-----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, J5FF85JnEme0QL0LXjtputlJjmIINLn28JbNQ2F5boXByvFloB8AEX6yGLE5HScH fybR3FuJ5FTb3yaw3WL3+Q== 0000357261-98-000088.txt : 19980723 0000357261-98-000088.hdr.sgml : 19980723 ACCESSION NUMBER: 0000357261-98-000088 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980716 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980721 SROS: NYSE SROS: PCX FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLORIDA PROGRESS CORP CENTRAL INDEX KEY: 0000357261 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 592147112 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08349 FILM NUMBER: 98669200 BUSINESS ADDRESS: STREET 1: ONE PROGRESS PLZ STREET 2: SUITE 2600 CITY: ST PETERSBURG STATE: FL ZIP: 33701 BUSINESS PHONE: 8138246400 MAIL ADDRESS: STREET 1: ONE PROGRESS PLZ STREET 2: SUITE 2600 CITY: ST PETERSBURG STATE: FL ZIP: 33701 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLORIDA POWER CORP / CENTRAL INDEX KEY: 0000037637 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 590247770 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-03274 FILM NUMBER: 98669201 BUSINESS ADDRESS: STREET 1: 3201 34TH ST SOUTH CITY: ST PETERSBURG STATE: FL ZIP: 33711 BUSINESS PHONE: 8138665151 8-K 1 FLORIDA PROGRESS/POWER FORM 8-K DATED 7/16/98 As filed with the Securities and Exchange Commission on July 21, 1998 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 --------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 16, 1998
Exact name of Registrant as Commission specified in its charter, address State of I.R.S. Employer File No. of principal executive offices, telephone Incorporation Identification No. 1-8349 FLORIDA PROGRESS CORPORATION Florida 59-2147112 One Progress Plaza St. Petersburg, Florida 33701 Telephone (813) 824-6400 1-3274 FLORIDA POWER CORPORATION Florida 59-0247770 3201 34th Street South St. Petersburg, Florida 33711 Telephone (813) 866-5151
The address of neither registrant has changed since the last report. This combined Form 8-K represents separate filings by Florida Progress Corporation and Florida Power Corporation. Florida Power makes no representations as to the information relating to Florida Progress' diversified operations. Item 5. Other Events In light of ongoing securities offerings by Florida Progress Corporation ("Florida Progress") and its subsidiaries, including Florida Power Corporation ("Florida Power") and Progress Capital Holdings, Inc., the following information is being presented pending distribution of the combined Florida Progress and Florida Power Quarterly Report on Form 10-Q for the quarter ended June 30, 1998: Florida Progress issued an Investor News report and a media News Release, each dated July 16, 1998, to report an increase in its 1998 second-quarter earnings. A copy of the Investor News report and the media News Release are being furnished herewith as Exhibits 99.(a) and 99.(b), respectively. In addition, Florida Progress is reporting the following litigation: ABC Rail Products Corporation v. Progress Rail Services Corporation and Louisville Scrap Material Co., Inc., U.S. District Court, Northern District of Illinois, Eastern Division, Civ. Action No. 98C3663. On June 12, 1998, ABC Rail Products Corporation ("ABC") brought an action against Progress Rail Services Corporation ("Progress Rail") and Louisville Scrap Material Co. ("Louisville") seeking injunctive and declaratory relief and treble damages based on alleged violations of federal and state antitrust statutes as well as damages under other state law claims. The complaint sought to enjoin Progress Rail's acquisition of certain assets and business of Louisville and several affiliated corporations known as the Blue Industrial Group. ABC alleged that Progress Rail and Louisville have conspired to deny ABC an adequate supply of used railcar wheelsets. The complaint also alleges Progress Rail would acquire monopoly power over the supply of used wheelsets by virtue of the acquisition. The court denied ABC's motion for a temporary restraining order and Progress Rail acquired the Blue Industrial Group's assets and business. Pursuant to the court's order, Progress Rail continues to provide ABC with used wheelsets. ABC has filed a motion for a preliminary injunction, pending trial, requiring Progress Rail (1) to continue providing ABC with used wheelsets and (2) to hold the assets of Louisville separate so as to enable divestiture to be an adequate remedy if the acquisition is found to violate the antitrust laws. Discovery concerning this motion is ongoing. ABC has asked for an evidentiary hearing on its motion. Item 7. Financial Statements and Exhibits (c) Exhibits: Exhibit Number (by reference to Item 601 of Regulation S-K) Description of Exhibit 99.(a) Florida Progress Investor News report dated July 16, 1998 reporting an increase in 1998 second-quarter earnings. 99.