As filed with the Securities and Exchange Commission on January 28, 1999
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 25, 1999
<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 (727) 824-6400
1-3274 FLORIDA POWER CORPORATION Florida 59-0247770
One Progress Plaza
St. Petersburg, Florida 33701
Telephone (727) 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. Information contained herein relating
to an individual registrant is filed by that registrant on its own behalf.
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, 1998:
Florida Progress issued an Investor News report dated January 25, 1999, and
a related News Release of even date therewith, regarding 1998 earnings. Copies
of the Investor News report and News Release 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 Investor News report dated January 25,
1999 regarding 1998 earnings.
99.(b) Florida Progress News Release dated January 25, 1999
regarding 1998 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: January 25, 1999
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
99.(a) Florida Progress Investor News report dated January 25,
1999 regarding 1998 earnings.
99.(b) Florida Progress News Release dated January 25, 1999
regarding 1998 earnings.
EXHIBIT 99.(a)
Florida Progress Corporation
Investor News
[LOGO OMITTED]
Analyst Contacts:
Gre Beuris (727) 820-5734
Lauran Willoughby (727) 820-5737
Florida Progress' 1998 Earnings Increase 10.7% over 1997
St. Petersburg, Florida, January 25, 1999 - Florida Progress Corporation
(NYSE:FPC), parent of St. Petersburg-based Florida Power Corporation, reported
1998 earnings of $281.7 million, or $2.90 per share, compared with 1997 earnings
from recurring operations of $254.3 million, or $2.62 per share. The strong
growth in earnings reflected growth in the utility's core Florida market,
double-digit earnings growth at Electric Fuels and high demand for electricity
due to warmer-than-normal weather in 1998.
Listed below are significant highlights for the year:
FLORIDA POWER CORPORATION
o Earnings per share up 3.2 percent over 1997
o Record sales - Solid customer growth of 2 percent, strong usage growth and
hotter-than-normal weather boosted total kilowatt-hour sales 11.9 percent
over 1997, setting a new annual kilowatt-hour sales record for Florida
Power.
o Regulatory asset amortization - Strengthened the balance sheet through $21
million of accelerated amortization of regulatory assets.
o Accelerated expenditures to enhance reliability - Accelerated $17 million
of 1999 expenditures to enhance the reliability of the generation fleet and
the transmission and distribution systems.
o Revenue deferral - Deferred $10 million of revenue for either future
accelerated regulatory asset amortization or other regulatory initiatives,
as approved by the state regulator.
o Restart of the nuclear unit - On February 15, 1998, the Crystal River
Nuclear Plant was returned to service. Since its restart, the plant has
delivered over 100 percent of its rated capacity.
ELECTRIC FUELS CORPORATION
o Earnings per share up 33 percent over 1997
o $200 million in acquisitions at Progress Rail - During 1998, Electric
Fuels' Rail Services group completed approximately $200 million in
acquisitions.
o Addition of 200 new barges - Electric Fuels' Inland Marine Transportation
group put into service approximately 200 new barges in 1998, bringing its
total barge fleet to 1,100.
-- more --
<PAGE>
FLORIDA POWER CORPORATION
Florida Power, the largest subsidiary of Florida Progress, reported earnings of
$248.6 million, or $2.56 per share for 1998, an increase of 3.2 percent over
1997 earnings from recurring operations of $240.9 million, or $2.48 per share. A
reconciliation of Florida Power's 1998 earnings is as follows:
1997 EPS from recurring operations $2.48
Customer & non-weather usage growth 0.28
Estimated weather impact on sales 0.25
Operations & maintenance
Accelerated reliability spending (0.11)
Accelerated lump-sum pay increase (0.04)
Write-off of obsolete inventory (0.03)
Ongoing operations and maintenance (0.13) (0.31)
------
Depreciation & amortization (0.08)
Nuclear replacement fuel (0.03)
Revenue deferral (0.06)
AFUDC, interest expense & other 0.03
------
1998 EPS $2.56
=====
Florida Power's 1998 kilowatt-hour sales increased 11.9 percent over 1997.
