FLORIDA PROGRESS CORPORATION
One Progress Plaza
St. Petersburg, Florida 33701
Fax: (813) 824-6401
INVESTOR INFORMATION
Analysts' Contacts:
Richard R. Champion, Director, Investor Relations (813) 824-6428
Mark A. Myers, Manager, Investor Communications (813) 824-6422
October 20, 1994
Florida Progress reports lower third-quarter 1994 earnings
Florida Progress, parent of St. Petersburg-based Florida Power Corporation,
today reported third-quarter earnings of $75.1 million, or 80 cents per
share, compared with $82 million, or 93 cents a share, earned during the
same period a year ago. Revenues for the quarter ended September 30, 1994,
totaled $745 million, compared with $768.9 million for the third quarter of
1993.
Third-quarter earnings were affected by:
-- Lower electricity sales at Florida Power.
-- A one-time charge that resulted from eliminating about
300 jobs.
-- Another one-time charge from withdrawing as an equity
partner in a gas pipeline project.
Florida Power, the largest subsidiary of Florida Progress, earned $69.4
million, or 74 cents per share, on revenues of $586.5 million in this
year's third quarter, compared with earnings of $81.5 million, or 92 cents
a share, on revenues of $609 million for the same period a year ago.
Lower retail kilowatt-hour sales during this year's third quarter
contributed to the reduced earnings at Florida Power. Also reducing
utility results were two one-time charges against earnings -- one for work
force reduction costs and another because of a decision to withdraw as an
equity partner in a gas pipeline project.
During the third quarter, frequent afternoon thunderstorms lowered normally
high temperatures across Florida Power's 32-county service territory. This
reduced electricity demand and customer usage from July to September,
compared with a year ago, when Florida Power customers used record amounts
of power. Six times last summer, the utility set system demand peaks.
In this year's third quarter, retail energy sales declined 3.7 percent,
compared with the same period in 1993. Florida Power's average residential
customer used
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Florida Progress Corporation
Investor Information - Florida Progress reports lower third-quarter 1994
earnings
6.5 percent less electricity in the third quarter of 1994 than during the
same three-month period last year. Partly offsetting the decline in
third-quarter sales was customer growth of about 2 percent during the past
year.
Earlier this month, Florida Power announced that about 300 jobs would be
eliminated by the end of the year as part of its continuing efforts to
reduce costs. Expenses associated with these work force reductions
resulted in an after-tax charge against third-quarter earnings of $4.4
million, or 5 cents per share. Later this year, Florida Power will
recognize a pension plan gain related to these work force reductions, which
will increase fourth-quarter earnings by approximately $2.5 million.
In addition, last month's decision to withdraw as an equity partner from
the proposed 715-mile SunShine gas pipeline project reduced Florida Power's
after-tax earnings in the third quarter by $3.9 million, or 4 cents a
share.
Earnings from Florida Progress' diversified operations for the quarter
ended September 30, 1994, were $5.7 million, or 6 cents per share, compared
with $500,000, or 1 cent a share, earned during last year's third quarter.
Electric Fuels Corporation, the company's coal mining and transportation
subsidiary, posted higher operating results during this year's third
quarter over the same three-month period in 1993. Diversified earnings
also were improved this year because, a year ago, Florida Progress
recognized a $1 million after-tax loss on the sale of four apartment
complexes.
During last year's third quarter, a one-percent increase in the federal
corporate income tax rate went into effect, retroactive to January 1, 1993.
The increase in the tax rate -- and its impact on accounting for long-term
leveraged leases -- lowered Florida Progress' consolidated earnings related
to the first six months of 1993 by $4.5 million. The retroactive tax rate
change reduced third-quarter 1993 diversified earnings by $3.4 million,
mostly related to a one-time deferred tax adjustment. At Florida Power,
the rate change added $1.1 million in tax expense in the third quarter
related to income earned during the first six months of 1993.
NINE-MONTH SUMMARY OF OPERATING RESULTS
For the nine months ended September 30, 1994, consolidated earnings from
Florida Progress' operations were $163.8 million, or $1.79 per share, on
revenues of $2.056 billion, compared with earnings of $159.4 million, or
$1.81 a share, on revenues of $1.816 billion from a year ago.
Florida Power's earnings for the first nine months of this year were $148.8
million, or $1.62 per share, on revenues of $1.587 billion. During the
same nine-month
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Florida Progress Corporation
Investor Information - Florida Progress reports lower third-quarter 1994
earnings
period in 1993, utility earnings were $152.1 million, or $1.73 a share, on
revenues of $1.478 billion.
Higher energy sales at Florida Power this year were offset by increased
costs for an early retirement program and work force reductions, as well as
a write-off related to the utility withdrawing as an equity partner from a
gas pipeline project.
In early 1994, the utility recognized after-tax expenses of $9.5 million,
or 11 cents a share, to cover costs associated with its early retirement
program. Expenses associated with eliminating an additional 300 jobs by
the end of this year resulted in an after-tax charge of $4.4 million, or 5
cents a share, in this year's third quarter.