(b) Florida Progress media News Release dated July 16, 1998 reporting an increase in 1998 second-quarter earnings. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. The signature of the undersigned on behalf of each listed company shall be deemed to relate only to matters having reference to such company. FLORIDA PROGRESS CORPORATION FLORIDA POWER CORPORATION /s/ Pamela A. Saari By:____________________________ Pamela A. Saari Treasurer of each Registrant Date: July 16, 1998 EXHIBIT INDEX Exhibit No. Description of Exhibit 99.(a) Florida Progress Investor News report dated July 16, 1998 reporting an increase in 1998 second-quarter earnings. 99.(b) Florida Progress media News Release dated July 16, 1998 reporting an increase in 1998 second-quarter earnings. EX-99.(A) 2 EX-99.(A) TO FLORIDA PROGRESS/POWER FORM 8-K Florida Progress Corporation Investor News Analyst Contacts: Greg Beuris (813) 866-4442 Lauran Willoughby (813) 866-4837 [LOGO OMITTED] Hot weather boosts Florida Progress' second-quarter earnings St. Petersburg, Florida, July 16, 1998 - Florida Progress Corporation (NYSE:FPC), parent of St. Petersburg-based Florida Power Corporation, reported second-quarter 1998 earnings of $77.8 million, or $.80 per share, compared with 1997 second-quarter earnings from recurring operations (excluding one-time nuclear outage costs) of $61.6 million, or $.64 per share. The 26-percent increase in earnings, was due primarily to hotter than normal weather experienced during the second quarter of 1998 as compared to the same period in the prior year. Second-quarter earnings for 1997, including extended outage costs of $55.3 million, or $.57 per share, associated with Florida Power Corporation's Crystal River Nuclear Plant, were $6.3 million, or $.07 per share. (See "1997 Restatement" below.) FLORIDA POWER CORPORATION Florida Power, the largest subsidiary of Florida Progress, earned $67.7 million, or $.70 per share, on revenues of $663.8 million for the second quarter of 1998, compared with second-quarter 1997 earnings from recurring operations of $56.2 million, or $.58 per share, on revenues of $597.2 million. Including the impact of the restated extended nuclear outage costs, Florida Power's 1997 second-quarter earnings were $.9 million, or $.01 per share. System requirements for Florida Power were up 16.5 percent during the second quarter of 1998 compared with the same period last year. The higher demand for electricity was experienced throughout the quarter but was particularly high during the month of June, in which new temperature records were set throughout Florida Power's service territory and the state. Florida Power's retail kilowatt-hour sales for the second quarter of 1998 increased over 13 percent compared with the second quarter of 1997. In addition to higher customer usage due to the warmer weather, strong retail customer growth also contributed to the increase in retail kilowatt-hour sales. Residential customer growth was 1.8 percent, or approximately 20,000 new customers, since the second quarter of 1997. Wholesale kilowatt-hour sales increased nearly 125 percent during the second quarter of 1998 compared with 1997. Unlike 1997, Florida Power's 860-megawatt nuclear power plant has been in service throughout most of 1998. As a result, Florida Power was able to sell, at certain times during the quarter, available generating capacity in the short-term wholesale energy market, after meeting the energy needs of its customers. -- more -- Page 2 Florida Progress Corporation Investor News - 2nd quarter earnings The impact on earnings of these short-term bulk energy sales is minimal as the sales are considered a "pass-through" item and are included as a component of the utility's fuel adjustment clause. Florida Power accelerated the amortization of regulatory assets in the amount of $14 million in the second quarter of 1998. Approximately half of the accelerated write-off was related to termination costs associated with the Tiger Bay purchased power contracts. The remainder was attributable to deferred carrying charges on plant assets which had previously been placed in extended cold shutdowns. Operating and maintenance expenses for the quarter increased $5.5 million when compared with the second quarter of 1997. The increase was due primarily to an unplanned 32-day outage of a coal-fired, base load plant, as well as higher planned operating costs associated with the new Tiger Bay cogeneration facility that was purchased in July 1997. Excluding the accelerated amortization of the regulatory assets as described above, the increase in depreciation and amortization expense was due to a higher overall plant balance, primarily resulting from the addition of the Tiger Bay facility. Interest expense was $9 million higher during the quarter compared with the same period last year. Most of the increase was attributable to higher debt balances during 1998 that resulted largely from the issuance of $450 million