FLORIDA PROGRESS CORPORATION
INVESTOR INFORMATION
- --------------------------------------------------------------------------
Analysts' Contacts:
Mark A. Myers, Manager, Investor Relations (813) 866-4245
John A. Serba, Senior Investor Communications Analyst (813) 866-4247
October 19, 1995
Florida Progress Corporation reports increase
in third-quarter earnings
Florida Progress Corporation, parent of St. Petersburg-based Florida Power
Corporation, today reported a third-quarter earnings increase of 20 percent.
Results for the quarter were $91.1 million, or 95 cents per share, compared with
$75.8 million, or 80 cents a share, earned a year ago.
In the prior-year quarter, Florida Power recognized two nonrecurring charges
that lowered after-tax earnings by $8.3 million, or 9 cents a share. Revenues
for the quarter totaled $862.6 million, compared with $756.2 million for the
same three-month period in 1994. Prior-year amounts have been restated to
include the 1994 results for FM Industries, Inc., to reflect the pooling of
interests accounting.
Significant items influencing third-quarter operating results:
o Higher energy sales at Florida Power in 1995 due to warmer weather and a
stronger economy.
o Continued customer growth of 2 percent.
o Impact of cost-cutting measures implemented by the utility.
Florida Power, the largest subsidiary of Florida Progress, earned $84.7 million,
or 88 cents per share, on revenues of $671.8 million in this year's third
quarter, compared with earnings of $69.4 million, or 73 cents a share, on
revenues of $586.5 million for the same three-month period a year ago.
Retail kilowatt-hour sales at Florida Power increased by 11.1 percent in the
third quarter of 1995, compared with the prior-year quarter. Warmer weather in
1995, customer growth of about 2 percent and a stronger economy contributed to
the improved energy sales.
Florida Power's cost-control initiatives have allowed the company to hold the
line on operation and maintenance expenses over the past year. This has
occurred even with the addition of more than 25,000 new customers since this
time last year. Partially offsetting higher energy sales and cost-reduction
efforts during the quarter were increased expenses for nuclear decommissioning
and depreciation, as well as after-tax charges of $3.4 million, or 3 cents per
share, related to the Florida Public Service Commission-approved amortization of
costs for the canceled Lake Tarpon to Kathleen transmission line.
A year ago, quarterly earnings at Florida Power were lower due to recognition of
restructuring costs ($4.4 million or 5 cents a share) and a write-off of a gas
pipeline investment ($3.9 million or 4 cents a share).
NINE-MONTH SUMMARY OF OPERATING RESULTS
Florida Progress' earnings for the first nine months of 1995 were $192.9
million, or $2.02 per share, compared with $166 million, or $1.80 a share,
earned for the same nine-month period in 1994. Revenues in 1995 were $2.31
billion, compared with $2.09 billion for the first nine months a year ago. The
increased earnings resulted from higher energy sales and continuing cost-control
efforts at Florida Power as well as improved results at Electric Fuels' inland
marine division, which has operations on the Mississippi and Ohio rivers.
Florida Power's earnings for the first nine months of this year were $176.1
million, or $1.84 per share, on revenues of $1.74 billion. During the same
nine-month period in 1994, utility earnings were $148.8 million, or $1.61 a
share, on revenues of $1.59 billion.
In the nine-month period of 1994, Florida Power recognized restructuring costs
that lowered after-tax earnings by $13.9 million, or 15 cents per share, and
wrote off its pipeline investment, which reduced 1994 net income by $3.9
million, or 4 cents a share.
In January 1995, the Florida Public Service Commission ordered Florida Power to
begin a three-year test of a revenue decoupling plan for its residential sales.
The plan separates, or decouples, revenues from energy sales. Decoupling is
designed to reconcile the revenues to an authorized target level. In the 1995
nine-month period, Florida Power's revenues were reduced by about $18 million
for the residential revenue decoupling adjustment.
