As filed with the Securities and Exchange Commission on January 29, 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):
January 26, 1998
<TABLE>
<CAPTION>
Exact name of Registrant as specified
Commission in its charter, address of principal State of I.R.S. Employer
File No. executive offices, telephone number Incorporation Identification No.
<S> <C> <C> <C>
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 Annual Report on Form 10-K for the year ended December 31, 1997:
Florida Progress issued a news release dated January 26, 1998 and a
related Investor News report of even date therewith reporting 1997 earnings.
Copies of the news release and report are being filed herewith as
Exhibits 99.(a) and 99.(b), respectively.
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 Corporation News Release dated January
26, 1998 reporting 1997 earnings.
99.(b) Florida Progress Corporation Investor News report dated
January 26, 1998 reporting 1997 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.
FLORIDA PROGRESS CORPORATION
FLORIDA POWER CORPORATION
/s/ Pamela A Saari
By:____________________________
Pamela A. Saari
Assistant Treasurer
of each Registrant
Date: January 26, 1998
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
99.(a) Florida Progress Corporation News Release dated January
26, 1998 reporting 1997 earnings.
99.(b) Florida Progress Corporation Investor News report dated
January 26, 1998 reporting 1997 earnings.
EXHIBIT 99.(a)
Florida Progress Corporation
News Release
Corporate Relations Department, St. Petersburg, Florida
FOR IMMEDIATE RELEASE Contact: Melanie Forbrick
(813) 866-5023
[LOGO OMITTED]
Florida Progress Reports 1997 Earnings
St. Petersburg, FL (January 26, 1998) -- Florida Progress Corporation
(NYSE:FPC), parent company of St. Petersburg-based Florida Power Corporation and
Electric Fuels Corporation, today reported 1997 earnings before non-recurring
items of $254.3 million, or $2.62 per share, compared with $252.4 million, or
$2.61 per share, for the same 12-month period last year.
Florida Progress recorded two significant non-recurring charges during
1997. Costs associated with the extended outage of Florida Power's Crystal River
3 nuclear unit and the provision for loss related to Mid-Continent Life
Insurance Company combined to reduce earnings by $200 million, or $2.06 per
share. After the effect of the one-time charges, reported earnings for the year
totaled $54.3 million, or $.56 per share, compared with $224.4 million, or $2.32
per share, in 1996. The company reported a loss for the fourth quarter of $51.5
million, or $ .53 per share, following the one-time charge for Mid-Continent.
"The year 1997 was unique and challenging," said Richard Korpan,
Florida Progress president and chief executive officer. "We've worked hard to
get many of these hurdles behind us so we can focus on our future growth
strategy. Our sound business fundamentals position us well for improved results
in 1998, which is reflected in our stock price today."
Florida Power, the largest subsidiary of Florida Progress, reported
earnings before nuclear outage costs of $240.9 million, or $2.48 per share,
compared with earnings of $232.6 million, or $2.40 per share, in 1996. This
reflects an increase of 3.3 percent over 1996 earnings per share. Costs
associated with the extended outage reduced Florida Power's earnings by $106.5
million, or $1.10 per share, in 1997.
On a recurring basis Electric Fuels had its second consecutive year of
double-digit earnings growth. Expanding rail services operations and higher
volumes of coal handled by the energy and related services business group
resulted in an 18 percent earnings increase to $32.1 million, or $.33 per share,
for 1997. This compares to 1996 earnings, before a provision for loss on coal
properties, of $27.1 million, or $.28 per share.
(more)
<PAGE>
Florida Progress 1997 Earnings
Add one
Significant items influencing 1997 results include:
o Crystal River 3 nuclear unit ready to restart- Florida Power has received
the approvals from the Nuclear Regulatory Commission necessary to proceed
to mode 2, the point at which reactor startup would commence. The company
has formally requested permission to start up the reactor. Once final
approval is received from the NRC to restart the reactor, the company
expects the plant to be back in service in approximately two weeks. During
1997, Florida Power incurred approximately $173 million in additional
nuclear outage operation and maintenance costs and non-recoverable
replacement power costs associated with the outage. These costs were
incurred not only to address certain backup safety system design issues,
but also to perform work that should enable the plant to be a productive
asset in the future.
