UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
__________________
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _________
Commission file number 1-3382
______
CAROLINA POWER & LIGHT COMPANY
______________________________
(Exact name of registrant as specified in its charter)
North Carolina 56-0165465
______________ ________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
411 Fayetteville Street, Raleigh, North Carolina 27601-1748
___________________________________________________________
(Address of principal executive offices)
(Zip Code)
919-546-6111
____________
(Registrant's telephone number, including area code)
__________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date. Common Stock (Without Par Value) shares outstanding at
October 31, 1995: 153,889,022
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
______ ____________________
Reference is made to the attached Appendix containing
the Consolidated Interim Financial Statements for the periods
ended September 30, 1995. The amounts are unaudited but, in the
opinion of management, reflect all adjustments necessary to fairly
present the Company's financial position and results of operations
for the interim periods.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
______ _________________________________________________
Results of Operations
For the Three, Nine and Twelve Months Ended September 30, 1995,
As Compared With the Corresponding Periods One Year Earlier
_______________________________________________________________
Operating Revenues: For the three, nine and twelve months
ended September 30, 1995, operating revenues increased due to the
following factors (in millions):
Three Months Nine Months Twelve Months
____________ ___________ _____________
Customer Growth/Changes
In Usage Patterns $33 $88 $118
Weather 31 7 (25)
Price (6) (55) (73)
Sales to North Carolina Eastern
Municipal Power Agency 1 (21) (27)
Sales to Other Utilities 11 29 36
___ ___ ____
Total $ 70 $ 48 $ 29
==== ==== ====
The increase in the weather component of revenue for the
three months ended September 30, 1995, is the result of warmer
weather in the current period as compared to the prior period.
The decrease in the price component of revenue for the nine- and
twelve-month periods is due primarily to the expiration in July
1994 of a North Carolina rate rider under which the Company was
allowed recovery of abandoned plant costs. The reduction in
revenue did not significantly impact net income due to a
corresponding decrease in amortization expense. In addition,
approximately $15 million of the price component decrease for the
nine-month period and approximately $20 million for the twelve-
month period is attributable to a decrease in the fuel cost
component of revenue. Sales to North Carolina Eastern Municipal
Power Agency (Power Agency) decreased for the nine- and twelve-
month periods due to greater availability of the jointly-owned
generating units. Sales to other utilities increased for the nine-
and twelve-month periods due to greater availability of the
Company's generating units. In addition, the Company was more
active in the bulk power market, contributing to the increase in
sales to other utilities for all periods.
Operating Expenses: The increase in fuel for generation for
the three and nine months ended September 30, 1995, is primarily
the result of 9% and 7% increases in total generation,
respectively. Also contributing to the increase for the three-
month period is a decrease in lower-cost nuclear generation
primarily attributable to a nuclear plant outage during the
current period. Despite a 6% increase in total generation, fuel
for generation decreased for the twelve months ended
September 30, 1995, due to greater availability of the Company's
nuclear generating units in the current period. During this
period, lower-cost nuclear generation, as a percentage of total
generation, increased and higher-cost fossil generation
correspondingly decreased.
For the three months ended September 30, 1995, deferred fuel
cost decreased primarily due to higher fuel costs resulting from a
nuclear plant outage in the current period. In addition, greater
demand in the current period resulted in increased generation at
the higher-cost fossil plants.
Purchased power decreased for the nine and twelve months
ended September 30, 1995, due to reduced purchases from Power
Agency in accordance with the Harris Plant buyback agreement that
stipulates a decrease in the buyback percentage from 50% in 1993
and 1994 to 33% in 1995. For the twelve-month period, the
decrease also reflects lower purchases from other utilities, as a
result of greater availability of Company generating facilities in
the current period. For the three-month period, purchased power
increased due to increased purchases from other utilities as a
result of warmer weather and a nuclear plant outage in the current
period.
For the nine and twelve months ended September 30, 1995,
maintenance expense decreased due to shorter nuclear outages in
the current periods as compared to the prior periods. The
increase in the three-month period is primarily due to a nuclear
plant outage during the current period.
For all periods, the decreases in depreciation and
amortization reflect the completion of the amortization of
abandoned plant costs for Harris Unit No. 2. For the nine- and
twelve-month periods, the decrease also reflects the completion of
amortization of costs associated with the North Carolina rate
rider.
The increase in income tax expense for all periods is
primarily due to an increase in operating income. Additionally,
contributing to the increase for the nine- and twelve-month periods is a
reduction of expense in the prior periods related to certain Internal
Revenue Service (IRS) audit issues.
Other Income (Expense): The increase in the income tax
credit for all periods ended September 30, 1995, is primarily
attributable to lower non-operating income in the current periods.
The decrease in Harris Plant carrying costs for the twelve
months ended September 30, 1995, is primarily related to the
Company's settlement with North Carolina Electric Membership
Corporation in 1993.
The decrease in interest income for the nine- and twelve-
month periods is primarily due to the June 1994 recording of
interest income related to certain IRS audit issues.
Interest Charges: Other interest charges increased for all
periods ended September 30, 1995, primarily due to a $6 million
interest accrual related to the 1995 North Carolina Utilities
Commission Fuel Order. Due to the improved performance of the
Company's nuclear facilities during the test year ended March 31,
1995, the fuel component of customer rates exceeded actual fuel
costs incurred. As a result, the Company must refund this over-
recovery of fuel cost with interest over the twelve month period
beginning September 15, 1995.
