-----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, T8suupD/TkP0RqhWJuu974Y0dnNiDAtURCrQF03fL2p3m5JbebuQA42Ds4ccaoba /ufx2A0PatcLwZNTSputAw== 0000017797-98-000010.txt : 19980626 0000017797-98-000010.hdr.sgml : 19980626 ACCESSION NUMBER: 0000017797-98-000010 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980625 SROS: NYSE SROS: PCX 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: 11-K SEC ACT: SEC FILE NUMBER: 001-03382 FILM NUMBER: 98653920 BUSINESS ADDRESS: STREET 1: 411 FAYETTEVILLE ST CITY: RALEIGH STATE: NC ZIP: 27601 BUSINESS PHONE: 9195466111 11-K 1 ANNUAL REPORT; STOCK PURCHASE SAVINGS PLAN UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K [ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the plan year ended December 31, 1997 ----------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to ---- ---- Commission file number 2-96881 ------- STOCK PURCHASE SAVINGS PLAN OF CAROLINA POWER & LIGHT COMPANY ------------------------------ Full title plan and the address of the plan, if different from that of the issuer named below CAROLINA POWER & LIGHT COMPANY (a North Carolina corporation) 411 Fayetteville Street, Raleigh, North Carolina 27601-1748 ----------------------------------------------------------- Name of issuer of the securities held pursuant to the plan and address of its principal executive office STOCK PURCHASE-SAVINGS PLAN OF CAROLINA POWER & LIGHT COMPANY FINANCIAL STATEMENTS AND EXHIBITS TABLE OF CONTENTS (A) Financial Statements PAGE Independent Auditors' Report ...........................................3 Statement of Net Assets Available for Benefits, December 31, 1997.......4 Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 1997...............................5 Statement of Net Assets Available for Benefits, December 31, 1996.......6 Statement of Changes in Net Assets Available for Benefits For the Period Ended December 31, 1996.............................7 Statement of Net Assets Available for Benefits, December 30, 1996.......8 Statement of Changes in Net Assets Available for Benefits For the Period Ended December 30, 1996.............................9 Notes to Financial Statements.......................................10-14 Item 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1997.......................15 Item 27d - Schedule of Reportable Transactions For the Year Ended December 31, 1997..............................16 (B) Exhibits Exhibit No. 23 - Consent of Deloitte & Touche LLP INDEPENDENT AUDITORS' REPORT Stock Purchase-Savings Plan of Carolina Power & Light Company We have audited the accompanying statements of net assets available for benefits of the Stock Purchase-Savings Plan of Carolina Power & Light Company as of December 31, 1997, December 31, 1996 and December 30, 1996, and the related statements of changes in net assets available for benefits for the years ended December 31, 1997 and December 30, 1996, and the one-day period ended December 31, 1996. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1997, December 31, 1996 and December 30, 1996, and the changes in net assets available for benefits for the periods then ended in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of (1) assets held for investment purposes as of December 31, 1997 and (2) reportable transactions for the year ended December 31, 1997 are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information by fund in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for the purpose of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of the individual funds. The supplemental schedules and supplemental information by fund are the responsibility of the Plan's management. Such supplemental schedules and supplemental information by fund have been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. May 22, 1998 STOCK PURCHASE-SAVINGS PLAN OF CAROLINA POWER & LIGHT COMPANY Statement of Net Assets Available for Benefits December 31, 1997 SUPPLEMENTAL INFORMATION --------------------------------------------------------------------------------------------------- PARTICIPANTS' EQUITY ---------------------------------------------------------------------------------------------------
