UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Exact name of Registrant as specified in I.R.S. Employer
Commission its charter, state of incorporation, address Identification
File No. of principal executive offices, telephone Number
------------ -------------------------------------------- ---------------
1-8349 FLORIDA PROGRESS CORPORATION 59-2147112
A Florida Corporation
One Progress Plaza
St. Petersburg, Florida 33701
Telephone (813) 824-6400
1-3274 FLORIDA POWER CORPORATION 59-0247770
A Florida Corporation
3201 34th Street South
St. Petersburg, Florida 33711
Telephone (813) 866-5151
Indicate by check mark whether each registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ___X___ No ______
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Description of Shares Outstanding
Registrant Class at June 30, 1996
---------- -------------- ------------------
Florida Progress Corporation Common Stock,
without par value 97,003,453
Florida Power Corporation Common Stock,
without par value 100 (all of which were
held, beneficially and
of record, by Florida
Progress Corporation)
This combined Form 10-Q represents separate filings by Florida Progress
Corporation and Florida Power Corporation. Florida Power makes no
representations as to the information relating to Florida Progress' diversified
operations.
PART I. FINANCIAL INFORMATION
FLORIDA PROGRESS CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
FLORIDA PROGRESS CORPORATION
Consolidated Statements of Income
(In millions, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
------- ------- -------- --------
(Unaudited) (Unaudited)
REVENUES:
Electric utility $588.7 $550.5 $1,136.0 $1,066.4
Diversified 184.9 180.8 368.0 357.9
-------- -------- --------- ---------
773.6 731.3 1,504.0 1,424.3
EXPENSES: -------- -------- --------- ---------
Electric utility:
Fuel used in generation 114.3 113.1 228.8 191.7
Purchased power 137.7 107.5 260.6 210.8
Deferred fuel (22.5) (8.6) (51.0) (1.2)
Other operation 83.2 85.7 171.4 173.1
-------- -------- --------- ---------
Operation 312.7 297.7 609.8 574.4
Maintenance 30.6 28.1 61.4 61.1
Depreciation 89.2 70.8 166.8 141.5
Taxes other than income taxes 45.2 44.9 92.4 87.8
-------- -------- --------- ---------
477.7 441.5 930.4 864.8
-------- -------- --------- ---------
Diversified:
Cost of sales 154.3 155.0 309.4 304.2
Other 16.6 13.9 32.0 28.2
-------- -------- --------- ---------
170.9 168.9 341.4 332.4
-------- -------- --------- ---------
INCOME FROM OPERATIONS 125.0 120.9 232.2 227.1
-------- -------- --------- ---------
INTEREST EXPENSE AND OTHER:
Interest expense 34.2 35.3 68.8 71.2
Allowance for funds used during
construction (1.9) (1.6) (3.6) (3.8)
Preferred dividend requirements of
Florida Power 2.1 2.4 4.4 4.9
Other expense (income), net (1.4) (2.6) (4.7) (5.4)
-------- -------- --------- ---------
33.0 33.5 64.9 66.9
-------- -------- --------- ---------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 92.0 87.4 167.3 160.2
Income Taxes 33.2 32.2 60.3 58.4
-------- -------- --------- ---------
NET INCOME FROM CONTINUING OPERATIONS 58.8 55.2 107.0 101.8
DISCONTINUED OPERATIONS, NET
OF INCOME TAXES (25.0) - (25.0) -
-------- -------- --------- ---------
NET INCOME $33.8 $55.2 $82.0 $101.8
======== ======== ========= =========
AVERAGE SHARES OF COMMON STOCK
OUTSTANDING 96.8 95.6 96.6 95.4
======== ======== ========= =========
EARNINGS PER AVERAGE COMMON SHARE
CONTINUING OPERATIONS $0.61 $0.58 $1.11 $1.07
DISCONTINUED OPERATIONS ($0.26) - ($0.26) -
-------- -------- --------- ---------
$0.35 $0.58 $0.85 $1.07
======== ======== ========= =========
DIVIDENDS PER COMMON SHARE $0.515 $0.505 $1.030 $1.010
======== ======== ========= =========
Note: The accompanying notes are an integral part of these financial statements.
2
FLORIDA PROGRESS CORPORATION
Consolidated Balance Sheets
(In millions)
June 30, December 31,
1996 1995
----------- -----------
ASSETS (Unaudited)
PROPERTY, PLANT AND EQUIPMENT:
Electric utility plant in service and held
for future use $5,892.2 $5,867.5
Less - Accumulated depreciation 2,276.4 2,179.7
Accumulated decommissioning for nuclear plant 178.3 165.2
Accumulated dismantlement for fossil plants 112.5 104.4
---------- ----------
3,325.0 3,418.2
Construction work in progress 174.3 131.8
Nuclear fuel, net of amortization of $352.6
in 1996 and $348.7 in 1995 64.0 59.1
---------- ----------
Net electric utility property 3,563.3 3,609.1
Other property, net of depreciation of $164.7
in 1996 and $157.3 in 1995 310.4 307.0
---------- ----------
3,873.7 3,916.1
---------- ----------
CURRENT ASSETS:
Cash and equivalents 8.8 4.3
Accounts receivable, net 298.2 307.3
Inventories at average cost:
Fuel 77.6 63.0
Materials and supplies 96.7 101.3
Diversified materials 129.8 111.0
Underrecovery of fuel cost 57.6 0.3
Deferred income taxes 32.5 32.3
Other 15.0 9.3
---------- ----------
716.2 628.8
---------- ----------
DISCONTINUED OPERATIONS:
Advances to discontinued operations 127.1 116.0
Net assets of discontinued operations 180.6 200.8
---------- ----------
307.7 316.8
---------- ----------
OTHER ASSETS:
Investments:
Loans receivable, net 30.7 31.5
Marketable securities 195.1 188.2
Nuclear plant decommissioning fund 183.3 161.1
Joint ventures and partnerships 35.8 33.9
Deferred insurance policy acquisition costs 115.0 106.4
Other 158.0 167.6
---------- ----------
717.9 688.7
---------- ----------
$5,615.5 $5,550.4
========== ==========
Note: The accompanying notes are an integral part of these financial statements.
