As filed with the Securities and Exchange Commission on September 8, 2003
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): September 8, 2003
Commission File Exact name of registrant as specified in its charter, I.R.S. Employer
Number state of incorporation, address of principal executive Identification Number
offices, and telephone number
1-3382 Carolina Power & Light Company 56-0165465
410 South Wilmington Street
Raleigh, North Carolina 27601-1748
Telephone: (919) 546-6411
State of Incorporation: North Carolina
The address of the registrant has not changed since the last report.
Item 5. Other Events
The purpose of this Form 8-K is to provide certain updated risk factor and
recent developments disclosure and to provide as an exhibit the Computation of
Ratio of Earnings to Fixed Charges and Preferred Dividends Combined and Ratio of
Earnings to Fixed Charges for the twelve months ended June 30, 2003 and 2002,
and December 31, 2002, 2001 and 2000.
Updated Risk Factor
On August 11, 2003, we filed a Form 10-K/A to reclassify approximately
$243.7 million from operating activities to investing activities on our
consolidated statement of cash flows for the year ended December 31, 2002. Since
our net cash flow from operations was reduced by approximately $243.7 million,
we are revising the following risk factor previously contained in our Form 10-K
for the year ended December 31, 2002.
Our business is dependent on our ability to successfully access capital
markets. Our inability to access capital may limit our ability to execute our
business plan, or pursue improvements and make acquisitions that we may
otherwise rely on for future growth.
We rely on access to both short-term money markets and long-term capital
markets as a significant source of liquidity for capital requirements not
satisfied by the cash flow from our operations. Our net cash flow from
operations funded approximately 158% of our capital requirements for the year
ended December 31, 2002. If we are not able to access capital at competitive
rates, our ability to implement our business operations will be adversely
affected. We believe that we will maintain sufficient access to these financial
markets based upon current credit ratings. However, certain market disruptions
or a downgrade of our credit rating may increase our cost of borrowing or
adversely affect our ability to access one or more financial markets. Such
disruptions could include:
o an economic downturn;
o a ratings downgrade of Progress Energy, Inc.;
o the bankruptcy of an unrelated energy company;
o capital market conditions generally;
o market prices for electricity;
o terrorist attacks or threatened attacks on our facilities or those of
unrelated energy companies; or
o the overall health of the utility industry.
Restrictions on our ability to access financial markets may affect our
ability to execute our business plan as scheduled. An inability to access
capital may limit our ability to pursue improvements or acquisitions that we may
otherwise rely on for future growth.
Recent Development
South Carolina Easement Litigation
On August 21, 2003, we were served as a co-defendant in a purported class
action lawsuit styled as Collins v. Duke Energy Corporation, Civil Action No.
03CP404050, in South Carolina's Circuit Court of Common Pleas for the Fifth
Judicial Circuit. We are one of three electric utilities operating in South
Carolina named in the suit. The plaintiffs are seeking damages for the alleged
improper use of electric transmission easements but have not asserted a dollar
amount for thair claims. the plaintiffs contend that the licensing of
attachments on electric utility poles, towers and other facilities to
non-utility third parties or telecommunication companies for other than the
electric utilities' internal use along the electric transmission line
right-of-way constitutes a trespass. We are still reviewing the complaint and
have not filed a response with the court. The court has not yet held any
hearings or made any rulings in this case. We cannot predict the outcome of any
future proceedings in this case.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibits
12 Computation of Ratio of Earnings to Fixed Charges and Preferred
Dividends Combined and Ratio of Earnings to Fixed Charges
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CAROLINA POWER & LIGHT COMPANY
d/b/a PROGRESS ENERGY CAROLINAS, INC.
Registrant
By: /s/ Robert H. Bazemore, Jr.
-----------------------------------------
Robert H. Bazemore, Jr.
Vice President and Controller
Date: September 8, 2003
Exhibit 12
CAROLINA POWER & LIGHT COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
PREFERRED DIVIDENDS COMBINED AND RATIO OF EARNINGS TO FIXED CHARGES
12 Months Ended
June 30, June 30, December 31, December 31, December 31,
2003 2002 2002 2001 2000
---- ---- ---- ---- ----
(Thousands of Dollars)
Earnings, as defined:
Net income $ 438,535 $ 374,750 $ 430,932 $ 364,231 $ 461,028
Fixed charges, as below 209,799 261,299 235,026 270,305 248,759
Income taxes, as below 230,443 189,147 199,211 215,084 282,122
------------- ------------- ------------ ------------ -------------
Total earnings, as defined $ 878,777 $ 825,196 $ 865,169 $ 849,620 $ 991,909
============= ============= ============ ============ =============
Fixed Charges, as defined:
Interest on long-term debt $ 185,373 $ 232,286 $ 204,672 $ 245,808 $ 223,562
Other interest 11,454 12,574 12,338 11,333 16,441
Imputed interest factor in rentals-charged
principally to operating expenses 12,972 16,439 18,016 13,164 8,756
------------- ------------- ------------ ------------ -------------
Total fixed charges, as defined $ 209,799 $ 261,299 $ 235,026 $ 270,305 $ 248,759
============= ============= ============ ============ =============
Earnings Before Income Taxes $ 668,978 $ 563,897 $ 630,143 $ 579,315 $ 743,150
============= ============= ============ ============ =============
Ratio of Earnings Before Income Taxes to Net Income 1.53 1.50 1.46 1.59 1.61
Income Taxes:
Income tax expense $ 238,592 $ 197,296 $ 207,360 $ 223,233 $ 290,271
Included in AFUDC - deferred taxes in
book depreciation (8,149) (8,149) (8,149) (8,149) (8,149)
------------- ------------- ------------ ------------ -------------
Total income taxes $ 230,443 $ 189,147 $ 199,211 $ 215,084 $ 282,122
============= ============= ============ ============ =============
Fixed Charges and Preferred Dividends Combined:
Preferred dividend requirements $ 2,964 $ 2,964 $ 2,964 $ 2,964 $ 2,966
Portion deductible for income tax purposes (312) (312) (312) (312) (312)
------------- ------------- ------------ ------------ -------------
Preferred dividend requirements not deductible $ 2,652 $ 2,652 $ 2,652 $ 2,652 $ 2,654
============= ============= ============ ============ =============
Preferred dividend factor:
Preferred dividends not deductible times ratio of
Earnings before income taxes to net income $ 4,058 $ 3,978 $ 3,872 $ 4,217 $ 4,273
Preferred dividends deductible for income taxes 312 312 312 312 312
Fixed charges, as above 209,799 261,299 235,026 270,305 248,759
------------- ------------- ------------ ------------ -------------
Total fixed charges and preferred dividends combined $ 214,169 $ 265,589 $ 239,210 $ 274,834 $ 253,344
============= ============= ============ ============ =============
Ratio of Earnings to Fixed Charges 4.19 3.16 3.68 3.14 3.99
Ratio of Earnings to Fixed Charges and Preferred 4.10 3.11 3.62 3.09 3.92
Dividends Combined