Material Changes in Capital Resources and Liquidity
From December 31, 1994, to September 30, 1995
and From September 30, 1994, to September 30, 1995
__________________________________________________
During the nine and twelve months ended September 30, 1995,
the Company issued long-term debt of $185 million and $235
million, respectively. The proceeds of these issuances, along
with the issuance of short-term debt and internally generated
funds, financed the redemption or retirement of long-term debt
totaling $252 million during the nine and twelve months ended
September 30, 1995.
In order to provide flexibility in the timing and amounts of
long-term financing, the Company uses short-term financing in the
form of commercial paper backed by revolving credit agreements. As
of September 30, 1995, the Company's credit facilities total $285
million, consisting of long-term agreements totaling $185 million
and a $100 million short-term agreement. The Company had $17
million of commercial paper outstanding at September 30, 1995.
The Company's capital structure as of September 30 was as
follows:
1995 1994
____ ____
Common Stock Equity 48.22% 49.82%
Long-term Debt 49.15% 47.46%
Preferred Stock 2.63% 2.72%
The Company's First Mortgage Bonds are currently rated "A2"
by Moody's Investors Service, "A" by Standard & Poors and "A+" by
Duff & Phelps. Moody's Investors Service, Standard & Poors and
Duff & Phelps have rated the Company's commercial paper "P-1", "A-
1" and "D-1" respectively.
In 1994, the Board of Directors of the Company authorized
the Executive Committee of the Board to repurchase up to 10
million shares of the Company's common stock on the open market.
Under this stock repurchase program, the Company has purchased
approximately 6.8 million shares from July 1994 through September
1995. The decrease in average common shares outstanding resulted
in an increase in earnings per common share of approximately $.04,
$.07 and $.07 for the three, nine and twelve months ended
September 30, 1995, respectively.
Impact of New Accounting Standard
_________________________________
The Financial Accounting Standards Board has issued
Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of." The provisions of the Statement, which must
be implemented by the Company for the year beginning January 1,
1996, require a review of long-lived assets and certain
identifiable intangibles for impairment whenever events or changes
in circumstances indicate the carrying amount may not be
recoverable. If such a review indicates that the carrying amount
of an asset is not recoverable, an impairment loss must be
recognized. The Company's initial review indicates that the
implementation of this Statement will not have a material impact
on the results of operations. In accordance with the requirements
of the Statement, the Company will periodically review its long-
lived assets to determine if an impairment loss exists.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
______ _________________
Legal aspects of certain matters are set forth in Item 5 below.
Item 2. Changes in Securities )
______ _____________________ )
)
)
Item 3. Defaults upon Senior Securities ) Not applicable
_______ _______________________________ ) for the quarter
) ended September 30, 1995.
)
)
Item 4. Submission of Matters to a Vote )
of Security Holders )
______ _______________________________ )
Item 5. Other Information
______ _________________
1. (Reference is made to the Company's 1994 Form 10-K
General, page 3, paragraph 4.a.). A 60-minute
system peak demand record of 10,156 megawatts (MW)
was reached on August 14, 1995. At the time of
this peak demand, the Company's capacity margin
based on installed capacity (less unavailable
capacity) and scheduled firm purchases and sales
was approximately 5.45%.
2. (Reference is made to the Company's 1994 Form 10-
K, Generating Capability, page 4, paragraph 3.)
With regard to the Company's plan to construct ten
new combustion turbine generating units adjacent
to the Company's Lee Steam Electric Plant in Wayne
County, North Carolina, on September 27, 1995, the
Company filed an Application for a Certificate of
Public Convenience and Necessity with the North
Carolina Utilities Commission (NCUC) seeking
permission to construct combustion turbines with a
combined capacity of 500 MW at the Wayne County
site. The units are scheduled to begin commercial
service in 1998. The NCUC hearing in this matter
is scheduled for January 9, 1996. Although the
Company's resource addition plans have not
changed, the Company elected not to seek
permission at the present time to construct the
entire amount of capacity as set forth in its
preliminary plans so that it can evaluate other
resource options. The Company cannot predict the
outcome of this matter.
3. (Reference is made to the Company's 1994 Form 10-
K, Competition and Franchises, page 8, paragraph
1.b. Reference is also made to the Company's Form
10-Q for the quarter ended March 31, 1995, Item 5,
paragraph 1.) With regard to the Notice of
Proposed Rulemaking (Proposal) issued by the
Federal Energy Regulatory Commission (FERC) on
March 29, 1995, that would establish guidelines
for wholesale wheeling of electric power, the
Company filed comments regarding the Proposal with
the FERC on August 7, 1995. In those comments, the
Company disagreed with the FERC's approach to
regulating wholesale wheeling, and indicated that
in issuing the proposed guidelines the FERC
exceeded its authority. The Company also
suggested ways to improve the proposed guidelines,
in the event that they are enacted. On August 11,
1995, the Company filed comments concerning the
FERC's inquiry regarding the potential
environmental impact of the Proposal. In those
comments, the Company questioned whether the FERC
had complied with the requirements of the National
Environmental Policy Act. On October 4, 1995,
the Company filed reply comments which addressed a
number of specific points made in the initial
comments other parties filed regarding the
Proposal. The Company cannot predict the outcome
of this matter.