of medium-term notes in July 1997 for the buy-out of the Tiger Bay purchase power contracts and the purchase of the related facility. ELECTRIC FUELS CORPORATION Electric Fuels earned $10.6 million or $.11 per share, during the second quarter, compared with $9.2 million or $.10 per share, in 1997. The 15-percent increase in earnings came from improved results from its Rail Services and Energy and Related Services business units. Improved second-quarter results for the Rail Services group stemmed from continued strong sales of trackworks and railcar parts and services. Also contributing to the $1.1 million increase in earnings for the group were higher volumes and operating margins resulting from acquisitions completed in both 1997 and 1998. Earnings for Electric Fuels' Energy and Related Services group were up $.7 million in the second quarter. The improvement in earnings was due primarily to increased deliveries by its offshore barge transportation division and lower operating costs. The increased offshore barge deliveries resulted largely from higher volumes of coal transported to Florida Power's Crystal River Energy Complex. The Inland Marine group experienced slightly lower earnings for the quarter when compared to 1997. Earnings from this group were down $.4 million due primarily to weak export market conditions that have lowered freight rates in 1998 when compared with 1997. -- more -- Page 3 Florida Progress Corporation Investor News - 2nd quarter earnings CORPORATE AND OTHER The loss of $.01 per share in the second quarter for corporate and other expenses represents a $.03 per share improvement when compared with 1997. The improvement is due primarily to a one-time gain realized from the buy-out of a purchase power contract associated with a cogeneration facility in which a Florida Progress subsidiary is a minority partner. 1997 RESTATEMENT In June 1998, Florida Power amended its second and third quarter 1997 Form 10-Qs and 1997 Form 10-K in order to comply with the view of the Securities and Exchange Commission (SEC) that Florida Power should have recognized extended nuclear outage costs as they were incurred during 1997. In the second quarter of 1997, Florida Power recognized nuclear outage costs incurred during the quarter and recorded an accrual for the nuclear outage costs it expected to incur for the remaining six months of 1997. The accrual was based on commitments and obligations associated with outage-related work planned for the remainder of the year. The financial results for the second, third and fourth quarters of 1997 were restated to reflect the recognition of nuclear outage costs as they were incurred. The change affected the financial results for the interim reporting periods but did not have any impact on the results of the fiscal year ended 1997. (See page 9 for restated quarterly earnings.) Florida Progress (NYSE:FPC) is a Fortune 500 diversified utility holding company with assets of $6.1 billion. Its principal subsidiary is Florida Power, the state's second largest electric utility serving about 1.3 million customers. Diversified operations include coal mining, marine operations and rail services. ###
FLORIDA PROGRESS CORPORATION CONSOLIDATED STATEMENTS OF INCOME Page 4 (UNAUDITED) (In millions, except per share amounts) Three Months Ended Six Months Ended Twelve Months Ended June 30 June 30 June 30 ------------------- ------------------- ------------------- 1998 1997 1998 1997 1998 1997 --------- --------- --------- --------- --------- --------- REVENUES: Electric utility $ 663.8 $ 597.2 $ 1,229.0 $1,151.0 $2,526.4 $2,408.6 Diversified 239.3 200.1 461.6 393.8 935.0 790.1 - ---------------------------------------------------------------------------------------------------------------------- 903.1 797.3 1,690.6 1,544.8 3,461.4 3,198.7 - ---------------------------------------------------------------------------------------------------------------------- EXPENSES: Electric utility: Fuel 135.9 118.8 245.1 213.7 489.5 447.8 Purchased power 110.8 116.8 209.8 244.0 456.4 515.0 Energy conservation cost 19.0 16.6 35.6 27.6 75.0 53.4 Operations and maintenance 116.2 110.7 218.6 213.1 427.8 428.3 Extended nuclear outage-O&M and replacement power costs - 89.9 5.1 97.8 80.6 97.8 Depreciation and amortization 90.4 74.2 171.4 148.5 348.8 305.9 Taxes other than income taxes 51.4 48.6 100.9 96.7 197.8 187.9 - ---------------------------------------------------------------------------------------------------------------------- 523.7 575.6 986.5 1,041.4 2,075.9 2,036.1 - ---------------------------------------------------------------------------------------------------------------------- Diversified: Cost of sales 192.8 169.1 386.6 340.9 799.6 674.4 Provision for loss on coal properties - - - - - 40.9 Loss related to life insurance subsidiary - - - - 97.6 - Other 19.0 14.8 31.8 29.7 62.8 64.3 - ---------------------------------------------------------------------------------------------------------------------- 211.8 183.9 418.4 370.6 960.0 779.6 - ------------------------------------------------------------------------------------------------------------------------ INCOME FROM OPERATIONS 167.6 37.8 285.7 132.8 425.5 383.0 - ------------------------------------------------------------------------------------------------------------------------ INTEREST EXPENSE AND OTHER: Interest expense 47.7 35.8 95.0 70.1 183.6 137.2 Allowance for funds used during construction (4.1) (2.3) (8.0) (4.4) (13.3) (8.3) Preferred dividend requirements of Florida Power .4 .4 .8 .8 1.5 2.2 (Gain) on sale of business - - - - - (44.2) Other expense (income) .6 (.7) .1 (.3) 1.8 .1 - ------------------------------------------------------------------------------------------------------------------------ 44.6 33.2 87.9 66.2 173.6 87.0 - ------------------------------------------------------------------------------------------------------------------------ INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 123.0 4.6 197.8 66.6 251.9 296.0 Income taxes 45.2 (1.7) 69.5 18.3 117.6 103.9 - ------------------------------------------------------------------------------------------------------------------------ INCOME FROM CONTINUING OPERATIONS 77.8 6.3 128.3 48.3 134.3 192.1 DISCONTINUED OPERATIONS, NET OF INCOME TAXES - - - - - (1.3) - ------------------------------------------------------------------------------------------------------------------------ NET INCOME $77.8 $ 6.3 $ 128.3 $ 48.3 $134.3 $ 190.8 - ------------------------------------------------------------------------------------------------------------------------ AVERAGE SHARES OF COMMON STOCK OUTSTANDING 97.0 97.1 97.1 97.0 97.1 97.0 - ------------------------------------------------------------------------------------------------------------------------ EARNINGS (LOSS) PER AVERAGE COMMON SHARE: CONTINUING OPERATIONS $.80 $.07 $1.32 $.50 $1.39 $1.98 DISCONTINUED OPERATIONS - - - - - (.01) - ------------------------------------------------------------------------------------------------------------------------- $.80 $.07 $1.32 $.50 $1.39 $1.97 - ------------------------------------------------------------------------------------------------------------------------- Regarding these financial statements: In June 1998, Florida Power restated its financial results for the second, third and fourth quarters of 1997 to reflect recognition of the extended nuclear outage costs as incurred. The change affected the financial results for the interim reporting periods but did not have any affect on the results for the fiscal year ended 1997. Effective December 31, 1997, the Company deconsolidated the accounts of Mid-Continent Life Insurance Company and established a provision for loss for the full amount of its investment. The deconsolidation has not been reflected in the consolidated financial statements of prior periods. Financial results for the twelve months ended 1997 reflects the recapitalization of the spin-off company, Echelon International, and its associated treatment as discontinued operations. These are interim statements. Reference should be made to Florida Progress Corporation's1997 Annual Report to shareholders. This report does not constitute an offer to sell or the solicitation of an offer to buy any securities.
FLORIDA PROGRESS CORPORATION CONSOLIDATED BALANCE SHEETS Page 5 (UNAUDITED) (In millions) June 30 -------------------------------- ASSETS 1998 1997 ------------ ------------- PROPERTY, PLANT AND EQUIPMENT: Electric utility plant in service and held for future use $ 6,210.6 $ 5,994.8 Less - Accumulated depreciation 2,621.2 2,440.2 Accumulated decommissioning for nuclear plant 238.4 207.1 Accumulated dismantlement for fossil plants 129.5 127.9 ------------------------------------------------------------------------------------------------------------------- 3,221.5 3,219.6 Construction work in progress 345.8 240.6 Nuclear fuel, net of amortization of $365.6 in 1998 and $356.7 in 1997 57.5 63.7 ------------------------------------------------------------------------------------------------------------------- Net electric utility plant 3,624.8 3,523.9 Other property, net of depreciation of $225.7 in 1998 and $186.7 in 1997 533.2 332.5 ------------------------------------------------------------------------------------------------------------------- 4,158.0 3,856.4 ------------------------------------------------------------------------------------------------------------------- CURRENT ASSETS: Cash and equivalents 9.7 19.1 Accounts receivable, net 425.5 326.7 Inventories, primarily at average cost: Fuel 78.9 87.1 Utility materials and supplies 92.6 95.0 Diversified materials 129.5 138.1 Underrecovery of fuel cost 39.6 59.0 Deferred income taxes 40.8 60.8 Other 47.9 18.0 ------------------------------------------------------------------------------------------------------------------- 