Retail kilowatt-hour sales were up 8.4 percent for the year. Strong customer
growth of 2 percent (26,000 new customers) and increased usage growth boosted
retail kilowatt-hour sales in 1998. In addition, Florida Power benefited from
hotter-than-normal weather experienced throughout most of the year.
Wholesale kilowatt-hour sales increased 57.2 percent in 1998. Most of the
increase was due to higher sales in the short-term energy market and higher
sales to Florida Power's largest wholesale customer. The short-term energy sales
have a minimal impact on Florida Power's earnings because the benefit of the
sales is credited to customers.
Florida Power's strong revenues enabled the company to take several actions to
better position itself for the future. These were (in millions):
Accelerated amortization of regulatory assets $21
Accelerated 1999 expenditures to enhance reliability $17
Accelerated 1999 lump-sum pay increase $ 7
Revenue deferral $10
Ongoing operations and maintenance expenses increased approximately $21 million
compared with 1997. The company absorbed the increased costs associated with its
growing customer base and a full year of costs for the 220-megawatt Tiger Bay
plant acquired in July 1997.
Depreciation and amortization expense increased $21 million in 1998 due to
higher plant balances and a full year of amortization of the Tiger Bay purchased
power contract termination costs (Tiger Bay regulatory asset).
-- more --
<PAGE>
ELECTRIC FUELS CORPORATION
Electric Fuels earned $42.3 million, or $.44 per share, in 1998, compared with
$32.1 million, or $.33 per share in 1997. The 33-percent increase in earnings
per share reflected improved operating results across all three of its business
units.
Earnings from the Inland Marine Transportation group were up $4.4 million over
1997. The improvement was due primarily to the expansion of its barge fleet. In
addition, 1997's results were negatively impacted due to flooding conditions
along the Ohio and Mississippi rivers in March 1997.
The Energy and Related Services group reported a $3.6 million improvement in
earnings from a year ago. The additional earnings from this group were
principally due to increased offshore barge deliveries of coal to Florida Power,
improved earnings from mining operations, and expanded terminal operations.
Results in the Rail Services group increased $2.6 million over 1997, although
negatively impacted by substantial declines in scrap steel prices during the
second half of 1998. Increase in demand for railcar and track parts and
services, sales of railcars from the lease portfolio and increases resulting
from a full year of businesses acquired in 1997 more than offset the effects of
lower scrap steel prices. Results for 1998 demonstrated the benefits of the
diversified yet complementary mix of products and services that Rail Services
delivers to its customers.
CORPORATE AND OTHER
The loss attributable to corporate and other diversified activities for the year
improved by $.09 per share over 1997. The improvement primarily resulted from a
one-time gain realized in 1998 from the sale of a purchased power contract and
the provision for an uncollectible receivable in the fourth quarter of 1997,
both associated with a cogeneration facility in which Florida Progress has an
indirect minority interest.
Including the charges associated with the 1997 extended outage of Florida Power
Corporation's Crystal River Nuclear Plant and the provision for loss related to
Mid-Continent Life Insurance Company, Florida Progress reported 1997 earnings of
$54.3 million, or $.56 per share.
FOURTH QUARTER
For the quarter, Florida Progress reported earnings of $36.1 million, or $.37
per share, compared with $43.2 million, or $.45 per share, from recurring
operations in 1997. Florida Power's earnings per share of $.27 were $.17 per
share lower than 1997. Strong year-to-date results through September and
favorable revenues in the fourth quarter enabled the utility to take several
actions including the acceleration of certain reliability expenditures and
others as previously discussed. In addition, the utility wrote off inventory
deemed obsolete. Electric Fuels reported $.13 per share for the quarter, up $.02
over 1997.