Florida Progress (NYSE: FPC) is a Fortune 500 diversified utility holding
company with assets of $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 3
(In millions, except per share amounts)
Three Months Ended Nine Months Ended Twelve Months Ended
September 30 September 30 September 30
------------------ ------------------ ------------------
(UNAUDITED) 1995 1994 1995 1994 1995 1994
-------- -------- -------- -------- -------- --------
REVENUES:
Electric utility $671.8 $586.5 $1,738.2 $1,587.0 $2,231.7 $2,066.7
Diversified 190.8 169.7 570.5 501.6 759.9 655.4
--------- --------- --------- --------- --------- ---------
862.6 756.2 2,308.7 2,088.6 2,991.6 2,722.1
EXPENSES: --------- --------- --------- --------- --------- ---------
Electric utility:
Fuel used in generation 144.1 127.6 335.8 346.2 421.5 436.4
Purchased power 120.1 80.2 330.9 216.9 408.6 277.1
Deferred fuel 1.8 (0.3) 0.6 (19.7) 18.8 (4.5)
Other operation 95.2 99.1 268.3 307.5 349.6 410.3
--------- --------- --------- --------- --------- ---------
Operation 361.2 306.6 935.6 850.9 1,198.5 1,119.3
Maintenance 23.8 27.5 84.9 90.9 116.9 132.1
Depreciation 75.8 65.5 217.3 194.9 283.9 257.3
Taxes other than income taxes 48.4 43.2 136.2 124.2 174.8 160.1
--------- --------- --------- --------- --------- ---------
509.2 442.8 1,374.0 1,260.9 1,774.1 1,668.8
--------- --------- --------- --------- --------- ---------
Diversified:
Cost of sales 155.1 139.8 467.6 413.5 625.3 536.6
Other 17.4 18.4 52.3 45.9 69.7 62.3
--------- --------- --------- --------- --------- ---------
172.5 158.2 519.9 459.4 695.0 598.9
--------- --------- --------- --------- --------- ---------
INCOME FROM OPERATIONS 180.9 155.2 414.8 368.3 522.5 454.4
--------- --------- --------- --------- --------- ---------
INTEREST EXPENSE AND OTHER:
Interest expense 34.9 36.1 107.5 108.9 143.4 143.2
Allowance for funds used during
construction (1.8) (2.8) (5.6) (8.3) (8.2) (11.0)
Preferred dividend requirements of
Florida Power 2.4 2.6 7.3 7.6 9.8 10.7
Other expense, net 0.8 6.0 2.1 7.6 4.8 5.9
--------- --------- --------- --------- --------- ---------
36.3 41.9 111.3 115.8 149.8 148.8
--------- --------- --------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 144.6 113.3 303.5 252.5 372.7 305.6
Income Taxes 53.5 37.5 110.6 86.5 133.8 102.4
--------- --------- --------- --------- --------- ---------
NET INCOME $91.1 $75.8 $192.9 $166.0 $238.9 $203.2
========= ========= ========= ========= ========= =========
AVERAGE SHARES OF COMMON STOCK
OUTSTANDING 95.9 94.6 95.6 92.3 95.4 91.5
========= ========= ========= ========= ========= =========
EARNINGS PER AVERAGE COMMON SHARE $0.95 $0.80 $2.02 $1.80 $2.50 $2.22
========= ========= ========= ========= ========= =========
Regarding these financial statements:
Prior-year amounts have been restated to include the 1994 results for FM Industries to reflect
the pooling of interests accounting. These are interim statements. Reference should be made to
Florida Progress Corporation's 1994 Annual Report to shareholders. Neither this report nor any
statement contained herein is intended to constitute an offer of or solicitation of an offer to
buy any securities or is furnished for the purpose of promoting or influencing the sale or
purchase of securities.
