-----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, WyjUkwWdcgUdLltX02GAVMmGFzyO10CaGp1IGFLfzl9xh5jYf+s7y2F0a9OKz7ki tZ8GIybgs/pgR1kZNFYMKA== 0000017797-96-000020.txt : 19960814 0000017797-96-000020.hdr.sgml : 19960814 ACCESSION NUMBER: 0000017797-96-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 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: 96610511 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 JUNE 30, 1996 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 June 30, 1996 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 incorporation (I.R.S. Employer 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 July 31, 1996: 151,953,422. 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 June 30, 1996. 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, Six and Twelve Months Ended June 30, 1996, As Compared With the Corresponding Periods One Year Earlier ___________________________________________________________ Operating Revenues: For the three, six and twelve months ended June 30, 1996, operating revenues were affected by the following factors (in millions): Three Months Six Months Twelve Months ____________ __________ _____________ Weather $ 21 $ 52 $ 152 Customer Growth/Changes In Usage Patterns 10 45 75 NCEMC Load Loss (20) (39) (40) Price (13) (28) (41) Other 6 29 65 ____ ____ ____ Total $ 4 $ 59 $ 211 ==== ==== ==== The increase in the weather component of revenue for the three months ended June 30, 1996, is the result of warmer than normal weather in the current period. The six and twelve-month increases reflect milder than normal weather in the prior period compared to more extreme weather patterns in the current period. The loss of 200 megawatts of load from North Carolina Electric Membership Corporation began in January 1996. For all periods, the majority of the decrease in the price component of revenue is attributable to a decrease in the fuel cost component of revenue. The increase in other for the six and twelve months is primarily due to increased bulk power sales, which reflect weather impacts and the Company's active participation in the bulk power market. Operating Expenses: Purchased power increased for the twelve months ended June 30, 1996, due to increased purchases from cogenerators ($9 million) and from other utilities ($29 million). The increase in purchases from cogenerators was the result of certain cogenerators being shut down in the prior year. Partially offsetting the increased purchases was a $10 million decrease in purchases from Power Agency, which was primarily due to the provisions of the Company's 1993 agreement with Power Agency. Pursuant to this agreement, the Company's buyback percentage of capacity and energy from the Harris Plant decreased from 50% in 1994 to 33% in 1995 and 1996. For the three and six months ended June 30, 1996, operation and maintenance expense decreased primarily due to increased expenses in the prior periods due to the timing of nuclear plant outages. Excluding the impact of a December 1994 insurance reserve adjustment, which reduced expense in the twelve month prior period, operation and maintenance expense decreased $37 million for the twelve months ended June 30, 1996 due to cost-cutting efforts and outage timing. In the prior period there were several major fossil and nuclear plant outages that resulted in higher expense for that period as compared to the current period. The increase in income tax expense for all periods is due to an increase in operating income and a reserve recorded for potential audit issues in open tax years. Other Income: The increase in the income tax credit for the twelve months ended June 30, 1996, is primarily attributable to lower non-operating income in the current period. Interest Charges: Other interest charges increased for the twelve months ended June 30, 1996, primarily due to a $6 million interest accrual related to the 1995 North Carolina Utilities Commission Fuel Order. Material Changes in Capital Resources and Liquidity From December 31, 1995, to June 30, 1996 and From June 30, 1995, to June 30, 1996 ________________________________________ In the first quarter of 1996, the Company entered into two new long-term revolving credit facilities totaling $350 million, which support the Company's commercial paper borrowings. The Company is required to pay minimal annual commitment fees to maintain these facilities. Consistent with management's intent to maintain its commercial paper on a long-term basis, and as supported by its long-term credit facilities, the Company has included in long-term debt $350 million of commercial paper outstanding as of June 30, 1996. In addition to these new facilities, the Company has other long-term credit agreements totaling $235 million and a $100 million short-term credit agreement. The