FLORIDA POWER CORPORATION
Florida Power's kilowatt-hour sales were up 8.8 percent during the fourth
quarter of 1998, compared with 1997. The higher sales were due to customer
growth, non-weather usage growth and warmer-than-normal weather during much of
the quarter.
-- more --
<PAGE>
A reconciliation of Florida Power's 1998 fourth-quarter earnings is as follows:
1997 4QTR EPS from recurring operations $0.44
Customer & non-weather usage growth 0.07
Estimated weather impact on sales (0.04)
Operations & maintenance
Accelerated reliability spending (0.10)
Accelerated lump-sum pay increase (0.04)
Obsolete inventory (0.03)
Ongoing operations & maintenance (0.09) (0.26)
------
Depreciation & amortization 0.09
Revenue deferral (0.06)
AFUDC, interest expense & other 0.03
------
1998 4QTR EPS $0.27
=====
The estimated weather impact on sales would have been favorable absent an $8
million increase to revenues in the fourth quarter of 1997. The adjustment was
made to recognize additional base revenues for residential revenue decoupling, a
three-year rate experiment which expired December 31, 1997.
Operations and maintenance expenses increased $41 million over the same quarter
last year. The increase was due primarily to the same items discussed for 1998,
accelerated reliability expenditures, accelerated lump-sum pay increase and the
write-off of obsolete inventory.
Depreciation and amortization declined $12 million in the fourth quarter of
1998, compared with 1997. The decrease was due to a $20 million write-off of the
Tiger Bay regulatory asset in the fourth quarter of 1997. Excluding the 1997
write-off, depreciation expense increased due to higher plant balances.
ELECTRIC FUELS CORPORATION
Electric Fuels' earnings increased $2.5 million, or $.02 per share, for the
fourth quarter of 1998, compared with 1997. The improvement in earnings was due
primarily to a larger barge fleet in the Inland Marine Transportation group and
favorable results in the Energy and Related Services group's terminal
operations. Also contributing was the Rail Services group with strong demand for
railcar and track parts and services and sales of railcars.
CORPORATE AND OTHER
Corporate and other recorded a loss of $.03 per share for the fourth quarter of
1998, compared with a $.10 per share loss in 1997. The improvement over the
prior year was largely due to charges that were recognized in the fourth quarter
of 1997. The charges were for the provision for an uncollectible receivable
associated with the cogeneration facility, as discussed previously, and
consolidated tax adjustments.
Including the charges related to the 1997 extended nuclear outage and the
provision for loss related to Mid-Continent Life Insurance Company, Florida
Progress reported a loss of $75.6 million or $.78 per share, for the fourth
quarter of 1997.
Florida Progress (NYSE:FPC) is a Fortune 500 diversified utility holding company
with assets of $6.2 billion. Its principal subsidiary is Florida Power, the
state's second largest electric utility serving about 1.3 million customers.
Diversified operations include rail services, marine operations and coal mining.
