<PAGE> 1
As filed with the Securities and Exchange Commission on January 31, 2000
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 27, 2000
<TABLE>
<S> <C> <C> <C>
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.
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) 820-5151
</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> 2
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, 1999:
Florida Progress issued an Investor News report dated January 27, 2000
reporting 1999 earnings. A copy of the Investor News report is filed
herewith as Exhibit 99.
In addition, Edward Moneypenny, Florida Progress' Senior Vice
President and Chief Financial Officer, has indicated that Florida Progress'
2000 earnings per share could be between six and seven percent over 1999's
earnings of $3.18 per share, which excludes a $.03 per share gain on the sale of
property. In response to an analyst's question as to whether the 6 to 7 percent
growth is a long-term growth rate, Mr. Moneypenny indicated that Florida
Progress' earnings growth over the next several years could be better than 5
percent.
A caution about forward looking statements
This report contains certain forward looking statements, including
projections regarding Florida Progress' earnings per share. These statements,
and any other statements contained herein that are not historical facts, are
forward-looking statements that are based on a series of projections and
estimates regarding the economy, the electric utility business and Florida
Progress' other businesses in general. Key factors that have a direct impact on
the ability to attain these projections include continued annual growth in
customers, the weather, successful cost containment efforts and the efficient
operation of Florida Power's existing and future generating units. If these
projections and estimates regarding the economy, the electric utility business
and other factors differ materially from what actually occurs, or if various
legal or regulatory proceedings have unfavorable outcomes, then actual results
could vary significantly from the performance projected in the forward-looking
statements.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
Exhibit Number (by
reference to Item 601
of Regulation S-K) Description of Exhibit
99 Florida Progress Corporation Investor News report dated
January 27, 2000.
2
<PAGE> 3
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
By: /s/ Pamela A. Saari
-------------------------
Pamela A. Saari
Treasurer of each Registrant
Date: January 27, 2000
3
<PAGE> 4
EXHIBIT INDEX
Exhibit No. Description of Exhibit
99 Florida Progress Corporation Investor News report dated
January 27, 2000.
4
<PAGE> 1
EXHIBIT 99
[FLORIDA PROGRESS CORPORATION LOGO] Investor News
Analyst Contacts:
Greg Beuris (727) 820-5734
Lauran Willoughby (727) 820-5737
FLORIDA PROGRESS REPORTS 1999 EARNINGS
St. Petersburg, Florida, January 27, 2000 - Florida Progress Corporation
(NYSE:FPC), parent of St. Petersburg-based Florida Power Corporation, reported
1999 earnings of $314.9 million, or $3.21 per share, compared with 1998 earnings
of $281.7 million, or $2.90 per share, an increase of about 11 percent. The
strong improvement in earnings came from the continued growth of the company's
core utility operations and the double-digit growth of its diversified
operations, led by Electric Fuels Corporation.
Listed below are significant highlights for the year:
FLORIDA POWER CORPORATION
- 27,000 NEW CUSTOMERS - Solid retail customer growth of about 2
percent, which is twice the national average.
- KWH SALES UP 3.4% - Higher wholesale sales and strong
non-weather related usage growth helped increase sales 3.4
percent over 1998, offsetting the impact of a return to more
normal weather in 1999 compared with the hotter-than-normal
weather experienced in 1998.
- REGULATORY REVENUE DEFERRAL - Deferred $44.4 million of
revenue for either future accelerated regulatory asset
amortization or other regulatory initiatives, as approved by
the Florida Public Service Commission (FPSC).
ELECTRIC FUELS CORPORATION
- SYNTHETIC FUEL SALES - Sale of about 2 million tons of a new
coal-based synthetic fuel in 1999, which qualifies for
alternative fuel tax credits, provided a majority of the
earnings improvement over 1998.
- EXPANSION OF RAIL SERVICES - During 1999, Electric Fuels' Rail
Services group continued to expand its operations through $47
million in acquisitions, expansion of a railcar repair
facility and completion of a new trackworks plant.
- ADDITION OF NEW BARGES - Electric Fuels' Inland Marine
Transportation group put into service approximately 100 new
barges and a new towboat in 1999, bringing its total barge
fleet to approximately 1,200.
FLORIDA POWER CORPORATION
Florida Power, the largest subsidiary of Florida Progress, reported earnings of
$264.7 million, or $2.70 per share for 1999, compared with 1998 earnings of
$248.6 million, or $2.56 per share. Included in 1999 earnings was a $.03 per
share gain on the sale of property.