Company did not issue long-term debt in the twelve-month period ended June 30, 1996. The proceeds of the issuance of short-term debt and/or internally generated funds financed the redemption or retirement of long-term debt totaling $378 million and $426 million during the six and twelve months ended June 30, 1996, respectively. The Company's capital structure as of June 30 was as follows: 1996 1995 ____ ____ Common Stock Equity 49.32% 47.98% Long-term Debt 47.99% 49.37% Preferred Stock 2.69% 2.65% The Company's First Mortgage Bonds are currently rated "A2" by Moody's Investors Service, "A" by Standard & Poor's and "A+" by Duff & Phelps. Moody's Investors Service, Standard & Poor's 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 repurchase of 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 8.8 million shares through June 30, 1996. 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 June 30, 1996. ) ) Item 4. Submission of Matters to a Vote of Security Holders _______ ___________________________________________________ (a) The Annual Meeting of the Shareholders was held on May 8, 1996. (b) The meeting involved the election of directors. Proxies for the meeting were solicited pursuant to Regulation 14, there was no solicitation in opposition to the management's nominees as listed below, and all such nominees were elected. (c) The Board of Directors' proposal to amend the Company's Restated Charter to expand the purposes for which the Company exists and to broaden the powers of the Company was approved by the shareholders. The number of shares voted for the amendment was 130,408,274, and the number of shares voted against the amendment was 2,117,895. The total votes for the election of directors were as follows: Class I Votes For Votes Withheld _______ _________ ______________ (Term Expiring in 1999) Leslie M. Baker, Jr. 132,601,648 2,750,919 William O. McCoy 132,713,230 2,639,337 Sherwood H. Smith, Jr. 132,665,812 2,686,755 J. Tylee Wilson 132,637,529 2,715,038 Item 5. Other Information _______ __________________ 1. (Reference is made to the Company's 1995 Form 10-K, Generating Capability, paragraph 3, page 6. Reference is also made to the Company's Form 10-Q for the quarter ended March 31, 1996, Item 5, paragraph 1.) With regard to the Company's generation additions schedule, the Company has delayed plans for construction of the 500 MW of combustion turbine capacity adjacent to the Company's Lee Steam Electric Plant in Wayne County, North Carolina. Construction of the 500 MW of capacity, originally scheduled to begin this year, is now scheduled to begin no earlier than 1997, with commercial operation now anticipated to begin in 1999. In the interim, summer 1998 peaking requirements will be met with power purchases. In June, the Company issued a Request for Proposals (RFP) for purchased power of 700 to 1000 MW of capacity to meet the Company's future generation needs in its service territory. The Company projects a need of approximately 200 to 350 MW in its western service territory, and approximately 350 to 650 MW in its eastern service territory. The capacity was requested to be available for delivery by June 1, 1999. Proposals were invited from all potential suppliers who were capable of meeting the conditions of the RFP. Due to increased economic activity and growth in its western service territory, the Company is also investigating the possibility of adding combustion turbines at its Asheville plant in order to ensure continuted reliable service to its customers. The Company cannot predict the outcome of this matter. 2. (Reference is made to the Company's 1995 Form 10-K, Interconnections with Other Systems, paragraph 3, page 7). The Company has agreed with Cogentrix of North Carolina, Inc. and Cogentrix Eastern North Carolina Corporation to amend five purchased power contracts. These amendments will become effective only after Cogentrix obtains refinancing of the debt for the five plants covered by the contracts. The amendments permit the Company to dispatch the output of these plants. In return, the Company will give up its right to purchase two of the five plants. These amendments will result in substantial savings to the Company over the life of these contracts. 