Florida Power's decision to withdraw as an equity partner from the proposed
SunShine gas pipeline project reduced 1994 after-tax earnings by $3.9
million, or 4 cents a share. Additional depreciation expenses also lowered
Florida Power's 1994 earnings by $10.5 million.
Year-to-date earnings from Florida Progress' diversified operations were
$15 million, or 17 cents per share, compared with $6.5 million, or 7 cents
a share, for the first nine months of 1993. Electric Fuels has continued
to post a significant earnings increase in 1994 due to an acquisition it
made last year. Also, diversified earnings are up during the first nine
months of this year because, a year ago, the change in the federal
corporate income tax rate reduced nine-month results by $3.3 million.
Florida Progress (NYSE: FPC) is a diversified utility holding company with
assets of $5.7 billion. Its principal subsidiary is Florida Power
Corporation, the state's second-largest electric utility with more than 1.2
million customers. Diversified operations include coal mining and
transportation, life insurance, real estate, and lending and leasing.
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Florida Progress Corporation Page 4
Selected Financial Information (Unaudited)
(In millions)
Three Months Ended Nine Months Ended Twelve Months Ended
September 30 Percent September 30 Percent September 30 Percent
1994 1993 Change 1994 1993 Change 1994 1993 Change
-------- ------ ------ -------- ------ ------- ------- ------ --------
Revenues:
Electric utility $586.5 $609.0 (3.7) $1,587.0 $1,477.9 7.4 $2,066.7 $1,885.6 9.6
Diversified 158.5 159.9 (0.9) 468.8 337.6 38.9 622.6 423.4 47.0
---------------------------- ---------------------------- -----------------------------
Total revenues 745.0 768.9 (3.1) 2,055.8 1,815.5 13.2 2,689.3 2,309.0 16.5
---------------------------- ---------------------------- -----------------------------
Expenses:
Electric utility:
Fuel and purchased power 207.5 217.8 (4.7) 543.4 492.9 10.2 709.0 625.5 13.3
Other operation and
maintenance 126.6 128.2 (1.2) 398.4 370.8 7.4 542.4 483.6 12.2
Depreciation and other
taxes 108.7 105.4 3.1 319.1 294.5 8.4 417.4 374.4 11.5
---------------------------- ---------------------------- -----------------------------
Total utility expenses 442.8 451.4 (1.9) 1,260.9 1,158.2 8.9 1,668.8 1,483.5 12.5
Diversified 148.3 145.3 2.1 430.7 300.8 43.2 570.2 377.4 51.1
---------------------------- ---------------------------- -----------------------------
Total expenses 591.1 596.7 (0.9) 1,691.6 1,459.0 15.9 2,239.0 1,860.9 20.3
---------------------------- ---------------------------- -----------------------------
Income from operations 153.9 172.2 (10.6) 364.2 356.5 2.2 450.3 448.1 0.5
Interest expense and other 41.6 35.0 18.9 115.1 103.4 11.3 148.1 145.0 2.1
---------------------------- ---------------------------- -----------------------------
Income before income taxes 112.3 137.2 (18.1) 249.1 253.1 (1.6) 302.2 303.1 (0.3)
Income taxes 37.2 55.2 (32.6) 85.3 94.5 (9.7) 101.2 108.4 (6.6)
---------------------------- ---------------------------- -----------------------------
Income before cumulative
effect of accounting change 75.1 82.0 (8.4) 163.8 158.6 3.3 201.0 194.7 3.2
Cumulative effect of change in
accounting for income taxes - - - - $0.8 - - $0.8 -
---------------------------- ---------------------------- -----------------------------
Net Income $75.1 $82.0 (8.4) $163.8 $159.4 2.8 $201.0 $195.5 2.8
============================ ============================ =============================
/TABLE
Florida Progress Corporation Page 5
Selected Financial Information (Unaudited)
Three Months Ended Percent Nine Months Ended Percent Twelve Months Ended Percent
September 30 Positive September 30 Positive September 30 Positive
1994 1993 (Negative) 1994 1993 (Negative) 1994 1993 (Negative
-------- -------- -------- -------- --------- -------- --------- -------- --------
Earnings Per Share:
Florida Power Corporation $0.74 $0.92 (19.6) $1.62 $1.73 (6.4) $1.96 $2.14 (8.4)
-------- -------- -------- -------- --------- --------
Electric Fuels Corporation 0.07 0.05 40.0 0.16 0.11 45.5 0.22 0.15 46.7
Mid-Continent Life Insurance Co. 0.01 0.02 (50.0) 0.06 0.07 (14.3) 0.08 0.10 (20.0)