3
FLORIDA PROGRESS CORPORATION
Consolidated Balance Sheets
(In millions)
June 30, December 31,
1996 1995
----------- -----------
CAPITAL AND LIABILITIES (Unaudited)
COMMON STOCK EQUITY:
Common stock $1,207.4 $1,187.6
Retained earnings 868.9 888.4
Unrealized gain (loss) on securities
available for sale (3.3) 2.1
---------- ----------
2,073.0 2,078.1
CUMULATIVE PREFERRED STOCK OF FLORIDA POWER:
Without sinking funds 33.5 113.5
With sinking funds 25.0 25.0
LONG-TERM DEBT 1,687.0 1,662.3
---------- ----------
TOTAL CAPITAL 3,818.5 3,878.9
---------- ----------
CURRENT LIABILITIES:
Accounts payable 186.9 165.7
Customers' deposits 88.6 85.3
Income taxes payable 26.1 1.7
Accrued other taxes 53.8 15.6
Accrued interest 46.0 46.9
Other 83.2 97.0
---------- ----------
484.6 412.2
Current portion of long-term debt 193.8 173.7
---------- ----------
678.4 585.9
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred income taxes 490.5 512.0
Unamortized investment tax credits 97.5 101.5
Insurance policy benefit reserves 295.7 265.0
Other postretirement benefit costs 87.9 84.5
Other 147.0 122.6
---------- ----------
1,118.6 1,085.6
---------- ----------
$5,615.5 $5,550.4
========== ==========
Note: The accompanying notes are an integral part of these financial statements.
4
FLORIDA PROGRESS CORPORATION
Consolidated Statements of Cash Flows
(In millions)
Six Months Ended
June 30,
1996 1995
----------- -----------
(Unaudited)
OPERATING ACTIVITIES:
Net income from continuing operations $107.0 $101.8
Adjustments for noncash items:
Depreciation and amortization 187.6 170.5
Deferred income taxes and
investment tax credits, net (26.3) (20.6)
Increase in accrued other postretirement
benefit costs 3.4 8.2
Net change in deferred insurance policy
acquisition costs (8.6) (8.6)
Net change in insurance policy
benefit reserves 30.7 20.3
Changes in working capital, net of effects
from acquisition or sale of businesses:
Accounts receivable 8.5 (31.5)
Inventories (31.5) (18.0)
Underrecovery of fuel cost (57.3) (6.6)
Accounts payable 21.4 7.5
Income taxes payable 21.2 8.5
Accrued other taxes 38.2 32.9
Other (12.3) 10.1
Other operating activities 23.1 6.2
--------- ---------
Cash provided by continuing operations 305.1 280.7
--------- ---------
Income (loss) from discontinued operations (25.0) -
Adjustments for non-cash items, primarily
loss provision 7.4 2.9
--------- ---------
Cash provided by (used for) discontinued
operations (17.6) 2.9
--------- ---------
287.5 283.6
--------- ---------
INVESTING ACTIVITIES:
Property additions (including allowance for
borrowed funds used during construction) (135.4) (147.2)
Proceeds from sale of properties and businesses 6.1 6.3
Net change in loans receivable and securities (14.2) (10.2)
Acquisition of businesses (3.2) (5.8)
Distributions from (investments in) joint
ventures and partnerships (1.2) (2.3)
Investing activities of discontinued operations 12.0 43.5
Other investing activities (18.0) (5.5)
--------- ---------
(153.9) (121.2)
--------- ---------
FINANCING ACTIVITIES:
Repayment of long-term debt (2.1) (20.8)
Increase (decrease) in commercial paper with
long-term support 46.7 (45.4)
Redemption of preferred stock (80.9) -
Sale of common stock 18.6 19.0
Dividends paid on common stock (99.7) (96.4)
Decrease in short-term debt - (14.2)
Financing activities of discontinued operations (10.2) (8.4)
Other financing activities (1.5) -
--------- ---------
(129.1) (166.2)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 4.5 (3.8)
Beginning cash and equivalents 4.3 13.8
--------- ---------
ENDING CASH AND EQUIVALENTS $8.8 $10.0
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) $66.4 $67.5
Income taxes (net of refunds) $61.0 $71.1
Note: The accompanying notes are an integral part of these financial statements.
5
FLORIDA POWER CORPORATION
FINANCIAL STATEMENTS
FLORIDA POWER CORPORATION
Statements of Income
(In millions) Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
------- ------- -------- --------
(Unaudited) (Unaudited)
OPERATING REVENUES:
Residential $297.1 $301.2 $625.6 $584.9
Commercial 131.7 130.1 246.8 239.5
Industrial 51.9 48.4 99.7 91.5
Sales for resale 37.1 28.8 80.1 54.8
Other 70.9 42.0 83.8 95.7
-------- -------- --------- ---------
588.7 550.5 1,136.0 1,066.4
-------- -------- --------- ---------
OPERATING EXPENSES:
Operation:
Fuel used in generation 114.3 113.1 228.8 191.7
Purchased power 137.7 107.5 260.6 210.8
Deferred fuel (22.5) (8.6) (51.0) (1.2)
Other 83.2 85.7 171.4 173.1
-------- -------- --------- ---------
312.7 297.7 609.8 574.4
-------- -------- --------- ---------
Maintenance 30.6 28.1 61.4 61.1
Depreciation 89.2 70.8 166.8 141.5
Taxes other than income taxes 45.2 44.9 92.4 87.8
Income taxes:
Currently payable 43.8 38.8 74.0 72.1
Deferred, net (9.9) (6.4) (12.9) (13.6)
Investment tax credits, net (2.0) (2.1) (4.0) (4.2)
-------- -------- --------- ---------
31.9 30.3 57.1 54.3
-------- -------- --------- ---------
509.6 471.8 987.5 919.1
-------- -------- --------- ---------
OPERATING INCOME 79.1 78.7 148.5 147.3
-------- -------- --------- ---------
OTHER INCOME AND DEDUCTIONS:
Allowance for equity funds used
during construction 1.0 0.9 1.9 2.1
Miscellaneous other expense, net (0.4) (0.5) (1.0) (1.0)
-------- -------- --------- ---------
0.6 0.4 0.9 1.1
-------- -------- --------- ---------
INTEREST CHARGES
Interest on long-term debt 21.8 23.9 43.9 48.1
Other interest expense 2.8 2.9 6.1 5.7
-------- -------- --------- ---------
24.6 26.8 50.0 53.8
Allowance for borrowed funds used
during construction (0.9) (0.7) (1.7) (1.7)
-------- -------- --------- ---------
23.7 26.1 48.3 52.1
-------- -------- --------- ---------
NET INCOME 56.0 53.0 101.1 96.3
DIVIDENDS ON PREFERRED STOCK 2.1 2.4 4.4 4.9
-------- -------- --------- ---------
NET INCOME AFTER DIVIDENDS
ON PREFERRED STOCK $53.9 $50.6 $96.7 $91.4
======== ======== ========= =========
Note: The accompanying notes are an integral part of these financial statements.