o More than 22,000 new customers in 1997- Strong customer growth and good
cost control contributed to increased earnings, before non-recurring
charges, for Florida Power. Customer growth in the central Florida area
around Orlando represented more than one-third of Florida Power's new
customers in 1997. Florida Power maintained good cost control, with 1997
Operations and Maintenance expenses increasing two percent, or $8.9
million, over the previous year.
o Loss provision for Mid-Continent Life Insurance Company- Although
Mid-Continent was placed in receivership in April 1997, the Oklahoma
Insurance Commissioner has not yet filed a plan of rehabilitation as
ordered by an Oklahoma district court judge. In addition, the commissioner
filed a lawsuit in December 1997 against Florida Progress and other
defendants. As a result of the passage of time without a rehabilitation
plan and other actions of the commissioner, Florida Progress established a
loss provision for the full amount of its $87 million investment and
accrued for estimated legal costs, which reduced 1997 earnings by $93.5
million, or $.96 per share.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: this news release contains forward looking statements, including
statements regarding the restart of the Crystal River 3 nuclear power unit and
the future productivity of the plant. These statements involve risks and
uncertainties that could cause actual results or outcomes to differ materially
from expectations. Key factors that have a direct impact on the actual results
at Florida Power include various factors that could impact the successful
execution of the nuclear restart plan and the future productivity of the plant.
These and other factors are described in the company's Securities and Exchange
Commission filings.
(more)
<PAGE>
Florida Progress 1997 Earnings
Add two
Florida Progress is a Fortune 500 diversified electric utility holding
company with assets of $5.8 billion. Its principal subsidiary is Florida Power
Corporation, the state's second-largest electric utility with 1.3 million
customers. Diversified operations include coal mining, marine operations and
rail services.
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31 December 31
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- ------------- ------------
<S> <C> <C> <C> <C>
Revenues $848,300,000 $774,900,000 $3,315,600,000 $3,157,900,000
-------------- -------------- -------------- -------------
Income (loss)from:
Florida Power 42,400,000 42,800,000 240,900,000 232,600,000
Electric Fuels 10,500,000 7,100,000 32,100,000 27,100,000
Corporate & Other (9,700,000) (2,600,000) (18,700,000) (7,300,000)
Continuing operations before -------------- -------------- -------------- --------------
non-recurring items 43,200,000 47,300,000 254,300,000 252,400,000
Non-recurring items (94,700,000) (1,700,000) (200,000,000) (1,700,000)
-------------- -------------- -------------- --------------
Continuing operations (51,500,000) 45,600,000 54,300,000 250,700,000
Discontinued operations - (1,300,000) - (26,300,000)
-------------- -------------- -------------- --------------
Net Income (loss) $(51,500,000) $ 44,300,000 $ 54,300,000 $ 224,400,000
============== ============== ============== ==============
Earnings (loss) per share (EPS):
Florida Power $ .44 $ .44 $2.48 $2.40
Electric Fuels .11 .07 .33 .28
Corporate & other (.10) (.02) (.19) (.07)
Income from continuting operations -------- -------- -------- -------
before non-recurring items $ .45 $ .49 $2.62 $2.61
Non-recurring items (.98) (.02) (2.06) (.02)
======== ======== ======== =======
Continuing operations (.53) .47 .56 2.59
Discontinued operations - (.01) - (.27)
-------- -------- -------- -------
Consolidated ($.53) $.46 $.56 $2.32
======== ======== ======== =======
Average Common
Shares Outstanding 97,061,777 97,026,036 97,054,280 96,835,632
Prior periods reflect the recapitalization of the spin-off company, Echelon and
its associated treatment as discontinued operations.
</TABLE>
EXHIBIT 99.(b)
Florida Progress Corporation
Investor News
Analyst Contacts:
Mark Myers (813) 866-4245
Greg Beuris (813) 866-4442
[LOGO OMITTED]
Florida Progress reports 1997 earnings
Florida Power receives final license amendment approval for its Crystal River
nuclear plant
St. Petersburg, Florida, January 26, 1998 -- Florida Progress Corporation
(NYSE:FPC), parent of St. Petersburg-based Florida Power Corporation, reported
1997 earnings before non-recurring items of $254.3 million, or $2.62 a share,
compared with $252.4 million, or $2.61 per share, for the same 12-month period
last year.