EQUITY CAROLINA POWER UNALLOCATED & LIGHT NEW EUROPACIFIC FIDELITY FIDELITY FIXED TO COMPANY OPPORTUNITIES GROWTH EQUITY- BALANCED INCOME TOTAL PLAN PARTICIPANTS COMMON STOCK FUND FUND INCOME FUND FUND FUND ------------- ------------- ------------- ----------- ---------- ----------- ---------- ----------- ASSETS Investments: Carolina Power & Light Company Common Stock $ 881,964,181 $ 320,368,814 $ 561,595,367 $ - $ - $ - $ - $ - New Opportunities Fund 8,410,295 - - 8,410,295 - - - - EuroPacific Growth Fund 6,102,592 - - - 6,102,592 - - - Fidelity Equity - Income Fund 76,630,397 - - - - 76,630,397 - - Fidelity Balanced Fund 7,055,760 - - - - - 7,055,760 - Fixed Income Fund 17,118,540 - - - - - - 17,118,540 Participants' Loans Receivable 21,669,116 21,669,116 - - - - - - ------------- ------------- ------------- ----------- ---------- ----------- ---------- ----------- Total Investments 1,018,950,881 342,037,930 561,595,367 8,410,295 6,102,592 76,630,397 7,055,760 17,118,540 Dividends/Capital Gains/ Interest Receivable 13,610,664 3,666,758 6,427,699 181,940 322,855 2,547,641 364,545 99,226 Contributions Receivable 5,118,423 - 5,118,423 - - - - - Cash 620,926 620,883 43 - - - - - ------------- ------------- ------------- ----------- ---------- ----------- ---------- ----------- Total Assets 1,038,300,894 346,325,571 573,141,532 8,592,235 6,425,447 79,178,038 7,420,305 17,217,766 ------------- ------------- ------------- ----------- ---------- ----------- ---------- ----------- LIABILITIES ESOP Loan Payable 177,687,308 177,687,308 - - - - - - Participants' Loans Payable 22,289,999 22,289,999 - - - - - - Interest Payable - ESOP Loan 1,776,873 1,776,873 - - - - - - Payable to Plan Sponsor 1,005,389 1,005,389 - - - - - - ------------- ------------- ------------- ----------- ---------- ----------- ---------- ----------- Total Liabilities 202,759,569 202,759,569 - - - - - - ------------- ------------- ------------- ----------- ---------- ----------- ---------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $ 835,541,325 $ 143,566,002 $ 573,141,532 $ 8,592,235 $6,425,447 $79,178,038 $7,420,305 $17,217,766 ============= ============= ============= =========== ========== =========== ========== =========== See Notes to Financial Statements
STOCK PURCHASE-SAVINGS PLAN OF CAROLINA POWER & LIGHT COMPANY Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 1997 SUPPLEMENTAL INFORMATION --------------------------------------------------------------------------------------------------- PARTICIPANTS' EQUITY ---------------------------------------------------------------------------------------------------
EQUITY CAROLINA POWER UNALLOCATED & LIGHT NEW EUROPACIFIC FIDELITY FIDELITY FIXED TO COMPANY OPPORTUNITIES GROWTH EQUITY- BALANCED INCOME TOTAL PLAN PARTICIPANTS COMMON STOCK FUND FUND INCOME FUND FUND FUND ------------ ------------ ------------ --------- --------- ----------- ---------- ----------- INCREASES IN NET ASSETS Investment Income: Dividends/Capital Gains $ 46,519,271 $ 14,788,010 $ 26,205,816 $ 181,940 $ 441,243 $ 4,076,761 $ 825,501 $ - Net Apppreciation (Depreciation)in Fair Value 133,961,696 44,358,817 76,766,379 854,340 (394,452) 12,034,457 342,155 - Interest 3,251,204 2,121,639 - - - - 1,129,565 Contributions: Employer 18,149,431 4,802,037 13,347,394 - - - - - Participants 25,659,644 - 15,813,965 1,252,168 714,185 5,941,388 890,557 1,047,381 ------------ ------------ ------------ --------- --------- ----------- ---------- ----------- Total Increase in Net Assets 227,541,246 66,070,503 132,133,554 2,288,448 760,976 22,052,606 2,058,213 2,176,946 ------------ ------------ ------------ --------- --------- ----------- ---------- ----------- DECREASES IN NET ASSETS Interest Expense 12,390,844 12,390,844 - - - - - - Allocation of Shares 21,045,028 21,045,028 - - - - - - Distribution of Benefits 100,346,313 - 87,078,576 413,522 220,923 9,078,174 1,023,591 2,531,527 Participant Loan Trustee Expense 638,407 638,407 - - - - - - ------------ ------------ ------------ --------- --------- ----------- ---------- ----------- Total Decrease in Net Assets 134,420,592 34,074,279 87,078,576 413,522 220,923 9,078,174 1,023,591 2,531,527 ------------ ------------ ------------ --------- --------- ----------- ---------- ----------- INCREASE (DECREASE) IN NET ASSETS 93,120,654 31,996,224 45,054,978 1,874,926 540,053 12,974,432 1,034,622 (354,581) NET TRANSFERS AMONG INVESTMENT OPTIONS - - (28,517,814) 6,717,309 5,885,394 17,275,253 2,055,943 (3,416,085) NET ASSETS - DECEMBER 31, 1996 742,420,671 111,569,778 556,604,368 - - 48,928,353 4,329,740 20,988,432 ------------ ------------ ------------ --------- --------- ----------- ---------- ----------- NET ASSETS - DECEMBER 31, 1997 $835,541,325 $143,566,002 $573,141,532 $8,592,235 $6,425,447 $79,178,038 $7,420,305 $17,217,766 ============ ============ ============ ========== ========== =========== ========== ============ See Notes to Financial Statements
