EXHIBIT 99.(b) Florida Progress Corporation Investor News Analyst Contact: Mark A. Myers, Manager, Investor Relations (813) 866-4245 Florida Progress Reports 6.3% Increase In Earnings Per Share For The Third Quarter ST. PETERSBURG, FL, October 17, 1996 - Florida Progress Corporation (NYSE: FPC), parent of Florida Power Corporation, reported third-quarter earnings of $98.1 million, or $1.01 per share, compared with $91.1 million, or $.95 per share, for the same period last year. Significant items influencing the third-quarter results: o Solid Utility Growth - Retail customer growth of 2 percent and megawatt-hour sales growth of 10 1/2 percent from industrial customers. o Lower Life Insurance Sales - Earnings from Mid-Continent Life Insurance suffered from lower than expected sales of its new insurance product. Florida Power, the largest subsidiary of Florida Progress, earned $93.1 million, or $.96 per share, on revenues of $694.7 million, compared with earnings of $84.7 million, or $.88 per share, on revenues of $671.8 million in the third quarter of 1995. Florida Power's results improved as its customer growth rate of 2 percent continues to be about twice the national average in the electric utility industry. A 26-percent jump in energy sales to phosphate operations as a result of new mining operations boosted industrial sales for the quarter. Megawatt-hour sales to commercial customers increased 3 percent compared with a year ago. Contributing to the improved earnings at Florida Power were lower interest expense and preferred dividend payments. The lower interest expense is due to reduced debt balances resulting from improved cash flow. In June 1996, Florida Power redeemed $80 million of preferred stock that reduced the utility's preferred dividend payments. During the third quarter of 1996, the utility incurred higher operating and maintenance expenses associated with various improvements to Florida Power's customer service operations along with additional repairs at its Crystal River Nuclear Plant. - more - - -Page 2- Florida Progress Corporation Investor News - Third Quarter Earnings Electric Fuels Corporation, the energy and transportation subsidiary of Florida Progress, had earnings of $6.5 million for the third quarter, compared with earnings of $6.3 million for the same period last year. The 3.2% increase in earnings is primarily attributable to improved earnings at its marine operations, which resulted from higher volumes of coal being transported this year over 1995. Mid-Continent Life Insurance Company's earnings for the third quarter were down $0.9 million compared with the same quarter in 1995. Lower than expected sales of its new insurance product, introduced in the second quarter, combined with higher death claims, were the primary factors causing lower earnings. 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. - more - FLORIDA PROGRESS CORPORATION CONSOLIDATED STATEMENTS OF INCOME Page 3 (UNAUDITED) (In millions, except per share amounts) Three Months Ended Nine Months Ended Twelve Months Ended September 30 September 30 September 30 ------------------- ------------------- ------------------- 1996 1995 1996 1995 1996 1995 -------- -------- -------- -------- -------- -------- REVENUES: Electric utility $694.7 $671.8 $1,830.7 $1,738.2 $2,364.2 $2,231.7 