3. (Reference is made to the Company's 1995 Form 10-K, Competition and Franchises, paragraph 1.b., page 8. Reference is also made to the Company's Form 10-Q for the quarter ended March 31, 1996, Item 5, paragraph 2.) With regard to the final rules issued on April 24, 1996 in orders 888 and 889 by the Federal Energy Regulatory Commission (FERC) regarding open access transmission and stranded costs and on information systems and standards of conduct, on May 24, 1996, the Company filed a Request for Clarification and Rehearing of those orders, as did many other entities. The orders vary in certain respects from the proposed rules the FERC had issued, but the final rules still require all transmitting utilities to file an open access transmission tariff for wholesale transactions. The Company filed its open access transmission tariff with the FERC on July 9, 1996. On August 7, 1996, North Carolina Eastern Municipal Power Agency (Power Agency) filed with FERC a motion to intervene and protest concerning the Company's tariff. That protest challenges numerous aspects of the Company's tariff and requests that an evidentiary proceeding be held. A number of other entities have filed similar interventions since that time. The Company cannot predict the outcome of this matter. By order issued May 7, 1996, in Docket No. E-100, Sub 77, which concerns retail competition, the North Carolina Utilities Commission (NCUC) found that these FERC rules essentially restructure the wholesale electric industry, and therefore may provide a new focus for NCUC proceedings with respect to competition in the electric industry. As a result, the NCUC concluded: (i) that all parties should concentrate their efforts on examining the impacts of the FERC orders, (ii) that the filing of comments requested by its order issued April 3, 1996 should be extended indefinitely, and (iii) that this docket should be held in abeyance pending further order. The Company cannot predict the outcome of this matter. By order issued May 15, 1996, the NCUC established a new docket (Docket No. E-100, Sub 78) to address the FERC orders. In accordance with the NCUC's order, the Company filed its comments on July 16, 1996 regarding the implementation of the FERC's orders, their impact on North Carolina customers and what the NCUC can do to maximize the benefits of the wholesale market. The Company cannot predict the outcome of this matter. With regard to the issue of retail wheeling, legislation was introduced in Congress on July 11, 1996 (HR 3790) mandating retail wheeling in all 50 states no later than December 15, 2000. As proposed, the bill would require states to give all customers the right to choose their electric supplier. If this choice was not implemented by the states, the bill proposes that the FERC would be responsible for the implementation. The Company cannot predict the outcome of this matter. 4. (Reference is made to the Company's 1995 Form 10-K, Competition and Franchises, paragraph 1.h., page 10.) With regard to the request made by one of the Company's industrial customers to the City of Darlington, South Carolina ("City") that the City become a municipal electric utility, both the Company and the City have undertaken studies to determine the feasibility of the municipalization proposal. The results of the Company's study, which was conducted by the consulting group Stone & Webster, found that municipalization would increase the cost of electricity to the City. The results of the City's study, conducted by the consulting group Strategic Energy Limited, found that municipalization will only benefit the City if the City is not required to pay the Company for any of its lost revenues or stranded costs. The Company cannot predict the outcome of this matter 5. (Reference is made to the Company's 1995 Form 10-K, Competition and Franchises, paragraph 1, page 11.) On August 7, 1996, North Carolina Eastern Municipal Power Agency (Power Agency) notified the Company that it intends to discontinue certain contractual purchases of electricity from the Company effective September 1, 2001. The contract between the parties requires that Power Agency give appropriate notice five years prior to such event. Power Agency stated that it intends to replace these contractual purchases with purchases from the wholesale market and that the Company will be considered as a supplier for those purchases. The Company cannot predict the outcome of this matter. 6. (Reference is made to the Company's 1995 Form 10-K, Retail Rate Matters, paragraph 2, page 13.) With regard to the Company's current retail rates, a petition was filed on July 19, 1996 by the Carolina Industrial Group for Fair Utility Rates (CIGFUR) with the NCUC requesting the NCUC conduct an investigation of the Company's base rates. The petition alleges that the Company's return on equity, which was authorized by the NCUC in the Company's last general rate proceeding in 1988, and earnings are too high. The Company filed a response to the petition and motion to dismiss on July 29, 1996, in which it argued that the petition was without merit. It is not known at this time if the NCUC will initiate a proceeding. The Company cannot predict the outcome of this matter. 