STOCK PURCHASE-SAVINGS PLAN OF CAROLINA POWER & LIGHT COMPANY Statement of Net Assets Available for Benefits December 31, 1996 SUPPLEMENTAL INFORMATION ------------------------------------------------------------------------------------- PARTICIPANTS' EQUITY -------------------------------------------------------------------------------------
EQUITY CAROLINA POWER FIXED FIDELITY FIDELITY UNALLOCATED TO & LIGHT COMPANY INCOME BALANCED EQUITY- TOTAL PLAN PARTICIPANTS COMMON STOCK FUND FUND INCOME FUND ---------- ------------- ------------- ------------ ---------- ------------- ASSETS Investments: Carolina Power & Light Company Common Stock $840,504,043 $298,068,454 $542,435,589 $ $ $ - Fidelity Equity - Income Fund 47,272,759 - - - - 47,272,759 Fixed Income Fund 20,866,823 - - 20,866,823 - - Fidelity Balanced Fund 4,269,483 - - - 4,269,483 - Participants' Loans Receivable 22,662,400 22,662,400 - - - - ------------ ------------ ------------ ---------- ---------- ---------- Total Investments 935,575,508 320,730,854 542,435,589 20,866,823 4,269,483 47,272,759 Dividends/Capital Gains/ Interest Receivable 12,660,389 3,838,142 6,984,787 121,609 60,257 1,655,594 Contributions Receivable 7,183,975 - 7,183,975 - - - Cash 388,825 388,808 17 - - - ------------ ------------ ------------ ---------- ---------- ---------- Total Assets 955,808,697 324,957,804 556,604,368 20,988,432 4,329,740 48,928,353 ------------ ------------ ------------ ---------- ---------- ---------- LIABILITIES ESOP Loan Payable 186,556,300 186,556,300 - - - - Participants' Loans Payable 23,051,208 23,051,208 - - - - Interest Payable - ESOP Loan 1,865,563 1,865,563 - - - - Payable to Plan Sponsor 1,914,955 1,914,955 - - - - ------------ ------------ ------------ ---------- ---------- ---------- Total Liabilities 213,388,026 213,388,026 - - - - ------------ ------------ ------------ ---------- ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $742,420,671 $111,569,778 $556,604,368 $20,988,432 $4,329,740 $48,928,353 ============ ============ ============ =========== ========== =========== See Notes to Financial Statements.
STOCK PURCHASE-SAVINGS PLAN OF CAROLINA POWER & LIGHT COMPANY Statement of Changes in Net Assets Available for Benefits For the One Day Period Ended December 31, 1996 SUPPLEMENTAL INFORMATION ------------------------------------------------------------------------------------- PARTICIPANTS' EQUITY -------------------------------------------------------------------------------------
EQUITY CAROLINA POWER FIXED FIDELITY FIDELITY UNALLOCATED TO & LIGHT COMPANY INCOME BALANCED EQUITY- TOTAL PLAN PARTICIPANTS COMMON STOCK FUND FUND INCOME FUND ---------- ------------- ------------- ------------- ------------ ------------- INCREASES IN NET ASSETS Investment Income: Net Depreciation in Fair Value $ (9,240,671) $ (3,062,347) $ (5,572,968) $ - $ (42,453) $ (562,903) ------------- ------------- ------------- ------------- ------------ ------------- Total Increase in Net Assets (9,240,671) (3,062,347) (5,572,968) - (42,453) (562,903) ------------- ------------- ------------- ------------- ------------ ------------- DECREASES IN NET ASSETS Total Decrease in Net Assets $ - $ - $ - $ - $ - $ - ------------- ------------- ------------- ------------- ------------ ------------- INCREASE (DECREASE) IN NET ASSETS (9,240,671) (3,062,347) (5,572,968) - (42,453) (562,903) NET TRANSFERS AMONG INVESTMENT OPTIONS - - - - - - NET ASSETS - DECEMBER 30, 1996 751,661,342 114,632,125 562,177,336 20,988,432 4,372,193 49,491,256 ------------- ------------- ------------- ------------- ------------ ------------- NET ASSETS - DECEMBER 31, 1996 $742,420,671 $111,569,778 $556,604,368 $ 20,988,432 $ 4,329,740 $ 48,928,353 ============= ============= ============= ============= ============ ============= See Notes to Financial Statements
STOCK PURCHASE-SAVINGS PLAN OF CAROLINA POWER & LIGHT COMPANY Statement of Net Assets Available for Benefits December 30, 1996 SUPPLEMENTAL INFORMATION ------------------------------------------------------------------------------------- PARTICIPANTS' EQUITY -------------------------------------------------------------------------------------
