FLORIDA PROGRESS CORPORATION
One Progress Plaza
St. Petersburg, FL 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
January 23, 1995
Florida Progress Corporation reports higher earnings in 1994
Florida Progress Corporation, parent of St. Petersburg-based Florida Power
Corporation, today reported 1994 consolidated earnings of $212 million, or
$2.28 per share, compared with $196.6 million, or $2.23 a share, earned a year
ago. Revenues for the year totaled $2.8 billion, compared with $2.4 billion
for 1993.
Significant items influencing 1994 operating results:
o Improved operating results from diversified operations.
o Higher electricity sales at Florida Power.
o Increased expenses associated with a voluntary early retirement
program and work-force reductions.
o A one-time charge from withdrawing as an equity partner in a natural
gas pipeline project.
Earnings per share increased in 1994 because of improved operating results from
Florida Progress' diversified operations. Significantly higher revenues and
earnings from the company's energy and transportation unit were the primary
reasons for the favorable diversified results in 1994.
The unit posted higher earnings in 1994 due to improved results from marine and
rail operations, including recent acquisitions. Diversified earnings were
$21.3 million, or 23 cents per share, compared with $14.3 million, or 16 cents
per share, in 1993.
Earnings from Florida Progress' life insurance unit were lower in 1994 due to
an increase in death benefits and additional life reserves.
In 1994, Florida Power earned $190.7 million, or $2.05 per share, on revenues
of $2.1 billion, compared with 1993 earnings of $181.5 million, or $2.06 a
share, on revenues of $2 billion. Although utility earnings increased in 1994,
earnings per share were lower due to the issuance of additional shares of
common stock.
Retail kilowatt-hour sales at Florida Power increased by 3.1 percent over 1993.
Customer growth of 2.4 percent, increased average customer usage and a stronger
economy contributed to the higher energy sales. During 1994, average
residential kilowatt-hour sales were up 1.4 percent, commercial sales increased
by 2 percent and industrial sales rose by 3.3 percent.
Earnings also improved during the year in part because of increased revenues
from higher retail electric rates, placed into effect during 1993, which state
regulators approved during Florida Power's 1992 rate case.
Partly offsetting the higher sales was the need to recognize expenses in 1994
associated with a voluntary early retirement program and work-force reductions.
These expenses reduced Florida Power's earnings during the year by $11.5
million, or 12 cents a share.
Florida Power ended 1993 with approximately 5,800 employees. At the end of
1994, the utility employed less than 5,000, its lowest work-force level in 10
years.
Also during 1994, subsidiaries of Florida Power decided to withdraw from a
proposed natural gas pipeline project. The write-off of the investments
reduced 1994 earnings by $3.9 million, or 4 cents per share.
Florida Power also recorded higher depreciation expenses in 1994 due primarily
to capital additions, including four new combustion turbines that were placed
into service in late 1993.
1994 FOURTH QUARTER RESULTS
Earnings for the fourth quarter of 1994 from Florida Progress' consolidated
operations were $46 million, or 49 cents per share, on revenues of $682.9
million, compared with earnings of $37.2 million, or 42 cents per share, on
revenues of $633.5 million a year ago.
Florida Power earned $41.9 million, or 44 cents per share, on revenues of
$493.5 million in the quarter ended December 31, 1994, compared with $29.4
million, or 33 cents a share, on revenues of $479.7 million in the prior-year
quarter.
Higher utility earnings were primarily the result of increased system
requirements and lower operation and maintenance expenses during the fourth
quarter of 1994. Also, a year ago, Florida Power recognized the initial costs
of the early retirement program, which lowered earnings in the fourth quarter
of 1993 by $3.4 million.
Earnings from diversified operations were $4.1 million, or 5 cents a share, in
the fourth quarter of 1994, compared with $7.8 million, or 9 cents per share,
in 1993.
The main reason for the reduced diversified results was lower earnings from
leveraged leasing at Progress Credit in the fourth quarter of 1994. In the
prior-year quarter, Progress Credit recognized gains from the sale of several
assets.
Florida Progress (NYSE: FPC) is a diversified utility holding company with
assets of more than $5.7 billion. Its principal subsidiary is Florida Power,
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.