6
FLORIDA POWER CORPORATION
Balance Sheets
(In millions)
June 30, December 31,
1996 1995
----------- -----------
ASSETS (Unaudited)
PROPERTY, PLANT AND EQUIPMENT:
Electric utility plant in service and held
for future use $5,892.2 $5,867.5
Less - Accumulated depreciation 2,276.4 2,179.7
Accumulated decommissioning for nuclear plant 178.3 165.2
Accumulated dismantlement for fossil plants 112.5 104.4
---------- ----------
3,325.0 3,418.2
Construction work in progress 174.3 131.8
Nuclear fuel, net of amortization of $352.6
in 1996 and $348.7 in 1995 64.0 59.1
---------- ----------
3,563.3 3,609.1
Other property, net 14.6 23.0
---------- ----------
3,577.9 3,632.1
---------- ----------
CURRENT ASSETS:
Cash and equivalents 5.2 0.8
Accounts receivable, less reserve of $5.0
in 1996 and $5.2 in 1995 211.4 200.7
Inventories at average cost:
Fuel 49.7 40.8
Materials and supplies 96.7 101.3
Underrecovery of fuel cost 57.6 0.3
Deferred income taxes 32.5 32.3
Other 4.6 3.9
---------- ----------
457.7 380.1
---------- ----------
OTHER ASSETS:
Nuclear plant decommissioning fund 183.3 161.1
Unamortized debt expense, being amortized
over term of debt 26.1 27.5
Other 72.6 84.1
---------- ----------
282.0 272.7
---------- ----------
$4,317.6 $4,284.9
========== ==========
Note: The accompanying notes are an integral part of these financial statements.
7
FLORIDA POWER CORPORATION
Balance Sheets
(In millions)
June 30, December 31,
1996 1995
----------- -----------
CAPITALIZATION AND LIABILITIES (Unaudited)
CAPITALIZATION:
Common stock $1,004.4 $992.9
Retained earnings 775.6 761.1
---------- ----------
1,780.0 1,754.0
CUMULATIVE PREFERRED STOCK:
Without sinking funds 33.5 113.5
With sinking funds 25.0 25.0
LONG-TERM DEBT 1,288.1 1,279.1
---------- ----------
TOTAL CAPITAL 3,126.6 3,171.6
---------- ----------
CURRENT LIABILITIES:
Accounts payable 96.1 89.8
Accounts payable to associated companies 22.7 24.8
Customers' deposits 88.6 85.3
Income taxes payable 20.2 8.9
Accrued other taxes 50.2 12.3
Accrued interest 31.7 32.9
Other 54.1 65.1
---------- ----------
363.6 319.1
Current portion of long-term debt 50.7 30.6
---------- ----------
414.3 349.7
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred income taxes 474.7 483.8
Unamortized investment tax credits 96.9 100.9
Other postretirement benefit costs 84.6 81.5
Other 120.5 97.4
---------- ----------
776.7 763.6
---------- ----------
$4,317.6 $4,284.9
========== ==========
Note: The accompanying notes are an integral part of these financial statements.
8
FLORIDA POWER CORPORATION
Statements of Cash Flows
(In millions)
Six Months Ended
June 30,
1996 1995
---------- ----------
(Unaudited)
OPERATING ACTIVITIES:
Net income after dividends on preferred stock $96.7 $91.4
Adjustments for noncash items:
Depreciation and amortization 175.4 159.6
Deferred income taxes and investment
tax credits, net (16.9) (17.8)
Increase in accrued other postretirement
benefit costs 3.0 7.9
Allowance for equity funds used during construction (1.9) (2.1)
Changes in working capital:
Accounts receivable (10.7) (39.7)
Inventories (4.3) (11.8)
Overrecovery (underrecovery) of fuel cost (57.3) (6.6)
Accounts payable 6.3 4.9
Accounts payable to associated companies (2.0) 1.1
Income taxes payable 11.3 3.2
Accrued other taxes 37.9 32.7
Other (9.7) 14.8
Other operating activities 25.8 4.6
--------- ---------
253.6 242.2
--------- ---------
INVESTING ACTIVITIES:
Construction expenditures (111.3) (125.3)
Allowance for borrowed funds used during construction (1.7) (1.7)
Additions to nonutility property (1.1) (0.9)
Proceeds from sale of properties 3.8 6.0
Other investing activities (18.1) (5.5)
--------- ---------
(128.4) (127.4)
--------- ---------
FINANCING ACTIVITIES:
Repayment of long-term debt (0.4) (19.2)
Increase (decrease) in commercial paper with
long term support 29.4 -
Redemption of preferred stock (80.9) -
Dividends paid on common stock (81.4) (88.8)
Equity contributions from parent 12.5 12.5
Decrease in short-term debt - (14.2)
--------- ---------
(120.8) (109.7)
--------- ---------
NET INCREASE IN CASH AND EQUIVALENTS 4.4 5.1
Beginning cash and equivalents 0.8 -
--------- ---------
ENDING CASH AND EQUIVALENTS $5.2 $5.1
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) $47.9 $48.5
Income taxes (net of refunds) $62.4 $68.6
Note: The accompanying notes are an integral part of these financial statements.
9
FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION
NOTES TO FINANCIAL STATEMENTS
1) On July 1, 1996, Florida Progress Corporation ("Florida Progress")
announced its plan to spin-off Progress Credit Corporation ("Progress
Credit"), Florida Progress' lending, leasing and real estate business, to
shareholders through a tax-free stock dividend. The dividend distribution
is expected to occur before the end of 1996.