EQUITY CAROLINA POWER FIXED FIDELITY FIDELITY UNALLOCATED TO & LIGHT COMPANY INCOME BALANCED EQUITY- TOTAL PLAN PARTICIPANTS COMMON STOCK FUND FUND INCOME FUND ---------- ------------- ------------- ------------ ----------- ------------- ASSETS Investments: Carolina Power & Light Company Common Stock $849,139,358 $301,130,801 $548,008,557 $ $ - $ - Fidelity Equity - Income Fund 47,835,662 - - - - 47,835,662 Fixed Income Fund 20,866,823 - - 20,866,823 - - Fidelity Balanced Fund 4,311,936 - - - 4,311,936 - Participants' Loans Receivable 22,662,400 22,662,400 - - - - ------------ ------------ ------------ ----------- ------------ ------------ Total Investments 944,816,179 323,793,201 548,008,557 20,866,823 4,311,936 47,835,662 Dividends/Capital Gains/ Interest Receivable 12,660,389 3,838,142 6,984,787 121,609 60,257 1,655,594 Contributions Receivable 7,183,975 - 7,183,975 - - - Cash 388,825 388,808 17 - - - ------------ ------------ ------------ ----------- ------------ ------------ Total Assets 965,049,368 328,020,151 562,177,336 20,988,432 4,372,193 49,491,256 ------------ ------------ ------------ ----------- ------------ ------------ LIABILITIES ESOP Loan Payable 186,556,300 186,556,300 - - - - Participants' Loans Payable 23,051,208 23,051,208 - - - - Interest Payable - ESOP Loan 1,865,563 1,865,563 - - - - Payable to Plan Sponsor 1,914,955 1,914,955 - - - - ------------ ------------ ------------ ----------- ------------ ------------ Total Liabilities 213,388,026 213,388,026 - - - - ------------ ------------ ------------ ----------- ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS $751,661,342 $114,632,125 $562,177,336 $20,988,432 $ 4,372,193 $ 49,491,256 ============ ============ ============ =========== ============ ============ See Notes to Financial Statements.
STOCK PURCHASE-SAVINGS PLAN OF CAROLINA POWER & LIGHT COMPANY Statement of Changes in Net Assets Available for Benefits For the Year Ended December 30, 1996 SUPPLEMENTAL INFORMATION -------------------------------------------------------------------------------------- PARTICIPANTS' EQUITY --------------------------------------------------------------------------------------
EQUITY CAROLINA POWER U.S. FIXED FIDELITY FIDELITY UNALLOCATED TO & LIGHT COMPANY SAVINGS INCOME BALANCED EQUITY- TOTAL PLAN PARTICIPANTS COMMON STOCK BONDS FUND FUND INCOME FUND ------------ ------------- ------------- ------------- ----------- ---------- ------------ INCREASES IN NET ASSETS Investment Income: Dividends/Capital Gains $ 45,845,526 $ 15,062,367 $ 27,691,989 $ - $ - $ 195,334 $ 2,895,836 Net Apppreciation in Fair Value 62,459,585 20,435,462 36,274,857 - - 216,490 5,532,776 Interest 3,130,615 2,058,186 - 309,748 762,681 - - Contributions: Employer 20,812,100 4,683,766 16,128,334 - - - - Participants 24,381,602 - 17,023,064 270,854 1,033,433 917,866 5,136,385 ------------ ------------- ------------- ------------- ----------- ---------- ------------ Total Increase in Net Assets 156,629,428 42,239,781 97,118,244 580,602 1,796,114 1,329,690 13,564,997 ------------ ------------- ------------- ------------- ----------- ---------- ------------ DECREASES IN NET ASSETS Interest Expense 12,921,087 12,921,087 - - - - - Allocation of Shares 21,277,019 21,277,019 - - - - - Distribution of Benefits 83,046,924 - 74,510,718 917,711 2,139,058 520,513 4,958,924 Participant Loan Trustee Expense 562,606 562,606 - - - - - ------------ ------------- ------------- ------------- ----------- ---------- ------------ Total Decrease in Net Assets 117,807,636 34,760,712 74,510,718 917,711 2,139,058 520,513 4,958,924 ------------ ------------- ------------- ------------- ----------- ---------- ------------ INCREASE (DECREASE) IN NET ASSETS 38,821,792 7,479,069 22,607,526 (337,109) (342,944) 809,177 8,606,073 NET TRANSFERS AMONG INVESTMENT OPTIONS - - (3,348,065) (11,719,350) 9,657,298 (289,018) 5,699,135 NET ASSETS - DECEMBER 30, 1995 712,839,550 107,153,056 542,917,875 12,056,459 11,674,078 3,852,034 35,186,048 ------------ ------------- ------------- ------------- ----------- ---------- ------------ NET ASSETS - DECEMBER 30, 1996 $751,661,342 $114,632,125 $562,177,336 $ - $20,988,432 $4,372,193 $49,491,256 ============= ============= ============= ============= ============ =========== ============ See Notes to Financial Statements.