- more -
<PAGE> 2
Page 2
Florida Progress Corporation
Investor News - 1999 Earnings
A reconciliation of Florida Power's 1999 earnings per share is as follows:
<TABLE>
<S> <C>
1998 EPS $2.56
Sales of electricity and other revenues .20
1999 regulatory revenue deferral (.28)
1998 accelerated regulatory asset amortization .13
1998 nuclear replacement fuel .03
Operation & maintenance .03
Depreciation (.06)
Interest expense & AFUDC .02
Other income, net .07
-----
1999 EPS $2.70
=====
</TABLE>
Florida Power's 1999 kilowatt-hour sales increased 3.4 percent over 1998.
Increased wholesale sales, up 30.5 percent over 1998, accounted for most of the
improvement, as retail sales were up just .3 percent.
Florida Power's 1999 retail kilowatt-hour sales were affected by a return to
more normal weather patterns compared with 1998 when customers experienced
hotter-than-normal weather throughout most of the year. Residential customers,
Florida Power's largest customer class, are more sensitive to weather than any
other customer group. As a result of the more moderate weather in 1999, usage
per residential customer dropped 3.6 percent compared with 1998.
Most of the improvement in earnings due to sales of electricity resulted from
the addition of approximately 27,000 new customers in 1999 and the benefits of a
strong Florida economy. Residential and commercial customer growth was
approximately 2 percent and 3 percent, respectively, in 1999. Partially
offsetting the effect of customer and non-weather related usage growth was lower
usage due to more normal weather temperatures experienced in 1999 compared with
1998.
Florida Power's 1999 results also benefited from an increase in wholesale sales,
most of which were to Florida Power's largest wholesale customer, Seminole
Electric Cooperative, and an increase in other operating revenues. The
improvement in other operating revenues, about $.04 per share, was primarily the
result of higher transmission wheeling revenues in 1999 compared with 1998.
In 1999, Florida Power deferred $44.4 million of revenues. Florida Power's 1999
regulatory revenue deferral, as approved by the FPSC, allows the utility
additional time to explore ways to provide a benefit to customers earlier than
accelerating the amortization of the Tiger Bay regulatory asset. Florida Power
must provide the FPSC with its plan to use the deferred revenues by August 2000.
In 1998, Florida Power took several actions to better position itself for the
future, which resulted in higher amortization and operation and maintenance
expense. Those actions included accelerated amortization of regulatory assets
($21 million), additional system reliability improvements ($17 million) and a
lump-sum payroll increase ($7 million).
Total operation and maintenance expense of $466.4 million was down $5.2 million
compared with 1998. As previously mentioned, 1998 expense included $24 million
of expenditures for system reliability improvements and a lump-sum payroll
increase.
Excluding those items, 1999 operation and maintenance expense was up about $19
million due to higher legal costs associated with a pre-existing age
discrimination litigation, environmental costs associated with a former plant
site and higher employee related benefits.
- more -
<PAGE> 3
Page 3
Florida Progress Corporation
Investor News - 1999 Earnings
Florida Power's depreciation and amortization expense increased approximately $9
million in 1999 over 1998, excluding the accelerated amortization of regulatory
assets. The increase was largely attributable to depreciation expense associated
with the new 500-megawatt Hines plant, which was placed in service in April
1999.
Other income improved $.07 per share compared with 1998 due primarily to higher
earnings from non-regulated activities and a one-time gain on the sale of
property.
ELECTRIC FUELS CORPORATION
Electric Fuels earned $62.5 million, or $.64 per share, in 1999, compared with
$42.3 million, or $.44 per share, in 1998. The 45-percent increase in earnings
per share was driven primarily by strong results from the Energy and Related
Services group and the Rail Services group.
The Energy and Related Services group reported earnings of $38.9 million, or an
increase of $18.5 million over last year's results. The additional earnings were
due primarily to the sale of a new coal-based synthetic fuel, which qualifies
for alternative fuel tax credits. In addition, increased production and sales of
natural gas contributed to the higher earnings.
In October 1999, Electric Fuels expanded its synthetic fuel operations through
the purchase of four synthetic fuel plants. The plants, all of which are
expected to be operational within the next 12 to 13 months, did not affect 1999
results.
Earnings in the Rail Services group increased $5.4 million, or 34 percent, over
1998. The increase was due to improved results from the group's recycling
operations and continued strong demand for railcar parts and repair work by the
Class I railroads and railcar fleet owners.