4. (Reference is made to the Company's 1994 Form 10-
K, Competition and Franchises, page 8,
paragraph 1.b. Reference is also made to the
Company's Form 10-Q for the quarter ended
June 30, 1995, Item 5, paragraph 1.) With regard
to the petition filed with the NCUC on February 8,
1995 by the Carolina Utility Customers
Association, Inc. requesting that the NCUC hold a
generic hearing to address various retail wheeling
issues, in an order dated July 21, 1995, the NCUC
requested that interested parties suggest specific
issues for further consideration. On September
19, 1995, the Company filed with the NCUC a list
of specific issues it believes should be addressed
prior to any form of retail wheeling being allowed
in the state of North Carolina. The issues
include, but are not limited to, (i) concerns
about system planning and service reliability;
(ii) the drastic changes to the laws governing
utility regulation that would need to be
implemented before retail wheeling could be
allowed; (iii) whether retail choice promotes cost
reduction rather than cost shifting; and (iv) how
will stranded costs be determined and recovered.
The Company cannot predict the outcome of this
matter.
5. (Reference is made to the Company's 1994 Form 10-
K, Competition and Franchises, page 8,
paragraph 1.d. Reference is also made to the
Company's Form 10-Q for the quarter ended June 30,
1995, Item 5, paragraph 3.) With regard to the
bids submitted by the Company in response to North
Carolina Electric Membership Corporation's (NCEMC)
two requests for proposals, on September 13, 1995,
NCEMC notified the Company that it had decided to
suspend negotiations regarding the Company's bids
at this time, but requested that the Company leave
its bids open for future consideration. Under
the terms of the Power Coordination Agreement,
dated August 27, 1993, between the Company and
NCEMC, reductions in the baseload capacity NCEMC
purchases from the Company beyond the year 2000
are subject to specific limits and require five
years notice. NCEMC has not officially notified
the Company that the baseload power to be supplied
to NCEMC by the Company beginning in 2001 will be
provided by another entity. The Company cannot
predict the outcome of this matter.
6. (Reference is made to the Company's 1994 Form 10-
K, Financing Program, page 10, paragraph 5.) As
of September 30, 1995, the Company's credit
facilities total $285 million, consisting of long-
term agreements totaling $185 million and a $100
million short-term agreement.
7. (Reference is made to the Company's 1994 Form 10-
K, Retail Rate Matters, page 12, paragraph 3.
Reference is also made to the Company's Form 10-Q
for the quarter ended June 30, 1995, Item 5,
paragraph 7.) With regard to the Company's 1995
Integrated Resource Plan (IRP), which was filed
with the NCUC on April 28, 1995, by order dated
September 8, 1995, the NCUC revised the filing and
hearing schedule in this proceeding. The NCUC has
indefinitely postponed the hearing that was
scheduled for October 10, 1995, in order to better
identify and refine the evidentiary issues so that
the hearing can be more clearly focused and
efficiently managed. The order also required all
parties not previously filing testimony to file
comments on the utilities' prefiled testimony by
October 10, 1995, and allowed all parties to file
reply comments by October 23, 1995. In a
subsequent order, the NCUC established November 7,
1995 as the deadline for intervenors to respond to
the reply comments, and allowed the electric
utilities to file rebuttal comments by November
14, 1995. The Company cannot predict the outcome
of this matter.
8. (Reference is made to the Company's 1994 Form 10-
K, Retail Rate Matters, page 12, paragraph 5.
Reference is also made to the Company's Form 10-Q
for the quarter ended June 30, 1995, Item 5,
paragraph 8.) With regard to the Company's annual
North Carolina fuel case proceeding, by order
dated September 6, 1995, the NCUC approved the
Company's request for a reduction in the fuel
expense portion of the Company's rates, reflecting
the Company's improved nuclear performance, and
refunding approximately $44 million
in fuel-related revenues, which exceeded actual
costs for the test period, and $6 million in
related interest. The new fuel factor became
effective on September 15, 1995, and will remain
in effect for one year.
With regard to the South Carolina jurisdiction,
the Company's fall 1995 fuel case hearing was held
on September 13, 1995, and by order dated
September 25, 1995, the South Carolina Public
Service Commission (SCPSC) approved the
continuation of the existing fuel factor of 1.34
cents/kwh for the six month period October 1, 1995
through March 31, 1996, as requested by the
Company.
9. (Reference is made to the Company's 1994 Form 10-
K, Nuclear Matters, page 19, paragraph 7.b.) With
regard to the Individual Plant Examinations (IPEs)
required by the Nuclear Regulatory Commission, in
June 1995, the Company completed and submitted the
results of the second phase of the IPEs (for
externally initiated events) for the Company's
three nuclear plants. The results of the IPEs
indicated that some procedural changes may be
required for the Harris and Brunswick Plants.
Those results also indicated that both minor
procedural changes and minor plant modifications
may be required for the Robinson Plant. Although
the Company cannot predict at this time the exact
magnitude of the financial and operational impacts
of the second phase of the IPEs, it does not
expect those impacts to be material to the results
of operations of the Company.