STOCK PURCHASE-SAVINGS PLAN OF CAROLINA POWER & LIGHT COMPANY Notes to Financial Statements Periods Ended December 31, 1997 and 1996 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Stock Purchase-Savings Plan's (the "Plan") investments in the common stock of Carolina Power & Light Company (the "Company"), the Putnam New Opportunities Fund, the EuroPacific Growth Fund, the Fidelity Equity-Income Fund and the Fidelity Balanced Fund are carried at fair value determined by quoted prices in an active market. The investment in the Fixed Income Fund is carried at fair value, which approximates cost plus accrued interest. The Plan's investment alternatives are described in Note 3. Dividends, interest and other income are accrued as earned, and expenses are accrued as incurred. The expenses incurred by the Trustee (Wachovia Bank of North Carolina, N.A.) and William M. Mercer, Inc., a third-party administrator, in the administration of the Plan may be paid from assets of the Plan to the extent not paid by the Company. Cash may be temporarily invested in Wachovia Bank's Short-Term Income (STICT) and Short Term Fund for Retirement Trusts (STIF), which consist primarily of money market funds, certificates of deposit and commercial paper. In preparing financial statements that conform with generally accepted accounting principles, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and amounts of revenues and expenses reflected during the reporting period. Actual results could differ from those estimates. 2. DESCRIPTION OF THE PLAN General Information Regarding the Plan - -------------------------------------- The purposes of the Plan, which was last restated effective December 31, 1994, and amended on January 1, 1997, are to encourage systematic savings by employees and to provide employees with a convenient method of acquiring an equity interest in the Company and other investments. The January 1, 1997 amendment changed the Plan's fiscal year-end to December 31 from December 30, beginning with the 1997 Plan year, resulting in a one day Plan period ended December 31, 1996. For that one day Plan period, the only activity affecting the financial statements was the depreciation in fair value of Net Assets. References to the Plan year ended December 30, 1996 and to the one day Plan period ended December 31, 1996 will be collectively referred to within the footnotes as the Plan year ended December 31, 1996. Participation in the Plan - ------------------------- Generally, all full-time employees of the Company who are at least 18 years of age are eligible to participate in the Plan on their first day of employment. Certain part-time employees are also eligible. If employees wish to participate in the Plan, they must elect to do so and must specify their level of savings and how their savings should be allocated among the Plan's investment alternatives. Retired participants may retain investments in the Plan but may not continue to make contributions to the Plan. Employee Contributions Under the Plan - ------------------------------------- Each participating employee may authorize the Company to contribute to the Plan. Employees who have eligible earnings of less than a certain level ($80,000 for 1997 and $66,000 for 1996) may contribute 2%, 4%, 6%, 8%, 10%, 12% or 14% of the employee's before-tax eligible earnings (the "Deferred Contribution"). Employees with earnings above this level may contribute 2%, 4%, 6%, 8% or 10% of the employee's before-tax eligible earnings. These contributions reduce, in like amount, the employee's earnings subject to income tax for that year. An employee's total before-tax contributions were limited to $9,500 for 1997 and $9,500 for 1996. Participating employees may also elect to contribute an additional amount on an after-tax basis. Employees who have eligible earnings of less than a certain level ($80,000 for 1997 and $66,000 for 1996) may elect to contribute an additional amount equal to 2%, 4%, 6%, 8%, 10%, 12% or 14% of the employee's pay (the "Additional Savings"). Employees with earnings above this level may contribute 2%, 4%, 6%, 8% or 10%. These additional contributions are made after-tax and are not matched by the Company. In no event may the Deferred Contribution and the Additional Savings exceed a total of 14%. Company Contributions Under the Plan - ------------------------------------ At the time employee contributions are made, the Company contributes to the Plan an amount equal to 50% of the first 6% of each employee's Deferred Contribution. All Company contributions and any earnings on securities purchased with these contributions are invested in common stock of the Company. The Plan has an incentive feature which provides for discretionary Company contributions to be made to the Plan on behalf of each eligible employee for any Plan year in an amount to be determined by the Board of Directors. Such Company contributions, if any, are made in an amount up to a maximum of 50% of the first 6% of Deferred Contribution for each employee if certain corporate goals established annually by the Board of Directors are met. All employees eligible to participate in the Plan are eligible for the discretionary Company contributions. Those eligible employees