EX-99 2 ex99.txt FLORIDA PROGRESS CORPORATION INVESTOR NEWS REPORT 1 Florida Progress Corporation Investor News Analyst Contacts: Greg Beuris (727) 820-5734 Lauran Willoughby (727) 820-5737 FLORIDA PROGRESS' 2ND QUARTER RESULTS UP SIGNIFICANTLY EARNINGS ESTIMATE RAISED FOR 2000 ST. PETERSBURG, FLORIDA, AUGUST 1, 2000 - Florida Progress Corporation (NYSE:FPC) reported second-quarter 2000 earnings of $109.9 million, or $1.11 per share, compared with 1999 second-quarter earnings of $76.6 million, or $.78 per share. A RECONCILIATION OF FLORIDA PROGRESS' 2000 SECOND-QUARTER EARNINGS PER SHARE IS AS FOLLOWS: 1999 FLORIDA PROGRESS 2ND QTR EPS $ .78 FLORIDA POWER Sales of electricity & other revenues .09 Operations & maintenance .07 Other, net (.02) ----- .14 ELECTRIC FUELS .21 CORPORATE & OTHER (.02) ----- 2000 FLORIDA PROGRESS 2ND QTR EPS $1.11 ===== FLORIDA POWER CORPORATION Florida Power reported earnings of $.81 per share for the second quarter of 2000, compared with $.67 per share for the same period last year. The improved earnings were due primarily to higher kilowatt-hour sales and lower operation and maintenance expense. Florida Power's total kilowatt-hour sales increased 4.7 percent during the second quarter of 2000, compared with 1999. The improvement was primarily due to strong customer growth and a return to more normal temperatures. Retail sales were up 5.6 percent as Florida Power provided electric service to approximately 30,000 new customers during the second quarter of 2000 compared with last year. Weather during the second quarter returned to normal compared to the second quarter of 1999. Cooling degree days were 51 percent higher this year when compared with the same quarter last year. Operation and maintenance expense was down $11.3 million during the quarter. Most of the decrease is due primarily to the timing of planned maintenance and reliability projects, most of which are expected to occur later this year. -- more -- 2 Page 2 Florida Progress Corporation Investor News - Second Quarter Earnings ELECTRIC FUELS CORPORATION Electric Fuels earned $.36 per share in the second quarter, compared with $.15 per share during the same period last year. Most of the improvement in earnings came from the Energy & Related Services group, which includes the company's synthetic fuel operations. Earnings at the Energy and Related Services group were up $24.7 million, of which $11.1 million was due to the timing of the recognition of alternative fuel tax credits. The remaining amount of the increase was due primarily to higher synthetic fuel sales during the quarter compared with last year. Electric Fuels has interests in nine synthetic fuel plants, four of which were relocated and began operation during the first six months of 2000. Second-quarter sales of the coal-based synthetic fuel were approximately 1.4 million net tons, compared with .3 million net tons during the same period last year. Total synthetic fuel sales for 2000 are expected to be approximately 5 million net tons compared with 1.6 million net tons sold in 1999. Earnings from the Inland Marine Transportation group were up $1.3 million during the quarter when compared to the same period last year. A larger barge fleet and more favorable weather conditions more than offset the effect of higher diesel fuel prices during the second quarter of 2000 compared to last year. Results in the Rail Services group totaled $1.9 million for the quarter, a decrease of $3.8 million when compared to 1999. The decrease is the result of weak demand from the major railroad carriers for mechanical and track work. Although demand among the Class 1 carriers is not expected to improve substantially during the second half of 2000, the long-term outlook for these services remains positive. Electric Fuels' second-quarter results also reflect higher interest expense when compared with last year due largely to higher debt balances resulting from the expansion of its operations. In addition, employee-related general administrative expenses have increased when compared with the second quarter of last year. CORPORATE & OTHER Corporate and other expenses were higher during the second quarter of 2000 compared with 1999 due primarily to costs associated with the business combination with Carolina Power & Light. 