10. (Reference is made to the Company's 1994 Form 10-
K, Other Matters, page 27, paragraph 2. Reference
is also made to the Company's Forms 10-Q for the
quarter ended March 31, 1995, Item 5, paragraph 6,
and for the quarter ended June 30, 1995, Item 5,
paragraph 17.) With regard to the independent
safety inspection report for the Marshall
Hydroelectric Project, on August 17, 1995, a
meeting was held between the Company and the FERC
to discuss the FERC's June 15, 1995, request for
further analyses. As a result of that meeting,
the Company submitted the first phase of the
requested analyses to the FERC by letter dated
September 15, 1995. The Company cannot predict
the outcome of this matter.
11. (Reference is made to the Company's 1994 Form 10-
K, Other Matters, page 27, paragraph 4. Reference
is also made to the Company's Form 10-Q for the
quarter ended June 30, 1995, Item 5, paragraph
18.) With regard to the tax refund dispute (Civil
Action No. 5:94-CV-313-BR3) in which the Company
is seeking a refund of certain tax and interest
related to the Harris Plant depreciation
deductions that were previously disallowed by the
Internal Revenue Service, on August 31, 1995, the
U.S. Government (Government) filed a Motion for
Summary Judgment. The Company filed a response in
opposition to the Government's Motion. By Order
dated October 18, 1995, the court denied the
Government's Motion for Summary Judgment. It is
anticipated that a trial in this matter will begin
in late 1995 or early 1996. The Company cannot
predict the outcome of this matter.
12. (Reference is made to the Company's 1994 Form 10-
K, Other Matters, page 27, paragraph 6. Reference
is also made to the Company's Form 10-Q for the
quarter ended March 31, 1995, Item 5, paragraph
9.) With regard to the Company's wholly-owned
subsidiary, CaroNet, Inc. (CaroNet), in addition
to participating in the regional partnership that
will operate a personal communications services
system, CaroNet plans to provide intrastate and
interstate telecommunications services as a
wholesaler. On May 15, 1995 and May 22, 1995,
CaroNet filed applications with the NCUC and the
SCPSC, respectively, for a Certificate of Public
Convenience and Necessity, seeking permission to
provide wholesale intrastate telecommunications
services in North Carolina and South Carolina. By
order dated November 3, 1995, the NCUC stated that
it will no longer regulate the provision of
wholesale intrastate telecommunications services.
As a result of this order, the application CaroNet
filed with the NCUC will be withdrawn. The
hearing regarding the application filed with the
SCPSC was held on November 1, 1995, but the SCPSC
has not yet issued its decision. The Company
cannot predict the outcome of this matter.
Item 6. Exhibits and Reports on Form 8-K
______ ________________________________
(a) Exhibits
None.
(b) Reports on Form 8-K filed during or with respect
to the quarter
None.
SIGNATURES
Pursuant to requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
CAROLINA POWER & LIGHT COMPANY
(Registrant)
By: /s/ Glenn E. Harder
Executve Vice President
and Chief Financial Officer
Date: November 9, 1995
<TABLE>
<CAPTION>
Carolina Power & Light Company
(ORGANIZED UNDER THE LAWS OF NORTH CAROLINA)
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(NOT AUDITED BY INDEPENDENT AUDITORS)
SEPTEMBER 30, 1995
<S> <C> <C> <C> <C> <C> <C>
STATEMENTS OF INCOME
Three Months Ended Nine Months Ended Twelve Months Ended
(In thousands September 30 September 30 September 30
except per share amounts) 1995 1994 1995 1994 1995 1994
- --------------------------------------------------------------------------------------------------------------------------------
Operating Revenues $ 875,500 $ 805,552 $ 2,285,703 $ 2,237,323 $ 2,924,969 $ 2,895,880
- --------------------------------------------------------------------------------------------------------------------------------
Operating Expenses
Operation - fuel for generation 163,459 126,692 401,577 378,109 495,436 501,291
deferred fuel cost (credit), net (8,683) 28,626 7,117 20,411 24,876 13,965
purchased power 110,538 102,483 309,334 319,838 403,796 415,615
other 133,841 130,305 400,025 400,375 539,609 534,913
Maintenance 45,206 38,719 143,314 149,455 200,591 210,962
Depreciation and amortization 91,415 97,025 272,586 311,227 359,094 417,892
Taxes other than on income 38,686 36,997 112,886 109,264 142,162 147,416
Income tax expense 99,424 82,433 193,782 163,743 228,574 184,345
Harris Plant deferred costs, net 7,174 6,476 20,957 19,648 27,638 30,515
- --------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses 681,060 649,756 1,861,578 1,872,070 2,421,776 2,456,914
- --------------------------------------------------------------------------------------------------------------------------------
Operating Income 194,440 155,796 424,125 365,253 503,193 438,966
- --------------------------------------------------------------------------------------------------------------------------------
Other Income (Expense)
Allowance for equity funds used during construction 774 1,660 2,671 5,761 2,984 8,330
Income tax credit 4,036 2,886 10,533 5,375 14,582 8,575
Harris Plant carrying costs 2,027 2,398 6,374 7,443 8,685 22,904
Interest income 2,058 2,329 7,427 13,731 8,265 18,990
Other income, net 5,523 5,586 13,794 19,601 19,786 32,115
- --------------------------------------------------------------------------------------------------------------------------------
Total Other Income 14,418 14,859 40,799 51,911 54,302 90,914
- --------------------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges 208,858 170,655 464,924 417,164 557,495 529,880
- --------------------------------------------------------------------------------------------------------------------------------
Interest Charges
Long-term debt 46,993 45,828 140,834 139,793 184,932 186,563
Other interest charges 11,288 5,655 22,327 13,392 25,055 17,163
Allowance for borrowed funds used
during construction (1,328) (1,081) (4,137) (3,313) (4,267) (5,010)
- --------------------------------------------------------------------------------------------------------------------------------
Net Interest Charges 56,953 50,402 159,024 149,872 205,720 198,716
- --------------------------------------------------------------------------------------------------------------------------------
Net Income 151,905 120,253 305,900 267,292 351,775 331,164
Preferred Stock Dividend Requirements (2,402) (2,402) (7,206) (7,206) (9,609) (9,609)
- --------------------------------------------------------------------------------------------------------------------------------
Earnings for Common Stock $ 149,503 $ 117,851 $ 298,694 $ 260,086 $ 342,166 $ 321,555
================================================================================================================================
Average Common Shares
Outstanding (Note 3) 146,161 149,416 146,867 150,426 146,952 153,025
Earnings per Common Share (Note 3) $ 1.02 $ 0.79 $ 2.03 $ 1.73 $ 2.33 $ 2.10
Dividends Declared per Common Share $ 0.440 $ 0.425 $ 1.320 $ 1.275 $ 1.760 $ 1.700
................................................................................................................................