Diversified 184.3 180.6 552.3 538.5 749.9 716.4 --------- --------- --------- --------- --------- --------- 879.0 852.4 2,383.0 2,276.7 3,114.1 2,948.1 EXPENSES: --------- --------- --------- --------- --------- --------- Electric utility: Fuel 147.5 140.9 323.0 336.7 417.5 439.5 Purchased power 127.6 123.7 388.2 326.8 498.0 404.5 Energy conservation costs 14.3 23.6 51.1 64.9 70.1 87.2 Operations & maintenance 105.9 96.8 304.2 292.1 405.9 384.2 Depreciation 74.7 75.8 241.5 217.3 317.9 283.9 Taxes other than income taxes 50.7 48.4 143.1 136.2 183.1 174.8 --------- --------- --------- --------- --------- --------- 520.7 509.2 1,451.1 1,374.0 1,892.5 1,774.1 --------- --------- --------- --------- --------- --------- Diversified: Cost of sales 153.5 151.0 462.9 455.2 632.3 609.0 Other 15.5 15.8 47.5 44.0 62.4 57.0 --------- --------- --------- --------- --------- --------- 169.0 166.8 510.4 499.2 694.7 666.0 --------- --------- --------- --------- --------- --------- INCOME FROM OPERATIONS 189.3 176.4 421.5 403.5 526.9 508.0 --------- --------- --------- --------- --------- --------- INTEREST EXPENSE AND OTHER: Interest expense 34.6 34.3 103.4 105.5 137.3 140.6 Allowance for funds used during construction (1.9) (1.8) (5.5) (5.6) (7.2) (8.2) Preferred dividend requirements of Florida Power 0.8 2.4 5.2 7.3 7.6 9.8 Other expense (income) (0.4) (3.4) (5.1) (8.8) (6.2) (8.6) --------- --------- --------- --------- --------- --------- 33.1 31.5 98.0 98.4 131.5 133.6 --------- --------- --------- --------- --------- --------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 156.2 144.9 323.5 305.1 395.4 374.4 Income Taxes 58.1 53.8 118.4 112.2 144.3 135.5 --------- --------- --------- --------- --------- --------- INCOME FROM CONTINUING OPERATIONS $98.1 $91.1 $205.1 $192.9 $251.1 $238.9 DISCONTINUED OPERATIONS, NET OF INCOME TAXES - - (25.0) - (25.0) - --------- --------- --------- --------- --------- --------- NET INCOME $98.1 $91.1 $180.1 $192.9 $226.1 $238.9 ========= ========= ========= ========= ========= ========= AVERAGE SHARES OF COMMON STOCK OUTSTANDING 97.0 95.9 96.8 95.6 96.6 95.4 ========= ========= ========= ========= ========= ========= EARNINGS PER AVERAGE COMMON SHARE CONTINUING OPERATIONS $1.01 $0.95 $2.12 $2.02 $2.60 $2.50 DISCONTINUED OPERATIONS - - ($0.26) - ($0.26) - --------- --------- --------- --------- --------- --------- $1.01 $0.95 $1.86 $2.02 $2.34 $2.50 ========= ========= ========= ========= ========= ========= 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 (UNAUDITED) (In millions) September 30 ------------------------- 1996 1995 ----------- ----------- ASSETS PROPERTY, PLANT AND EQUIPMENT: Electric utility plant in service and held for $5,921.2 $5,794.9 for future use Less - Accumulated depreciation 2,296.6 2,138.2 Accumulated decommissioning for nuclear plant 185.4 155.5 Accumulated dismantlement for fossil plants 115.4 100.2 ---------- ---------- 3,323.8 3,401.0 Construction work in progress 148.1 150.7 Nuclear fuel, net of amortization of $356.7 in 1996 and $342.2 in 1995 60.0 37.0 ---------- ---------- Net electric utility plant 3,531.9 3,588.7 Other property, net of depreciation of $170.2 in 1996 and $153.6 in 1995 327.9 290.1 ---------- ---------- 3,859.8 3,878.8 ---------- ---------- CURRENT ASSETS: Cash and equivalents 17.8 9.3 Accounts