FLORIDA PROGRESS CORPORATION
CONSOLIDATED BALANCE SHEETS Page 4
(In millions)
September 30
------------------------
(UNAUDITED) 1995 1994
----------- -----------
ASSETS
PROPERTY, PLANT AND EQUIPMENT:
Electric utility plant in service and held for
for future use $5,794.9 $5,503.7
Less - Accumulated depreciation 2,138.2 1,950.4
Accumulated decommissioning for nuclear plant 155.5 129.1
Accumulated dismantlement for fossil plants 100.2 86.4
---------- ----------
3,401.0 3,337.8
Construction work in progress 150.7 242.1
Nuclear fuel, net of amortization of $342.2
in 1995 and $316.3 in 1994 37.0 59.3
---------- ----------
Net electric utility plant 3,588.7 3,639.2
Other property, net of depreciation of $182.1
in 1995 and $158.6 in 1994 427.5 409.5
---------- ----------
4,016.2 4,048.7
---------- ----------
CURRENT ASSETS:
Cash and equivalents 9.4 8.3
Accounts receivable, net 338.6 287.6
Current portion of leases and loans receivable 16.2 23.5
Inventories, primarily at average cost:
Fuel 58.5 68.5
Utility materials and supplies 108.7 115.8
Diversified materials 83.7 63.5
Underrecovery of fuel cost 8.5 31.8
Other 44.9 30.4
---------- ----------
668.5 629.4
---------- ----------
OTHER ASSETS:
Investments:
Leases and loans receivable, net 384.2 459.3
Marketable securities 172.6 156.1
Nuclear plant decommissioning fund 148.5 120.9
Joint ventures and partnerships 75.7 79.5
Deferred insurance policy acquisition costs 103.6 93.3
Other 180.1 161.3
---------- ----------
1,064.7 1,070.4
---------- ----------
$5,749.4 $5,748.5
========== ==========
CAPITAL AND LIABILITIES
CAPITAL:
Common stock equity $2,068.2 $1,980.0
Cumulative preferred stock of Florida Power 138.5 148.5
Long-term debt 1,579.2 1,872.9
---------- ----------
3,785.9 4,001.4
---------- ----------
CURRENT LIABILITIES:
Accounts payable 165.1 129.0
Customers' deposits 82.5 75.4
Income taxes payable 56.3 45.3
Accrued other taxes 71.4 59.2
Accrued interest 44.0 43.0
Other 93.6 73.0
---------- ----------
512.9 424.9
Notes payable - 26.7
Current portion of long-term debt
and preferred stock 196.7 57.9
---------- ----------
709.6 509.5
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred income taxes 687.8 723.8
Unamortized investment tax credits 103.7 112.4
Insurance policy benefit reserves 253.9 217.0
Other postretirement benefit costs 80.7 65.1
Other 127.8 119.3
---------- ----------
1,253.9 1,237.6
---------- ----------
$5,749.4 $5,748.5
========== ==========
FLORIDA PROGRESS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS Page 5
(In millions)
Three Months Ended Nine Months Ended Twelve Months Ended
September 30 September 30 September 30
------------------ ------------------ ------------------
(UNAUDITED) 1995 1994 1995 1994 1995 1994
-------- -------- -------- -------- -------- --------
OPERATING ACTIVITIES:
Net income $91.1 $75.8 $192.9 $166.0 $238.9 $203.2
Adjustments for noncash items:
Depreciation and amortization 92.6 81.2 265.9 238.0 349.6 317.0
Deferred income taxes and investment
tax credits, net (22.6) (30.2) (73.2) (40.5) (65.0) (74.6)
Increase in accrued other postretirement
benefit costs 4.5 6.9 12.9 17.6 15.7 27.6
Net change in deferred insurance policy
acquisition costs (3.1) (3.8) (11.7) (11.7) (10.4) (14.6)
Net change in insurance policy
benefit reserves 11.1 10.1 31.4 30.5 36.9 38.2
Changes in working capital, net of effects
from acquisition or sale of businesses:
Accounts receivable (43.1) (23.2) (74.3) (41.8) (49.9) (16.6)
Inventories 18.6 9.8 - (4.3) (5.8) (21.4)
Overrecovery (underrecovery)of fuel cost (0.1) 0.1 (6.7) (24.7) 23.3 (2.1)
Accounts payable 8.4 (30.5) 16.0 (22.0) 33.8 4.2
Income taxes payable 13.5 31.2 44.1 3.0 11.5 (17.5)
Accrued other taxes 22.5 15.3 56.4 48.3 11.9 3.1
Other 11.8 15.5 23.2 9.5 28.0 18.5
Other operating activities 9.1 11.0 20.8 28.4 15.4 31.9
--------- --------- --------- --------- --------- ---------
214.3 169.2 497.7 396.3 633.9 496.9
--------- --------- --------- --------- --------- ---------
INVESTING ACTIVITIES:
Property additions (including allowance for