The accompanying financial statements account for Progress Credit as
discontinued operations. Accordingly, the results and balances related to
this segment have been segregated from the ongoing operations of Florida
Progress in the accompanying financial statements for all periods
presented. For each of the periods presented, the accompanying financial
statements reflect the conversion of a portion of Progress Credit
intercompany debt to equity and the removal of the corresponding interest
from the results of operations of Progress Credit. In anticipation of the
spin-off of Progress Credit, Florida Progress has recorded a $25 million
charge to earnings in the second quarter of 1996 comprised of the
following:
(In millions)
Writedown of assets to be disposed of by Progress
Credit (net of income tax benefits of $11.3 million) $ 18.0
Costs associated with the spin-off
(net of income tax benefits of $4.4 million) 7.0
-----
Total $ 25.0
Progress Credit revenues were $27.6 million and $23.0 million for the six
months ended June 30, 1996 and 1995, respectively. The following amounts
are included as discontinued operations on the Florida Progress balance
sheet as of June 30, 1996 and December 31, 1995:
June 30, December 31,
In millions 1996 1995
-----------------------------------------------------------------------
Leases and loans receivable, net $ 318.9 $ 351.7
Property and equipment, net 141.3 148.3
Other assets 53.7 57.6
-----------------------------------------------------------------------
Total assets 513.9 557.6
-----------------------------------------------------------------------
Less: Advances from parent 127.1 116.0
Less: Other liabilities 206.2 240.8
-----------------------------------------------------------------------
Net assets $ 180.6 $ 200.8
-----------------------------------------------------------------------
2) As ordered by the Florida Public Service Commission ("FPSC"), Florida
Power Corporation ("Florida Power") is in its second year of conducting a
three-year test for residential revenue decoupling which began in January
1995. The difference between target revenues and actual revenues is
included as a current asset or current liability on the balance sheet.
Revenue decoupling reduced residential billed revenues by $21.9 million
and $16.6 million for the six months ended June 30, 1996 and 1995,
respectively.
3) CONTINGENCIES
PURCHASED POWER - Florida Power's cogeneration purchased power contracts
employ separate pricing methodologies for capacity payments and energy
payments. Two cogenerators have filed suit against Florida Power in state
court and a third in both state and federal court challenging the energy
pricing methodology.
10
Another cogenerator entered into a standard offer cogeneration contract
with Florida Power and subsequently indicated its intention to build a 115
megawatt ("MW") facility. On May 20, 1996, the FPSC issued an order ruling
against the cogenerator on two of the three material issues related to the
contract. First, the FPSC held that the cogenerator's proposed 115 MW
facility does not comply with the 75 MW limitation contained in the FPSC's
standard offer rules. Second, the FPSC held that under its rules, Florida
Power is required to make capacity payments for 20 years rather than for
30 years as argued by the cogenerator. On a third issue, the FPSC ruled
against Florida Power by extending for 18 months the "milestone" dates
contained in the standard offer contract, including the construction
commencement date and the commercial in-service date. The cogenerator
appealed this order to the Florida Supreme Court. It is expected that the
Supreme Court will render a decision in the first half of 1997.
Management does not expect that the results of these actions will have a
material impact on earnings.
INSURANCE - Florida Progress and its subsidiaries utilize various risk
management techniques to protect assets from risk of loss, including the
purchase of insurance. Risk avoidance, risk transfer and self-insurance
techniques are utilized depending on Florida Progress' ability to assume
risk, the relative cost and availability of methods for transferring risk
to third parties, and the requirements of applicable regulatory bodies.
Florida Power self-insures its transmission and distribution lines against
loss due to storm damage and other natural disasters. Florida Power is
accruing $6 million annually to a storm damage reserve and may defer any
losses in excess of the reserve.
Under the provisions of the Price Anderson Act, which limits liability for
accidents at nuclear power plants, Florida Power, as an owner of a nuclear
plant, can be assessed for a portion of any third-party liability claims
arising from an accident at any commercial nuclear power plant in the
United States. If total third-party claims relating to a single nuclear
incident exceed $200 million (the amount of currently available commercial
liability insurance), Florida Power could be assessed up to $79.3 million
per incident, with a maximum assessment of $10 million per year.
Florida Power is a member of the Nuclear Electric Insurance, Ltd.
("NEIL"), an industry mutual insurer, which provides business interruption
and extra expense coverage in the event of a major accidental outage at a
covered nuclear power plant. Florida Power is subject to a retroactive
premium assessment under this policy in the event of adverse loss
experience. Florida Power's present maximum share of any such retroactive
assessment is $2.6 million per policy year.
Florida Power also maintains nuclear property damage insurance and
decontamination and decommissioning liability insurance totaling $2.1
billion. The first layer of $500 million is purchased in the commercial
insurance market with the remaining excess coverage purchased from NEIL.
Florida Power is self-insured for any losses that are in excess of this
coverage. Under the terms of the NEIL policy agreements, Florida Power
could be assessed up to $8.1 million in any policy year if a loss in
excess of NEIL's available surplus is incurred. In the event of multiple
losses in any policy year, Florida Power's retroactive premium could total
up to $15.9 million.
Florida Power has never been assessed under these nuclear indemnities or
insurance policies.
11
CONTAMINATED SITE CLEANUP - Florida Progress is subject to regulation with
respect to the environmental effects of its operations. Florida Progress'
disposal of hazardous waste through third-party vendors can result in
costs to clean up facilities found to be contaminated. Federal and state
statutes authorize governmental agencies to compel responsible parties to
pay for cleanup of certain abandoned or uncontrolled hazardous waste
sites.
Florida Power and former subsidiaries of Florida Progress, whose
properties were sold in prior years, have been identified by the United
States Environmental Protection Agency ("EPA") as potentially responsible
parties at certain sites. In addition to these designated sites, there are
other sites where Florida Progress affiliates may be responsible for
additional environmental cleanup, including a coal gasification plant site
that Florida Power previously owned and operated. There are five parties
which have been identified as potentially responsible for this gas site,
including Florida Power. Liability for the cleanup costs of these sites
is joint and several.
Florida Progress believes that its subsidiaries will not be required to
pay a disproportionate share of the costs for cleanup of these sites.
Florida Progress' best estimates indicate that its proportionate share of
liability for cleaning up all sites ranges from $2.5 million to $4.5
million. Florida Progress has reserved $2.8 million against these
potential costs. Further study of the coal gasification plant site by the
EPA is expected to be completed in the fourth quarter 1996 and could cause
Florida Power to increase its reserve for its portion of liability for
cleanup costs. Although estimates of any additional costs are not
available, the results of the tests are not expected to have a material
effect on Florida Power's financial position, operations or liquidity.