who do not contribute to the Plan are, for the purpose of determining the discretionary contributions, assumed to be contributing 2% of eligible earnings. The Company made discretionary contributions of $5.1 million for the Plan year ended December 31, 1997 and $7.2 million for the Plan year ended December 31, 1996. For participants other than those leaving the Company, Company contributions are not considered matured, and cannot be distributed, until the end of the second year after the Plan year for which such Company contributions were made. Employee Stock Ownership Plan - ----------------------------- In 1989, the Plan was restated as an employee stock ownership plan, which allows the Trustee to enter into acquisition loans ("ESOP Loans") for the purpose of acquiring Company common stock for the benefit of Plan participants. Common stock acquired with the proceeds of an ESOP Loan is held by the Trustee in a suspense account ("ESOP Stock Suspense Account"). Such common stock is released from the ESOP Stock Suspense Account and made available for allocation to the accounts of participants as the ESOP Loan is repaid as specified by provisions of the Internal Revenue Code. Such allocations are used to meet Company common stock requirements related to participant contributions, Company 50% matching contributions, discretionary contributions and/or reinvested dividends. ESOP Loan repayments are made from (1) cash dividends on common stock held in the ESOP Stock Suspense Account or cash dividends on common stock allocated to the accounts of employee participants, (2) the proceeds from the sale of common stock held in the ESOP Stock Suspense Account, if any, and (3) additional Company contributions, if any. These contributions will be made to the Plan in an amount which, when added to the value of common stock released from the ESOP Stock Suspense Account and allocated to participants' accounts, will equal the sum of (1) cash dividends used to repay an ESOP Loan, (2) amounts allocated to participants' accounts and attributable to Deferred Contributions and Additional Savings and (3) amounts, if any, necessary to satisfy requirements for restoration of forfeitures upon reemployment. In October 1989, the Trustee purchased 13,636,362 shares of common stock (as restated for the two-for-one stock split in February 1993) from the Company for an aggregate purchase price of approximately $300 million. The purchase was financed with a long-term ESOP Loan from the Company, bearing a 6% interest rate. Prepayment without a penalty is allowed. Excluding the effects of any future prepayments, required payments, including interest, are $19,865,293 for each of the years 1998 through 2002 and a total of $157,303,411 from 2003 through 2010. The ESOP Loan is secured by the ESOP Stock Suspense Account shares in the Plan, which totaled 7,560,326 shares at December 31, 1997. During the 1997 Plan year, 577,728 ESOP shares were released from the ESOP Stock Suspense Account and allocated to participants. Also, during each quarter of 1996, the Company made a qualified ESOP Loan of approximately $5.5 million to the Plan. Each loan was repaid within the quarter. The Company made no qualified ESOP loans to the Plan during 1997. Investment of Funds - ------------------- At the election of the participating employee, contributions authorized by the employee and any earnings on the securities purchased with these contributions are invested in the investment alternatives described in Note 3. Employee contributions to the Plan can be allocated to one or more of the investment options in increments of 5%; however, a minimum of 25% of the first 6% of Deferred Contributions must be invested in Company common stock. This election is made at the time the employee begins to participate in the Plan and may be changed semi-monthly. A participant may move among the options for investments accumulated after 1988, subject to certain limitations. All Company contributions and any dividends on stock purchased with Company contributions will be invested in common stock of the Company. For employees age 55 and older who have participated in the Plan for at least 10 years, the Company offers diversification of a portion of a participant's accumulated investment in Company common stock acquired after 1986. Qualified participants can elect annually, for a maximum of six years, to transfer to one or more of the remaining investment alternatives up to 25% (50% in the final year of election) of 1) Company common stock acquired by the participant, 2) Company matching contributions and 3) dividends on Company common stock accrued after 1986. At retirement, all contributions made by the participant in Company common stock may be diversified. Retirement, Death, or Termination of Employment - ----------------------------------------------- Participants with five or more years of service are vested with respect to all Company contributions. Generally, participants leaving the employ of the Company with less than five years of service forfeit unmatured Company contributions. In the case of an employee's death, retirement or termination of employment with at least five years of service, all employee and Company contributions, including