###
<PAGE>
<TABLE>
<CAPTION>
FLORIDA PROGRESS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME Page 5
(UNAUDITED) (In millions, except per share amounts)
Three Months Ended Twelve Months Ended
December 31 December 31
------------------------- -------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
REVENUES:
<S> <C> <C> <C> <C>
Electric utility $ 623.6 $ 590.5 $ 2,648.2 $ 2,448.4
Diversified 274.6 258.6 972.1 868.0
- -------------------------------------------------------------------------------------------------------------------------
898.2 849.1 3,620.3 3,316.4
- -------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Electric utility:
Fuel 161.7 114.9 595.7 458.1
Purchased power 101.7 112.9 433.8 490.6
Energy conservation cost 19.5 17.7 79.6 67.0
Operations and maintenance 144.7 103.7 471.6 422.3
Extended nuclear outage - O&M and replacement power costs - 42.4 5.1 173.3
Depreciation and amortization 86.2 98.6 347.1 325.9
Taxes other than income taxes 45.2 43.7 203.6 193.6
- -------------------------------------------------------------------------------------------------------------------------
559.0 533.9 2,136.5 2,130.8
- -------------------------------------------------------------------------------------------------------------------------
Diversified:
Cost of sales 239.6 226.0 827.2 753.9
Loss related to life insurance subsidiary - 96.3 - 97.6
Other 13.3 18.1 56.3 60.4
- -------------------------------------------------------------------------------------------------------------------------
252.9 340.4 883.5 911.9
- -------------------------------------------------------------------------------------------------------------------------
INCOME FROM OPERATIONS 86.3 (25.2) 600.3 273.7
- -------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE AND OTHER:
Interest expense 45.9 46.3 187.1 158.7
Allowance for funds used during construction (4.5) (2.8) (16.9) (9.7)
Other expense (income) (3.2) 4.6 (.2) 4.0
- -------------------------------------------------------------------------------------------------------------------------
38.2 48.1 170.0 153.0
- -------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 48.1 (73.3) 430.3 120.7
Income taxes 12.0 2.3 148.6 66.4
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 36.1 $ (75.6) $ 281.7 $ 54.3
- -------------------------------------------------------------------------------------------------------------------------
AVERAGE SHARES OF COMMON
STOCK OUTSTANDING 97.1 97.1 97.1 97.1
- -------------------------------------------------------------------------------------------------------------------------
EARNINGS (LOSS) PER AVERAGE COMMON SHARE (BASIC and DILUTED) $.37 $(.78) $2.90 $.56
- -------------------------------------------------------------------------------------------------------------------------
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. These are interim statements. Reference should be made to Florida Progress Corporation's
1997 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 6
(UNAUDITED) (In millions)
December 31
--------------------------------
ASSETS 1998 1997
------------ -------------
PROPERTY, PLANT AND EQUIPMENT:
<S> <C> <C>
Electric utility plant in service and held for future use $ 6,307.8 $ 6,166.8
Less - Accumulated depreciation 2,716.0 2,511.0
Accumulated decommissioning for nuclear plant 254.8 223.7
Accumulated dismantlement for fossil plants 130.7 128.5
- ----------------------------------------------------------------------------------------------------------------------
3,206.3 3,303.6
Construction work in progress 378.3 279.4
Nuclear fuel, net of amortization of $377.2 in 1998 and $356.7 in 1997 45.9 66.5
- ----------------------------------------------------------------------------------------------------------------------
Net electric utility plant 3,630.5 3,649.5
Other property, net of depreciation of $234.6 in 1998 and $219.3 in 1997 560.1 437.7
----------------------------------------------------------------------------------------------------------------------
4,190.6 4,087.2
- ----------------------------------------------------------------------------------------------------------------------
CURRENT ASSETS:
Cash and equivalents 2.5 3.1
Accounts receivable, net 413.4 373.7
Inventories, primarily at average cost:
Fuel 69.8 77.6
Utility materials and supplies 83.3 91.9
Diversified materials 137.0 126.8
Underrecovered utility fuel cost - 34.5