864.5 803.8 ------------------------------------------------------------------------------------------------------------------- OTHER ASSETS: Investments: Loans receivable, net 31.0 35.0 Marketable securities - 238.6 Nuclear plant decommissioning fund 295.9 232.5 Joint ventures and partnerships 56.2 53.2 Deferred insurance policy acquisition costs - 123.9 Deferred purchased power contract termination costs 336.7 - Other 338.6 185.7 ------------------------------------------------------------------------------------------------------------------- 1,058.4 868.9 ------------------------------------------------------------------------------------------------------------------- $ 6,080.9 $ 5,529.1 ------------------------------------------------------------------------------------------------------------------- CAPITAL AND LIABILITIES CAPITAL: Common stock equity $ 1,799.8 $ 1,870.7 Cumulative preferred stock of Florida Power 33.5 33.5 Long-term debt 2,372.1 1,826.5 ------------------------------------------------------------------------------------------------------------------- 4,205.4 3,730.7 ------------------------------------------------------------------------------------------------------------------- CURRENT LIABILITIES: Accounts payable 254.6 216.1 Customers' deposits 100.4 95.1 Income taxes payable 63.4 10.5 Accrued other taxes 55.3 51.6 Accrued interest 60.4 37.2 Other 59.2 68.8 ------------------------------------------------------------------------------------------------------------------- 593.3 479.3 Notes payable 330.4 94.2 Current portion of long-term debt 56.3 25.0 ------------------------------------------------------------------------------------------------------------------- 980.0 598.5 ------------------------------------------------------------------------------------------------------------------- DEFERRED CREDITS AND OTHER LIABILITIES: Deferred income taxes 489.4 490.6 Unamortized investment tax credits 81.7 89.5 Insurance policy benefit reserves - 356.1 Other postretirement benefit costs 111.7 103.9 Other 212.7 159.8 ------------------------------------------------------------------------------------------------------------------- 895.5 1,199.9 ------------------------------------------------------------------------------------------------------------------- $ 6,080.9 $ 5,529.1 -------------------------------------------------------------------------------------------------------------------
FLORIDA PROGRESS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Page 6 (UNAUDITED) (In millions) Three Months Ended Six Months Ended Twelve Months Ended June 30 June 30 June 30 --------------------- -------------------- -------------------- 1998 1997 1998 1997 1998 1997 ---------- ---------- ---------- --------- --------- --------- OPERATING ACTIVITIES: Income from continuing operations $ 77.8 $ 6.3 $ 128.3 $ 48.3 $ 134.3 $ 192.1 Adjustments for noncash items: Depreciation and amortization 108.0 83.1 208.9 166.3 406.8 345.4 Extended nuclear outage - replacement power costs - 70.2 - 70.2 3.1 70.2 Provision for loss on investment in life insurance subsidiary - - - - 86.9 - Gain on sale of business - - - - - (44.2) Provision for loss on coal properties - - - - - 40.9 Deferred income taxes and investment tax credits, net (19.8) (8.6) (27.1) (20.9) (36.9) (51.2) Increase in accrued other postretirement benefit costs 2.7 1.9 4.3 3.9 9.0 16.0 Net change in deferred insurance policy acquisition costs - (.9) - (3.0) 1.3 (8.9) Net change in insurance policy benefit reserves - 14.8 - 30.8 21.9 60.4 Changes in working capital, net of effects from acquisition or sale of businesses: Accounts receivable (38.1) (43.9) (27.9) (59.4) (76.8) (32.5) Inventories 14.9 (5.0) 18.0 (30.0) 50.2 (9.4) Underrecovery of fuel cost (1.8) (23.6) (10.1) (46.6) 3.4 (71.6) Accounts payable 17.8 25.8 (15.2) 21.8 21.3 22.0 Income taxes payable 50.7 (26.3) 80.6 (16.9) 52.4 (14.8) Accrued other taxes 22.5 19.2 43.0 38.2 2.8 (2.3) Other (2.6) (10.9) (14.4) (13.1) (.1) (14.3) Other operating activities (1.6) 4.1 (4.3) 5.8 (48.3) (36.6) - ---------------------------------------------------------------------------------------------------------------------------- Cash provided by continuing operations 230.5 106.2 384.1 195.4 631.3 461.2 - ---------------------------------------------------------------------------------------------------------------------------- Cash provided by discontinued operations - - - - - 8.7 - ---------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------- 230.5 106.2 384.1 195.4 631.3 469.9 - ---------------------------------------------------------------------------------------------------------------------------- INVESTING ACTIVITIES: Property additions (including allowance for borrowed funds used during construction) (114.1) (93.7) (217.1) (188.5) (542.2) (317.1) Sales (purchases) of loans and securities, net .6 16.3 (7.1) 11.8 (29.9) (44.4) Proceeds from sales of properties and businesses 4.6 2.0 6.7 4.2 26.8 59.2 Acquisition of businesses (95.2) (14.3) (104.3) (14.3) (122.7) (64.9) Acquisition of cogeneration facility and payment of contract termination costs - - - - (445.0) - Investments in joint ventures and partnerships, net (1.5) (3.3) (2.0) (12.6) (19.9) (20.8) Investing activities of discontinued operations - - - - - 44.5 Other investing activities (77.3) (4.8) (82.5) (9.7) (95.0) (19.3) - ---------------------------------------------------------------------------------------------------------------------------- (282.9) (97.8) (406.3) (209.1) (1,227.9) (362.8) - ---------------------------------------------------------------------------------------------------------------------------- FINANCING ACTIVITIES: Issuance of long-term debt 45.0 - 189.1 - 671.9 178.0 Repayment of long-term debt (.7) (.7) (170.1) (22.2) (182.8) (210.5) Increase(decrease) in commercial paper with long-term support - 7.1 - 61.7 68.9 (.3) Redemption of preferred stock - - - - - (25.5) Equity contributions to discontinued operations - - - - - (23.7) Dividends paid on common stock (52.0) (50.9) (103.9) (101.9) (205.8) (201.7) Increase in short-term debt 62.9 38.3 115.6 90.1 236.3 94.2 Financing activities of discontinued operations - - - - - 95.4 Other financing activities (1.3) .4 (1.9) (.1) (1.3) (2.7) - ---------------------------------------------------------------------------------------------------------------------------- 53.9 (5.8) 28.8 27.6 587.2 (96.8) - ---------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 1.5 2.6 6.6 13.9 (9.4) 10.3 Beginning cash and equivalents 8.2 16.5 3.1 5.2 19.1 8.8 - ---------------------------------------------------------------------------------------------------------------------------- ENDING CASH AND EQUIVALENTS $9.7 $19.1 $9.7 $19.1 $9.7 $19.1 - ----------------------------------------------------------------------------------------------------------------------------
Florida Progress Corporation Selected Financial Information (Unaudited) Page 7 Three Months Ended Percent Six Months Ended Percent Twelve Months Ended Percent June 30 Positive June 30 Positive June 30 Positive 1998 1997 (Negative) 1998 1997 (Negative) 1998 1997 (Negative) ---------- ---------- ---------- --------- --------- --------- ------ ------ ---------- Earnings (Loss) Per Share: Florida Power Corporation $.70 $.58 20.7 $1.17 $1.06 10.4 $2.60 $2.46 5.7 ---------- ---------- ---------- ---------- ---------- --------- Electric Fuels Corporation .11 .10 10.0 .19 .13 46.2 .40 .27 48.1 Corporate and other (.01) (.04) 75.0 (.04) (.07) 42.9 (.17) (.11) (54.5) ---------- ---------- ---------- ---------- -------------------- Diversified Continuing before non- recurring .10 .06 66.7 .15 .06 150.0 .23 .16 43.8 ---------- ---------- ---------- ---------- -------------------- Continuing Ops before non-recurring .80 .64 25.0 1.32 1.12 17.9 2.83 2.62 8.0 Impact of nuclear outage - (.57) - - (.62) - (.48) (.62) 22.6 Provision for loss on coal properties - - - - - - - (.26) - Gain on sale of business - - - - - - - .24 - Loss related to life insurance sub- sidiary - - - - - - (.96) - - ---------- ---------- ---------- ---------- ------------------- Total Continuing Operations .80 .07 1,042.9 1.32 .50 164.0 1.39 1.98 (29.8) Discontinued Operations - - - - - - (.01) - ========== ========== ========== ========== ==================== $.80 $.07 1,042.9 $1.32 $.50 164.0 $1.39 $1.97 (29.4) ========== ========== ========== ========== ==================== Avg. shares outstanding (millions) 97.0 97.1 (.1) 97.1 97.0 .1 97.1 97.0 .1 Dividends per share $.535 $.525 1.9 $1.07 $1.05 1.9 $2.12 $2.08 1.9 Book value per share: Florida Power Corporation $18.37 $18.25 .7 Consolidated $18.55 $19.27 (3.7)
June 30 June 30 June 30 1998 1997 1998 1997 Amount Percent Amount Percent ---------- ---------- ------------------------------------------- Equity investments (percent): Capitalization(in millions): Florida Power Corporation 89 87 Common stock $1,799.8 39.2 $1,870.7 48.6 Electric Fuels Corporation 11 9 Preferred stock 33.5 .7 33.5 .9 Mid-Continent Life Insurance Co. - 4 Long-term debt 2,372.1 51.7 1,826.5 47.4 ---------- ---------- Total 100 100 Short-term debt 386.7 8.4 119.2 3.1 ---------- ---------- ------------------------------------------- Total $4,592.1 100.0 $3,849.9 100.0 ------------------------------------------- Note:In June 1998, Florida Power restated its financial results for the second, third and fourth quarters of 1997 to reflect recognition of the extended nuclear outage costs as incurred. The change affected the dfinancialeresultstforsthe interim reporting periods but did not have any affect on results for the fiscal year ended 1997. Financial results for the twelve months ended 1997 reflect the recapitalization of the spin-off company, Echelon International, and its associated treatment as discontinued operations.