Florida Progress recorded two significant charges in 1997. Costs associated with
the extended outage at Florida Power's Crystal River nuclear plant and the
provision for loss related to Mid-Continent Life Insurance Company combined to
reduce earnings by $2.06 a share. Florida Progress' core utility and diversified
operations are now better positioned for improved results in 1998.
Significant items :
o Nuclear plant close to restart - Florida Power has received approval on all
license submittals necessary before returning the plant to service. Outage
related charges reduced Florida Power's earnings by $1.10 per share in
1997.
o More than 22,000 new customers added in 1997 - Strong customer growth in
the Central Florida areas around Orlando represented about one-third of the
utility's new customers.
o Purchased power commitments reduced - Through the buy-out of the Tiger Bay
purchased power contracts, Florida Power reduced its long-term purchased
power commitments by 20 percent. The utility also wrote-off $20 million of
the contract termination costs in the fourth quarter.
o Electric Fuels' earnings up 18 percent - Expanding rail services operations
and increased volume of coal transported resulted in higher earnings.
o Loss provision for Mid-Continent - Florida Progress recorded a provision
for the loss of its investment in Mid-Continent and accrued for legal
costs, resulting in a $.96 per share charge to 1997 earnings.
-- more --
<PAGE>
Page 2
Florida Progress Corporation
Investor News - 1997 Earnings
FLORIDA POWER CORPORATION
Florida Power, the largest subsidiary of Florida Progress, reported earnings
before nuclear outage costs of $240.9 million, or $2.48 per share, compared with
earnings of $232.6 million, or $2.40 per share, in 1996. This reflects an
increase of 3.3 percent over 1996 earnings per share.
Florida Power's kilowatt-hour sales for 1997 were essentially level with 1996
energy sales despite the addition of more than 22,000 retail customers. The lack
of kilowatt-hour sales growth in 1997 was due largely to weather, which was
milder in 1997 when compared to 1996.
Normally, Florida Power's revenues are heavily influenced by weather, especially
its effect on usage by residential customers. However, for the last three years
Florida Power has been recognizing residential revenues based on the number of
residential customers instead of kilowatt-hour sales. This method, called
residential revenue decoupling, was ordered by the Florida Public Service
Commission as part of a three-year experiment, which began in 1995 and ended in
1997. Florida Power does not intend to seek approval to continue this method
beyond 1997.
For 1997, residential revenue decoupling offset the effect weather had on
residential customer usage and, as a result, residential base revenues were
$21.3 million higher than if the utility had not used this method. The milder
weather in 1997 did result in lower wholesale kilowatt-hour sales and base
revenues when compared with 1996. Lower demand from these customers reduced
wholesale revenues by $9.2 million when compared with 1996.
Florida Power's 1997 O&M expenses, excluding nuclear outage costs, were up $8.9
million or 2 percent over 1996. The increase included additional O&M costs
associated with Florida Power's purchase of the Tiger Bay facility.
The price of the Tiger Bay plant and contract termination costs totaled $445
million. Tiger Bay was Florida Power's largest cogeneration supplier
representing more than 20-percent of the company's total capacity received from
qualified facilities.
Approximately $370 million of the $445 million was for contract termination
costs. Of this amount, approximately $350 million, along with interest charges,
will be recovered from ratepayers over the next ten years. The additional O&M
costs related to Tiger Bay as well as depreciation charges and property taxes
related to the remaining $75 million of the purchase price, are expected to be
about $20 million annually.
Depreciation expense in 1997 and 1996 included the amortization of certain
regulatory assets.
-- more --
<PAGE>
Page 3
Florida Progress Corporation
Investor News - 1997 Earnings
In 1997, Florida Power wrote-off approximately $20 million of contract
termination costs related to the Tiger Bay purchase power agreement.
In 1996, Florida Power amortized approximately $31 million related to the
shutdown of two oil-fired power plants and a canceled transmission line.