borrowed funds used during construction) (65.7) (87.7) (214.2) (246.2) (336.1) (413.1)
Proceeds from sales of properties and businesses 3.7 2.0 10.3 14.3 12.3 23.8
Purchase of leases, loans and securities (21.6) (11.6) (36.1) (69.0) (41.2) (92.5)
Proceeds from sale or collection of
leases, loans and securities 21.8 18.8 70.5 67.7 105.0 134.5
Acquisition of businesses (0.1) (0.3) (5.9) (17.1) (5.9) (18.5)
Distributions from (investments in) joint
ventures and partnerships, net (0.8) (3.1) (3.2) (4.7) 0.2 (2.9)
Other investing activities (2.8) (2.7) (8.3) (8.2) (10.9) (10.9)
--------- --------- --------- --------- --------- ---------
(65.5) (84.6) (186.9) (263.2) (276.6) (379.6)
--------- --------- --------- --------- --------- ---------
FINANCING ACTIVITIES:
Issuance of long-term debt - 3.2 - 103.6 - 202.2
Repayment of long-term debt (10.0) (38.5) (39.2) (55.6) (70.2) (111.5)
Increase (decrease) in commercial paper with
long-term support (59.6) 19.2 (105.0) (68.6) (97.6) (92.7)
Redemption of preferred stock - - - - (5.0) (35.3)
Sale of common stock 9.8 10.4 28.8 128.4 38.4 142.1
Dividends paid on common stock (48.4) (47.5) (144.8) (138.0) (192.7) (182.0)
Decrease in short-term debt (41.1) (42.0) (55.3) (103.0) (27.9) (40.6)
Other financing activities (0.3) - (0.3) (0.7) (1.2) (1.5)
--------- --------- --------- --------- --------- ---------
(149.6) (95.2) (315.8) (133.9) (356.2) (119.3)
--------- --------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (0.8) (10.6) (5.0) (0.8) 1.1 (2.0)
Beginning cash and equivalents 10.2 18.9 14.4 9.1 8.3 10.3
--------- --------- --------- --------- --------- ---------
ENDING CASH AND EQUIVALENTS $9.4 $8.3 $9.4 $8.3 $9.4 $8.3
========= ========= ========= ========= ========= =========
/TABLE
Florida Progress Corporation
Selected Financial Information (Unaudited)
Page 6
Three Months Ended Percent Nine Months Ended Percent Twelve Months Ended Percent
September 30 Positive September 30 Positive September 30 Positive
1995 1994 (Negative) 1995 1994 (Negative) 1995 1994 (Negative)
-------- --------- --------- --------- --------- --------- --------- --------- ---------
Earnings Per Share:
Florida Power Corporation $0.88 $0.73 20.5 $1.84 $1.61 14.3 $2.28 $1.95 16.9
--------- --------- --------- --------- --------- ---------
Electric Fuels Corporation 0.07 0.07 - 0.19 0.18 5.6 0.24 0.24 -
Mid-Continent Life Insurance Co. 0.01 0.01 - 0.06 0.06 - 0.08 0.08 -
Progress Credit Corporation:
Lending and leasing 0.01 - - 0.02 0.02 - 0.02 0.04 (50.0)
Real estate (0.02) (0.01) (100.0) (0.06) (0.05) (20.0) (0.07) (0.06) (16.7)
Corporate and other - - - (0.03) (0.02) (50.0) (0.05) (0.03) (66.7)
--------- --------- --------- --------- --------- ---------
Diversified 0.07 0.07 - 0.18 0.19 (5.3) 0.22 0.27 (18.5)
--------- --------- --------- --------- --------- ---------
Consolidated $0.95 $0.80 18.8 $2.02 $1.80 12.2 $2.50 $2.22 12.6
========= ========= ========= ========= ========= =========
Avg. shares outstanding (millions) 95.9 94.6 1.4 95.6 92.3 3.6 95.4 91.5 4.3
Dividends per share $0.505 $0.495 2.0 $1.515 $1.485 2.0 $2.020 $1.980 2.0
Book value per share:
Florida Power Corporation $18.03 $17.46 3.3
Consolidated $21.51 $20.87 3.1
September 30 September 30
September 30 1995 1994
1995 1994 Amount Percent Amount Percent
--------- --------- ----------------------------------------
Equity investments (percent): Capitalization (in millions):
Florida Power Corporation 84 84 Common stock $2,068.2 51.9 $1,980.0 48.5
Electric Fuels Corporation 9 8 Preferred stock 138.5 3.5 148.5 3.6
Mid-Continent Life Insurance Co. 4 4 Long-term debt 1,579.2 39.7 1,872.9 45.8
Progress Credit Corporation 3 4 Short-term capital 196.7 4.9 84.6 2.1
--------- --------- ----------------------------------------
Total 100 100 Total $3,982.6 100.0 $4,086.0 100.0
========= ========= ========================================
Note: Prior-year amounts have been restated to include the 1994 results for FM Industries to reflect the pooling of interests
accounting.