Florida Power Corporation Selected Statistical Data (Unaudited) Page 8 (In millions, except billing degree days) Three Months Ended Six Months Ended Twelve Months Ended June 30 Percent June 30 Percent June 30 Percent 1998 1997 Change 1998 1997 Change 1998 1997 Change --------- --------- ----------- --------- --------- --------- ---------- --------- ---------- Revenues: Residential $335.5 $306.3 9.5 $644.2 $597.0 7.9 $1,362.5 $1,289.0 5.7 Commercial 153.7 145.4 5.7 277.4 269.6 2.9 576.2 560.1 2.9 Industrial 55.2 55.1 .2 103.0 107.0 (3.7) 203.9 214.1 (4.8) Other retail sales 35.0 34.1 2.6 65.0 63.9 1.7 134.5 132.0 1.9 ------- -------- -------- -------- -------- -------- 579.4 540.9 7.1 1,089.6 1,037.5 5.0 2,277.1 2,195.2 3.7 Sales for resale 43.8 20.3 115.8 80.7 57.4 40.6 174.0 137.2 26.8 ------- -------- -------- -------- -------- -------- 623.2 561.2 11.0 1,170.3 1,094.9 6.9 2,451.1 2,332.4 5.1 Other electric revenues 47.9 39.7 20.7 69.3 52.5 32.0 92.8 72.7 27.6 Deferred fuel (7.3) (3.7) - (10.6) 3.6 - (17.5) 3.5 - ------- -------- -------- -------- -------- -------- Total $663.8 $597.2 11.2 $1,229.0 $1,151.0 6.8 $2,526.4 $2,408.6 4.9 ------- -------- -------- -------- -------- -------- Kilowatt-hour sales billed: Residential 3,859.7 3,363.7 14.7 7,415.5 6,660.0 11.3 15,835.3 14,680.8 7.9 Commercial 2,497.7 2,269.0 10.1 4,528.6 4,263.4 6.2 9,522.5 9,007.2 5.7 Industrial 1,120.2 1,074.1 4.3 2,103.1 2,124.0 (1.0) 4,166.9 4,247.0 (1.9) Other retail sales 608.0 569.8 6.7 1,137.9 1,087.2 4.7 2,376.1 2,279.9 4.2 -------- -------- -------- -------- -------- -------- 8,085.6 7,276.6 11.1 15,185.1 14,134.6 7.4 31,900.8 30,214.9 5.6 Sales for resale 733.8 307.1 138.9 1,389.0 839.0 65.6 2,989.6 2,265.0 32.0 -------- -------- --------- --------- --------- --------- Total electric sales 8,819.4 7,583.7 16.3 16,574.1 14,973.6 10.7 34,890.4 32,479.9 7.4 -------- -------- --------- --------- --------- --------- System Requirements (KWH) 9,947 8,535 16.5 17,790 16,055 10.8 36,340 33,963 7.0 KWH Sales (Billed & Unbilled): Retail 8,767 7,738 13.3 15,865 14,526 9.2 32,205 30,336 6.2 Wholesale 1,031 459 124.6 1,682 896 87.7 3,217 2,181 7.5 Billing Degree Days: Cooling 819 470 74.3 843 495 70.3 3,782 3,358 12.6 Heating 70 12 483.3 532 309 72.2 666 407 63.6 Note: Revenues include amounts resulting from fuel, purchased power, and energy conservation clauses; which are designed to permit full recovery of these costs. Total revenues include billed revenues and unbilled revenues that are accrued for accounting purposes. Statistics for total kilowatt-hour sales include only billed kilowatt-hour sales. The statistic for retail and wholesale KWH sales includes both billed and unbilled sales. From 1995 through 1997, Florida Power, as ordered by state regulators, conducted a three-year test of residential revenue decoupling. Under the plan, abnormal weather variances did not impact earnings with respect to residential revenues.