7. (Reference is made to the Company's 1995 Form 10-K, Retail Rate Matters, paragraph 5, page 14. Reference is also made to the Company's Form 10-Q for the quarter ended March 31, 1996, Item 5, paragraph 6.) With regard to the Company's 1996 North Carolina fuel case hearing, on June 7, 1996, the Company filed its 1996 application proposing no change in its net fuel factor. The Company cannot predict the outcome of this matter. With regard to the South Carolina retail jurisdiction, the South Carolina General Assembly made several modifications during the 1996 legislative session to SC Code Ann. Section 58-27-865, which is the statute that governs the recovery of fuel cost by electric utilities. The modifications include: changing the test period from a six month period to a twelve month period, which would result in the frequency of fuel cost hearings being changed from every six months to every twelve months; allowing utilities to recover the cost of Clear Air Act allowances through the fuel factor; and establishing a rebuttable presumption of prudent operation of a utility's nuclear generating facilities if the utility achieves a nuclear system capacity factor of 92.5%, exclusive of refueling and maintenance outages. Due to these modifications of the statute, the Company's next South Carolina fuel proceeding will be in March of 1997. 8. (Reference is made to the Company's 1995 Form 10-K, Fuel, paragraph 2, page 24.) With regard to the Company's coal-supply contracts, the Company and certain subsidiaries of Zeigler Coal Holding Company (Zeigler) have renegotiated their existing contract. Under the revised agreement, which expires in 2006, the Company will continue to purchase approximately 2.75 million tons of coal annually from Zeigler's Marrowbone mine, and will purchase approximately 6 million tons of additional, lower cost coal from Zeigler over a period of several years under a new contract. The coal will be required to meet the same technical specifications for sulfur and thermal content as the coal supplied from the Marrowbone mine, and is expected to save the Company more than $100 million over the life of the contract. 9. (Reference is made to the Company's 1995 Form 10-K, Other Matters, page 27.) With regard to Hurricane Bertha that struck the North Carolina coast on July 12, 1996, as a precaution the Company's Brunswick nuclear power plant was put into cold shutdown. Once the storm passed, the Federal Emergency Management Agency completed its review of the plant's offsite emergency plans and equipment, and the plant was given permission to restart on July 15. The cost of repairing the storm's damage to the Company's system, estimated to be between $8 million and $10 million, will not have a material impact on the results of operations or financial position of the Company. 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 _________________________ _________________ ______________ 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 Executive Vice President By /s/ Mark F. Mulhern Vice President and Controller (and Principal Accounting Officer) Date: August 12, 1996 EX-99 2 INCOME STATEMENT
Carolina Power & Light Company (ORGANIZED UNDER THE LAWS OF NORTH CAROL INA) CONSOLIDATED INTERIM FINANCIAL STATEMENTS (NOT AUDITED BY INDEPENDENT AUDITORS) JUNE 30, 1996 STATEMENTS OF INCOME Three Months Ended Six Months Ended Twelve Months Ended June 30 June 30 June 30 (In thousands except per share amounts) 1996 1995 1996 1995 1996 1995 - -------------------------------------------------------------------------------------------------------------------------------- Operating Revenues $ 685,968 $ 681,965 $ 1,469,553 $ 1,410,203 $ 3,065,903 $ 2,855,021 - -------------------------------------------------------------------------------------------------------------------------------- Operating Expenses Operation - fuel 112,955 120,647 250,521 253,918 526,415 520,853 purchased power 105,688 105,137 211,677 198,796 422,822 395,741 other 128,743 139,106 251,099 266,184 526,361 536,073 Maintenance 44,620 57,353 91,664 98,108 190,142 194,105 Depreciation and amortization 93,408 90,896 185,886 181,171 369,242 364,703 Taxes other than on income 34,092 35,280 72,656 74,200 142,499 140,473 Income tax expense 67,172 32,942 144,267 94,358 309,134 211,583 Harris Plant deferred costs, net 4,324 7,178 12,389 13,783 26,735 26,940 - -------------------------------------------------------------------------------------------------------------------------------- Total Operating Expenses 591,002 588,539 1,220,159 1,180,518 2,513,350 2,390,471 - -------------------------------------------------------------------------------------------------------------------------------- Operating Income 94,966 93,426 249,394 229,685 552,553 464,550 - -------------------------------------------------------------------------------------------------------------------------------- Other Income Allowance for equity funds used during construction 1,187 984 2,222 1,897 3,675 