EXHIBIT 99.(B)
Florida Progress Corporation
INVESTOR NEWS
Analyst Contact:
Mark A. Myers, Manager, Investor Relations (813) 866-4245
Florida Progress reports 5.2% increase in earnings per share from continuing
operations for the second quarter
ST. PETERSBURG, FL, July 18, 1996 -- Florida Progress Corporation (NYSE: FPC),
parent of Florida Power Corporation, reported second-quarter earnings of $58.8
million, or 61 cents a share from continuing operations, compared with $55.2
million, or 58 cents a share, for the prior-year quarter.
In anticipation of the spin-off of Progress Credit Corporation, the company's
lending, leasing and real estate business, Florida Progress recorded an
after-tax charge in the second quarter of $25 million, or 26 cents per share,
primarily to write down certain Progress Credit assets that will be sold. The
company is reporting the results of Progress Credit as discontinued operations.
The spin-off will allow Florida Progress management to be able to focus more
attention on its core utility and coal and transportation businesses. Progress
Credit will be launched as a well-capitalized business dedicated to seeking
growth opportunities primarily in real estate development to maximize the value
of its assets for shareholders.
Significant items influencing continuing operations for the second-quarter
results:
o Strong utility growth -- Retail customer growth of about 2 percent and
megawatt-hour sales growth of 21 percent for wholesale business and 10
percent for industrial customers.
o Continuing cost-control efforts at Florida Power -- The utility is on
track toward maintaining its annual base O&M costs at the 1995 spending
level.
o Balance sheet cleanup-- Wrote off $12 million of utility assets for two
oil-fired power plants that were shut down in early 1994.
o Electric Fuels earnings jumped 26 percent -- Continued growth in marine
operations and rail services.
Florida Power, the largest subsidiary of Florida Progress, earned $53.9 million,
or 56 cents per share, on revenues of $588.7 million, compared with earnings of
$50.6 million, or 53 cents per share, on revenues of $550.5 million in the
second quarter of 1995.
Florida Power's customer growth is benefiting from a strong Florida economy. The
utility added more than 10,300 new service connections during the quarter. New
service connections are running at the highest annual rate since 1989.
The utility's wholesale kilowatt-hour sales were up sharply for the quarter due
to weather-related customer demand. Industrial energy sales for the quarter
increased primarily because of a 27 percent jump in sales to phosphate
customers, largely due to the opening of new mining operations in Hardee county.
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- -Page 2-
Florida Progress Corporation
Investor News - Second Quarter Earnings
Continuing cost-control efforts allowed Florida Power to be in a position to
strengthen its balance sheet by writing down $12 million of plant assets that
are not expected to be used in repowering two oil-fired power plants -- Higgins
and Turner -- that were placed in extended cold shut down in 1994.
Electric Fuels' earnings for the second quarter increased to $6.7 million,
compared with $5.3 million a year ago. The earnings growth was attributed to
improved results at both its marine and rail services operations, that offset
weak results at its coal operations.
Electric Fuels' marine operations continues to benefit from strong customer
demand to move coal, grain and other bulk commodities along the Ohio and lower
Mississippi rivers and across the Gulf of Mexico.
Earnings from Electric Fuels' rail subsidiary, Progress Rail Services
Corporation, improved as the company continues to expand its operations through
acquisitions and internal expansion. Progress Rail Services has locations in 14
states and is one of the largest integrated processors and suppliers of railroad
materials in the United States.
Electric Fuels' coal operations continued to be hurt by a depressed national
coal market. Electric Fuels made some operational changes and brought in new
leadership for its coal operations. Electric Fuels has developed a new business
plan for its coal operations that is designed to improve its coal margins by
improving productivity and quality control. The plan calls for increasing output
from company-owned mines and directing production to higher-profit markets.
Electric Fuels will further evaluate the market opportunities for each of its
mining operations later this year as its five-year business plan is updated for
review by the Board of Directors in December.
Mid-Continent Life Insurance's earnings for the second quarter were down $1
million compared with the same quarter in 1995. The insurance unit began selling
a new insurance product that will become the company's core product. The company
had expected, and previously reported, that lower earnings in 1996 were likely
as the new product is introduced and marketed to customers.
Florida Progress is a Fortune 500 diversified utility holding company with
assets of $5.6 billion. Its principal subsidiary is Florida Power, the state's
second-largest electric utility with about 1.3 million customers. Diversified
operations include coal mining, marine operations, rail services and life
insurance.