those otherwise unmatured, become payable upon request by the employee, the employee's estate or other appropriate recipients. Forfeited contributions are used by the Plan to reduce contributions otherwise required from the Company. These forfeited contributions were approximately $494,000 in 1997 and $362,000 in 1996. Withdrawals - ----------- Participants may withdraw, at times and in minimum amounts specified by the Plan, any or all of the securities purchased with, and any uninvested cash attributable to, Company contributions and earnings thereon for such Plan year. A participant who has reached age 59 1/2 may withdraw any or all contributions made by the participant and any or all matured Company contributions. At times and in amounts specified by the Plan, a participant may withdraw any or all securities and cash related to Additional Savings. The Plan also provides for withdrawal of employee contributions prior to age 59 1/2 upon furnishing proof of financial hardship satisfactory to the Committee that administers the Plan. Federal Income Taxes - -------------------- The Plan obtained its latest determination letter on May 16, 1996, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, he believes that the Plan was qualified and the related trust was tax-exempt as of the financial statement date. No provision for income taxes has been included in the Plan's financial statements. Termination of the Plan - ----------------------- The Company has reserved the right to amend, modify, suspend or terminate the Plan at any time, except that no such action will have a retroactive effect and none of the assets of the Plan will revert to the Company or be used for any purpose other than the exclusive benefit of the participating employees, provided that, in the event of Plan termination, shares of Company common stock not allocated to participants' accounts may be sold to repay the ESOP Loans. In the event of termination of the Plan, all contributions of the participants and of the Company through the date of termination will be vested. 3. INVESTMENTS Company Common Stock - -------------------- The price at which original issue common stock is deemed to have been acquired under the Plan is the closing price per share quoted on the composite tape as reported in The Wall Street Journal on the last trading day preceding the applicable payroll or dividend payment date. Shares may be purchased on the open market. The price at which open market common stock is deemed to have been acquired under the Plan is the weighted average price of all shares so purchased during the Investment Period as defined in the Plan. The average total return of the Company's common stock was 22.30% for 1997 and 11.36% for 1996. Shares may also be released from the ESOP Stock Suspense Account (see Note 2). The price at which such released shares are allocated to Plan participants is determined in the same manner as described above for original issue common stock. New Opportunities Fund - ---------------------- The Putnam New Opportunities Fund of Pentium Investments, Inc. ("New Opportunities Fund"), which became an investment option on January 1, 1997, invests principally in common stocks of companies in sectors which Putnam Investments believes possess above-average long-term growth potential. The New Opportunities Fund seeks long-term capital appreciation from stocks of smaller to midsize companies and targets sectors of the economy that are expanding rapidly and then selects fast-growing companies within these sectors. It has a relatively higher risk as compared to certain other options in the Plan, but has potential for higher returns over a long-term horizon. Current income from dividends is only an incidental consideration. Income earned on the New Opportunities Fund is reinvested in additional fund shares. The average total return of the New Opportunities Fund was 22.55% in 1997 and 10.82% in 1996. EuroPacific Growth Fund - ----------------------- The EuroPacific Growth Fund of Capital Research and Management Company ("EuroPacific Growth Fund"), which became an investment option on January 1, 1997, invests principally in strong, growing companies based chiefly in Europe and the Pacific Basin, ranging from small firms to large corporations. The EuroPacific Growth Fund seeks long-term growth of capital by investing in securities of companies located outside the U. S. and has relatively higher market risk as compared to certain other options in the Plan, but has potential for higher returns over a long-term horizon. The fund is also affected by the fluctuating value of the American dollar in relation to foreign currencies. Income earned on the EuroPacific Growth Fund is reinvested in additional fund shares. The total average return for the EuroPacific Growth Fund was 9.19% in 1997 and 18.51% in 1996. Fidelity Equity-Income Fund - --------------------------- Funds invested in the Fidelity Equity-Income mutual fund ("Equity-Income Fund") are pooled and used primarily to purchase a variety of income-producing common or preferred stocks, as well as bonds or securities which may be convertible into common stock, and other similar types of investments. Normally, at least 80% of the Equity-Income Fund's assets