2000 EARNINGS OUTLOOK Florida Progress' current estimate of its 2000 earnings per share is around $3.60 per share. The increase over the company's previous estimate of $3.50 per share is due primarily to a projected increase in synthetic fuel sales for 2000, partially offset by lower earnings from its Rail Services group. Florida Progress' estimate of $3.60 per share, which is on an operating basis, is 13 percent over 1999's operating earnings per share of $3.18, which excludes a $.03 per share nonrecurring gain. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This news release contains forward-looking statements including projected synthetic fuel sales for 2000, the demand for rail services and projected 2000 earnings per share. These statements involve risks and uncertainties that could cause actual results or outcomes to differ materially from expectations. -- more -- 3 Page 3 Florida Progress Corporation Investor News - Second Quarter Earnings Key factors that could have a direct bearing on the company's ability to meet these projections include continued successful operation of synthetic fuel plants, market acceptance of synthetic fuel, competition from competing products, impacts of environmental regulations on potential buyers, actions of various regulatory bodies, economic and weather conditions affecting the demand for and supply of not only electricity but also Electric Fuels' barge, rail and other services, and other factors. Florida Progress (NYSE:FPC) is a Fortune 500 diversified utility holding company with assets of $6.7 billion. Its principal subsidiary is Florida Power, one of the nation's leading electric utilities committed to serving its 1.4 million customers in Florida with competitively priced energy, excellent reliability, and outstanding customer service. Diversified operations include energy operations, marine operations and rail services. ### 4
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 ------------------------ ------------------------ ------------------------ 2000 1999 2000 1999 2000 1999 ----------- ----------- ------------ ----------- ----------- ----------- REVENUES: Electric utility $ 701.4 $ 671.7 $ 1,323.3 $ 1,242.4 $ 2,713.5 $ 2,661.6 Diversified 392.1 304.6 720.3 554.3 1,378.5 1,064.8 ----------------------------------------------------------------------------------------------------------------------------- 1,093.5 976.3 2,043.6 1,796.7 4,092.0 3,726.4 ----------------------------------------------------------------------------------------------------------------------------- EXPENSES: Electric utility: Fuel 154.2 143.5 288.2 257.2 627.0 607.8 Purchased power 120.3 108.4 223.4 198.7 438.8 422.7 Energy conservation costs 15.9 19.4 30.0 36.5 74.7 80.5 Operation and maintenance 109.5 120.8 209.5 217.9 458.0 470.9 Depreciation and amortization 92.1 93.2 177.8 174.0 351.3 349.7 Taxes other than income taxes 52.8 51.1 105.9 103.0 206.0 205.7 ----------------------------------------------------------------------------------------------------------------------------- 544.8 536.4 1,034.8 987.3 2,155.8 2,137.3 ----------------------------------------------------------------------------------------------------------------------------- Diversified: Cost of sales 377.4 269.7 681.6 494.8 1,259.1 935.4 Loss related to life insurance subsidiary -- -- - - 