receivable, net 327.2 336.6 Inventories, primarily at average cost: Fuel 69.0 58.5 Utility materials and supplies 97.1 108.7 Diversified materials 128.3 81.2 Underrecovery of fuel cost 47.4 8.5 Other 48.0 42.7 ---------- ---------- 734.8 645.5 ---------- ---------- DISCONTINUED OPERATIONS: Advances to discontinued operations 102.7 128.2 Net assets of discontinued operations 179.1 202.9 ---------- ---------- 281.8 331.1 ---------- ---------- OTHER ASSETS: Investments: Leases and loans receivable, net 31.2 26.9 Marketable securities 205.9 172.6 Nuclear plant decommissioning fund 187.7 148.5 Joint ventures and partnerships 37.9 33.3 Deferred insurance policy acquisition costs 120.1 103.6 Other 180.9 171.0 ---------- ---------- 763.7 655.9 ---------- ---------- $5,640.1 $5,511.3 ========== ========== CAPITAL AND LIABILITIES CAPITAL: Common stock equity $2,121.0 $2,068.2 Cumulative preferred stock of Florida Power 33.5 138.5 Long-term debt 1,727.4 1,556.7 ---------- ---------- 3,881.9 3,763.4 ---------- ---------- CURRENT LIABILITIES: Accounts payable 193.8 164.9 Customers' deposits 87.7 82.5 Income taxes payable 64.9 46.2 Accrued other taxes 68.6 69.6 Accrued interest 44.3 43.3 Other 100.1 87.7 ---------- ---------- 559.4 494.2 Notes payable 29.0 - Current portion of long-term debt and preferred stock 59.8 194.4 ---------- ---------- 648.2 688.6 ---------- ---------- DEFERRED CREDITS AND OTHER LIABILITIES: Deferred income taxes 484.2 495.4 Unamortized investment tax credits 95.5 103.7 Insurance policy benefit reserves 309.0 253.9 Other postretirement benefit costs 96.4 80.5 Other 124.9 125.8 ---------- ---------- 1,110.0 1,059.3 ---------- ---------- $5,640.1 $5,511.3 ========== ========== FLORIDA PROGRESS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Page 5 (UNAUDITED) (In millions) Three Months Ended Nine Months Ended Twelve Months Ended September 30 September 30 September 30 ------------------- ------------------- ------------------- 1996 1995 1996 1995 1996 1995 -------- -------- -------- -------- -------- -------- OPERATING ACTIVITIES: Income from continuing operations $98.1 $91.1 $205.1 $192.9 $251.1 $238.9 Adjustments for noncash items: Depreciation and amortization 87.5 90.9 275.1 261.4 366.4 343.7 Deferred income taxes and investment tax credits, net (10.9) (20.6) (37.2) (41.2) (34.0) (29.7) Increase in accrued other postretirement benefit costs 8.5 4.6 11.9 12.8 15.9 15.6 Net change in deferred insurance policy acquisition costs (5.1) (3.1) (13.7) (11.7) (16.5) (10.3) Net change in insurance policy benefit reserves 13.3 11.1 44.0 31.4 55.1 36.9 Changes in working capital, net of effects from acquisition or sale of businesses: Accounts receivable (16.1) (43.1) (7.6) (74.6) 22.5 (50.2) Inventories 13.6 19.0 (17.9) 1.0 (48.0) (5.1) Overrecovery (underrecovery) of fuel cost 10.2 (0.1) (47.1) (6.7) (38.9) 23.3 Accounts payable (0.1) 8.5 21.3 16.0 21.7 33.9 Income taxes payable 38.8 26.8 60.0 35.3 16.1 12.6 Accrued other taxes 14.7 22.1 52.9 55.0 (1.1) 12.1 Other (6.7) 11.1 2.5 21.2 19.6 26.6 Other operating activities - 7.7 1.6 13.9 (5.0) 3.3 --------- --------- --------- --------- --------- --------- Cash provided by continuing operations 245.8 226.0 550.9 506.7 624.9 651.6 --------- --------- --------- --------- --------- --------- Income (loss) from discontinued