3,870 Income tax credit 4,418 3,207 8,831 6,497 20,875 13,432 Harris Plant carrying costs 2,549 2,128 4,358 4,347 8,308 9,055 Interest income 1,041 2,781 2,175 5,369 5,486 8,536 Other income, net 5,799 4,250 11,998 8,271 12,795 19,846 - -------------------------------------------------------------------------------------------------------------------------------- Total Other Income 14,994 13,350 29,584 26,381 51,139 54,739 - -------------------------------------------------------------------------------------------------------------------------------- Income Before Interest Charges 109,960 106,776 278,978 256,066 603,692 519,289 - -------------------------------------------------------------------------------------------------------------------------------- Interest Charges Long-term debt 43,353 47,248 88,029 93,841 181,585 183,767 Other interest charges 4,993 5,011 11,905 11,039 26,763 19,420 Allowance for borrowed funds used during construction (1,042) (1,445) (1,958) (2,809) (4,267) (4,021) - -------------------------------------------------------------------------------------------------------------------------------- Net Interest Charges 47,304 50,814 97,976 102,071 204,081 199,166 - -------------------------------------------------------------------------------------------------------------------------------- Net Income 62,656 55,962 181,002 153,995 399,611 320,123 Preferred Stock Dividend Requirements (2,402) (2,402) (4,804) (4,804) (9,609) (9,609) - -------------------------------------------------------------------------------------------------------------------------------- Earnings for Common Stock $ 60,254 $ 53,560 $ 176,198 $ 149,191 $ 390,002 $ 310,514 ================================================================================================================================ Average Common Shares Outstanding (Note 3) 143,808 147,183 143,716 147,226 144,490 147,772 Earnings per Common Share (Note 3) $ 0.42 $ 0.36 $ 1.23 $ 1.01 $ 2.70 $ 2.10 Dividends Declared per Common Share $ 0.455 $ 0.440 $ 0.910 $ 0.880 $ 1.805 $ 1.745 ................................................................................................................................ See Supplemental Data and Notes to Financial Statements.
EX-99 3 BALANCE SHEET
Carolina Power & Light Company BALANCE SHEETS June 30 December 31 (In thousands) 1996 1995 1995 - ------------------------------------------------------------------------------------------------------ ASSETS Electric Utility Plant Electric utility plant in service $ 9,584,032 $ 9,295,945 $ 9,440,442 Accumulated depreciation (3,643,838) (3,337,249) (3,493,153) - ------------------------------------------------------------------------------------------------------ Electric utility plant in service, net 5,940,194 5,958,696 5,947,289 Held for future use 12,752 13,303 13,304 Construction work in progress 184,614 188,610 179,260 Nuclear fuel, net of amortization 175,968 181,774 188,655 - ------------------------------------------------------------------------------------------------------ Total Electric Utility Plant, Net 6,313,528 6,342,383 6,328,508 - ------------------------------------------------------------------------------------------------------ Current Assets Cash and cash equivalents 2,448 16,600 14,489 Accounts receivable 355,137 308,941 364,536 Fuel 58,094 97,264 53,654 Materials and supplies 124,245 126,191 121,227 Prepayments 58,359 64,935 59,918 Other current assets 30,651 29,607 27,834 - ------------------------------------------------------------------------------------------------------ Total Current Assets 628,934 643,538 641,658 - ------------------------------------------------------------------------------------------------------ Deferred Debits and Other Assets Income taxes recoverable through future rates 384,669 385,960 387,150 Abandonment costs 50,136 63,880 57,120 Harris Plant deferred costs 94,782 118,388 107,992 Unamortized debt expense 72,452 60,875 58,404 Miscellaneous other property and investments 499,424 428,556 475,564 Other assets and deferred debits 176,284 175,136 170,754 - ------------------------------------------------------------------------------------------------------ Total Deferred Debits and Other Assets 1,277,747 1,232,795 1,256,984 - ------------------------------------------------------------------------------------------------------ Total Assets $ 8,220,209 $ 8,218,716 $ 8,227,150 ====================================================================================================== CAPITALIZATION AND LIABILITIES Capitalization Common stock equity $ 2,636,175 $ 2,607,920 $ 2,574,743 Preferred stock - redemption not required 143,801 143,801 143,801 Long-term debt, net 2,565,268 2,683,514 2,610,343 - ------------------------------------------------------------------------------------------------------ Total