Florida Power's nuclear plant was out of service during 1997 to address certain
backup safety system design issues. During the extended outage, Florida Power
incurred $100 million in additional O&M costs at its nuclear plant. While most
of these costs were necessary to fully address safety system design issues,
Florida Power also performed work that should enable the plant to be a
productive asset in the future.
Florida Power has received the approvals from the NRC necessary to proceed to
Mode 2, the point at which reactor startup would commence. Florida Power has
formally requested permission to startup the reactor once it receives approval
from the NRC. Once Florida Power receives approval from the NRC to startup the
reactor, the company expects the plant to be back in service in approximately
two weeks.
In addition to the higher O&M costs related to the outage, Florida Power
expensed approximately $73 million of non-recoverable replacement power costs
during 1997. This was in accordance with the terms of a settlement agreement
between Florida Power and several intervening parties.
Interest expense at Florida Power increased $18.9 million in 1997 when compared
with 1996. The increase is due largely to higher debt balances at Florida Power,
which resulted from the issuance of medium-term notes for the purchase of Tiger
Bay and higher O&M expenses because of the extended outage.
Florida Power is recovering $350 million of the acquisition costs of Tiger Bay
and related interest charges through its capacity cost recovery clause. In 1997,
$10.8 million in interest charges were recovered from ratepayers through this
pass-through clause.
ELECTRIC FUELS CORPORATION
Electric Fuels earned $32.1 million, or $.33 a share, in 1997, compared with
$27.1 million before a provision for loss on coal properties, or $.28 per share,
in 1996. The 18 percent improvement in 1997 earnings per share over 1996
resulted from the expansion of Electric Fuels' rail services business unit and
higher volumes of coal transported by the company's energy and related services
business unit.
Electric Fuels' inland marine transportation business unit, reported lower
earnings for 1997 compared with 1996, due largely to the effect of flooding
along the Ohio and Mississippi rivers during the first quarter of 1997. MEMCO,
the principal subsidiary in
-- more --
<PAGE>
Page 4
Florida Progress Corporation
Investor News - 1997 Earnings
this group, expanded its barge fleet in 1997 to 900 barges, up from about 700 at
the end of 1996 and intends to purchase another 200 barges in 1998.
Progress Rail, which is one of the largest integrated processors and suppliers
of railroad materials in the country, acquired the assets of a metal recycling
and railcar scrapping business in the second half of 1996. This acquisition,
along with other smaller acquisitions in 1997, contributed to the improvement in
1997 earnings over 1996.
Higher tonnage of coal transported in 1997 boosted the results at Electric
Fuels' river terminals. The higher volume was due largely to increased coal
requirements of Florida Power's four coal-fired units located in Crystal River,
Florida. The lack of availability of its nuclear plant during 1997 forced
Florida Power to increase generation among its other generation resources
including the coal plants at Crystal River.
MID-CONTINENT LIFE INSURANCE COMPANY
Florida Progress believes its investment in Mid-Continent has been impaired.
Even though Mid-Continent was placed in receivership in April 1997, the Oklahoma
Insurance Commissioner has not yet filed a plan of rehabilitation as ordered by
the Oklahoma district court. In addition, the Commissioner filed a lawsuit in
December 1997 against Florida Progress and other defendants.
As a result of the continuing passage of time without a rehabilitation plan and
other actions of the Commissioner, Florida Progress established a loss provision
for the full amount of its $87 million investment in Mid-Continent and accrued
for estimated legal costs for pending litigation in the fourth quarter. The
impact of the loss provision and accrual for legal costs reduced 1997 earnings
by $.96 a share.
CORPORATE AND OTHER
The loss attributable to corporate and other diversified activities increased
$.10 a share in 1997 compared with 1996. The increase is primarily attributable
to the loss of earnings from Advanced Separation Technologies, Inc., which was
sold in 1996, and a loss associated with an investment in a generation facility,
of which the company has a minority interest.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: this news release contains forward looking statements, including
statements regarding the purchase of barges by MEMCO, the restart of the nuclear
unit and the future productivity of the nuclear plant. These statements involve
risks and uncertainties that could cause actual results or outcomes to differ
materially from expectations. Key factors that have a direct impact on the
actual results at Florida Power include various factors that could impact the
successful execution of the nuclear restart plan and the future productivity of
the nuclear plant, primarily the actions of the NRC.