Scrap steel prices improved significantly during the fourth quarter of 1999 and
positively affected operating margins. Higher margins combined with an increase
in tons sold resulted in improved results from the recycling operations. Demand
for railcar repair work was strong throughout 1999, but demand for track parts
and services fluctuated during the year as railroads rescheduled the timing of
track repair work.
Despite the addition of 100 new barges in 1999, earnings from the Inland Marine
Transportation group were flat compared with 1998, due primarily to the adverse
operating conditions experienced in early 1999. Prolonged icing conditions and
high water during the first quarter disrupted barge traffic and limited tow
capacity. In addition, higher diesel fuel costs in 1999 negatively impacted
results for the year.
CORPORATE AND OTHER
The loss attributable to corporate and other diversified activities for the year
increased by $.03 per share over 1998. The increased loss was primarily due to
the absence of a $.04 per share gain realized in 1998 for the buyout of a
purchased power contract associated with a cogeneration facility in which
Florida Progress has an indirect minority interest.
FOURTH QUARTER
For the quarter, Florida Progress reported earnings of $33.4 million, or $.34
per share, compared with $36.1 million, or $.37 per share, in 1998. Florida
Power earned $16.3 million, or $.17 per share, $.10 per share less than the same
period in 1998. Electric Fuels reported earnings of $.16 per share for the
quarter, up $.03 over 1998.
- more -
<PAGE> 4
Page 4
Florida Progress Corporation
Investor News - 1999 Earnings
FLORIDA POWER CORPORATION
A reconciliation of Florida Power's 1999 fourth-quarter earnings per share is as
follows:
<TABLE>
<S> <C>
1998 4QTR EPS $.27
Sales of electricity and other revenues .08
1999 regulatory revenue deferral (.28)
1998 regulatory revenue deferral .06
Operation & maintenance .03
Interest expense & AFUDC (.02)
Other income, net .03
----
1999 4QTR EPS $.17
====
</TABLE>
Florida Power's kilowatt-hour sales were up 4.7 percent during the fourth
quarter of 1999, compared with 1998. Retail sales decreased slightly by .4
percent due to a return to more normal weather conditions in the fourth quarter
of 1999, compared with the warmer-than-normal weather in 1998. Customer growth
of approximately 2 percent combined with strong economic growth essentially
offset the effect of weather.
Wholesale sales increased over 56 percent in the fourth quarter compared with a
year ago. Most of the increase was due to higher sales to Florida Power's
largest wholesale customer, Seminole Electric, and higher sales to other
municipal customers.
The revenue increase of $.08 per share was primarily due to higher wholesale
sales and a true-up adjustment related to the utility's 1997 residential revenue
decoupling program.
Operation and maintenance expense decreased $4.2 million in the fourth quarter
of 1999 over the same quarter last year. Excluding 1998 fourth-quarter
expenditures of $24 million for strategic spending, operation and maintenance
expense increased $19.8 million over the fourth quarter of 1998. The increase
was primarily due to the same items previously discussed for 1999.
The completion of the Hines plant in April 1999 lowered construction
work-in-progress balances in the fourth quarter of 1999 compared with 1998. This
reduced the amount of allowance for funds used during construction (AFUDC)
recognized during the quarter compared with a year ago.
Other income increased due to higher earnings from non-regulated activities.
ELECTRIC FUELS CORPORATION
Electric Fuels' earnings increased $2.6 million, or $.03 per share, in the
fourth quarter of 1999, over the fourth quarter of 1998. The improvement was
largely due to higher earnings in the Rail Services and Inland Marine
Transportation groups.
The Rail Services group's earnings were $4.3 million higher in the fourth
quarter of 1999 compared with 1998. The improvement was largely due to higher
margins at the group's recycling division as a result of improved scrap steel
prices.
The Inland Marine Transportation group's earnings were up $1.1 million, or 32
percent, over the same period last year. The improved results were due to higher
barge rates and increased volumes, as well as higher earnings from barge
fleeting services.
- more -
<PAGE> 5
Page 5
Florida Progress Corporation
Investor News - 1999 Earnings
Partially offsetting these results were lower earnings from the Energy and
Related Services group and higher employee benefit costs. The lower Energy and
Related Services group results were due to the third quarter tax true-up which
affected the timing of recognizing the tax credits related to synthetic fuel
sales.