See Supplemental Data and Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Carolina Power & Light Company
BALANCE SHEETS September 30 December 31
(In thousands) 1995 1994 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Electric Utility Plant
Electric utility plant in service $ 9,354,427 $ 9,076,667 $ 9,190,874
Accumulated depreciation (3,413,489) (3,132,176) (3,196,139)
- ------------------------------------------------------------------------------------------------------
Electric utility plant in service, net 5,940,938 5,944,491 5,994,735
Held for future use 13,304 13,222 13,195
Construction work in progress 177,606 193,286 170,390
Nuclear fuel, net of amortization 181,720 181,399 171,164
- ------------------------------------------------------------------------------------------------------
Total Electric Utility Plant, Net 6,313,568 6,332,398 6,349,484
- ------------------------------------------------------------------------------------------------------
Current Assets
Cash and cash equivalents 14,868 48,419 80,239
Accounts receivable 345,894 314,790 302,218
Fuel 58,137 71,439 96,136
Materials and supplies 127,385 121,934 122,720
Prepayments 56,577 41,233 52,988
Other current assets 31,844 26,896 24,129
- ------------------------------------------------------------------------------------------------------
Total Current Assets 634,705 624,711 678,430
- ------------------------------------------------------------------------------------------------------
Deferred Debits and Other Assets
Income taxes recoverable
through future rates 386,581 381,981 384,375
Abandonment costs 60,528 75,237 71,079
Harris Plant deferred costs 113,240 132,194 127,824
Unamortized debt expense 59,599 64,567 63,302
Miscellaneous other property and investments 439,992 313,766 360,611
Other assets and deferred debits 170,061 190,651 176,058
- ------------------------------------------------------------------------------------------------------
Total Deferred Debits and Other Assets 1,230,001 1,158,396 1,183,249
- ------------------------------------------------------------------------------------------------------
Total Assets $ 8,178,274 $ 8,115,505 $ 8,211,163
======================================================================================================
CAPITALIZATION AND LIABILITIES
Capitalization
Common stock equity $ 2,633,751 $ 2,627,338 $ 2,586,179
Preferred stock - redemption not required 143,801 143,801 143,801
Long-term debt, net 2,684,408 2,502,893 2,530,773
- ------------------------------------------------------------------------------------------------------
Total Capitalization 5,461,960 5,274,032 5,260,753
- ------------------------------------------------------------------------------------------------------
Current Liabilities
Current portion of long-term debt 53,000 252,050 275,050
Notes payable (principally commercial paper) 17,000 15,000 68,100
Accounts payable 122,635 133,691 285,610
Taxes accrued 168,696 155,901 4,650
Interest accrued 49,785 50,969 54,569
Dividends declared 69,103 70,207 70,658
Deferred fuel credit 35,460 10,584 28,344
Other current liabilities 72,006 65,696 67,161
- ------------------------------------------------------------------------------------------------------
Total Current Liabilities 587,685 754,098 854,142
- ------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities
Accumulated deferred income taxes 1,640,364 1,586,643 1,628,430
Accumulated deferred investment tax credits 244,393 254,935 252,051
Other liabilities and deferred credits 243,872 245,797 215,787
- ------------------------------------------------------------------------------------------------------
Total Deferred Credits and Other Liabilities 2,128,629 2,087,375 2,096,268
- ------------------------------------------------------------------------------------------------------
Commitments and Contingencies (Note 4)
Total Capitalization and Liabilities $ 8,178,274 $ 8,115,505 $ 8,211,163
======================================================================================================
SCHEDULES OF COMMON STOCK EQUITY
(In thousands)
Common stock (Note 3) $ 1,439,814 $ 1,534,029 $ 1,510,956
Unearned ESOP common stock (191,526) (206,654) (204,947)
Capital stock issuance expense (790) (790) (790)
Retained earnings 1,386,253 1,300,753 1,280,960
- ------------------------------------------------------------------------------------------------------
Total Common Stock Equity $ 2,633,751 $ 2,627,338 $ 2,586,179
======================================================================================================
......................................................................................................