Progress Credit Corporation
Lending and Leasing - (0.02) - 0.02 - - 0.04 0.01 300.0
Real estate (0.02) (0.03) 33.3 (0.05) (0.07) 28.6 (0.05) (0.18) 72.2
Corporate and other - (0.01) - (0.02) (0.04) 50.0 (0.04) (0.01) (300.0)
-------- -------- -------- -------- --------- --------
Diversified (before SFAS 109) 0.06 0.01 500.0 0.17 0.07 142.9 0.25 0.07 257.1
-------- -------- -------- -------- --------- --------
Before accounting change 0.80 0.93 (14.0) 1.79 1.80 (0.6) 2.21 2.21 -
Change in accounting - - - - 0.01 - - 0.01 -
-------- -------- -------- -------- --------- --------
Total $0.80 $0.93 (14.0) $1.79 $1.81 (1.1) $2.21 $2.22 (0.5)
======== ======== ======== ======== ========= ========
Avg. shares outstanding (millions) 93.9 88.6 6.0 91.6 88.1 4.0 91.0 87.9 3.5
Dividends per share $0.495 $0.485 2.1 $1.485 $1.455 2.1 $1.980 $1.940 2.1
Book value per share:
Florida Power Corporation $17.59 $17.11 2.8
Consolidated $20.96 $20.42 2.6
September 30
September 30 1994 1993
1994 1993 Amount Percent Amount Percent
-------- -------- --------- -------- --------- --------
Equity investments (percent): Capitalization (in millions):
Florida Power Corporation 84 84 Common stock $1,973.3 48.5 $1,813.9 45.5
Electric Fuels Corporation 8 8 Preferred stock 148.5 3.6 183.5 4.6
Mid-Continent Life Insurance Co. 4 4 Long-term debt 1,867.9 45.9 1,838.1 46.2
Progress Credit Corporation 4 4 Short-term
-------- -------- capital 79.3 2.0 147.1 3.7
Total 100 100 --------- -------- --------- --------
======== ======== Total $4,069.0 100.0 $3,982.6 100.0
========= ======== ========= ========
Florida Power Corporation
Selected Statistical Data (Unaudited) Page 6
(In millions, except billing degree days)
Three Months Ended Nine Months Ended Twelve Months Ended
September 30 Percent September 30 Percent September 30 Percent
1994 1993 Change 1994 1993 Change 1994 1993 Change
-------- -------- -------- -------- -------- -------- -------- -------- --------
Revenues:
Residential $336.6 $346.0 (2.7) $876.9 $796.8 10.1 $1,138.8 $1,017.4 11.9
Commercial 133.4 136.8 (2.5) 358.6 341.2 5.1 475.3 444.4 7.0
Industrial 44.5 43.1 3.2 128.2 120.9 6.0 169.2 156.5 8.1
Other retail sales 28.6 28.4 0.7 79.2 72.7 8.9 106.2 97.4 9.0
-------- -------- -------- -------- -------- --------
543.1 554.3 (2.0) 1,442.9 1,331.6 8.4 1,889.5 1,715.7 10.1
Sales for resale 38.7 37.0 4.6 96.2 87.4 10.1 131.1 112.4 16.6
-------- -------- -------- -------- -------- --------
581.8 591.3 (1.6) 1,539.1 1,419.0 8.5 2,020.6 1,828.1 10.5
Other electric revenues 7.3 17.7 (58.8) 45.0 60.5 (25.6) 50.6 60.0 (15.7)
Deferred fuel (2.6) -- -- 2.9 (1.6) -- (4.5) (2.5) --
-------- -------- -------- -------- -------- --------
Total $586.5 $609.0 (3.7) $1,587.0 $1,477.9 7.4 $2,066.7 $1,885.6 9.6
======== ======== ======== ======== ======== ========
Kilowatt-hour sales billed:
Residential 4,207.2 4,414.4 (4.7) 10,772.6 10,176.3 5.9 13,968.9 13,173.8 6.0
Commercial 2,335.9 2,342.6 (0.3) 6,184.6 5,889.6 5.0 8,179.8 7,775.7 5.2
Industrial 933.7 873.9 6.8 2,692.9 2,534.2 6.3 3,539.5 3,340.2 6.0
Other retail sales 537.4 526.3 2.1 1,468.5 1,390.8 5.6 1,967.8 1,862.9 5.6
-------- -------- -------- -------- -------- --------
8,014.2 8,157.2 (1.8) 21,118.6 19,990.9 5.6 27,656.0 26,152.6 5.7
Sales for resale 781.0 670.3 16.5 1,721.8 1,437.5 19.8 2,403.8 1,956.3 22.9
-------- -------- -------- -------- -------- --------
Total electric sales 8,795.2 8,827.5 (0.4) 22,840.4 21,428.4 6.6 30,059.8 28,108.9 6.9
======== ======== ======== ======== ======== ========
System Requirements (KWH) 8,934 9,413 (5.1) 24,101 23,239 3.7 31,132 29,705 4.8
Retail KWH Sales
(Billed & Unbilled) 7,835 8,139 (3.7) 21,218 20,448 3.8 27,544 26,260 4.9
Billing Degree Days:
Cooling 2,024 2,365 (14.4) 2,790 2,758 1.2 3,418 3,388 0.9
Heating -- -- -- 483 397 21.7 594 521 14.0
Note: Total revenues include billed revenues and unbilled revenues that are
accrued for accounting purposes. Statistics for total kilowatt-hour sales only
include billed kilowatt-hour sales. The statistic for system requirements is
based on total system generation, so it includes billed and unbilled sales.
Since system requirements include billed and unbilled kilowatt-hour sales, it
is a better measure of total sales growth.