MOS DEC-31-1995 SEP-30-1995 PER-BOOK $6,313,568 $439,992 $634,705 $619,948 $170,061 $8,178,274 $1,248,288 ($790) $1,386,253 $2,633,751 $0 $143,801 $2,684,408 $0 $0 $17,000 $53,000 $0 $0 $0 $2,646,314 $8,178,274 $2,285,703 $193,782 $1,667,796 $1,861,578 $424,125 $40,799 $464,924 $159,024 $305,900 $7,206 $298,694 $193,400 $140,834 $648,295 $2.03 $2.03
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