See Supplemental Data and Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Carolina Power & Light Company
STATEMENTS OF CASH FLOWS
(In thousands) Three Months Ended Nine Months Ended Twelve Months Ended
September 30 September 30 September 30
1995 1994 1995 1994 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Activities
Net income $ 151,905 $ 120,253 $ 305,900 $ 267,292 $ 351,775 $ 331,164
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 111,958 119,547 334,706 363,174 445,012 487,725
Harris Plant deferred costs 5,147 4,078 14,583 12,205 18,953 7,611
Deferred income taxes 12,499 (5,578) 4,988 (4,771) 46,999 32,993
Investment tax credit adjustments (2,553) (2,884) (7,658) (8,653) (10,542) (11,612)
Allowance for equity funds used during construction (774) (1,660) (2,671) (5,761) (2,984) (8,330)
Deferred fuel cost (credit) (8,683) 28,626 7,117 20,411 24,876 13,965
Net (increase) decrease in receivables, inventories
and prepaid expenses 5,147 19,246 (73,818) (50,068) (97,641) 19,103
Net increase (decrease) in payables and accrued
expenses 37,425 25,565 30,622 (1,234) (14,915) (50,608)
Miscellaneous 7,300 2,983 34,526 18,428 11,168 1,479
- -----------------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 319,371 310,176 648,295 611,023 772,701 823,490
- -----------------------------------------------------------------------------------------------------------------------------------
Investing Activities
Gross property additions (52,629) (63,935) (191,361) (191,876) (274,262) (302,609)
Nuclear fuel additions (31,933) (2,894) (67,243) (15,322) (77,771) (34,834)
Contributions to external decommissioning trust (6,899) (4,746) (33,515) (18,461) (36,679) (28,253)
</TABLE>
<TABLE>
<CAPTION>
Carolina Power & Light Company
SUPPLEMENTAL DATA Three Months Ended Nine Months Ended Twelve Months Ended
September 30 September 30 September 30
1995 1994 1995 1994 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues (in thousands)
Residential $ 292,830 $ 263,677 $ 737,448 $ 716,067 $ 937,367 $ 927,361
Commercial 178,531 165,008 469,387 458,325 606,635 598,245
Industrial 201,202 197,282 553,360 556,828 738,194 744,165
Government and municipal 21,650 20,815 59,215 59,913 77,619 78,813
Power Agency contract requirements 34,242 33,565 80,650 101,330 94,582 121,421
NCEMC 89,585 79,191 231,949 212,863 285,819 258,957
Other wholesale 21,136 20,469 61,661 69,460 76,975 95,126
Other utilities 24,343 14,121 58,012 29,762 62,040 32,186
Miscellaneous revenue 11,981 11,424 34,021 32,775 45,738 39,606
- ---------------------------------------------------------------------------------------------------------------------------
Total Operating Revenues $ 875,500 $ 805,552 $ 2,285,703 $ 2,237,323 $ 2,924,969 $ 2,895,880
===========================================================================================================================
Energy Sales (millions of kWh)
Residential 3,413 3,029 9,095 8,675 11,567 11,251
Commercial 2,678 2,453 7,016 6,671 9,034 8,672
Industrial 3,676 3,585 10,676 10,378 14,327 13,872
Government and municipal 373 359 973 969 1,266 1,263
Power Agency contract requirements 802 664 1,767 2,115 2,241 2,777
NCEMC 1,702 1,536 4,186 3,811 5,260 4,895
Other wholesale 487 436 1,422 1,488 1,916 2,035
Other utilities 831 465 2,307 799 2,497 879
- ---------------------------------------------------------------------------------------------------------------------------
Total Energy Sales 13,962 12,527 37,442 34,906 48,108 45,644
===========================================================================================================================
Energy Supply (millions of kWh)
Generated - coal 7,231 5,492 17,671 17,341 21,331 23,611
nuclear 5,010 5,730 14,901 12,782 20,630 15,698
hydro 145 192 599 728 753 846
combustion turbines 55 2 55 68 54 66
Purchased 2,082 1,764 5,626 5,580 7,086 7,459
- ---------------------------------------------------------------------------------------------------------------------------
Total Energy Supply
(Company Share) 14,523 13,180 38,852 36,499 49,854 47,680
===========================================================================================================================
Detail of Income Taxes (in thousands)
Included in Operating Expenses
Income tax expense - current $ 90,522 $ 96,224 $ 200,692 $ 185,305 $ 198,034 $ 169,572
Income tax expense (credit) - deferred 11,455 (10,907) 748 (12,909) 41,082 25,191
Income tax credit - investment tax
credit adjustments (2,553) (2,884) (7,658) (8,653) (10,542) (10,418)
- ---------------------------------------------------------------------------------------------------------------------------
Subtotal 99,424 82,433 193,782 163,743 228,574 184,345
- ---------------------------------------------------------------------------------------------------------------------------
Harris Plant deferred costs -
investment tax credit adjustments (74) (74) (223) (223) (297) 21
- ---------------------------------------------------------------------------------------------------------------------------
Total Included in Operating Expenses 99,350 82,359 193,559 163,520 228,277 184,366
- ---------------------------------------------------------------------------------------------------------------------------
Included in Other Income
Income tax credit - current (5,080) (8,215) (14,773) (13,513) (20,499) (15,183)
Income tax expense - deferred 1,044 5,329 4,240 8,138 5,917 7,802
Income tax credit - investment tax
credit adjustments - - - - - (1,194)
- ---------------------------------------------------------------------------------------------------------------------------
Total Included in Other Income (4,036) (2,886) (10,533) (5,375) (14,582) (8,575)
- ---------------------------------------------------------------------------------------------------------------------------
Total Income Tax Expense $ 95,314 $ 79,473 $ 183,026 $ 158,145 $ 213,695 $ 175,791
===========================================================================================================================
FINANCIAL STATISTICS
Ratio of earnings to fixed charges 3.49 3.29
Return on average common stock equity 12.91 % 12.07 %
Book value per common share $ 18.14 $ 17.77
Capitalization ratios
Common stock equity 48.22 % 49.82 %
Preferred stock - redemption not required 2.63 2.72
Long-term debt, net 49.15 47.46
- ---------------------------------------------------------------------------------------------------------------------------
Total 100.00 % 100.00 %
===========================================================================================================================
...........................................................................................................................