Income taxes receivable 23.4 16.8
Deferred income taxes 55.9 5.8
Other 68.8 45.1
- ----------------------------------------------------------------------------------------------------------------------
854.1 775.3
- ----------------------------------------------------------------------------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS:
Costs deferred pursuant to regulation:
Deferred purchased power contract termination costs 321.0 348.2
Other 113.6 126.4
Investments in nuclear plant decommissioning fund 332.1 266.7
Goodwill 139.8 55.2
Joint ventures and partnerships 71.5 54.6
Other 138.1 46.4
- ----------------------------------------------------------------------------------------------------------------------
1,116.1 897.5
- ----------------------------------------------------------------------------------------------------------------------
$ 6,160.8 $ 5,760.0
- ----------------------------------------------------------------------------------------------------------------------
CAPITAL AND LIABILITIES
CAPITAL:
Common stock equity $ 1,862.0 $ 1,776.0
Cumulative preferred stock of Florida Power 33.5 33.5
Long-term debt 2,250.4 2,377.8
- ----------------------------------------------------------------------------------------------------------------------
4,145.9 4,187.3
- ----------------------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES:
Accounts payable 297.9 253.2
Customers' deposits 104.1 97.1
Accrued other taxes 10.1 12.0
Accrued interest 70.4 56.8
Overrecovered utility fuel cost 22.2 -
Other 85.8 74.8
- ----------------------------------------------------------------------------------------------------------------------
590.5 493.9
Notes payable 236.2 214.8
Current portion of long-term debt 145.9 15.2
- ----------------------------------------------------------------------------------------------------------------------
972.6 723.9
- ----------------------------------------------------------------------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred income taxes 595.4 471.2
Unamortized investment tax credits 77.8 85.7
Other postretirement benefit costs 116.1 107.4
Other 253.0 184.5
- ----------------------------------------------------------------------------------------------------------------------
1,042.3 848.8
- ----------------------------------------------------------------------------------------------------------------------
$ 6,160.8 $ 5,760.0
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Florida Progress Corporation Page 7
Selected Financial Information (Unaudited)
Three Months Ended Percent Twelve Months Ended
December 31 Positive December 31 Percent
1998 1997 (Negative) 1998 1997 Positive
----------- ----------- --------- ------------ ----------- -----------
Earnings (Loss) Per Share:
<S> <C> <C> <C> <C> <C> <C>
Florida Power Corporation $.27 $.44 (38.6) $2.56 $2.48 3.2
----------- ----------- ------------ -----------
Electric Fuels Corporation .13 .11 18.2 .44 .33 33.3
Corporate and other (.03) (.10) 70.0 (.10) (.19) 47.4
----------- ----------- ------------ -----------
Diversified Continuing before
non-recurring .10 .01 900.0 .34 .14 142.9
----------- ----------- ------------ -----------
Continuing Ops before non-recurring .37 .45 (17.8) 2.90 2.62 10.7
Impact of nuclear outage - (.27) - - (1.10) -
Loss related to life insurance subsidiary - (.96) - - (.96) -
----------- ----------- ------------ -----------
Total $.37 ($.78) 147.4 $2.90 $.56 417.9
=========== =========== ============ ===========
Avg. shares outstanding (millions) 97.1 97.1 - 97.1 97.1 -
Dividends per share $.535 $.525 1.9 $2.14 $2.10 1.9
Book value per share:
Florida Power Corporation $18.70 $18.21 2.7
Consolidated $19.13 $18.30 4.5
</TABLE>
<TABLE>
<CAPTION>
December 31 December 31
December 31 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 90 Common stock $1,862.0 41.1 $1,776.0 40.2
Electric Fuels Corporation 11 10 Preferred stock 33.5 .7 33.5 .8
----------- -----------
Total 100 100 Long-term debt 2,250.4 49.7 2,377.8 53.8
----------- -----------
Short-term debt 382.1 8.5 230.0 5.2
-----------------------------------------------
Total $4,528.0 100.0 $4,417.3 100.0
-----------------------------------------------
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 financial results for
the interim reporting periods but did not have any affect on results for the fiscal year ended 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Florida Power Corporation Page 8