-- more --
<PAGE>
Page 5
Florida Progress Corporation
Investor News - 1997 Earnings
A key factor influencing the future operations of MEMCO include future demand
for barge transportation services along the Ohio and Mississippi rivers. These
and other factors are described in the Company's Securities and Exchange
Commission filings.
Florida Progress (NYSE:FPC) is a Fortune 500 diversified utility holding company
with assets of $5.8 billion. Its principal subsidiary is Florida Power, the
state's second-largest electric utility with 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 6
(UNAUDITED) (In millions, except per share amounts)
Three Months Ended Twelve Months Ended
December 31 December 31
----------------------- -----------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
REVENUES:
<S> <C> <C> <C> <C>
Electric utility $ 590.5 $ 562.9 $ 2,448.4 $ 2,393.6
Diversified 257.8 212.0 867.2 764.3
- ----------------------------------------------------------------------------------------------------------------
848.3 774.9 3,315.6 3,157.9
- ----------------------------------------------------------------------------------------------------------------
EXPENSES:
Electric utility:
Fuel 114.9 86.7 458.1 409.7
Purchased power 112.9 143.4 490.6 531.6
Energy conservation cost 17.7 11.5 67.0 62.6
Operations and maintenance 103.7 109.2 422.3 413.4
Extended nuclear outage - O&M and replacement power costs 3.1 - 173.3 -
Depreciation 98.6 82.7 325.9 324.2
Taxes other than income taxes 43.7 40.5 193.6 183.6
- ----------------------------------------------------------------------------------------------------------------
494.6 474.0 2,130.8 1,925.1
- ----------------------------------------------------------------------------------------------------------------
Diversified:
Cost of sales 226.0 180.0 753.9 642.9
Provision for loss on coal properties - 40.9 - 40.9
Loss related to life insurance subsidiary 96.3 - 97.6 -
Other 18.2 19.1 60.7 66.6
- ----------------------------------------------------------------------------------------------------------------
340.5 240.0 912.2 750.4
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM OPERATIONS 13.2 60.9 272.6 482.4
- ----------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE AND OTHER:
Interest expense 46.3 32.5 158.7 135.9
Allowance for funds used during construction (2.8) (2.0) (9.7) (7.5)
Preferred dividend requirements of Florida Power .4 .6 1.5 5.8
(Gain) on sale of business - (44.2) - (44.2)
Other expense (income) 3.3 .9 1.4 (4.2)
- ----------------------------------------------------------------------------------------------------------------
47.2 (12.2) 151.9 85.8
- ----------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (34.0) 73.1 120.7 396.6
Income taxes 17.5 27.5 66.4 145.9
- ----------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS (51.5) 45.6 54.3 250.7
DISCONTINUED OPERATIONS, NET OF INCOME TAXES - (1.3) - (26.3)
================================================================================================================
NET INCOME (LOSS) $ (51.5) $ 44.3 $ 54.3 $ 224.4
- ----------------------------------------------------------------------------------------------------------------
AVERAGE SHARES OF COMMON
STOCK OUTSTANDING 97.1 97.0 97.1 96.8
- ----------------------------------------------------------------------------------------------------------------
EARNINGS (LOSS) PER AVERAGE COMMON SHARE:
CONTINUING OPERATIONS $(.53) $.47 $.56 $2.59
DISCONTINUED OPERATIONS - (.01) - (.27)
- ----------------------------------------------------------------------------------------------------------------
$(.53) $.46 $.56 $2.32
================================================================================================================
</TABLE>
Regarding these financial statements:
Prior periods reflect the recapitalization of the spin-off company, Echelon
International, and its associated treatment as discontinued operations.
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. These are interim
statements. Reference should be made to Florida Progress Corporation's 1996
Annual Report to shareholders. This report does not constitute an offer to sell
or the solicitation of an offer to buy any securities.