FLORIDA PROGRESS CORPORATION
Consolidated Statements of Income Page 4
(In millions, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ -------------------
(UNAUDITED) 1994 1993 1994 1993
------- ------- -------- --------
<C
REVENUES:
Electric utility $493.5 $479.7 $2,080.5 $1,957.6
Diversified 189.4 153.8 691.0 491.4
------- ------- -------- --------
682.9 633.5 2,771.5 2,449.0
EXPENSES: ------- ------- -------- --------
Electric utility:
Fuel used in generation 85.7 90.2 431.9 460.8
Purchased power 77.7 60.3 294.6 209.5
Deferred fuel 18.2 15.1 (1.5) (11.8)
Other operation 81.3 102.8 388.8 378.0
------- ------- -------- --------
Operation 262.9 268.4 1,113.8 1,036.5
Maintenance 32.0 41.2 122.9 136.8
Depreciation 66.6 62.4 261.5 240.2
Taxes other than income taxes 38.6 35.9 162.8 152.6
------- ------- -------- --------
400.1 407.9 1,661.0 1,566.1
------- ------- -------- --------
Diversified:
Cost of sales 157.7 123.1 571.2 390.1
Other 17.4 16.4 63.3 50.2
------- ------- -------- --------
175.1 139.5 634.5 440.3
------- ------- -------- --------
INCOME FROM OPERATIONS 107.7 86.1 476.0 442.6
------- ------- -------- --------
INTEREST EXPENSE AND OTHER:
Interest expense 35.9 34.3 144.8 141.1
Allowance for funds used during
construction (2.6) (2.7) (10.9) (15.6)
Preferred dividend requirements of
Forida Power 2.5 3.1 10.1 13.4
Other expense (income), net 2.7 (1.7) 10.3 (2.5)
------- ------- -------- --------
38.5 33.0 154.3 136.4
------- ------- -------- --------
INCOME BEFORE INCOME TAXES 69.2 53.1 321.7 306.2
Income Taxes 23.2 15.9 109.7 110.4
------- ------- -------- --------
INCOME BEFORE ACCOUNTING CHANGE 46.0 37.2 212.0 195.8
CUMULATIVE EFFECT OF INCOME TAX
ACCOUNTING CHANGE - - - 0.8
------- ------- -------- --------
NET INCOME $46.0 $37.2 $212.0 $196.6
======= ======= ======== ========
AVERAGE SHARES OF COMMON STOCK
OUTSTANDING 94.9 89.0 93.0 88.3
======= ======= ======== ========
EARNINGS PER AVERAGE COMMON SHARE:
Income before accounting change $0.49 $0.42 $2.28 $2.22
Cumulative effect of income tax
accounting change - - - 0.01
------- ------- -------- --------
$0.49 $0.42 $2.28 $2.23
======= ======= ======== ========
These are interim statements. Reference should be made to Florida Progress Corporation's 1993 Annual Report to shareholders.
Neither this report nor any statement contained herein is furished in connection with the offering of securities or for the purpose
of promoting or influencing the sale or purchase of securities.
FLORIDA PROGRESS CORPORATION
Consolidated Balance Sheets Page 5
(In millions)
December 31,
(UNAUDITED) 1994 1993
----------- -----------
ASSETS
PROPERTY, PLANT AND EQUIPMENT:
Electric utility plant in service and held for $5,603.4 $5,320.3
for future use
Less - Accumulated depreciation 1,981.6 1,846.2
Accumulated decommissioning for nuclear plant 135.2 118.3
Accumulated dismantlememt for fossil plants 92.4 68.5
---------- ----------
3,394.2 3,287.3
Construction work in progress 222.1 285.7
Nuclear fuel, net of amortization of $ 322.8
in 1994 and $ 299.9 in 1993 52.9 68.4
---------- ----------
Net electric utility plant 3,669.2 3,641.4
Other property, net of depreciation of $ 163.5
in 1994 and $ 141.0 in 1993 420.9 391.6
---------- ----------
4,090.1 4,033.0
---------- ----------
CURRENT ASSETS:
Cash and equivalents 14.4 9.1
Accounts receivable, net 262.2 242.7
Current portion of leases and loans receivable 15.3 31.3
Inventories, primarily at average cost:
Fuel 75.2 79.5
Utility materials and supplies 110.4 112.2
Diversified materials 68.1 35.8
Underrecovery of fuel cost 1.8 7.1
Other 41.0 41.8
---------- ----------
588.4 559.5
---------- ----------
OTHER ASSETS:
Investments:
Leases and loans receivable, net 438.0 485.4
Marketable securities 148.3 129.3
Nuclear plant decommissioning fund 123.6 107.7
Joint ventures and partnerships 74.5 88.4
Deferred insurance policy acquisition costs 91.9 81.5
Other 163.9 154.0
---------- ----------
1,040.2 1,046.3
---------- ----------
$5,718.7 $5,638.8
========== ==========
CAPITAL AND LIABILITIES
CAPITAL:
Common stock equity $1,984.4 $1,820.5
Cumlative preferred stock of Florida Power 143.5 148.5
Long-term debt 1,859.6 1,866.6
---------- ----------
3,987.5 3,835.6
CURRENT LIABILITIES:
Accounts payable 147.1 149.4
Customers' deposits 76.9 71.5
Income taxes payable 12.7 42.3
Accrued other taxes 14.8 11.0
Accrued interest 47.3 45.2
Other 69.3 66.4
---------- ----------
368.1 385.8
Notes payable 55.3 125.0
Current portion of long-term debt 52.9 76.6
---------- ----------
476.3 587.4
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred income taxes 744.1 756.3
Unamortized investment tax credits 110.0 119.6
Insurance policy benefit reserves 222.5 186.5
Postemployment benefits reserve 67.8 47.5
Other 110.5 105.9
---------- ----------
1,254.9 1,215.8
---------- ----------
$5,718.7 $5,638.8
========== ==========
These are interim statements. Reference should be made to Florida Progress
Corporation's 1993 Annual Report to shareholders.