CORPORATE AND OTHER
Corporate and other income of $.01 per share improved $.04 in the fourth quarter
of 1999 compared with the same period last year. The improvement over the prior
year was primarily due to the recognition of a tax benefit related to the 1997
write-off of the company's investment in Mid-Continent Life Insurance Company.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: This news release contains a forward-looking statement regarding the
projected period of time four synthetic fuel plants become operational. This
statement involves risks and uncertainties that could cause actual results or
outcomes to differ materially from expectations. Key factors that could have a
direct bearing on the company's ability to meet this projection include the time
needed for plants to be reassembled and become fully operational in a manner
that qualifies the fuel for federal tax credits, market acceptance of synthetic
fuel, competition from competing products, impacts of environmental regulations
on potential buyers and other factors.
Florida Progress (NYSE:FPC) is a Fortune 500 diversified electric utility
holding company with assets of $6.5 billion. Its principal subsidiary is Florida
Power, the state's second largest electric utility serving about 1.4 million
customers. Diversified operations include energy operations, marine operations
and rail services.
###
<PAGE> 6
FLORIDA PROGRESS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(UNAUDITED) (In millions, except per share amounts)
Three Months Ended Twelve Months Ended
December 31 December 31
------------------------- --------------------------
1999 1998 1999 1998
------- --------- --------- ---------
<S> <C> <C> <C> <C>
REVENUES:
Electric utility $ 595.3 $ 623.6 $ 2,632.6 $ 2,648.2
Diversified 345.8 274.6 1,212.5 972.1
------- --------- --------- ---------
941.1 898.2 3,845.1 3,620.3
------- --------- --------- ---------
EXPENSES:
Electric utility:
Fuel 147.3 161.7 596.0 595.7
Purchased power 108.7 101.7 414.1 433.8
Energy conservation cost 19.3 19.5 81.2 79.6
Operation and maintenance 140.5 144.7 466.4 471.6
Extended nuclear outage - replacement power costs -- -- -- 5.1
Depreciation and amortization 86.7 86.2 347.5 347.1
Taxes other than income taxes 43.2 45.2 203.1 203.6
------- --------- --------- ---------
545.7 559.0 2,108.3 2,136.5
------- --------- --------- ---------
Diversified:
Cost of sales 303.9 239.6 1,072.3 827.2
Other 28.9 13.3 89.6 56.3
------- --------- --------- ---------
332.8 252.9 1,161.9 883.5
------- --------- --------- ---------
INCOME FROM OPERATIONS 62.6 86.3 574.9 600.3
------- --------- --------- ---------
INTEREST EXPENSE AND OTHER:
Interest expense 42.4 45.9 173.6 187.1
Allowance for funds used during construction (.5) (4.5) (7.2) (16.9)
Distributions on quarterly income preferred securities 5.3 -- 15.2 --
Other (income), net (2.5) (3.2) (13.3) (.2)
------- --------- --------- ---------
44.7 38.2 168.3 170.0
------- --------- --------- ---------
INCOME FROM OPERATIONS BEFORE INCOME TAXES 17.9 48.1 406.6 430.3
Income taxes (15.5) 12.0 91.7 148.6
------- --------- --------- ---------
NET INCOME $ 33.4 $ 36.1 $ 314.9 $ 281.7
======= ========= ========= =========
AVERAGE SHARES OF COMMON STOCK OUTSTANDING 98.5 97.1 98.1 97.1
======= ========= ========= =========
EARNINGS PER AVERAGE COMMON SHARE
(Basic and Diluted) $ .34 $ .37 $ 3.21 $ 2.90
======= ========= ========= =========
</TABLE>
Regarding these financial statements:
These are interim statements. Reference should be made to Florida Progress
Corporation's 1998 Annual Report to shareholders. This report does not
constitute an offer to sell or the solicitation of an offer to buy any
securities.