11.8 - Other 21.1 15.8 41.9 30.4 89.3 55.1 ----------------------------------------------------------------------------------------------------------------------------- 398.5 285.5 723.5 525.2 1,360.2 990.5 ----------------------------------------------------------------------------------------------------------------------------- INCOME FROM OPERATIONS 150.2 154.4 285.3 284.2 576.0 598.6 ----------------------------------------------------------------------------------------------------------------------------- INTEREST EXPENSE AND OTHER: Interest expense 48.2 43.9 93.4 88.9 178.1 181.0 Allowance for funds used during construction (1.0) (1.2) (1.9) (6.3) (2.8) (15.2) Distributions on company obligated mandatorily redeemable preferred securities 5.4 4.6 10.7 4.6 21.3 4.6 Other expense (income), net (3.2) 1.0 (3.6) (3.3) (13.6) (4.6) ----------------------------------------------------------------------------------------------------------------------------- 49.4 48.3 98.6 83.9 183.0 165.8 ----------------------------------------------------------------------------------------------------------------------------- INCOME BEFORE INCOME TAXES 100.8 106.1 186.7 200.3 393.0 432.8 Income taxes (9.1) 29.5 .3 56.1 35.9 135.2 ----------------------------------------------------------------------------------------------------------------------------- NET INCOME $ 109.9 76.6 $ 186.4 $ 144.2 $ 357.1 297.6 ============================================================================================================================= AVERAGE SHARES OF COMMON STOCK OUTSTANDING 98.6 98.0 98.6 97.8 98.5 97.4 ============================================================================================================================= EARNINGS PER AVERAGE COMMON SHARE (Basic and Diluted): $ 1.11 .78 $ 1.89 $ 1.48 $3.63 $3.06$ =============================================================================================================================
REGARDING THESE FINANCIAL STATEMENTS: THESE ARE INTERIM STATEMENTS. REFERENCE SHOULD BE MADE TO FLORIDA PROGRESS CORPORATION'S 1999 ANNUAL REPORT TO SHAREHOLDERS. THIS REPORT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES. 5
FLORIDA PROGRESS CORPORATION SELECTED FINANCIAL INFORMATION (UNAUDITED) PAGE 5 Three Months Ended Six Months Ended Twelve Months Ended June 30 June 30 June 30 -------------------- Percent --------------- Percent ------------------------- Percent 2000 1999 Change 2000 1999 Change 2000 1999 Change -------- ----------- -------- ------- ------- ----------- ------------ ------------ ------------ Earnings Per Share: Florida Power Corporation $.81 $.67 20.9 $1.45 $1.31 10.7 $2.84 $2.70 5.2 -------- ----------- ------- ------- ------------ ------------ Electric Fuels Corporation .36 .15 140.0 .57 .24 137.5 .97 .48 102.1 Corporate and other (.06) (.04) (50.0) (.13) (.07) (85.7) (.18) (.12) (50.0) -------- ----------- ------- ------- ------------ ------------ Diversified continuing .30 .11 172.7 .44 .17 158.8 .79 .36 119.4 -------- ----------- ------- ------- ------------ ------------ Total $1.11 $.78 42.3 $1.89 $1.48 27.7 $3.63 $3.06 18.6 ======== =========== ======= ======= ============ ============ Average shares outstanding (millions) 98.6 98.0 .6 98.6 97.8 .8 98.5 97.4 1.1 Dividends per share $.555 $.545 1.8 $1.11 $1.09 1.8 $2.20 $2.16 1.9 Book value per share: Florida Power Corporation $19.52 $18.82 3.7 Consolidated $21.22 $19.70 7.7 June 30 June 30 2000 1999 June 30 ------------------- ------------------------- 2000 1999 Amount Percent Amount Percent ------- ----------- ----------------------------------------------- Equity investments (percent): Capitalization (in millions): Florida Power Corporation 81 86 Common stock $2,092.5 42.1 $1,934.8 41.2 Electric Fuels Corporation 15 12 Preferred stock 33.5 .7 33.5 .7 Other subsidiaries 4 2 Preferred securities * 300.0 6.0 300.0 6.4 ------- ----------- Total 100 100 Long-term debt 2,132.0 42.9 2,282.5 48.6 ======= =========== Short-term debt 414.2 8.3 140.9 3.1 ----------------------------------------------- Total $4,972.2 100.0 $4,691.7 100.0 ===============================================