Neither this report nor any statement contained herein is furished in connection
with the offering of securities or for the purpose of promoting or influencing
the sale or purchase of securities.
FLORIDA PROGRESS CORPORATION
Consolidated Statements of Cash Flows Page 6
(In millions)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ -------------------
(UNAUDITED) 1994 1993 1994 1993
------- ------- -------- --------
OPERATING ACTIVITIES:
Income before accounting change $46.0 $37.2 $212.0 $195.8
Adjustments for noncash items:
Depreciation and amortization 83.7 79.0 321.7 299.9
Deferred income taxes and
investment tax credits, net 8.2 (34.0) (32.3) (49.1)
Increase in accrued other postretirement
benefit costs 2.7 10.0 20.3 23.6
Net change in deferred insurance policy
acquisition costs 1.4 (2.9) (10.4) (12.9)
Net change in deferred insurance policy
benefits reserves 5.5 8.1 36.0 25.8
Changes in working capital, net of effects
from acquisition or sale of businesses:
Accounts receivable 24.4 25.2 (17.4) (26.1)
Inventories (5.8) (17.1) (10.1) 12.2
Overrecovery (underrecovery) of fuel costs 30.0 22.6 5.3 (2.7)
Accounts payable 17.8 26.2 (4.2) 17.7
Income taxes payable (32.6) (20.5) (29.6) 2.7
Accrued other taxes (44.5) (45.2) 3.8 1.0
Other 4.8 9.0 14.3 19.7
Other operating activities (5.4) 3.0 23.1 (4.7)
-------- -------- -------- --------
136.2 100.6 532.5 502.9
-------- -------- -------- --------
INVESTING ACTIVITIES:
Property additions (including allowance for
borrowed funds used during construction) (121.9) (166.9) (368.1) (462.4)
Proceeds from sale of properties and businesses 2.0 9.5 16.3 35.8
Purchase of leases, loans and securities (5.1) (23.5) (74.1) (128.6)
Proceeds from sale or collection of
leases, loans, and securities 34.5 66.8 102.2 150.1
Acquisition of businesses - (1.4) (17.1) (80.5)
Distributions from (investments in) joint
ventures and partnerships, net 3.4 1.8 (1.3) 1.9
Other investing activities (2.6) (2.7) (10.8) (13.5)
-------- -------- -------- --------
(89.7) (116.4) (352.9) (497.2)
-------- -------- -------- --------
FINANCING ACTIVITIES:
Issuance of long-term debt - 98.6 103.7 385.7
Repayment of long-term debt (31.0) (55.9) (86.7) (473.2)
Increase (decrease) in commercial paper with
long term support 7.4 (24.1) (61.2) 154.0
Redemption of preferred stock (5.0) (35.3) (5.0) (80.5)
Sale of common stock 9.6 13.7 138.0 59.1
Dividends paid on common stock (47.9) (44.0) (185.9) (172.3)
Increase (decrease) in short-term debt 27.4 62.4 (75.6) 124.2
Other financing activities (0.9) (0.8) (1.6) (1.7)
-------- -------- -------- --------
(40.4) 14.6 (174.3) (4.7)
-------- -------- -------- --------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 6.1 (1.2) 5.3 1.0
Beginning cash and equivalents 8.3 10.3 9.1 8.1
-------- -------- -------- --------
ENDING CASH AND EQUIVALENTS $14.4 $9.1 $14.4 $9.1
======== ======== ========= =========
These are interim statements. Reference should be made to Florida Progress
Corporation's 1993 Annual Report to shareholders.
Neither this report nor any statement contained herein is furished in connection
with the offering of securities or for the purpose of promoting or influencing
the sale or purchase of securities.