Capitalization 5,345,244 5,435,235 5,328,887 - ------------------------------------------------------------------------------------------------------ Current Liabilities Current portion of long-term debt 138,258 78,000 105,755 Notes payable 80,749 82,700 73,743 Accounts payable 155,758 187,318 309,294 Taxes accrued 83,070 87,142 2,456 Interest accrued 42,462 50,265 48,441 Dividends declared 71,549 69,925 71,285 Deferred fuel credit 17,560 44,144 27,495 Other current liabilities 78,618 62,508 79,220 - ------------------------------------------------------------------------------------------------------ Total Current Liabilities 668,024 662,002 717,689 - ------------------------------------------------------------------------------------------------------ Deferred Credits and Other Liabilities Accumulated deferred income taxes 1,733,287 1,630,742 1,716,835 Accumulated deferred investment tax credits 237,484 246,945 242,707 Other liabilities and deferred credits 236,170 243,792 221,032 - ------------------------------------------------------------------------------------------------------ Total Deferred Credits and Other Liabilities 2,206,941 2,121,479 2,180,574 - ------------------------------------------------------------------------------------------------------ Commitments and Contingencies (Note 4) Total Capitalization and Liabilities $ 8,220,209 $ 8,218,716 $ 8,227,150 ====================================================================================================== SCHEDULES OF COMMON STOCK EQUITY (In thousands) Common stock (Note 3) $ 1,384,712 $ 1,505,093 $ 1,381,496 Unearned ESOP common stock (178,514) (197,010) (191,341) Capital stock issuance expense (790) (790) (790) Retained earnings 1,430,767 1,300,627 1,385,378 - ------------------------------------------------------------------------------------------------------ Total Common Stock Equity $ 2,636,175 $ 2,607,920 $ 2,574,743 ====================================================================================================== ...................................................................................................... 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 June 30 June 30 June 30 1996 1995 1996 1995 1996 1995 - ----------------------------------------------------------------------------------------------------------------------------------- Operating Activities Net income $ 62,656 $ 55,962 $ 181,002 $ 153,995 $ 399,611 $ 320,123 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 115,350 107,687 228,283 222,748 452,197 452,602 Harris Plant deferred costs 1,775 5,050 8,031 9,436 18,427 17,885 Deferred income taxes 12,639 4,068 27,265 (7,511) 124,457 28,922 Investment tax credit adjustments (2,610) (2,553) (5,221) (5,106) (9,459) (10,877) Allowance for equity funds used during construction (1,187) (984) (2,222) (1,897) (3,675) (3,870) Deferred fuel cost (credit) 1,473 (6,675) (9,936) 15,800 (26,585) 62,185 Net increase in receivables, inventories and prepaid expenses (19,710) (35,573) (35,285) (78,965) (34,169) (83,542) Net increase (decrease) in payables and accrued expenses 29,302 9,573 10,687 (6,803) (22,102) (26,775) Miscellaneous 20,488 15,248 26,232 27,227 34,633 6,852 - ----------------------------------------------------------------------------------------------------------------------------------- Net Cash Provided by Operating Activities 220,176 151,803 428,836 328,924 933,335 763,505 - ----------------------------------------------------------------------------------------------------------------------------------- Investing Activities Gross property additions (81,022) (66,804) (169,500) (138,732) (297,168) (285,567) Nuclear fuel additions (9,825) (19,442) (35,898) (35,310) (77,934) (48,732) Contributions to external decommissioning trust (7,722) (8,052) (18,020) (26,616) (29,479) (34,526) Contributions to retiree benefit trusts - - (24,700) (2,400) (24,700) (2,400) Allowance for equity funds used during construction 1,187 984 2,222 1,897 3,675 3,870 Miscellaneous (5,328) (16,035) (18,566) (16,522) (30,559) (22,617) - ----------------------------------------------------------------------------------------------------------------------------------- Net Cash Used in Investing Activities (102,710) (109,349) (264,462) (217,683) (456,165) (389,972) - ----------------------------------------------------------------------------------------------------------------------------------- Financing Activities Proceeds from issuance of long-term debt 10,700 120,939 276,257 180,670 276,300 230,556 Net increase (decrease) in short-term notes payable (maturity less than 90 days) 77,109 (12,800) 80,749 14,600 71,792 10,100 Retirement of long-term debt (135,971) (102,050) (391,475) (227,095) (440,524) (227,236) Purchase of Company common