* Quarterly income preferred securities 6
FLORIDA POWER CORPORATION SELECTED STATISTICAL DATA (UNAUDITED) PAGE 6 (In millions, except billing degree days) Three Months Ended Six Months Ended Twelve Months Ended June 30 June 30 June 30 ----------------------- Percent ------------------ Percent ---------------------- Percent 2000 1999 Change 2000 1999 Change 2000 1999 Change ------------ ---------- ------- --------- -------- ------- ----------- ---------- -------- Revenues: Residential $347.1 $326.9 6.2 $666.3 $625.6 6.5 $1,435.6 $1,406.0 2.1 Commercial 165.3 153.3 7.8 301.2 284.7 5.8 634.1 616.2 2.9 Industrial 53.5 51.7 3.5 104.5 101.0 3.5 211.1 212.4 (.6) Other retail sales 37.6 34.9 7.7 69.8 66.0 5.8 145.5 143.3 1.5 ------------ ----------- --------- --------- ----------- ----------- 603.5 566.8 6.5 1,141.8 1,077.3 6.0 2,426.3 2,377.9 2.0 Wholesale sales 54.1 43.8 23.5 114.0 92.6 23.1 249.5 217.7 14.6 ------------ ----------- --------- --------- ----------- ----------- 657.6 610.6 7.7 1,255.8 1,169.9 7.3 2,675.8 2,595.6 3.1 Other electric revenues (1) 35.7 47.6 (25.0) 62.8 71.2 (11.8) 51.1 68.9 (25.8) Deferred fuel (2) 8.1 13.5 n/m* 4.7 1.3 n/m* (13.4) (2.9) n/m* ------------ ----------- --------- --------- ----------- ----------- Total $701.4 $671.7 4.4 $1,323.3 $1,242.4 6.5 $2,713.5 $2,661.6 1.9 ============ =========== ========= ========= =========== =========== Kilowatt-hour sales billed: Residential 4,065.4 3,780.8 7.5 7,799.8 7,199.6 8.3 16,845.0 16,310.4 3.3 Commercial 2,757.9 2,545.3 8.4 5,030.5 4,723.5 6.5 10,633.8 10,194.2 4.3 Industrial 1,101.4 1,082.5 1.7 2,166.5 2,110.1 2.7 4,390.1 4,382.4 .2 Other retail sales 671.7 618.6 8.6 1,250.9 1,178.4 6.2 2,608.2 2,526.1 3.3 ------------ ----------- --------- --------- ----------- ----------- 8,596.4 8,027.2 7.1 16,247.7 15,211.6 6.8 34,477.1 33,413.1 3.2 Wholesale sales 1,006.7 962.3 4.6 2,291.0 1,969.9 16.3 5,177.4 4,445.4 16.5 ------------ ----------- --------- --------- ----------- ----------- Total electric sales 9,603.1 8,989.5 6.8 18,538.7 17,181.5 7.9 39,654.5 37,858.5 4.7 ============ =========== ========= ========= =========== =========== System Requirements (KWH) 10,487 9,960 5.3 19,358 17,983 7.6 40,534 37,956 6.8 KWH Sales (Billed & Unbilled): Retail 8,951 8,479 5.6 16,609 15,688 5.9 34,481 33,274 3.6 Wholesale 1,174 1,193 (1.6) 2,428 2,160 12.4 5,257 4,302 22.2 ------------ ----------- --------- --------- ----------- ----------- 10,125 9,672 4.7 19,037 17,848 6.7 39,738 37,576 5.8 ============ =========== ========= ========= =========== =========== Billing Degree Days: Cooling 748 495 51.1 748 495 51.1 3,699 3,811 (2.9) Heating 21 50 (58.0) 405 379 6.9 468 404 15.8 Normal Average Billing Degree Days: Cooling 720 696 3.4 730 702 4.0 3,719 3,697 .6 Heating 45 44 2.3 437 444 (1.6) 544 547 (.5)
Note: (1) In the 4th quarter of 1999 and 1998, the FPSC approved the establishment of a regulatory liability for the purpose of deferring nonfuel revenues. The 1999 and 1998 deferrals were $44.4 million and $10.1 million, respectively. In the 2nd quarter of 1999, Florida Power recognized the 1998 $10 million deferral in Other electric revenues and applied it to the amortization of the Tiger Bay regulatory asset, which resulted in no impact to 1999 earnings. Other electric revenues also includes unbilled revenues. (2) Revenues include amounts resulting from fuel, purchased power, and energy conservation clauses, which are designed to permit full recovery of these costs. * Not meaningful