4) In the opinion of management, the accompanying financial statements
include all adjustments deemed necessary to summarize fairly and reflect
the financial position and results of operations of Florida Progress and
Florida Power for the interim periods presented. Results for these interim
periods are not necessarily indicative of results for the full year. It is
suggested that these financial statements be read in conjunction with the
financial statements and notes thereto in the combined Form 10-K of
Florida Progress and Florida Power for the year ended December 31, 1995
(the "1995 Form 10-K") and the combined Form 10-Q of Florida Progress and
Florida Power for the quarter ended March 31, 1996 (the "first quarter
1996 Form 10-Q").
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
OPERATING RESULTS
Florida Progress' earnings per share from continuing operations for the six
months ended June 30, 1996, were $1.11 compared to $1.07 for the same period in
1995. This increase resulted from Florida Power, Florida Progress' largest
operating unit, which reported earnings of $1.00 per share compared to $.96 per
share for the same period last year, primarily due to stronger sales and the
impact of cost containment efforts. Earnings per share from continuing
operations were $.61 for the current quarter, or $.03 higher than last year's
comparable quarter. The increase at Florida Power was due primarily to customer
growth, higher industrial kilowatt hour ("KWH") sales largely from phosphate
mining, and increased wholesale KWH sales from weather-related increases in
customer demand, partially offset by residential revenue decoupling adjustments.
Diversified earnings per share from continuing operations remained constant
compared to last year with improved results in the marine and rail services
operations at Electric Fuels Corporation ("Electric Fuels"), offset by
unfavorable results at Mid-Continent Life Insurance Company ("Mid-Continent").
12
Florida Power - Operating Revenues
Florida Power's operating revenues were $38.2 million (6.9%) and $69.6 million
(6.5%) higher for the three and six-month periods ended June 30, 1996, compared
to the same periods in 1995. Recoverable fuel revenues increased $5.1 million
and $34.7 million for the three and six-month periods as a result of the
corresponding increase in fuel and purchased power expenses discussed below.
KWH sales increased 2.1% and 9.4% for the three and six-month periods ended June
30, 1996, respectively, compared to the same periods in 1995, due primarily to
customer growth, higher industrial customer usage largely from phosphate mining,
and increased wholesale sales from weather-related increases in customer demand,
partially offset by residential revenue decoupling adjustments. (See Note 2 to
the Financial Statements.)
Florida Power - Operating Expenses
Fuel and purchased power costs were $31.4 million (14.2%) and $86.9 million
(21.6%) higher for the three and six months ended June 30, 1996, compared to the
same periods in 1995, due primarily to increased KWH sales, higher than
anticipated oil prices and a nuclear refueling outage which extended longer than
forecast. These factors resulted in a significant underrecovery of fuel and
purchased power costs for which Florida Power petitioned and received approval
from the FPSC to increase rates by $1.06 per 1,000 KWH. The rate increase is
effective from July 1, 1996 through March 31, 1997 and is designed to recover
past deferred fuel cost and the higher fuel costs forecast for this period.
Florida Power's cost control initiatives and lower recoverable energy
conservation program costs enabled Florida Power to keep other operation and
maintenance expenses even for the three months ended June 30, 1996 and slightly
lower for the six months ended June 30, 1996, when compared to the same periods
in 1995. Florida Power recovers substantially all of its energy conservation
program costs through a FPSC ordered program cost recovery clause, thereby
eliminating any significant impact on net income.
Depreciation expense was $18.4 million (26.0%) and $25.3 million (17.9%) higher
for the three and six-month periods ended June 30, 1996, respectively, compared
to the prior year periods. These increases were due primarily to expensing the
remaining $11.6 million of book value in 1996 for the Turner and Higgins power
plants that had previously been placed in extended cold shutdown and the
amortization recognized in 1996 of the Lake Tarpon Kathleen transmission line
project canceled in September 1995.
Florida Power - Other Operating Results
As previously reported in the 1995 Form 10-K, Note 10 to the Financial
Statements and in the first quarter 1996 Form 10-Q, Item 2, under the heading
"Operating Results - Florida Power - Other Operating Results", the Federal
Energy Regulatory Commission ("FERC") had proposed new rules that would require
electric utilities to provide open access to the nation's interstate
transmission network. On April 24, 1996, the FERC issued its final rule on open
access transmission. On July 9, 1996, Florida Power filed a nondiscriminatory
open access transmission tariff that complies with the new rule. The new tariff
was accepted by the FERC and became effective immediately. Florida Power
expects that the new rule will not have a material effect on Florida Power's
revenues or earnings.
As previously reported in the 1995 Form 10-K, Part I, Item 7, under "Operating
Results - Florida Power - Nuclear Operations" and in the first quarter 1996 Form
10-Q, Item 2, under the heading "Operating Results - Florida Power - Other
Operating Results", Florida Power has cooperated with the Nuclear Regulatory
Commission ("NRC") in its investigation of unauthorized tests performed by
control room operators in September 1994 at the Crystal River Nuclear Plant
("the plant"). On July 10, 1996, although stating that the tests did not result
in any actual impact on public health and safety, the NRC staff proposed to levy
13
a $500,000 fine and cited the plant for insufficient management oversight and
weak engineering work in connection with the tests and resulting violations of
NRC rules. In the nearly two years since the tests, the plant has taken
corrective action to help prevent such an occurrence in the future including (i)
increased management presence in the control room, (ii) improved communications
with control room operators, engineers, support personnel and mid-level
managers, and (iii) improved coordination between engineers and plant personnel.
Florida Power must either pay the fine or appeal the decision to the NRC.
Florida Power does not believe that it would be productive to appeal the
decision and therefore plans to pay the fine.
Florida Power is a member of the Nuclear Electric Insurance, Ltd. ("NEIL"), an
industry mutual insurer, which provides property damage and decontamination
liability coverage in the event of a major accident at a covered nuclear power
plant. Florida Power is subject to a retrospective premium assessment under
this coverage in the event of a loss in excess of NEIL's available surplus at
any of the covered plants. Based on new policy terms which become effective
November 1996, Florida Power's maximum share of any retrospective premiums for
property damage/decontamination losses is expected to decrease from $8.1 million
to $5.4 million for a single loss in any policy year and from $15.9 million to
$10.6 million in the event of multiple losses.
Florida Progress Diversified Operations
Florida Progress' diversified revenues increased $4.1 million (2.3%) and $10.1
million (2.8%), respectively, for the three and six-month periods ended June 30,
1996 compared to the same periods in 1995, due primarily to increased sales in
the marine and rail divisions of Electric Fuels. Margins in diversified
operations increased from 15% of sales to nearly 16% for the six months ended
June 30, 1996, compared to the same period in 1995. This increase was due to
increased sales in the higher margin marine and rail divisions of Electric
Fuels, partially offset by lower margins at Mid-Continent from higher than
expected death claims during the 1996 period.