Florida Power Corporation
Selected Statistical Data (Unaudited) Page 7
(In millions, except billing degree days)
Three Months Ended Nine Months Ended Twelve Months Ended
September 30 Percent September 30 Percent September 30 Percent
1995 1994 Change 1995 1994 Change 1995 1994 Change
------- ------- ------- ------- ------- ------- ------- ------- -------
Revenues:
Residential $374.8 $336.6 11.3 $959.7 $876.9 9.4 $1,225.5 $1,138.8 7.6
Commercial 147.2 133.4 10.3 386.7 358.6 7.8 512.0 475.3 7.7
Industrial 48.8 44.5 9.7 140.3 128.2 9.4 185.2 169.2 9.5
Other retail sales 31.4 28.6 9.8 86.5 79.2 9.2 115.6 106.2 8.9
------------------ -------------------- --------------------
602.2 543.1 10.9 1,573.2 1,442.9 9.0 2,038.3 1,889.5 7.9
Sales for resale 56.0 38.7 44.7 110.8 96.2 15.2 143.3 131.1 9.3
------------------ -------------------- --------------------
658.2 581.8 13.1 1,684.0 1,539.1 9.4 2,181.6 2,020.6 8.0
Other electric revenues 12.4 7.3 69.9 47.7 45.0 6.0 53.3 50.6 5.3
Deferred fuel 1.2 (2.6) - 6.5 2.9 - (3.2) (4.5) -
------------------ -------------------- --------------------
Total $671.8 $586.5 14.5 $1,738.2 $1,587.0 9.5 $2,231.7 $2,066.7 8.0
================== ==================== ====================
Kilowatt-hour sales billed:
Residential 4,571.1 4,207.2 8.6 11,480.7 10,772.6 6.6 14,571.5 13,968.9 4.3
Commercial 2,483.5 2,335.9 6.3 6,465.6 6,184.6 4.5 8,533.1 8,179.8 4.3
Industrial 990.1 933.7 6.0 2,852.1 2,692.9 5.9 3,738.8 3,539.5 5.6
Other retail sales 567.0 537.4 5.5 1,549.7 1,468.5 5.5 2,061.3 1,967.8 4.8
------------------ -------------------- --------------------
8,611.7 8,014.2 7.5 22,348.1 21,118.6 5.8 28,904.7 27,656.0 4.5
Sales for resale 1,141.8 781.0 46.2 2,021.0 1,721.8 17.4 2,638.6 2,403.8 9.8
------------------ -------------------- --------------------
Total electric sales 9,753.5 8,795.2 10.9 24,369.1 22,840.4 6.7 31,543.3 30,059.8 4.9
================== ==================== ====================
System Requirements (KWH) 9,973 8,934 11.6 25,771 24,101 6.9 32,844 31,132 5.5
Retail KWH Sales
(Billed & Unbilled) 8,708 7,835 11.1 22,677 21,218 6.9 29,056 27,544 5.5
Billing Degree Days:
Cooling 2,153 2,024 6.4 3,037 2,790 8.9 3,593 3,418 5.1
Heating - - - 480 483 (0.6) 512 594 (13.8)
Note:
Total revenues include billed revenues and unbilled revenues that are accrued for accounting purposes.
Statistics for total kilowatt-hour sales include only billed kilowatt-hour sales. The statistic for retail KWH
sales includes both billed and unbilled sales. Beginning in 1995, Florida Power was ordered by state regulators
to conduct a three-year test for residential revenue decoupling. Under the plan, abnormal weather variances
will no longer impact earnings with respect to residential revenues.