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
<TABLE>
<CAPTION>
<S> <C> <C> <C>
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
</TABLE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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.
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>
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>
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.
###
<PAGE>
<TABLE>
<CAPTION>
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:
<S> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FLORIDA PROGRESS CORPORATION
CONSOLIDATED BALANCE SHEETS Page 5
(UNAUDITED) (In millions)
June 30
--------------------------------
ASSETS 1998 1997
------------ -------------
PROPERTY, PLANT AND EQUIPMENT:
<S> <C> <C>
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
-------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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:
<S> <C> <C> <C> <C>
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
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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)
</TABLE>
<TABLE>
<CAPTION>
June 30 June 30
June 30 1998 1997
1998 1997 Amount Percent Amount Percent
---------- ---------- -------------------------------------------
Equity investments (percent): Capitalization(in millions):
<S> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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. </TABLE>
<PAGE>
<TABLE>
<CAPTION>
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:
<S> <C> <C> <C> <C> <C>
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
</TABLE>
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>
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)
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
JUNE 30 JUNE 30
----------------------------------------------------------
1998 1997 1998 1997
------------ ------------ -------------- --------------
<S> <C> <C> <C> <C>
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.
</TABLE>