Selected Statistical Data (Unaudited)
(In millions, except billing degree days)
Three Months Ended Twelve Months Ended
December 31 Percent December 31 Percent
1998 1997 Change 1998 1997 Change
----------- ------------ ---------- ------------------------ ---------
Revenues:
<S> <C> <C> <C> <C> <C> <C>
Residential (1) $335.4 $321.0 4.5 $1,424.6 $1,315.0 8.3
Commercial 157.1 142.1 10.6 608.9 568.4 7.1
Industrial 55.9 49.9 12.0 214.4 207.9 3.1
Other retail sales 38.2 34.6 10.4 142.3 133.4 6.7
----------- ------------ ------------------------
586.6 547.6 7.1 2,390.2 2,224.7 7.4
Sales for resale 50.8 45.6 11.4 205.8 150.7 36.6
----------- ------------ ------------------------
637.4 593.2 7.5 2,596.0 2,375.4 9.3
Other electric revenues (2) (20.4) 0.6 - 67.0 76.3 (12.2)
Deferred fuel (3) 6.6 (3.3) - (14.8) (3.3) -
----------- ------------ ------------------------
Total $623.6 $590.5 5.6 $2,648.2 $2,448.4 8.2
----------- ------------ ------------------------
Kilowatt-hour sales billed:
Residential 3,850.7 3,618.4 6.4 16,526.3 15,079.8 9.6
Commercial 2,589.8 2,342.3 10.6 9,999.3 9,257.3 8.0
Industrial 1,143.0 1,005.3 13.7 4,375.4 4,187.8 4.5
Other retail sales 665.1 608.4 9.3 2,485.6 2,325.4 6.9
----------- ------------ ------------------------
8,248.6 7,574.4 8.9 33,386.6 30,850.3 8.2
Sales for resale 1,085.4 900.2 20.6 3,864.5 2,439.6 58.4
----------- ------------ ------------------------
Total electric sales 9,334.0 8,474.6 10.1 37,251.1 33,289.9 11.9
----------- ------------ ------------------------
System Requirements (KWH) 8,570 7,933 8.0 37,763 34,605 9.1
KWH Sales (Billed & Unbilled):
Retail 7,713 7,124 8.3 33,451 30,865 8.4
Wholesale 772 677 14.0 3,823 2,432 57.2
=========== ============ ========================
8,485 7,801 8.8 37,274 33,297 11.9
=========== ============ ========================
Billing Degree Days:
Cooling 862 719 19.9 4,159 3,434 21.1
Heating 25 134 (81.3) 557 443 25.7
Note: (1) 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. (2) In the 4th quarter of 1998, the FPSC approved the establishment of a regulatory liability for
1998 deferred earnings, which resulted in a $10 million charge to Other electric revenues. Total revenues include billed
revenues and unbilled revenues that are accrued for accounting purposes. (3) Revenues include amounts resulting from
fuel, purchased power, and energy conservation clauses; which are designed to permit full recovery of these costs.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
EX-99.(b)
Florida Progress Corporation
News Release
Corporate Relations Department, St. Petersburg, Florida
FOR IMMEDIATE RELEASE CONTACT: MELANIE FORBRICK
727/820-5023
Florida Progress' 1998 Earnings Increase 10.7% over 1997
St. Petersburg, FL...January 25, 1999...Florida Progress Corporation (NYSE:FPC),
parent of St. Petersburg-based Florida Power Corporation, reported 1998 earnings
of $281.7 million, or $2.90 per share. This compares with 1997 earnings from
recurring operations of $254.3 million, or $2.62 per share. The increase in
earnings was a result of strong growth in the utility's core Florida market,
high demand for electricity due to warmer-than-normal weather in 1998, and
double-digit earnings growth at Electric Fuels.
"We're very pleased with our 1998 earnings results," said Chairman and CEO
Richard Korpan. "These results were driven by the outstanding performance of
Florida Power's utility business, and by substantial growth at Electric Fuels.
And the strength of our operating results at Florida Power permitted us to make
investments designed to improve reliability and service for our customers."
Listed below are significant highlights for the year:
o Florida Power's earnings per share up 3.2 percent over 1997
o Electric Fuels' earnings per share up 33 percent over 1997
o Strong sales for Florida Power- Solid customer growth of two percent,
strong usage growth of approximately two percent, and hotter-than-normal
weather boosted total kilowatt-hour sales 11.9 percent over 1997.
o Reliability enhancements for Florida Power customers - Accelerated $17
million of 1999 expenditures to enhance the reliability of the generation
fleet and the transmission and distribution systems.
o Restart of Florida Power's nuclear plant - On February 15, 1998, the
Crystal River Nuclear Plant was returned to service. Since its restart, the
plant has delivered over 100 percent of its rated capacity.