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FLORIDA PROGRESS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME Page 3
(In millions, except per share amounts)
Three Months Ended Six Months Ended Twelve Months Ended
June 30 June 30 June 30
------------------- ------------------- -------------------
(UNAUDITED) 1996 1995 1996 1995 1996 1995
-------- -------- -------- -------- -------- --------
REVENUES:
Electric utility $588.7 $550.5 $1,136.0 $1,066.4 $2,341.3 $2,146.4
Diversified 184.9 180.8 368.0 357.9 746.2 694.2
--------- --------- --------- --------- --------- ---------
773.6 731.3 1,504.0 1,424.3 3,087.5 2,840.6
EXPENSES: --------- --------- --------- --------- --------- ---------
Electric utility:
Fuel used in generation 114.3 113.1 228.8 191.7 470.8 405.0
Purchased power 137.7 107.5 260.6 210.8 490.5 368.7
Deferred fuel (22.5) (8.6) (51.0) (1.2) (51.5) 16.7
Other operation 83.2 85.7 171.4 173.1 357.0 353.5
--------- --------- --------- --------- --------- ---------
Operation 312.7 297.7 609.8 574.4 1,266.8 1,143.9
Maintenance 30.6 28.1 61.4 61.1 114.4 120.6
Depreciation 89.2 70.8 166.8 141.5 319.0 273.6
Taxes other than income taxes 45.2 44.9 92.4 87.8 180.8 169.6
--------- --------- --------- --------- --------- ---------
477.7 441.5 930.4 864.8 1,881.0 1,707.7
--------- --------- --------- --------- --------- ---------
Diversified:
Cost of sales 154.3 155.0 309.4 304.2 629.8 594.5
Other 16.6 13.9 32.0 28.2 62.7 55.6
--------- --------- --------- --------- --------- ---------
170.9 168.9 341.4 332.4 692.5 650.1
--------- --------- --------- --------- --------- ---------
INCOME FROM OPERATIONS 125.0 120.9 232.2 227.1 514.0 482.8
--------- --------- --------- --------- --------- ---------
INTEREST EXPENSE AND OTHER:
Interest expense 34.2 35.3 68.8 71.2 137.0 141.6
Allowance for funds used during
construction (1.9) (1.6) (3.6) (3.8) (7.1) (9.2)
Preferred dividend requirements of
Florida Power 2.1 2.4 4.4 4.9 9.2 10.0
Other expense (income) (1.4) (2.6) (4.7) (5.4) (9.2) (2.9)
--------- --------- --------- --------- --------- ---------
33.0 33.5 64.9 66.9 129.9 139.5
--------- --------- --------- --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 92.0 87.4 167.3 160.2 384.1 343.3
Income Taxes 33.2 32.2 60.3 58.4 140.0 119.7
--------- --------- --------- --------- --------- ---------
NET INCOME FROM CONTINUING OPERATIONS $58.8 $55.2 $107.0 $101.8 $244.1 $223.6
DISCONTINUED OPERATIONS, NET
OF INCOME TAXES (25.0) - (25.0) - (25.0) -
--------- --------- --------- --------- --------- ---------
NET INCOME $33.8 $55.2 $82.0 $101.8 $219.1 $223.6
========= ========= ========= ========= ========= =========
AVERAGE SHARES OF COMMON STOCK
OUTSTANDING 96.8 95.6 96.6 95.4 96.4 95.1
========= ========= ========= ========= ========= =========
EARNINGS PER AVERAGE COMMON SHARE
CONTINUING OPERATIONS $ .61 $0.58 $1.11 $1.07 $2.53 $2.35
DISCONTINUED OPERATIONS ($ .26) - ($ .26) - ($ .26) -
--------- --------- --------- --------- --------- ---------
$ .35 $ .58 $ .85 $1.07 $2.27 $2.35
========= ========= ========= ========= ========= =========
Regarding these financial statements:
Current and prior periods reflect the recapitalization of the spin-off company, Progress Credit,
and its associated treatment as discontinued operations. These are interim statements. Reference
should be made to Florida Progress Corporation's 1995 Annual Report to shareholders. Neither this
report nor any statement contained herein is furnished 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 4
(In millions)
June 30
-------------------------
(UNAUDITED) 1996 1995
----------- -----------
ASSETS
PROPERTY, PLANT AND EQUIPMENT:
Electric utility plant in service and held
for future use $5,892.2 $5,735.6
Less - Accumulated depreciation 2,276.4 2,094.8
Accumulated decommissioning for nuclear plant 178.3 147.9
Accumulated dismantlement for fossil plants 112.5 96.1
---------- ----------
3,325.0 3,396.8
Construction work in progress 174.3 201.4
Nuclear fuel, net of amortization of $352.6