Florida Progress Corporation
Selected Financial Information (Unaudited) Page 7
Three Months Ended Percent Twelve Months Ended Percent
December 31, Positive December 31, Positive
1994 1993 (Negative) 1994 1993 (Negative)
-------- -------- -------- -------- -------- --------
Earnings Per Share:
Florida Power Corporation $0.44 $0.33 33.3 $2.05 $2.06 (0.5)
-------- -------- -------- --------
Electric Fuels Corporation 0.06 0.06 - 0.25 0.17 47.1
Mid-Continent Life Insurance Co. 0.02 0.02 - 0.08 0.10 (20.0)
Progress Credit Corporation
Lending and leasing - 0.03 (100.0) 0.02 0.02 -
Real estate (0.01) (0.01) - (0.07) (0.08) 12.5
Corporate and other (0.02) (0.01) (100.0) (0.05) (0.05) -
-------- -------- -------- --------
Diversified (before SFAS 109) 0.05 0.09 (44.4) 0.23 0.16 43.8
-------- -------- -------- --------
Income before accounting change 0.49 0.42 16.7 2.28 2.22 2.7
Change in accounting - - - - 0.01 (100.0)
-------- -------- -------- --------
Total $0.49 $0.42 16.7 $2.28 $2.23 2.2
======== ======== ======== ========
Avg. shares outstanding (millions) 94.9 89.0 6.6 93.0 88.3 5.3
Dividends per share $0.505 $0.495 2.0 $1.99 $1.95 2.1
Book value per share:
Florida Power Corporation $17.52 $17.06 2.7
Consolidated $20.85 $20.40 2.2
December 31, December 31,
December 31, 1994 1993
1994 1993 Amount Percent Amount Percent
-------- -------- --------- ------------------ --------
Equity investments (percent): Capitalization (in millions):
Florida Power Corporation 84 84 Common stock $1,984.4 48.5 $1,820.5 45.1
Electric Fuels Corporation 8 8 Preferred stock 143.5 3.5 148.5 3.7
Mid-Continent Life Insurance Co. 4 4 Long-term debt 1,859.6 45.4 1,866.6 46.2
Progress Credit Corporation 4 4 Short-term debt 108.2 2.6 201.6 5.0
-------- -------- --------- -------- --------- --------
Total 100 100 Total $4,095.7 100.0 $4,037.2 100.0
======== ======== ========= ======== ========= ========
Note: The results of Electric Fuels include FM Industries, Inc., which was acquired in a pooling of
interests in December 1994. Prior years have not been restated for this acquisition due to immateriality.
Florida Power Corporation
Selected Statistical Data (Unaudited) Page 8
(In millions, except billing degree days)
Three Months Ended Twelve Months Ended
December 31, Percent December 31, Percent
1994 1993 Change 1994 1993 Change
------- ------- ------- ------- ------- -------
Revenues:
Residential $265.8 $261.9 1.5 $1,142.7 $1,058.7 7.9
Commercial 125.3 116.7 7.4 483.9 457.9 5.7
Industrial 44.9 41.0 9.5 173.1 161.9 6.9
Other retail sales 29.1 27.0 7.8 108.3 99.7 8.6
------- ------- -------- --------
465.1 446.6 4.1 1,908.0 1,778.2 7.3
Sales for resale 32.5 34.9 (6.9) 128.7 122.3 5.2
------- ------- -------- --------
497.6 481.5 3.3 2,036.7 1,900.5 7.2
Other electric revenues 5.6 5.6 -- 50.6 66.1 (23.4)
Deferred fuel (9.7) (7.4) -- (6.8) (9.0) --
------- ------- -------- --------
Total $493.5 $479.7 2.9 $2,080.5 $1,957.6 6.3
======= ======= ======== ========
Kilowatt-hour sales billed:
Residential 3,090.8 3,196.3 (3.3) 13,863.4 13,372.6 3.7
Commercial 2,067.5 1,995.2 3.6 8,252.1 7,884.8 4.7
Industrial 886.7 846.6 4.7 3,579.6 3,380.8 5.9
Other retail sales 511.6 499.3 2.5 1,980.1 1,890.1 4.8
------- ------- -------- --------
6,556.6 6,537.4 0.3 27,675.2 26,528.3 4.3
Sales for resale 617.6 682.0 (9.4) 2,339.4 2,119.5 10.4
------- ------- -------- --------
Total electric sales 7,174.2 7,219.4 (0.6) 30,014.6 28,647.8 4.8
======= ======= ======== ========
System Requirements (KWH) 7,073 7,005 1.0 31,174 30,244 3.1
Retail KWH Sales
(Billed & Unbilled) 6,380 6,326 0.9 27,598 26,774 3.1
Billing Degree Days:
Cooling 556 628 (11.5) 3,346 3,386 (1.2)
Heating 32 111 (71.2) 515 508 1.4
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.