Discontinued Operations
On July 1, 1996, Florida Progress announced its plan to spin-off Progress Credit
to shareholders through a tax-free stock dividend. The spin-off is anticipated
to occur before the end of 1996. Florida Progress has presented the results of
operations of Progress Credit as discontinued operations, therefore, the results
and balances related to Progress Credit have been segregated from ongoing
operations in the financial statements for all periods presented. (See Note 1
to the Financial Statements).
Florida Progress Diversified Operations - Other Operating Results
Although Electric Fuels' coal operations remain a profitable business unit, its
coal mining operations continue to be negatively affected by a depressed
national coal market. Electric Fuels has made some operational changes and
brought in new leadership for its coal mining operations. Electric Fuels has
developed a new business plan for these 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. Certain coal properties were purchased in the late
1980s, when real price growth for low sulfur coal was expected due to new
restrictions anticipated from the Clean Air Act. When the expected price growth
failed to occur, Electric Fuels temporarily reduced production at its mining
operations while implementing the plan discussed above. Electric Fuels intends
to re-evaluate the market opportunities for each of its mining operations later
this year as its five-year business plan is reviewed by the board of directors
in December.
14
As previously reported in the 1995 Form 10-K, Part I, Item 7, under "Operating
Results - Diversified Operations - Mid-Continent", over the past few years, the
life insurance industry has become more competitive. Mid-Continent experienced
a decline in new sales in 1994 and 1995. Florida Progress has brought in new
leadership for its insurance unit and a new business plan was developed to
improve its market position. In 1996, Mid-Continent is replacing its primary
policy with a new product. Other complementary products may be introduced in the
future. Mid-Continent's earnings were down $1 million and $2.3 million for the
three and six-month periods ended June 30, 1996, respectively, compared with the
same periods in 1995. Mid-Continent expects lower earnings for 1996 when
compared to 1995 as the new product is introduced and marketed to customers.
Mid-Continent has held an A+ (Superior) rating from A.M. Best Company ("A.M.
Best"), an insurance rating agency, for 17 consecutive years. Only 8% of all
life insurance companies have been rated A+ for more than ten consecutive years.
However, in June 1996, A.M. Best placed Mid-Continent's A+ rating under review
with negative implications. This rating action reflects the Company's recent
decline in new business and limited operating profile which has been focused
until recently on the sale of one primary life insurance product. By
successfully implementing its new business plan, Mid-Continent believes it can
restore and build market share and profitability in an increasingly competitive
life insurance business.
LIQUIDITY AND CAPITAL RESOURCES
Florida Power budgeted $265.3 million, excluding allowance for funds used during
construction, for its 1996 construction program, of which $114.9 million was
spent during the first six months of the year. These expenditures were
financed primarily with funds from operations.
On June 10, 1996, Florida Power redeemed all 500,000 shares of its 7.76% series
cumulative preferred stock and all 300,000 shares of its 7.40% series cumulative
preferred stock. The redemption price on the 7.76% series was $102.21 a share
plus accrued and unpaid dividends. The redemption price on the 7.40% series was
$102.48 a share plus accrued and unpaid dividends. Florida Power redeemed this
preferred stock with funds from operations.
On August 1, 1996, Florida Power redeemed all $16.7 million outstanding
principal amount of its 6.125% series first mortgage bonds due August 1, 1997 at
a price of 100% of the principal amount of the bonds. Florida Power redeemed
these first mortgage bonds with funds from operations.
Florida Power's ratio of earnings to fixed charges was 4.62 for the twelve
months ended June 30, 1996. (See Exhibit 12 filed herewith.)
On August 1, 1996, the Electric Fuels' Rail Services business unit purchased the
assets of Mansbach Metal Company ("Mansbach"). Mansbach was a privately held
company based in Ashland, Kentucky and principally engaged in general metal
recycling and railcar scrapping and repair.
In connection with the spin-off of Progress Credit discussed above, Florida
Progress and Progress Capital Holdings, Inc. ("PCH") have entered into a Second
Amended and Restated Guaranty and Support Agreement dated as of August 7, 1996
(the "Guaranty and Support Agreement") (see copy filed herewith as Exhibit 4).
The Guaranty and Support Agreement amends and restates the earlier Amended and
Restated Support Agreement dated as of February 1, 1991 (the "1991 Support
Agreement"). The Guaranty and Support Agreement (i) eliminated certain
covenants and support provisions under the 1991 Support Agreement, (ii) expanded
the definition of "Debt" under the 1991 Support Agreement, and (iii) provided
that Florida Progress unconditionally guarantees the payment of PCH's Debt. PCH
solicited and received the consent to these changes from the holders of a
majority in principal amount of PCH's Debt.
15
"SAFE HARBOR" STATEMENT UNDER
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Form 10-Q contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, including (without limitation)
statements as to expectations, beliefs, plans, objectives and future financial
performance, and assumptions underlying or concerning the foregoing, relating to
the following identified matters: (a) the expectation that the spin-off of
Progress Credit will occur before the end of 1996, (b) estimated amounts of
capital and operating expenditures and fees relating to compliance with
environmental/safety requirements and remediation of contaminated sites (Note 3
to the Financial Statements), (c) expectations as to the timing, outcome or
effect of legal or regulatory proceedings (Part II, Item 1. Legal Proceedings
and Part I, Item 2. MD&A - Operating Results - Discontinued Operations,
including portions of the Notes to Financial Statements referred to therein),
(d) expectations or beliefs as to (1) Florida Power's plans to pay the NRC fine,
(2) Florida Power's expectations that its maximum share of any retrospective
NEIL premium assessment will be reduced in November 1996, and (3) the effects on
Florida Power of the FERC's new rule on open transmission access (Part I, Item
2. MD&A - Operating Results - Florida Power - Other Operating Results, including
portions of the Notes to Financial Statements referred to therein), and (e) the
expectation or belief as to Mid-Continent's future market share and earnings
(Part I, Item 2. MD&A - Florida Progress Diversified Operations - Other
Operating Results). These statements, and any other statements contained in
this Form 10-Q that are not historical facts, are forward-looking and,
accordingly, involve risks and uncertainties which could cause actual results or
outcomes to differ materially from those expressed in the forward-looking
statements.