<PAGE>
<TABLE>
<CAPTION>
FLORIDA PROGRESS CORPORATION
CONSOLIDATED BALANCE SHEETS Page 7
(UNAUDITED) (In millions)
December 31
----------------------------
ASSETS 1997 1996
------------ ------------
PROPERTY, PLANT AND EQUIPMENT:
<S> <C> <C>
Electric utility plant in service and held for future use $ 6,166.8 $ 5,965.6
Less - Accumulated depreciation 2,511.0 2,335.8
Accumulated decommissioning for nuclear plant 223.7 193.3
Accumulated dismantlement for fossil plants 128.5 119.6
- ------------------------------------------------------------------------------------------------------------
3,303.6 3,316.9
Construction work in progress 279.4 140.3
Nuclear fuel, net of amortization of $356.7 in 1997 and 1996 66.5 59.9
- ------------------------------------------------------------------------------------------------------------
Net electric utility plant 3,649.5 3,517.1
Other property, net of depreciation of $219.3 in 1997 and $173.8 in 1996 437.7 309.3
- ------------------------------------------------------------------------------------------------------------
4,087.2 3,826.4
- ------------------------------------------------------------------------------------------------------------
CURRENT ASSETS:
Cash and equivalents 3.1 5.2
Accounts receivable, net 373.7 265.0
Inventories, primarily at average cost:
Fuel 77.6 67.1
Utility materials and supplies 91.9 95.4
Diversified materials 126.8 125.5
Underrecovery of fuel cost 34.5 82.6
Income taxes receivable 16.8 -
Deferred income taxes 5.8 35.6
Other 45.1 12.6
- ------------------------------------------------------------------------------------------------------------
775.3 689.0
- ------------------------------------------------------------------------------------------------------------
OTHER ASSETS:
Investments:
Loans receivable, net 24.0 68.1
Marketable securities - 217.9
Nuclear plant decommissioning fund 266.7 207.8
Joint ventures and partnerships 54.6 41.9
Deferred insurance policy acquisition costs - 120.9
Deferred purchased power contract termination costs 348.2 -
Other 204.0 176.4
- ------------------------------------------------------------------------------------------------------------
897.5 833.0
- ------------------------------------------------------------------------------------------------------------
$ 5,760.0 $ 5,348.4
============================================================================================================
CAPITAL AND LIABILITIES
CAPITAL:
Common stock equity $ 1,776.0 $ 1,924.2
Cumulative preferred stock of Florida Power 33.5 33.5
Long-term debt 2,377.8 1,776.9
- ------------------------------------------------------------------------------------------------------------
4,187.3 3,734.6
- ------------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES:
Accounts payable 253.2 193.2
Customers' deposits 97.1 81.8
Income taxes payable - 27.8
Accrued other taxes 12.0 13.4
Accrued interest 56.8 48.3
Other 74.8 78.5
- ------------------------------------------------------------------------------------------------------------
493.9 443.0
Notes payable 214.8 4.1
Current portion of long-term debt 15.2 34.9
- ------------------------------------------------------------------------------------------------------------
723.9 482.0
- ------------------------------------------------------------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred income taxes 471.2 475.4
Unamortized investment tax credits 85.7 93.5
Insurance policy benefit reserves - 325.3
Other postretirement benefit costs 107.4 100.0
Other 184.5 137.6
- ------------------------------------------------------------------------------------------------------------
848.8 1,131.8
- ------------------------------------------------------------------------------------------------------------
$ 5,760.0 $ 5,348.4
============================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FLORIDA PROGRESS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS Page 8
(UNAUDITED) (In millions)
Three Months Ended Twelve Months Ended
December 31 December 31