stock (Note 3) (4,676) (3,815) (6,596) (7,993) (131,042) (122,710) Dividends paid on common stock (65,378) (65,583) (130,546) (130,239) (258,244) (257,274) Dividends paid on preferred stock (2,404) (2,403) (4,804) (4,823) (9,604) (9,623) - ----------------------------------------------------------------------------------------------------------------------------------- Net Cash Used in Financing Activities (120,620) (65,712) (176,415) (174,880) (491,322) (376,187) - ----------------------------------------------------------------------------------------------------------------------------------- Net Decrease in Cash and Cash Equivalents (3,154) (23,258) (12,041) (63,639) (14,152) (2,654) Cash and Cash Equivalents at Beginning of the Period 5,602 39,858 14,489 80,239 16,600 19,254 - ----------------------------------------------------------------------------------------------------------------------------------- Cash and Cash Equivalents at End of the Period $ 2,448 $ 16,600 $ 2,448 $ 16,600 $ 2,448 $ 16,600 =================================================================================================================================== Supplemental Disclosures of Cash Flow Information Cash paid during the period - interest $ 48,188 $ 48,761 $ 103,390 $ 103,455 $ 203,231 $ 196,578 income taxes $ 39,735 $ 39,000 $ 40,390 $ 40,611 $ 176,942 $ 168,645 ................................................................................................................................... See Supplemental Data and Notes to Financial Statements.
EX-99 5 SUPPLEMENTAL DATA
Carolina Power & Light Company SUPPLEMENTAL DATA Three Months Ended Six Months Ended Twelve Months Ended June 30 June 30 June 30 1996 1995 1996 1995 1996 1995 - ---------------------------------------------------------------------------------------------------------------------------- Operating Revenues (in thousands) Residential $ 204,385 $ 193,263 $ 488,663 $ 444,618 $ 1,013,157 $ 908,214 Commercial 150,338 149,714 301,916 290,856 629,455 593,112 Industrial 178,985 187,742 342,229 352,158 723,519 734,274 Government and municipal 18,966 18,723 39,025 37,565 79,859 76,784 Power Agency contract requirements 23,422 22,590 48,874 46,408 103,418 93,905 NCEMC 54,293 58,657 124,430 142,364 281,237 275,425 Other wholesale 19,990 20,125 41,895 40,525 83,776 76,309 Other utilities 22,412 20,128 56,109 33,669 100,587 51,817 Miscellaneous revenue 13,177 11,023 26,412 22,040 50,895 45,181 - ---------------------------------------------------------------------------------------------------------------------------- Total Operating Revenues $ 685,968 $ 681,965 $ 1,469,553 $ 1,410,203 $ 3,065,903 $ 2,855,021 ============================================================================================================================ Energy Sales (millions of kWh) Residential 2,640 2,419 6,448 5,682 12,840 11,184 Commercial 2,335 2,247 4,657 4,338 9,594 8,811 Industrial 3,691 3,733 7,025 7,000 14,337 14,237 Government and municipal 319 299 655 600 1,343 1,252 Power Agency contract requirements 615 489 1,385 965 2,759 2,103 NCEMC 862 1,100 1,953 2,484 4,923 5,093 Other wholesale 503 473 983 935 1,963 1,866 Other utilities 1,080 902 2,652 1,476 4,410 2,126 - ---------------------------------------------------------------------------------------------------------------------------- Total Energy Sales 12,045 11,662 25,758 23,480 52,169 46,672 ============================================================================================================================ Energy Supply (millions of kWh) Generated - coal 4,884 5,877 12,027 10,440 25,104 19,591 nuclear 5,805 4,044 10,484 9,891 20,541 21,352 hydro 211 155 523 453 894 800 combustion turbines 15 1 29 85 1 Purchased 1,828 2,034 3,724 3,544 7,613 6,767 - ---------------------------------------------------------------------------------------------------------------------------- Total Energy Supply (Company Share) 12,743 12,111 26,787 24,328 54,237 48,511 ============================================================================================================================ Detail of Income Taxes (in thousands) Included in Operating Expenses Income tax expense (credit)- current $ 58,915 $ 33,016 $ 125,020 $ 110,171 $ 200,115 $ 203,736 Income tax expense - deferred 10,868 2,479 24,470 (10,708) 118,480 18,721 Income tax expense - investment tax credit adjustments (2,611) (2,553) (5,223) (5,105) (9,461) (10,874) - ---------------------------------------------------------------------------------------------------------------------------- Subtotal 67,172 32,942 144,267 94,358 309,134 211,583 - ---------------------------------------------------------------------------------------------------------------------------- Harris Plant deferred costs - investment tax credit