<PAGE> 7
FLORIDA PROGRESS CORPORATION
SELECTED FINANCIAL INFORMATION (UNAUDITED) PAGE 7
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
December 31 Percent December 31 Percent
1999 1998 Change 1999 1998 Change
----- ----- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
Earnings (Loss) Per Share:
(Basic and Diluted)
Florida Power Corporation $ .17 $ .27 (37.0) $ 2.70 $ 2.56 5.5
----- ----- ------ ------
Electric Fuels Corporation .16 .13 23.1 .64 .44 45.5
Corporate and other .01 (.03) n/m* (.13) (.10) (30.0)
----- ----- ------ ------
Diversified continuing .17 .10 70.0 .51 .34 50.0
----- ----- ------ ------
Total $ .34 $ .37 (8.1) $ 3.21 $ 2.90 10.7
===== ===== ====== ======
Avg. shares outstanding (millions) 98.5 97.1 1.4 98.1 97.1 1.0
Dividends per share $.545 $.535 1.9 $ 2.18 $ 2.14 1.9
Book value per share:
Florida Power Corporation $19.15 $18.70 2.4
Consolidated $20.40 $19.13 6.6
</TABLE>
<TABLE>
<CAPTION>
December 31 December 31
December 31 1999 1998
1999 1998 Amount Percent Amount Percent
---- ---- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Equity investments (percent): Capitalization (in millions):
Florida Power Corporation 83 85 Common stock $2,008.7 41.7 $1,862.0 41.1
Electric Fuels Corporation 13 11 Preferred stock 33.5 .7 33.5 .8
Other subsidiaries 4 4 Preferred securities ** 300.0 6.2 -- --
--- ---
Total 100 100 Long-term debt 2,154.1 44.8 2,250.4 49.7
=== ===
Short-term debt 316.3 6.6 382.1 8.4
-------- ----- -------- -----
Total $4,812.6 100.0 $4,528.0 100.0
======== ===== ======== =====
</TABLE>
* not meaningful
** Quarterly income preferred securities
<PAGE> 8
FLORIDA POWER CORPORATION
SELECTED STATISTICAL DATA (UNAUDITED) PAGE 8
(In millions, except billing degree days)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
December 31 Percent December 31 Percent
1999 1998 Change 1999 1998 Change
-------- -------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Residential $ 322.4 $ 335.4 (3.9) $ 1,394.9 $ 1,424.6 (2.1)
Commercial 152.9 157.1 (2.7) 617.6 608.9 1.4
Industrial 51.8 55.9 (7.3) 207.6 214.4 (3.2)
Other retail sales 36.5 38.2 (4.5) 141.7 142.3 (.4)
-------- -------- --------- ---------
563.6 586.6 (3.9) 2,361.8 2,390.2 (1.2)
Wholesale sales 63.4 50.8 24.8 228.1 205.8 10.8
-------- -------- --------- ---------
627.0 637.4 (1.6) 2,589.9 2,596.0 (.2)
Other electric revenues (1) (37.9) (20.4) (85.8) 59.5 67.0 (11.2)
Deferred fuel (2) 6.2 6.6 - (16.8) (14.8) --
-------- -------- --------- ---------
Total $ 595.3 $ 623.6 (4.5) $ 2,632.6 $ 2,648.2 (.6)
======== ======== ========= =========
Kilowatt-hour sales billed:
Residential 3,714.2 3,850.7 (3.5) 16,244.8 16,526.3 (1.7)
Commercial 2,557.3 2,589.8 (1.3) 10,326.8 9,999.3 3.3
Industrial 1,082.4 1,143.0 (5.3) 4,333.7 4,375.4 (1.0)
Other retail sales 652.4 665.1 (1.9) 2,535.7 2,485.6 2.0
-------- -------- --------- ---------
8,006.3 8,248.6 (2.9) 33,441.0 33,386.6 .2
Wholesale sales 1,397.6 1,085.4 28.8 4,856.3 3,864.5 25.7
-------- -------- --------- ---------
Total electric sales 9,403.9 9,334.0 .7 38,297.3 37,251.1 2.8
-------- -------- --------- ---------
System Requirements (KWH) 9,045 8,570 5.5 39,160 37,763 3.7
KWH Sales (Billed & Unbilled):
Retail 7,679 7,713 (.4) 33,560 33,451 .3
Wholesale 1,208 772 56.5 4,989 3,823 30.5
-------- -------- --------- ---------
8,887 8,485 4.7 38,549 37,274 3.4
======== ======== ========= =========
Billing Degree Days:
Cooling 724 862 (16.0) 3,446 4,159 (17.1)
Heating 63 25 152.0 442 557 (20.6)
Normal Average Billing Degree Days:
Cooling 716 698 2.6 3,691 3,697 (.2)
Heating 107 103 3.9 551 567 (2.8)
</TABLE>
Note:
(1) In the 4th quarter of 1999 and 1998, the FPSC approved the
establishment of a regulatory liability for the purpose of deferring
nonfuel revenues. The 1999 and 1998 deferrals were $44.4 million and
$10.1 million, respectively. In the 2nd quarter of 1999, Florida
Power recognized the 1998 $10 million deferral in Other electric
revenues and applied it to the amortization of the Tiger Bay
regulatory asset, which resulted in no impact to 1999 earnings.
Other electric revenues also includes unbilled revenues.
(2) Revenues include amounts resulting from fuel, purchased power, and
energy conservation clauses, which are designed to permit full
recovery of these costs.