- more -
<PAGE>
Florida Progress Corporation
1998 Earnings
Page 2
FLORIDA POWER CORPORATION
Florida Power, the largest subsidiary of Florida Progress, reported earnings of
$248.6 million, or $2.56 per share, for 1998 -- an increase of 3.2 percent over
1997 earnings from recurring operations of $240.9 million, or $2.48 per share.
Florida Power's 1998 kilowatt-hour sales increased 11.9 percent over 1997.
Retail kilowatt-hour sales were up 8.4 percent for the year. Strong customer
growth of two percent (26,000 new customers) and increased usage growth boosted
retail kilowatt-hour sales in 1998. In addition, Florida Power benefited from
the hotter-than-normal weather throughout most of the year.
The extremely hot weather during 1998 enabled the company to accelerate $17
million of expenditures from 1999 into the fourth quarter of 1998 for
reliability projects that will enhance customer service. In addition, Florida
Power deferred $10 million of revenues for either future accelerated regulatory
asset amortization or other regulatory initiatives that would benefit customers.
This deferral was approved by the Florida Public Service Commission.
ELECTRIC FUELS CORPORATION
Electric Fuels earned $42.3 million, or $.44 per share, in 1998. This compares
with $32.1 million, or $.33 per share, in 1997. The 33-percent increase in
earnings per share reflects improved results across all three of its business
units, including an expanded barge fleet, increased coal deliveries and an
increased demand for railcar and track parts and services.
FOURTH QUARTER
For the fourth quarter of 1998, Florida Progress reported earnings of $36.1
million, or $.37 per share. This compares with $43.2 million, or $.45 per share,
from recurring operations in the fourth quarter of 1997. Florida Power earned
$26.3 million, or $.27 per share, compared with $42.4 million, or $.44 per
share, for the same period in 1997. Electric Fuels reported earnings of $13
million, or $.13 per share, for the quarter, compared with 1997 fourth-quarter
earnings of $10.5 million, or $.11 per share.
Strong year-to-date results through September and favorable revenues in the
fourth quarter enabled the utility to take several actions including the
acceleration of $17 million of reliability expenditures as previously discussed,
which reduced 1998 fourth-quarter earnings compared with 1997's fourth-quarter
results before non-recurring items.
- more -
<PAGE>
Florida Progress Corporation
1998 Earnings
Page 3
1997 Adjusted Results
Including the charges associated with the 1997 extended outage of Florida Power
Corporation's Crystal River Nuclear Plant and the provision for loss related to
Mid-Continent Life Insurance Company, Florida Progress reported 1997 earnings of
$54.3 million, or $.56 per share, and a fourth-quarter loss of $75.6 million, or
$.78 per share.
Florida Progress (NYSE:FPC) is a FORTUNE 500 diversified utility holding company
with assets of $6.2 billion. Its principal subsidiary is Florida Power, one of
the nation's leading electric utilities serving 1.3 million customers in central
and northern Florida. Diversified operations include rail services, marine
operations and coal mining.
###
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
December 31 December 31
(in millions) (in millions)
----------------------------- ------------------------------
1998 1997 1998 1997
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Revenues $898.2 $849.1 $3,620.3 $3,316.4
------------- ------------- -------------- -------------
Income from continuing operations before
non-recurring items 36.1 43.2 281.7 254.3
Non-recurring items - (118.8) - (200.0)
------------- ------------- -------------- -------------
Net income $36.1 ($75.6) $281.7 $54.3
============= ============= ============== =============
Earnings (loss) per share (EPS):
Income from continuing operations
before non-recurring items $.37 $.45 $2.90 $2.62
Non-recurring items - (1.23) - (2.06)
------------- ------------- -------------- -------------
Consolidated $.37 ($.78) $2.90 $.56
============= ============= ============== =============
Average Common
Shares Outstanding 97,122,637 97,061,777 97,068,047 97,054,280
</TABLE>