adjustments (74) (74) (149) (149) (297) (297) - ---------------------------------------------------------------------------------------------------------------------------- Total Included in Operating Expenses 67,098 32,868 144,118 94,209 308,837 211,286 - ---------------------------------------------------------------------------------------------------------------------------- Included in Other Income Income tax expense (credit) - current (6,189) (4,796) (11,626) (9,693) (26,852) (23,633) Income tax expense - deferred 1,771 1,589 2,795 3,196 5,977 10,201 - ---------------------------------------------------------------------------------------------------------------------------- Total Included in Other Income (4,418) (3,207) (8,831) (6,497) (20,875) (13,432) - ---------------------------------------------------------------------------------------------------------------------------- Total Income Tax Expense $ 62,680 $ 29,661 $ 135,287 $ 87,712 $ 287,962 $ 197,854 ============================================================================================================================ FINANCIAL STATISTICS Ratio of earnings to fixed charges 4.07 3.35 Return on average common stock equity 15.03 % 11.93 % Book value per common share $ 18.33 $ 17.72 Capitalization ratios Common stock equity 49.32 % 47.98 % Preferred stock - redemption not required 2.69 2.65 Long-term debt, net 47.99 49.37 - ---------------------------------------------------------------------------------------------------------------------------- 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 1995 Annual Report to Shareholders and the 1995 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 1995 have been reclassified to conform to the 1996 presentation. 2. In the first quarter of 1996, the Company entered into two new long-term revolving credit facilities totaling $350 million, which support the Company's commercial paper borrowings. The Company is required to pay minimal annual commitment fees to maintain these facilities. Consistent with management's intent to maintain its commercial paper on a long-term basis, and as supported by the long-term credit facilities, the Company included $350 million of commercial paper outstanding in long-term debt. 3. In 1994, the Board of Directors of the Company authorized the repurchase of 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 8.8 million shares through June 30, 1996. 4. Contingencies existing as of the date of these statements are described below. No significant changes have occurred since December 31, 1995, with respect to the commitments discussed in Note 10 of the financial statements included in the Company's 1995 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 agreements. 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 the Brunswick and Harris nuclear 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 reached several tentative conclusions with respect to its project regarding accounting practices related to closure and removal of long-lived assets. The primary conclusions as they relate to nuclear decommissioning are: 1) the cost of decommissioning should be accounted for as a liability and accrued as the obligation is incurred; 2) recognition of a liability for decommissioning results in recognition of an increase to the cost of the plant; 3) the decommissioning liability should be measured based on discounted future cash flows using a risk-free rate; and 4) decommissioning trust funds should not be offset against the decommissioning liability. An exposure draft was issued in February 1996 and it is uncertain what impact, if any, the final statement may have on the Company's accounting for decommissioning and other closure and removal 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 continues to investigate the identities of parties connected to MGP sites in North Carolina, 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 expect costs associated with these sites to be material to the results of operations of the Company. The Company has recorded a liability for the estimated costs associated with investigation and remediation activities for certain MGP sites and for sites other than MGP sites. This liability is not material to the financial position 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 JUNE 30, 1996) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000017797 CAROLINA POWER & LIGHT COMPANY 6-MOS DEC-31-1995 JUN-30-1996 PER-BOOK $6,313,528 $499,424 $628,934 $602,039 $176,284 $8,220,209 $1,206,198 ($790) $1,430,767 $2,636,175 $0 $143,801 $2,565,268 $0 $0 $0 $138,258 $0 $0 $0 $2,736,707 $8,220,209 $1,469,553 $144,267 $1,075,892 $1,220,159 $249,394 $29,584 $278,978 $97,976 $181,002 $4,804 $176,198 $130,809 $88,029 $428,836 $1.23 $1.23
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