in 1996 and $335.8 in 1995 64.0 40.7
---------- ----------
Net electric utility plant 3,563.3 3,638.9
Other property, net of depreciation of $164.7
in 1996 and $148.7 in 1995 310.4 290.7
---------- ----------
3,873.7 3,929.6
---------- ----------
CURRENT ASSETS:
Cash and equivalents 8.8 10.0
Accounts receivable, net 298.2 291.5
Current portion of loans receivable .7 .5
Inventories, primarily at average cost:
Fuel 77.6 88.8
Utility materials and supplies 96.7 111.9
Diversified materials 129.8 69.4
Underrecovery of fuel cost 57.6 8.4
Other 46.8 35.6
---------- ----------
716.2 616.1
---------- ----------
DISCONTINUED OPERATIONS:
Advances to discontinued operations 127.1 116.5
Net assets of discontinued operations 180.6 204.8
---------- ----------
307.7 321.3
---------- ----------
OTHER ASSETS:
Investments:
Loans receivable, net 30.7 27.8
Marketable securities 195.1 169.2
Nuclear plant decommissioning fund 183.3 142.2
Joint ventures and partnerships 35.8 33.1
Deferred insurance policy acquisition costs 115.0 100.5
Other 158.0 151.3
---------- ----------
717.9 624.1
---------- ----------
$5,615.5 $5,491.1
========== ==========
CAPITAL AND LIABILITIES
CAPITAL:
Common stock equity $2,073.0 $2,016.1
Cumulative preferred stock of Florida Power 58.5 143.5
Long-term debt 1,687.0 1,788.1
---------- ----------
3,818.5 3,947.7
---------- ----------
CURRENT LIABILITIES:
Accounts payable 186.9 156.4
Customers' deposits 88.6 79.2
Income taxes payable 26.1 17.6
Accrued other taxes 53.8 47.5
Accrued interest 46.0 47.0
Other 83.2 74.7
---------- ----------
484.6 422.4
Notes payable - 41.1
Current portion of long-term debt 193.8 26.2
---------- ----------
678.4 489.7
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred income taxes 490.5 509.2
Unamortized investment tax credits 97.5 105.8
Insurance policy benefit reserves 295.7 242.8
Other postretirement benefit costs 87.9 75.9
Other 147.0 120.0
---------- ----------
1,118.6 1,053.7
---------- ----------
$5,615.5 $5,491.1
========== ==========
FLORIDA PROGRESS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS Page 5
(In millions)
Three Months Ended Six Months Ended Twelve Months Ended
June 30 June 30 June 30
------------------- ------------------- -------------------
(UNAUDITED) 1996 1995 1996 1995 1996 1995
-------- -------- -------- -------- -------- --------
OPERATING ACTIVITIES:
Net income from continuing operations $58.8 $55.2 $107.0 $101.8 $244.1 $223.6
Adjustments for noncash items:
Depreciation and amortization 99.6 85.2 187.6 170.5 369.8 332.8
Deferred income taxes and investment
tax credits, net (19.4) (9.7) (26.3) (20.6) (43.7) (23.8)
Increase in accrued other postretirement
benefit costs 1.7 4.0 3.4 8.2 12.0 17.8
Net change in deferred insurance policy
acquisition costs (6.4) (3.3) (8.6) (8.6) (14.5) (11.1)
Net change in insurance policy
benefit reserves 17.9 9.5 30.7 20.3 52.9 35.9
Changes in working capital, net of effects
from acquisition or sale of businesses:
Accounts receivable (3.0) (43.0) 8.5 (31.5) (4.5) (30.7)
Inventories (34.5) (11.4) (31.5) (18.0) (42.6) (13.8)
Overrecovery (underrecovery) of fuel cost (38.3) (11.3) (57.3) (6.6) (49.2) 23.5
Accounts payable 33.7 8.8 21.4 7.5 30.3 (5.2)
Income taxes payable (17.8) (24.3) 21.2 8.5 4.1 2.2
Accrued other taxes 18.0 18.4 38.2 32.9 6.3 4.7
Other (10.6) 18.9 (12.3) 10.1 15.9 30.0
Other operating activities 12.0 (.7) 23.1 6.2 24.2 3.5
--------- --------- --------- --------- --------- ---------
Cash provided by continuing operations 111.7 96.3 305.1 280.7 605.1 589.4
--------- --------- --------- --------- --------- ---------
Income (loss) from discontinued operations (25.0) - (25.0) - (25.0) -
Adjustments for non-cash items, primarily
loss provision 19.9 1.0 7.4 2.9 (13.1) (.7)
--------- --------- --------- --------- --------- ---------
Cash provided by (used for) discontinued
operations (5.1) 1.0 (17.6) 2.9 (38.1) (.7)
--------- --------- --------- --------- --------- ---------
106.6 97.3 287.5 283.6 567.0 588.7
--------- --------- --------- --------- --------- ---------
INVESTING ACTIVITIES:
Property additions (including allowance for
borrowed funds used during construction) (64.7) (75.6) (135.4) (147.2) (319.6) (355.9)
Proceeds from sales of properties and businesses 2.8 2.8 6.1 6.3 12.9 10.3
(Purchase of) proceeds from sale or collection
of loans and securities (2.4) (12.7) (14.2) (10.2) (32.9) (15.3)
Acquisition of businesses (3.2) (5.8) (3.2) (5.8) (6.6) (6.1)
Distributions from (investments in) joint
ventures and partnerships, net (1.2) (1.6) (1.2) (2.3) (2.9) (5.1)
Investing activities of discontinued operations 5.3 34.4 12.0 43.5 38.3 87.5
Other investing activities (4.7) (2.8) (18.0) (5.5) (23.5) (10.9)
--------- --------- --------- --------- --------- ---------
(68.1) (61.3) (153.9) (121.2) (334.3) (295.5)
--------- --------- --------- --------- --------- ---------
FINANCING ACTIVITIES:
Issuance of long-term debt - - - - - 3.3
Repayment of long-term debt (.6) (19.2) (2.1) (20.8) (27.0) (86.3)
Increase (decrease) in commercial paper with
long-term support 87.4 (31.0) 46.7 (45.4) 93.1 (18.8)
Redemption of preferred stock (80.9) - (80.9) - (85.9) (5.0)
Sale of common stock 9.3 9.6 18.6 19.0 38.0 39.1
Dividends paid on common stock (50.0) (48.3) (99.7) (96.4) (196.7) (191.8)
Increase (decrease) in short-term debt - 41.1 - (14.2) (41.1) (28.8)
Financing activities of discontinued operations - - (10.2) (8.4) (11.5) (12.8)
Other financing activities (.8) - (1.5) - (2.8) (.9)
--------- --------- --------- --------- --------- ---------
(35.6) (47.8) (129.1) (166.2) (233.9) (302.0)
--------- --------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 2.9 (11.8) 4.5 (3.8) (1.2) (8.8)
Beginning cash and equivalents 5.9 21.8 4.3 13.8 10.0 18.8
--------- --------- --------- --------- --------- ---------
ENDING CASH AND EQUIVALENTS $8.8 $10.0 $8.8 $10.0 $8.8 $10.0
========= ========= ========= ========= ========= =========
Florida Progress Corporation
Selected Financial Information (Unaudited) Page 6
Three Months Ended Percent Six Months Ended Percent Twelve Months Ended Percent
June 30 Positive June 30 Positive June 30 Positive
1996 1995 (Negative) 1996 1995 (Negative) 1996 1995 (Negative)
-------- --------- --------- --------- --------- --------- --------- --------- ---------
Earnings Per Share:
Florida Power Corporation $.56 $.53 5.7 $1.00 $.96 4.2 $2.31 $2.13 8.5
--------- --------- --------- --------- --------- ---------
Electric Fuels Corporation .07 .05 40.0 .14 .12 16.7 .27 .25 8.0
Mid-Continent Life Insurance Co. .01 .02 (50.0) .02 .04 (50.0) .04 .08 (50.0)
Corporate and other (.03) (.02) (50.0) (.05) (.05) - (.09) (.11) 18.2
--------- --------- --------- --------- --------- ---------
Diversified .05 .05 - .11 .11 - .22 .22 -
--------- --------- --------- --------- --------- ---------
Total Continuing Operations .61 .58 5.2 1.11 1.07 3.7 2.53 2.35 7.7
Discontinued Operations (.26) - (.26) - (.26) -
--------- --------- --------- --------- --------- ---------
$.35 $.58 $.85 $1.07 $2.27 $2.35
========= ========= ========= ========= ========= =========
Avg. shares outstanding (millions) 96.8 95.6 1.3 96.6 95.4 1.3 96.4 95.1 1.4
Dividends per share $.515 $.505 2.0 $1.03 $1.01 2.0 $2.04 $2.01 1.5
Book value per share:
Florida Power Corporation $18.35 $17.56 4.5
Consolidated $21.37 $21.04 1.6
June 30 June 30
June 30 1996 1995
1996 1995 Amount Percent Amount Percent
--------- --------- ----------------------------------------
Equity investments (percent): Capitalization (in millions):
Florida Power Corporation 87 87 Common stock $2,073.0 51.7 $2,016.1 50.2
Electric Fuels Corporation 9 9 Preferred stock 58.5 1.5 143.5 3.6
Mid-Continent Life Insurance Co. 4 4 Long-term debt 1,687.0 42.0 1,788.1 44.5
--------- --------- Short-term capital 193.8 4.8 67.3 1.7
Total 100 100 ----------------------------------------
========= ========= Total $4,012.3 100.0 $4,015.0 100.0
========================================
Note: Current and prior periods reflect the recapitalization of the spin-off company, Progress Credit, and its associated
treatment as discontinued operations.