In addition to those matters discussed elsewhere in this Form 10-Q, the
following are some of the important factors that could cause actual results or
outcomes to differ materially from those discussed in the forward-looking
statements (the categories of forward-looking statements described in the
preceding paragraph that could be affected by these factors are identified in
parentheses by their letter heading): (1) governmental actions and initiatives,
including those affecting industry and rate structure, and competition in the
utility industry (e.g., retail wheeling and transmission access), and
environmental/safety requirements (a, b, c, d), (2) pricing and other actions
by competitors (c, d, e), (3) unanticipated delays or actions by courts,
administrative agencies or regulatory authorities (a, b, c, d), (4)
significant changes from expectations in actual capital expenditures and
operating expenses and unanticipated project delays (a, b, c, d, e), (5) changes
in economic conditions (including population growth rates), demographic patterns
and weather conditions in Florida Power's service territory or the United States
generally (a, d, e), (6) changes in Florida Power's environmental compliance
strategies or fuel strategies (b, c), (7) changes in the availability of fuel
(b, c), and (8) significant changes in tax rates or policies or in rates of
inflation (a, b, e).
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
1. In re: Standard Offer Contract for the purchase of firm capacity and
energy from a qualifying facility between Panda-Kathleen, L.P. and Florida
Power Corporation, FPSC Docket No. 950110-EI.
Panda-Kathleen, L.P./Panda Energy Corporation v. Florida Public Service
Commission, Supreme Court, State of Florida, Case No. 88,280.
See prior discussion of this matter in the 1995 Form 10-K, Item 3,
paragraph 2 and the first quarter 1996 Form 10-Q, Part II, Item 1,
paragraph 5. On May 20, 1996, the FPSC issued an order ruling against
16
Panda-Kathleen, L.P. ("Panda") on two of three material issues in the
case. First, the FPSC held that Panda's proposed 115 MW facility does not
comply with the 75 MW limitation contained in the FPSC's standard offer
rules. Second, the FPSC held that under its rules, Florida Power is
required to make capacity payments for 20 years rather than for 30 years
as argued by Panda. On a third issue, the FPSC ruled against Florida
Power by extending for 18 months the "milestone" dates contained in the
standard offer contract, including the construction commencement date and
the commercial in-service date.
On June 20, 1996, Panda appealed this order to the Florida Supreme Court.
At the same time prior appeals filed by Panda of interlocutory FPSC
rulings by the FPSC in the case were voluntarily dismissed as being moot.
It is expected that the Supreme Court will render a decision in the first
half of 1997. (See Note 3 to the Financial Statements for further
information regarding purchased power expenses and commitments.)
2. Florida Power Corporation v. Panda-Kathleen Corp., United States District
Court for the Middle District of Florida, Tampa Division, Case No.
95-2145-CIV-T-25-B.
See prior discussion of this matter in the 1995 Form 10-K, Item 3,
paragraph 2. In response to allegations made by Panda, Florida Power
requested in this complaint that the court (i) enter a declaratory
judgment that Panda had no contractual or other right that was legally
superior to Florida Power's right to negotiate or contract with the City
of Lakeland and (ii) declare that Florida Power did not tortiously
interfere with any contractual or legal right of Panda with respect to the
City of Lakeland. On June 13, 1996, the court issued an order setting
this case for trial in the trial term which begins April 1, 1997.
A dispute also exists between Florida Power and Panda with respect to the
parties' Standard Offer Contract for the purchase of firm capacity and
energy from a qualifying facility between the parties (see "Legal
Proceedings", paragraph 1 herein). This dispute currently is pending
before the Florida Supreme Court on appeal from the FPSC. Panda has
challenged the FPSC's jurisdiction over the dispute. In the event that an
order were to be entered determining that the FPSC does not have
jurisdiction, Florida Power has asked the U.S. District Court to
resolve the dispute by rendering a declaratory judgment in Florida Power's
favor. (See Note 3 to the Financial Statements for further information
regarding purchased power expenses and commitments.)
3. Orlando Cogen (1), Inc. and Orlando Power Generation I Inc., as general
partners of and on behalf of Orlando CoGen Limited, L.P. v. Florida Power
Corporation, U.S. District Court, Middle District of Florida, Orlando
Division, Case No. 94-303-CIV-ORL-22.
See prior discussion of this matter in the 1995 Form 10-K, Item 3,
paragraph 3. On February 3, 1996, the parties executed a final settlement
agreement, pending approval by the FPSC and the lenders to Orlando CoGen
Limited, L.P. ("OCL"). Since then, OCL's lenders have approved the
agreement and on July 12, 1996, the FPSC issued an order approving the
settlement agreement. This matter is now concluded for future reporting
purposes. (See Note 3 to the Financial Statements for further information
regarding purchased power expenses and commitments.)
4. Pasco Cogen, Ltd. v. Florida Power Corporation, Florida Circuit Court,
Sixth Judicial Circuit for Pasco County, Case No. 94-5331-CA-DIV-Y.
See prior discussion of this matter in the 1995 Form 10-K, Item 3,
paragraph 4. The parties to this case are in the process of holding
settlement negotiations. (See Note 3 to the Financial Statements for
further information regarding purchased power expenses and commitments.)
17
5. Metropolitan Dade County and Montenay Power Corp. v. Florida Power
Corporation, Circuit Court of the Eleventh Circuit for Dade County,
Florida, Case No 96-09598-CA-30.
Metropolitan Dade County and Montenay Power Corp. v. Florida Power
Corporation, U.S. District Court, Southern District, Miami Division,
Florida, Case No 96-594-CIV-LENARD.
See prior discussion of this matter in the 1995 Form 10-K, Item 3,
paragraph 6. On March 1, 1996, Florida Power filed a notice of removal
of the state court case originally filed by Metropolitan Dade County
("Dade") and Montenay Power Corp. v. Florida Power Corporation, Circuit
Court of the Eleventh Circuit for Dade County, Florida, Case No
96-02990CA-22, to the United States District Court for the Southern
District of Florida, Miami Division.
On May 14, 1996, the plaintiffs amended their state court complaint
raising two counts: (i) breach of contract, seeking damages in excess of
$1.3 million for energy payments allegedly withheld, plus interest, and
(ii) declaratory judgment, seeking a ruling that Dade and Montenay are
contractually entitled to payment for energy payments in accordance with
their interpretation of the parties' purchased power agreement. On May
14, 1996, the plaintiffs also amended their federal court complaint,
alleging violations of federal antitrust laws and demanding treble
damages, attorneys' fees, interest and costs.