See Notes to Financial Statements.
</TABLE>
Carolina Power & Light Company
NOTES TO FINANCIAL STATEMENTS
1. These interim financial statements are prepared in conformity with the
accounting principles reflected in the financial statements included in
the Company's 1994 Annual Report to Shareholders and the 1994 Annual
Report on Form 10-K. These are interim financial statements, and because
of temperature variations between seasons of the year and the timing of
outages of electric generating units, especially nuclear-fueled units,
the amounts reported in the Statements of Income for periods of less
than twelve months are not necessarily indicative of amounts expected
for the year. Certain amounts for 1994 have been reclassified to conform
to the 1995 presentation.
2. In 1994, the Company established a wholly-owned subsidiary, CaroNet,
Inc., which owns a ten percent interest in BellSouth Carolinas PCS, a
limited partnership, led by BellSouth Personal Communications, Inc.
(BellSouth). In March 1995, BellSouth won its bid for a Federal
Communications Commission license for the limited partnership to operate
a personal communications services (PCS) system covering most of North
Carolina and South Carolina, as well as a small portion of Georgia. PCS,
a wireless communications technology, is expected to provide
high-quality mobile communications. BellSouth will transfer the PCS
license to the limited partnership. BellSouth is the general partner and
handles day-to-day management of the business. In April 1995, the
Company invested $50 million in CaroNet, Inc. in anticipation of
infrastructure construction. Construction of the system infrastructure
began in the spring of 1995 and service start-up is expected by
mid-1996.
3. In 1994, the Board of Directors of the Company authorized the Executive
Committee of the Board to repurchase up to 10 million shares of the
Company's common stock on the open market. In accordance with the stock
repurchase program, the Company has purchased approximately 6.8 million
shares through September 30, 1995. The decrease in average common shares
outstanding resulted in an increase in earnings per common share of
approximately $.04, $.07 and $.07 for the three, nine and twelve month
periods ended September 30, 1995, respectively.
4. Contingencies existing as of the date of these statements are described
below. No significant changes have occurred since December 31, 1994,
with respect to the commitments discussed in Note 10 of the financial
statements included in the Company's 1994 Annual Report to Shareholders.
a) In the Company's retail jurisdictions, provisions for nuclear
decommissioning costs are approved by the North Carolina Utilities
Commission and the South Carolina Public Service Commission and are
based on site-specific estimates that included the costs for removal of
all radioactive and other structures at the site. In the wholesale
jurisdiction, the provisions for nuclear decommissioning costs are based
on amounts agreed upon in applicable rate settlements. Based on the
site-specific estimates discussed below, and using an assumed after-tax
earnings rate of 8.5% and an assumed cost escalation rate of 4%, current
levels of rate recovery for nuclear decommissioning costs are adequate
to provide for decommissioning of the Company's nuclear facilities.
The Company's most recent site-specific estimates of decommissioning
costs were developed in 1993, using 1993 cost factors, and are based
on prompt dismantlement decommissioning, which reflects the cost of
removal of all radioactive and other structures currently at the site,
with such removal occurring shortly after operating license expiration.
These estimates, in 1993 dollars, are $257.7 million for Robinson Unit
No. 2, $235.4 million for Brunswick Unit No. 1, $221.4 million for
Brunswick Unit No. 2 and $284.3 million for the Harris Plant. These
estimates are subject to change based on a variety of factors including,
but not limited to, cost escalation, changes in technology applicable to
nuclear decommissioning, and changes in federal, state or local
regulations. The cost estimates exclude the portion attributable to
North Carolina Eastern Municipal Power Agency, which holds an undivided
ownership interest in certain of the Company's generating facilities.
Operating licenses for the Company's nuclear units expire in the year
2010 for Robinson Unit No. 2, 2016 for Brunswick Unit No. 1, 2014 for
Brunswick Unit No. 2 and 2026 for the Harris Plant.
The Financial Accounting Standards Board has added a project to its
agenda regarding the electric industry's current accounting practices
related to decommissioning costs. Any changes to these practices could
affect such items as: 1) when the decommissioning obligation is
recognized, 2) where balances of accumulated decommissioning costs are
recorded, 3) where income earned on external decommissioning trust
balances is recorded and 4) the levels of annual decommissioning cost
provisions. It is uncertain what impact, if any, this project may have
on the Company's accounting for decommissioning costs.
b) As required under the Nuclear Waste Policy Act of 1982, the Company
entered into a contract with the U. S. Department of Energy (DOE) under
which the DOE agreed to dispose of the Company's spent nuclear fuel. The
Company cannot predict whether the DOE will be able to perform its
contractual obligations and provide interim storage or permanent
disposal repositories for spent nuclear fuel and/or high-level
radioactive waste materials on a timely basis.