operations - - (25.0) - (25.0) - Adjustments for non-cash items, primarily loss provision 3.7 (11.3) 11.1 (8.4) 1.9 (16.9) --------- --------- --------- --------- --------- --------- Cash provided by (used for) discontinued operations 3.7 (11.3) (13.9) (8.4) (23.1) (16.9) --------- --------- --------- --------- --------- --------- 249.5 214.7 537.0 498.3 601.8 634.7 --------- --------- --------- --------- --------- --------- INVESTING ACTIVITIES: Property additions (including allowance for borrowed funds used during construction) (56.6) (64.6) (192.0) (211.8) (311.6) (333.2) Proceeds from sales of properties and businesses 0.9 3.3 7.0 9.6 10.5 11.6 (Purchase of) proceeds from sale or collection of loans and securities (10.9) (3.0) (25.1) (13.2) (40.8) (10.0) Acquisition of businesses (41.9) (0.1) (45.1) (5.9) (48.4) (5.9) Distributions from (investments in) joint ventures and partnerships, net (3.4) (1.3) (4.6) (3.6) (5.0) (3.2) Investing activities of discontinued operations 23.2 2.8 35.2 46.3 58.7 75.1 Other investing activities (6.5) (2.8) (24.5) (8.3) (27.2) (11.0) --------- --------- --------- --------- --------- --------- (95.2) (65.7) (249.1) (186.9) (363.8) (276.6) --------- --------- --------- --------- --------- --------- FINANCING ACTIVITIES: Issuance of long-term debt 118.0 - 118.0 - 118.0 - Repayment of long-term debt (187.7) (8.7) (189.8) (29.5) (206.0) (60.7) Increase (decrease) in commercial paper with long-term support (52.0) (59.6) (5.3) (105.0) 100.7 (97.6) Redemption of preferred stock - - (80.9) - (85.9) (5.0) Sale of common stock - 9.8 18.6 28.8 28.2 38.5 Dividends paid on common stock (49.8) (48.4) (149.5) (144.8) (198.1) (192.7) Increase (decrease) in short-term debt 29.0 (41.1) 29.0 (55.3) 29.0 (27.9) Financing activities of discontinued operations (1.1) (1.3) (11.3) (9.7) (11.3) (9.8) Other financing activities (1.7) (0.4) (3.2) (0.4) (4.1) (1.3) --------- --------- --------- --------- --------- --------- (145.3) (149.7) (274.4) (315.9) (229.5) (356.5) --------- --------- --------- --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 9.0 (0.7) 13.5 (4.5) 8.5 1.6 Beginning cash and equivalents 8.8 10.0 4.3 13.8 9.3 7.7 --------- --------- --------- --------- --------- --------- ENDING CASH AND EQUIVALENTS $17.8 $9.3 $17.8 $9.3 $17.8 $9.3 ========= ========= ========= ========= ========= ========= 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 1996 1995 (Negative) 1996 1995 (Negative) 1996 1995 (Negative) -------- --------- --------- --------- --------- --------- --------- --------- --------- Earnings Per Share: Florida Power Corporation $0.96 $0.88 9.1 $1.96 $1.84 6.5 $2.39 $2.28 4.8 --------- --------- --------- --------- --------- --------- Electric Fuels Corporation 0.07 0.07 - 0.21 0.19 10.5 0.27 0.24 12.5 Mid-Continent Life Insurance Co. - 0.01 (100.0) 0.02 0.06 (66.7) 0.03 0.08 (62.5) Corporate and other (0.02) (0.01) (100.0) (0.07) (0.07) - (0.09) (0.10) 10.0 --------- --------- --------- --------- --------- --------- Diversified 0.05 0.07 (28.6) 0.16 0.18 (11.1) 0.21 0.22 (4.5) --------- --------- --------- --------- --------- --------- Total Continuing Operations 1.01 0.95 6.3 2.12 2.02 5.0 2.60 2.50 4.0 Discontinued Operations 0.00 - (0.26) - (0.26) - --------- --------- --------- --------- --------- --------- Consolidated $1.01 $0.95 $1.86 $2.02 $2.34 $2.50 ========= ========= ========= ========= ========= ========= Avg. shares outstanding (millions) 97.0 95.9 1.1 96.8 95.6 1.3 96.6 95.4 1.3 Dividends per share $0.515 $0.505 2.0 $1.545 $1.515 2.0 $2.050 $2.020 1.5 Book value per share: Florida Power Corporation $18.95 $18.03 5.1 Consolidated $21.87 $21.51 1.7 September 30 September 30 September 30 1996 1995 1996 1995 Amount Percent Amount Percent --------- --------- --------------------------------------- Equity investments (percent): Capitalization (in millions): Florida Power Corporation 87 87 Common stock $2,121.0 53.4 $2,068.2 52.3 Electric Fuels Corporation 9 9 Preferred stock 33.5 0.8 138.5 3.5 Mid-Continent Life Insurance Co. 4 4 Long-term debt 1,727.4 43.5 1,556.7 39.3 --------- --------- Short-term capital 88.8 2.3 194.4 4.9 Total 100 100 ---------------------------------------- ========= ========= Total $3,970.7 100.0 $3,957.8 100.0 ======================================== 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 Nine Months Ended Twelve Months Ended September 30 Percent September 30 Percent September 30 Percent 1996 1995 Change 1996 1995 Change 1996 1995 Change ------- ------- ------- ------- ------- ------- ------- ------- ------- Revenues: Residential $387.6 $374.8 3.4 $1,013.2 $959.7 5.6 $1,306.2 $1,225.5 6.6 Commercial 155.4 147.2 5.6 402.2 386.7 4.0 530.8 512.0 3.7 Industrial 54.9 48.8 12.5 154.6 140.3 10.2 203.6 185.2 9.9 Other retail sales 34.3 31.4 9.2 92.1 86.5 6.5 122.1 115.6 5.6 ------------------ -------------------- -------------------- 632.2 602.2 5.0 1,662.1 1,573.2 5.7 2,162.7 2,038.3 6.1 Sales for resale 46.5 56.0 (17.0) 126.6 110.8 14.3 165.4 143.3 15.4 ------------------ -------------------- -------------------- 678.7 658.2 3.1 1,788.7 1,684.0 6.2 2,328.1 2,181.6 6.7 Other electric revenues 23.4 12.4 88.7 43.1 47.7 (9.6) 46.9 53.3 (12.0) Deferred fuel (7.4) 1.2 - (1.1) 6.5 - (10.8) (3.2) - ------------------ -------------------- -------------------- Total $694.7 $671.8 3.4 $1,830.7 $1,738.2 5.3 $2,364.2 $2,231.7 5.9 ================== ==================== ==================== Kilowatt-hour sales billed: Residential 4,682.2 4,571.1 2.4 12,142.8 11,480.7 5.8 15,600.1 14,571.5 7.1 Commercial 2,557.1 2,483.5 3.0 6,661.3 6,465.6 3.0 8,807.8 8,533.1 3.2 Industrial 1,094.5 990.1 10.5 3,195.2 2,852.1 12.0 4,207.5 3,738.8 12.5 Other retail sales 602.8 567.0 6.3 1,641.8 1,549.7 5.9 2,177.1 2,061.3 5.6 ------------------ -------------------- -------------------- 8,936.6 8,611.7 3.8 23,641.1 22,348.1 5.8 30,792.5 28,904.7 6.5 Sales for resale 804.0 1,141.8 (29.6) 2,085.7 2,021.0 3.2 2,967.8 2,638.6 12.5 ------------------ -------------------- -------------------- Total electric sales 9,740.6 9,753.5 (0.1) 25,726.8 24,369.1 5.6 33,760.3 31,543.3 7.0 ================== ==================== ==================== System Requirements (KWH) 10,230 9,973 2.6 27,037 25,771 4.9 34,934 32,844 6.4 Retail KWH Sales (Billed & Unbilled) 8,930 8,718 2.4 23,732 22,686 4.6 30,793 29,070 5.9 Billing Degree Days: Cooling 2,252 2,153 4.6 3,071 3,037 1.1 3,963 3,593 10.3 Heating - - - 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 of residential revenue decoupling. Under the plan, abnormal weather variances will no longer impact earnings with respect to residential revenues.