Florida Power Corporation
Selected Statistical Data (Unaudited) Page 7
(In millions, except billing degree days)
Three Months Ended Six Months Ended Twelve Months Ended
June 30 Percent June 30 Percent June 30 Percent
1996 1995 Change 1996 1995 Change 1996 1995 Change
------- ------- ------- ------- ------- ------- ------- ------- -------
Revenues:
Residential $297.1 $301.2 (1.4) $625.6 $584.9 7.0 $1,293.4 $1,187.3 8.9
Commercial 131.7 130.1 1.2 246.8 239.5 3.0 522.6 498.2 4.9
Industrial 51.9 48.4 7.2 99.7 91.5 9.0 197.5 180.9 9.2
Other retail sales 30.8 29.8 3.4 57.8 55.1 4.9 119.2 112.8 5.7
------------------ -------------------- --------------------
511.5 509.5 0.4 1,029.9 971.0 6.1 2,132.7 1,979.2 7.8
Sales for resale 37.1 28.8 28.8 80.1 54.8 46.2 174.9 126.0 38.8
------------------ -------------------- --------------------
548.6 538.3 1.9 1,110.0 1,025.8 8.2 2,307.6 2,105.2 9.6
Other electric revenues 24.3 9.5 155.8 19.7 35.3 (44.2) 35.9 48.2 (25.5)
Deferred fuel 15.8 2.7 - 6.3 5.3 18.9 (2.2) (7.0) -
------------------ -------------------- --------------------
Total $588.7 $550.5 6.9 $1,136.0 $1,066.4 6.5 $2,341.3 $2,146.4 9.1
================== ==================== ====================
Kilowatt-hour sales billed:
Residential 3,541.1 3,589.2 (1.3) 7,460.6 6,909.6 8.0 15,489.0 14,207.6 9.0
Commercial 2,215.3 2,211.9 .2 4,104.2 3,982.1 3.1 8,734.2 8,385.5 4.2
Industrial 1,099.8 1,001.5 9.8 2,100.7 1,862.0 12.8 4,103.1 3,682.4 11.4
Other retail sales 558.2 539.6 3.4 1,039.0 982.7 5.7 2,141.3 2,031.7 5.4
------------------ -------------------- --------------------
7,414.4 7,342.2 1.0 14,704.5 13,736.4 7.0 30,467.6 28,307.2 7.6
Sales for resale 529.1 436.9 21.1 1,281.7 879.2 45.8 3,305.6 2,277.8 45.1
------------------ -------------------- --------------------
Total electric sales 7,943.5 7,779.1 2.1 15,986.2 14,615.6 9.4 33,773.2 30,585.0 10.4
================== ==================== ====================
System Requirements (KWH) 8,578 8,585 (.1) 16,808 15,798 6.4 34,677 31,805 9.0
Retail KWH Sales
(Billed & Unbilled) 7,585 7,554 .4 14,803 13,968 6.0 30,580 28,184 8.5
Billing Degree Days:
Cooling 819 884 (7.4) 819 884 (7.4) 3,864 3,464 11.5
Heating 108 16 - 761 480 58.5 882 512 72.3
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.