With certain modifications, the Company's spent fuel storage facilities
are sufficient to provide storage space for spent fuel generated on the
Company's system through the expiration of the current operating
licenses for all of the Company's nuclear generating units. Subsequent
to the expiration of the licenses, dry storage may be necessary.
c) The Company is subject to federal, state and local regulations
addressing air and water quality, hazardous and solid waste management
and other environmental matters.
Various organic materials associated with the production of manufactured
gas, generally referred to as coal tar, are regulated under various
federal and state laws, and a liability may exist for their remediation.
There are several manufactured gas plant (MGP) sites to which the
Company and certain entities that were later merged into the Company may
have had some connection. In this regard, the Company, along with other
entities alleged to be former owners and operators of MGP sites in North
Carolina, is participating in a cooperative effort with the North
Carolina Department of Environment, Health and Natural Resources,
Division of Solid Waste Management (DSWM) to establish a uniform
framework for addressing those sites. It is anticipated that the
investigation and remediation of specific MGP sites will be addressed
pursuant to one or more Administrative Orders on Consent between DSWM
and individual potentially responsible parties. To date, the Company has
not entered into any such orders.
The Company has been approached by another North Carolina public utility
concerning a possible cost-sharing arrangement with respect to the
investigation and, if necessary, remediation of four MGP sites. The
Company is currently engaged in discussions with the other utility
regarding this matter.
In addition, a current owner of property that was the site of one MGP
owned by Tide Water Power Company (Tide Water Power), which merged into
the Company in 1952, and the Company have entered into an agreement to
share the cost of the investigation and, if necessary, the remediation
of this site. The Company has also been approached by a North Carolina
municipality that is the current owner of another MGP site that was
formerly owned by Tide Water Power. The Company is engaged in
discussions with that municipality concerning a possible cost-sharing
arrangement with respect to the investigation and, if necessary, the
remediation of that site.
The Company is continuing its investigation regarding the identities of
parties connected to several additional MGP sites, the relative
relationships of the Company and other parties to those sites and the
degree, if any, to which the Company should undertake shared voluntary
efforts with others at individual sites.
The Company has been notified by regulators of its involvement or
potential involvement in several sites, other than MGP sites, that
require remedial action. Although the Company cannot predict the outcome
of these matters, it does not anticipate significant costs associated
with these sites.
The Company has accrued a liability for the estimated costs associated
with investigation and remediation activities for certain MGP sites and
for sites other than MGP sites. This accrual was not material to the
results of operations of the Company. Due to the lack of information
with respect to the operation of MGP sites for which a liability has not
been accrued and due to the uncertainty concerning questions of
liability and potential environmental harm, the extent and cost of
required remedial action, if any, are not currently determinable. The
Company cannot predict the outcome of these matters or the extent to
which other MGP sites may become the subject of inquiry.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM (INTERIM FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1995) AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000017797
<NAME> CAROLINA POWER & LIGHT COMPANY
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> $6,313,568
<OTHER-PROPERTY-AND-INVEST> $439,992
<TOTAL-CURRENT-ASSETS> $634,705
<TOTAL-DEFERRED-CHARGES> $619,948
<OTHER-ASSETS> $170,061
<TOTAL-ASSETS> $8,178,274
<COMMON> $1,248,288
<CAPITAL-SURPLUS-PAID-IN> ($790)
<RETAINED-EARNINGS> $1,386,253
<TOTAL-COMMON-STOCKHOLDERS-EQ> $2,633,751
$0
$143,801
<LONG-TERM-DEBT-NET> $2,684,408
<SHORT-TERM-NOTES> $0
<LONG-TERM-NOTES-PAYABLE> $0
<COMMERCIAL-PAPER-OBLIGATIONS> $17,000
<LONG-TERM-DEBT-CURRENT-PORT> $53,000
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<CAPITAL-LEASE-OBLIGATIONS> $0
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<OTHER-ITEMS-CAPITAL-AND-LIAB> $2,646,314
<TOT-CAPITALIZATION-AND-LIAB> $8,178,274
<GROSS-OPERATING-REVENUE> $2,285,703
<INCOME-TAX-EXPENSE> $193,782
<OTHER-OPERATING-EXPENSES> $1,667,796
<TOTAL-OPERATING-EXPENSES> $1,861,578
<OPERATING-INCOME-LOSS> $424,125
<OTHER-INCOME-NET> $40,799
<INCOME-BEFORE-INTEREST-EXPEN> $464,924
<TOTAL-INTEREST-EXPENSE> $159,024
<NET-INCOME> $305,900
$7,206
<EARNINGS-AVAILABLE-FOR-COMM> $298,694
<COMMON-STOCK-DIVIDENDS> $193,400
<TOTAL-INTEREST-ON-BONDS> $140,834
<CASH-FLOW-OPERATIONS> $648,295
<EPS-PRIMARY> $2.03
<EPS-DILUTED> $2.03
</TABLE>