------------------------ ------------------------
1997 1996 1997 1996
------------ ----------- ----------- -----------
OPERATING ACTIVITIES:
<S> <C> <C> <C> <C>
Income (loss) from continuing operations $ (51.5) $ 45.6 $ 54.3 $ 250.7
Adjustments for noncash items:
Depreciation and amortization 109.3 91.6 364.2 366.7
Extended nuclear outage - O&M and replacement power costs (36.2) - 73.3 -
Provision for loss on investment in life insurance subsidiary 86.9 - 86.9 -
Gain on sale of business - (44.2) - (44.2)
Provision for loss on coal properties - 40.9 - 40.9
Deferred income taxes and investment tax
credits, net 5.5 (19.4) (30.7) (56.6)
Increase in accrued other postretirement benefit costs 2.0 3.6 8.6 15.5
Net change in deferred insurance policy acquisition costs 1.1 (.8) (1.7) (14.5)
Net change in insurance policy benefit reserves 9.0 16.3 52.7 60.3
Changes in working capital, net of effects from acquisition or sale of
businesses:
Accounts receivable (16.6) 43.0 (108.3) 35.4
Inventories 18.7 7.0 2.2 (10.9)
Underrecovery of fuel cost 28.2 (35.2) (33.1) (82.3)
Accounts payable 31.0 .3 58.3 21.6
Income taxes payable (55.9) (36.7) (45.1) 23.3
Accrued other taxes (60.3) (55.2) (2.0) (2.3)
Other (5.1) (16.0) 1.2 (13.5)
Other operating activities (13.2) (20.8) (38.2) (19.2)
- ------------------------------------------------------------------------------------------------------------------------------------
Cash provided by continuing operations 52.9 20.0 442.6 570.9
- ------------------------------------------------------------------------------------------------------------------------------------
Cash provided by (used for) discontinued operations - 5.0 - (8.9)
- ------------------------------------------------------------------------------------------------------------------------------------
52.9 25.0 442.6 562.0
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Property additions (including allowance for
borrowed funds used during construction) (224.9) (72.0) (513.6) (264.0)
Purchases of loans and securities, net (8.6) (45.3) (11.0) (70.4)
Proceeds from sales of properties and businesses 15.7 54.1 24.3 61.1
Acquisition of businesses (9.5) (8.7) (32.7) (53.8)
Acquisition of cogeneration facility and payment of
contract termination costs - - (445.0) -
Distributions from (investments in) joint ventures
and partnerships, net (7.0) (4.8) (30.5) (9.4)
Investing activities of discontinued operations - 21.3 - 56.5
Other investing activities (4.9) (3.1) (22.2) (27.6)
- ------------------------------------------------------------------------------------------------------------------------------------
(239.2) (58.5) (1,030.7) (307.6)
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Issuance of long-term debt 35.1 60.0 482.8 178.0
Repayment of long-term debt (.7) (.6) (34.9) (190.4)
Increase(decrease) in commercial paper with
long-term support - (10.0) 130.6 (15.3)
Redemption of preferred stock - (25.5) - (106.4)
Sale of common stock - - - 18.5
Equity contributions to discontinued operations - (23.7) - (23.7)
Dividends paid on common stock (50.9) (50.0) (203.8) (199.5)
Increase (decrease) in short-term debt 191.2 (24.9) 210.8 4.1
Financing activities of discontinued operations - 96.5 - 85.2
Other financing activities (.5) (.9) .5 (4.0)
- ------------------------------------------------------------------------------------------------------------------------------------
174.2 20.9 586.0 (253.5)
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (12.1) (12.6) (2.1) .9
Beginning cash and equivalents 15.2 17.8 5.2 4.3
- ------------------------------------------------------------------------------------------------------------------------------------
ENDING CASH AND EQUIVALENTS $ 3.1 $ 5.2 $ 3.1 $ 5.2
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION> Florida Progress Corporation
Selected Financial Information (Unaudited) Page 9
Three Months Ended Percent Twelve Months Ended Percent
December 31 Positive December 31 Positive
1997 1996 (Negative) 1997 1996 (Negative)
---------- ---------- ------------- ---------- ---------- ------------