On June 28, 1996, Florida Power answered the amended federal complaint,
moved to dismiss the federal claim with respect to plaintiff Montenay due
to lack of antitrust standing, and brought a declaratory judgment
counterclaim seeking a declaration that Florida Power has made appropriate
payments under the contract and has not violated antitrust laws. On June
28, 1996, Florida Power also moved to stay the state court proceeding
until the conclusion of the federal court case. This motion has been set
for hearing on August 21, 1996. (See Note 3 to the Financial Statements
for further information regarding purchased power expenses and
commitments.)
6. Northern States Power Company, et al., v. United States Department of
Energy, Case Number 94-1457, U.S. Court of Appeals, D.C. Circuit.
Indiana Michigan Power Company, et al. v. United States Department of
Energy, Case Number 95-1279, U.S. Court of Appeals, D.C. Circuit.
See prior discussion of this matter in the 1995 Form 10-K, Item 3,
paragraph 8. On June 20, 1994, Florida Power joined with 13 other nuclear
utilities in the above referenced case number 94-1457 brought against the
Department of Energy ("DOE") under the terms of the Nuclear Waste Policy
Act ("NWPA"). The NWPA requires the DOE to accept responsibility for
spent nuclear fuel ("SNF") and high level radioactive waste ("HLW") by
January 31, 1998. The DOE had announced that it will not meet that
deadline. The U.S. Court of Appeals dismissed the case stating that the
DOE announcement did not constitute a final order.
On April 28, 1995, the DOE issued an order stating that it had no
unconditional statutory or contractual obligation to accept HLW and SNF
beginning in January 1998, in the absence of a repository or interim
storage facility having been constructed. A group of utilities, including
Florida Power, challenged this order in the above-referenced case number
95-1279.
On July 23, 1996 the court ruled in favor of the utilities, holding that
the NWPA creates an unconditional obligation on the DOE to begin to
dispose of SNF no later than January 31, 1998. The court vacated the
DOE's order and the case was remanded to the DOE for further proceedings
18
consistent with the court's opinion. The court refused to address the
question of remedies as premature, stating that the DOE had not yet
defaulted upon either its statutory or contractual obligations. The court
stated, however, that the utilities' obligation to pay fees to fund
repository construction is reciprocal to the DOE's obligation to start
disposing of SNF no later than January 1998.
The DOE has until September 6, 1996 to seek rehearing of the court's
order. The DOE has not indicated whether it will do so.
7. Wanda L. Adams, et. al. vs. Florida Power Corporation and Florida Progress
Corporation, U.S. District Court, Middle District of Florida, Ocala
Division; Case No. 95-123-CIV-OC-10.
See prior discussion of this matter in the 1995 Form 10-K, Item 3,
paragraph 9. On July 31, 1996, counsel for the plaintiffs filed a motion
to amend this complaint to add 35 former employees as plaintiffs to the
case, bringing the total to 52 named plaintiffs.
Item 5. Other
On July 1, 1996, Florida Power implemented a new organizational structure.
The Energy Delivery business unit was expanded to include all distribution
assets in addition to the transmission assets for which it was already
responsible. Energy Delivery is headed by Senior Vice President Mike
Foley. The new Energy Solutions SM business unit headed by Vice President
Janice Case is responsible for customer service, marketing and new product
development. Fossil and nuclear generation continues to operate as the
Energy Supply business unit under John Hancock and Pat Beard. Florida Power
considers Mr. Foley and Mrs. Case to be executive officers for reporting
purposes under the rules of the Securities and Exchange Commission.
Michael B. Foley, Jr., Senior Vice President, Energy Delivery of Florida
Power Corporation, Age 53
Mr. Foley became Senior Vice President, Energy Delivery, effective July 1,
1996, after serving as Vice President, Energy Delivery since February 1995.
From October 1988 until February 1995, Mr. Foley served as Director of
System Planning of Florida Power.
Janice B. Case, Vice President, Energy Solutions SM of Florida Power
Corporation. Age 43
Mrs. Case was named Vice President, Energy Solutions SM effective July 1,
1996. From October 1990 until July 1996, Mrs. Case served as Vice President,
Suncoast Florida Region of Florida Power.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
Florida Florida
Number Exhibit Progress Power
------ ------- -------- -------
4 Second Amended and Restated Guaranty and X
Support Agreement.
12 Statement Regarding Computation of Ratio X
of Earnings to Fixed Charges for Florida
Power.
27.(a) Florida Progress Financial Data Schedule. X
27.(b) Florida Power Financial Data Schedule. X
X = Exhibit is filed for that respective company.
19
(b) Reports on Form 8-K:
During the second quarter 1996, Florida Progress and Florida
Power filed the following report on Form 8-K:
Form 8-K dated April 22, 1996, reporting under Item
5 "Other Events" a press release and related Investor
Information Report reporting Florida Progress' and
Florida Power's first quarter 1996 earnings.
Subsequent to the second quarter 1996, Florida Progress filed
the following report on Form 8-K:
Form 8-K dated July 1, 1996, reporting under Item
5 "Other Events" a news release dated July 1, 1996,
announcing that Florida Progress' Board of Directors
approved a plan to spin-off Progress Credit.
Also subsequent to the second quarter 1996 Florida Progress and
Florida Power filed the following report on Form 8-K:
Form 8-K dated July 18, 1996, reporting under Item 5
"Other Events" a press release and related Investor
Information Report reporting Florida Progress' and
Florida Power's second quarter earnings.
20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FLORIDA PROGRESS CORPORATION
FLORIDA POWER CORPORATION
Date: August 7, 1996 /s/ John Scardino, Jr.
-----------------------------
John Scardino, Jr.
Vice President and Controller
Date: August 7, 1996 /s/ James V. Smallwood
-----------------------------
James V. Smallwood
Vice President and Treasurer
Exhibit Index
Florida Florida
Number Exhibit Progress Power
------ ------- -------- -------
4 Second Amended and Restated Guaranty and X
Support Agreement.
12 Statement Regarding Computation of Ratio X
of Earnings to Fixed Charges for Florida
Power.
27.(a) Florida Progress Financial Data Schedule. X
27.(b) Florida Power Financial Data Schedule. X
X = Exhibit is filed for that respective company.