will be invested in such securities. The objective of the Equity-Income Fund is to produce current income while taking into account the potential for long-term growth through capital appreciation. Income earned on the Equity-Income Fund is reinvested in additional fund shares. The average total return of the Equity-Income Fund was 29.98% in 1997 and 21.02% in 1996. Fidelity Balanced Fund - ---------------------- The Fidelity Balanced Fund ("Balanced Fund") consists of high-yielding securities, including foreign and domestic stocks and bonds. Also, the Balanced Fund diversifies across a variety of industries. At least 25% of the Balanced Fund's total holdings will always consist of fixed-income securities. The objective of the Balanced Fund is to provide as much income as possible while preserving capital. Income earned on the Balanced Fund is reinvested in additional fund shares. The average total return of the Balanced Fund was 23.45% in 1997 and 9.32% in 1996. Fixed Income Fund - ----------------- Contributions to the Fixed Income Fund ("FIF") are invested in the American Express Trust Income Fund I, which includes a mix of investment contracts, primarily with high quality insurance companies, along with other short-term investments. The FIF's objectives are to preserve principal and income while maximizing current income by investing in investment contracts, primarily with insurance companies, high-quality fixed-income investments such as securities issued by the U.S. Government or its agencies, and polled short-term cash funds. The average total return of the FIF was 6.42% in 1997 and 6.46% in 1996. 4. LOANS TO PARTICIPANTS The Plan allows participants to borrow an amount not to exceed the lesser of $50,000 or 50% of their vested account balances. Each loan is collateralized by the individual participant's equity in the Plan. At December 31, 1997 and 1996, the Trustee had recorded approximately $21.7 million and $22.7 million, respectively, of receivables for loans to participants. The loans are funded with a borrowing arrangement by the Plan with an outside lending institution. 5. INVESTMENTS GREATER THAN 5% OF NET ASSETS AVAILABLE FOR PLAN BENEFITS As of December 31, 1997, the following investments represented 5% or more of net Plan assets: CP&L common stock with a fair market value of $881,964,181 (20,813,314 shares) and the Fidelity Equity-Income Fund with a fair market value of $76,630,397. As of December 31, 1996, the following investment represented 5% or more of net Plan assets: CP&L common stock with a fair market value of $840,504,043 (23,027,508 shares) and the Fidelity Equity Income Fund with a fair market value of $47,272,759. STOCK PURCHASE-SAVINGS PLAN OF CAROLINA POWER & LIGHT COMPANY Item 27a - Schedule of Assets Held for Investment Purposes As of December 31, 1997
Identity of Issue Description of Investment Cost Value Fair Value - ----------------- ------------------------- ---------- ---------- Carolina Power & Light Company Common stock, no par or $457,892,908 $881,964,181 stated value, 20,813,314 shares New Opportunities Fund Mutual fund - 172,873 shares 7,653,519 8,410,295 EuroPacific Growth Fund Mutual fund - 234,535 shares 6,510,578 6,102,592 Fidelity Equity-Income Fund Mutual fund - 1,462,133 share 57,577,011 76,630,397 Fidelity Balanced Fund Mutual fund - 462,067 shares 6,651,619 7,055,760 Fixed Income Fund Various investments 17,118,540 17,118,540 Participants' Loans Receivable Loans to plan participants 21,669,116 21,669,116 Total $575,073,291 $1,018,950,881 Party-in-Interest
Item 27d - Schedule of Reportable Transactions For the Year Ended December 31, 1997
Expenses Fair Value on Identity of Party/Description of Asset Purchase Price Selling Price Incurred Cost Value Transaction Date Gain/Loss - -------------------------------------- -------------- ------------- -------- ----------- ---------------- --------- Carolina Power & Light Company Common Stock: 107 Sales - $109,735,274 - $68,371,601 $109,735,274 $41,363,673 ------------ 107 Transactions $109,735,274 ============ Wachovia Bank Short-Term Investment Fund: 380 Purchases $131,748,476 - - $131,748,476 $131,748,476 308 Sales - $131,171,375 - $131,171,375 $131,171,375 - ------------ 688 Transactions $262,919,851 ============
SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, - --------- the Stock Purchase-Savings Plan Committee has duly caused this Annual Report to be signed on its behalf by the undersigned hereunto duly authorized. STOCK PURCHASE-SAVINGS PLAN OF CAROLINA POWER & LIGHT COMPANY /s/ Cecil L. Goodnight, Chairman ------------------------------------- Cecil L. Goodnight, Chairman Stock Purchase-Savings Plan Committee Date: June 17, 1998 EXHIBITS INDEX Exhibit Number - -------------- Exhibit No. 23 Consent of Deloitte & Touche LLP EX-23 2 INDEPENDANT AUDITORS' CONSENT EXHIBIT NO. 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 33-33520 on Form S-8 of Carolina Power & Light Company, of our report dated May 22, 1998, appearing in this Annual Report on Form 11-K of the Stock Purchase-Savings Plan of Carolina Power & Light Company for the year ended December 31, 1997. /s/ DELOITTE & TOUCHE LLP Raleigh, North Carolina June 24, 1998 -----END PRIVACY-ENHANCED MESSAGE-----