Florida Progress Corporation Page 9 Selected Financial Information (Unaudited) (In millions, except per share amounts) Three Months Three Months Three Months Three Months Twelve Months Ended Ended Ended Ended Ended March 31, 1997 June 30, 1997 Sept. 30, 1997 Dec. 31, 1997 Dec. 31, 1997 1997 as amended: Florida Power: Net income $ 41.2 $ 0.9 $ 76.0 $ 16.3 $ 134.4 Earnings per share 0.42 0.01 0.78 0.17 1.38 Florida Progress: Net income (loss) 42.0 6.3 81.6 (75.6) 54.3 Earnings (loss) per share 0.43 0.07 0.84 (0.78) 0.56 1997 as originally reported: Florida Power: Net income (loss) 41.2 (43.6) 96.4 40.4 134.4 Earnings (loss) per share 0.42 (0.45) 0.99 0.42 1.38 Florida Progress: Net income (loss) 42.0 (38.2) 102.0 (51.5) 54.3 Earnings (loss) per share 0.43 (0.39) 1.05 (0.53) 0.56
EX-99 3 EX-99.(B) TO FLORIDA PROGRESS/POWER FORM 8-K EXHIBIT 99.(b) Florida Progress Corporation News Release Corporate Relations Department, St. Petersburg, Florida FOR IMMEDIATE RELEASE Media contact: [LOGO OMITTED] Mary Estes (727) 820-5348 FLORIDA PROGRESS REPORTS SECOND QUARTER EARNINGS Record Heat Boosts Energy Sales St. Petersburg, Fla. (July 16, 1998) -- Florida Progress Corporation (NYSE:FPC), parent of St. Petersburg-based Florida Power Corporation, today reported second-quarter 1998 earnings of $77.8 million, or $.80 a share compared with 1997 second-quarter earnings from recurring operations (excluding one-time nuclear outage costs) of $61.6 million, or $.64 a share. The improvement reflected record demand caused by the hotter than normal weather experienced during the second quarter of 1998, as well as continuing growth in the company's customer base. Florida Power president Joe Richardson, commenting on the results, said, "June's extraordinary hot weather created record demand for energy to meet the needs of customers throughout our service territory. We're proud of the dedication and determination with which our employees and our entire system responded to that situation. Florida Power is committed to meeting the needs of today's customers, and planning for the future growth of Florida." Second quarter results for 1997, including extended outage costs of $55.3 million, or $.57 a share associated with Florida Power Corporation's Crystal River Nuclear Plant, were $6.3 million, or $.07 per share. Florida Power, the largest subsidiary of Florida Progress, earned $67.7 million, or $.70 a share, on revenues of $663.8 million for the quarter, compared with 1997 earnings from recurring operations of $56.2 million, or $.58 a share on revenues of $597.2 million. Florida Power's retail kilowatt hour sales during the second quarter of 1998 increased approximately 13 percent compared to the second quarter of 1997. In addition to higher customer usage due to the warmer weather, strong retail customer growth contributed to the increase in kilowatt-hour sales. Average residential customer growth was 1.8 percent, or approximately 20,000 over 1997. Electric Fuels earned $10.6 million or $.11 a share, during the second quarter compared with $9.2 million or $.10 a share, in 1997. The increase in earnings came from improved results from its Rail Services and Energy and Related Services business units. The improved second quarter results for the Rail Services group stemmed from continued strong sales for trackwork and railcar parts and services. Also contributing to the increase were higher volumes and operating margins from 1997 and 1998 acquisitions. -continued- page 2. The improvement in Energy & Related Services' earnings were due primarily to increased deliveries by its offshore barge transportation division and lower operating costs. Florida Progress (NYSE:FPC) is a Fortune 500 diversified utility holding company with assets of $6.1 billion. Its principal subsidiary is Florida Power, the state's second largest electric utility serving about 1.3 million customers. Diversified operations include coal mining, marine operations and rail services. ### (earnings chart -- see attached)
Three Months Ended Twelve Months Ended JUNE 30 JUNE 30 ---------------------------------------------------------- 1998 1997 1998 1997 ------------ ------------ -------------- -------------- Revenues $903,100,000 $797,300,000 $3,461,400,000 $3,198,700,000 ------------ ------------ -------------- -------------- Income (loss) from: Florida Power 67,700,000 56,200,000 252,200,000 238,000,000 Electric Fuels 10,600,000 9,200,000 38,400,000 26,100,000 Corporate & other (500,000) (3,800,000) (16,400,000) (10,200,000) ------------ ------------ -------------- -------------- Continuing operations before non-recurring items 77,800,000 61,600,000 274,200,000 253,900,000 Non-recurring items (55,300,000) (139,900,000) (61,800,000) ------------ ------------ -------------- -------------- Continuing operations 77,800,000 6,300,000 134,300,000 192,100,000 Discontinued operations - - - (1,300,000) -------------------------- -------------- -------------- Net income (loss) $77,800,000 $6,300,000 $134,300,000 $190,800,000 ============ ============ ============== ============== Earnings (loss) per share (EPS): Florida Power $ .70 $ .58 $ 2.60 $ 2.46 Electric Fuels .11 .10 .40 .27 Corporate & other (.01) (.04) (.17) (.11) ------------ ------------ -------------- -------------- Income from continuing operations before non-recurring items $ .80 $ .64 $ 2.83 $ 2.62 Non-recurring items (.57) (1.44) (.64) ------------ ------------ -------------- -------------- Continuing operations .80 .07 1.39 1.98 Discontinued operations - - - (.01) ------------ ------------ -------------- -------------- Consolidated $ .80 $ .07 $ 1.39 $ 1.97 ============ ============ ============== ============== Average Common Shares Outstanding 97,045,075 97,057,713 97,056,909 97,034,292 Note: In June 1998, Florida Power restated its financial results for the second, third and fourth quarters of 1997 to reflect recognition of the extended nuclear outage costs as incurred. The change affected the financial results for the interim reporting periods but did not have any affect on results for the fiscal year ended 1997. Financial results for the twelve months ended 1997 reflect the recapitalization of the spin-off company, Echelon International, and its associated treatment as discontinued operations.
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