Earnings (Loss) Per Share:
<S> <C> <C> <C> <C> <C> <C>
Florida Power Corporation $.44 $.44 - $2.48 $2.40 3.3
---------- ---------- ---------- ----------
Electric Fuels Corporation .11 .07 57.1 .33 .28 17.9
Mid-Continent Life Insurance Co. - - - - .02 -
Corporate and other (.10) (.02) (400.0) (.19) (.09) (111.1)
---------- ---------- ---------- ----------
Diversified Continuing before non-recurring .01 .05 (80.0) .14 .21 (33.3)
---------- ---------- ---------- ----------
Continuing Ops before non-recurring .45 .49 (8.2) 2.62 2.61 .4
Impact of nuclear outage (.02) - - (1.10) - -
Provision for loss on coal properties - (.26) - - (.26) -
Gain on sale of business - .24 - - .24 -
Loss related to life insurance subsidiary (.96) - - (.96) -
----------- ---------- ---------- ----------
Total Continuing Operations (.53) .47 (212.8) .56 2.59 (78.4)
Discontinued Operations - (.01) - - (.27) -
========== ========== ========== ==========
($.53) $.46 (215.2) $.56 $2.32 (75.9)
========== ========== ========== ==========
Avg. shares outstanding (millions) 97.1 97.0 .1 97.1 96.8 .3
Dividends per share $.525 $.515 1.9 $2.10 $2.06 1.9
Book value per share:
Florida Power Corporation $18.21 $18.82 (3.2)
Consolidated $18.30 $19.84 (7.8)
</TABLE>
<TABLE>
<CAPTION>
December 31 December 31
December 31 1997 1996
1997 1996 Amount Percent Amount Percent
---------- ---------- -----------------------------------------
Equity investments (percent): Capitalization (in millions):
<S> <C> <C> <C> <C> <C> <C> <C>
Florida Power Corporation 90 88 Common stock $1,776.0 40.2 $1,924.2 51.0
Electric Fuels Corporation 10 8 Preferred stock 33.5 .8 33.5 .9
Mid-Continent Life Insurance Co. - 4 Long-term debt 2,377.8 53.8 1,776.9 47.1
---------- ---------- Short-term debt 230.0 5.2 39.0 1.0
Total 100 100 --------------------------------------------------------------
========== ========== Total $4,417.3 100.0 $3,773.6 100.0
==============================================================
Note: Prior periods 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 10
(In millions, except billing degree days)
Three Months Ended Twelve Months Ended
December 31 Percent December 31 Percent
1997 1996 Change 1997 1996 Change
----------- ------------ ------------- ------------ ----------- -----------
Revenues:
<S> <C> <C> <C> <C> <C> <C>
Residential $321.0 $298.4 7.6 $1,315.0 $1,304.3 .8
Commercial 142.1 135.1 5.2 568.4 537.3 5.8
Industrial 49.9 52.2 (4.4) 207.9 206.8 .5
Other retail sales 34.6 33.8 2.4 133.4 125.9 6.0
----------- ------------ ------------ -----------
547.6 519.5 5.4 2,224.7 2,174.3 2.3
Sales for resale 45.6 33.3 36.9 150.7 159.9 (5.8)
----------- ------------ ------------ -----------
593.2 552.8 7.3 2,375.4 2,334.2 1.8
Other electric revenues 0.6 2.8 (78.6) 76.3 53.2 43.4
Deferred fuel (3.3) 7.3 - (3.3) 6.2 -
----------- ------------ ------------ -----------
Total $590.5 $562.9 4.9 $2,448.4 $2,393.6 2.3
----------- ------------ ------------ -----------
Kilowatt-hour sales billed:
Residential 3,618.4 3,338.6 8.4 15,079.8 15,481.4 (2.6)
Commercial 2,342.3 2,186.7 7.1 9,257.3 8,848.0 4.6
Industrial 1,005.3 1,028.5 (2.3) 4,187.8 4,223.7 (.8)
Other retail sales 608.4 589.9 3.1 2,325.4 2,231.7 4.2
----------- ------------ ------------ -----------
7,574.4 7,143.7 6.0 30,850.3 30,784.8 .2
Sales for resale 900.2 622.0 44.7 2,439.6 2,707.7 (9.9)
----------- ------------ ------------ -----------
Total electric sales 8,474.6 7,765.7 9.1 33,289.9 33,492.5 (.6)
----------- ------------ ------------ -----------
System Requirements (KWH) 7,933 7,678 3.3 34,605 34,715 (.3)
KWH Sales (Billed & Unbilled):
Retail 7,124 6,881 3.5 30,865 30,613 .8
Wholesale 677 457 48.1 2,432 2,656 (8.4)
Billing Degree Days:
Cooling 719 611 17.7 3,434 3,682 (6.7)
Heating 134 98 36.7 443 859 (48.4)
</TABLE>
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. Beginning
in 1995, Florida Power was ordered by state regulators to conduct a
three-year test of residential revenue decoupling. Under the plan,
abnormal weather variances did not impact earnings with respect to
residential revenues.
