EXHIBIT 99.(a)
Florida Progress Corporation
News Release
Corporate Relations Department, St. Petersburg, Florida
FOR IMMEDIATE RELEASE Contact: Melanie Forbrick
(813) 866-5023
[LOGO OMITTED]
Florida Progress Reports 1997 Earnings
St. Petersburg, FL (January 26, 1998) -- Florida Progress Corporation
(NYSE:FPC), parent company of St. Petersburg-based Florida Power Corporation and
Electric Fuels Corporation, today reported 1997 earnings before non-recurring
items of $254.3 million, or $2.62 per share, compared with $252.4 million, or
$2.61 per share, for the same 12-month period last year.
Florida Progress recorded two significant non-recurring charges during
1997. Costs associated with the extended outage of Florida Power's Crystal River
3 nuclear unit and the provision for loss related to Mid-Continent Life
Insurance Company combined to reduce earnings by $200 million, or $2.06 per
share. After the effect of the one-time charges, reported earnings for the year
totaled $54.3 million, or $.56 per share, compared with $224.4 million, or $2.32
per share, in 1996. The company reported a loss for the fourth quarter of $51.5
million, or $ .53 per share, following the one-time charge for Mid-Continent.
"The year 1997 was unique and challenging," said Richard Korpan,
Florida Progress president and chief executive officer. "We've worked hard to
get many of these hurdles behind us so we can focus on our future growth
strategy. Our sound business fundamentals position us well for improved results
in 1998, which is reflected in our stock price today."
Florida Power, the largest subsidiary of Florida Progress, reported
earnings before nuclear outage costs of $240.9 million, or $2.48 per share,
compared with earnings of $232.6 million, or $2.40 per share, in 1996. This
reflects an increase of 3.3 percent over 1996 earnings per share. Costs
associated with the extended outage reduced Florida Power's earnings by $106.5
million, or $1.10 per share, in 1997.
On a recurring basis Electric Fuels had its second consecutive year of
double-digit earnings growth. Expanding rail services operations and higher
volumes of coal handled by the energy and related services business group
resulted in an 18 percent earnings increase to $32.1 million, or $.33 per share,
for 1997. This compares to 1996 earnings, before a provision for loss on coal
properties, of $27.1 million, or $.28 per share.
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Florida Progress 1997 Earnings
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Significant items influencing 1997 results include:
o Crystal River 3 nuclear unit ready to restart- Florida Power has received
the approvals from the Nuclear Regulatory Commission necessary to proceed
to mode 2, the point at which reactor startup would commence. The company
has formally requested permission to start up the reactor. Once final
approval is received from the NRC to restart the reactor, the company
expects the plant to be back in service in approximately two weeks. During
1997, Florida Power incurred approximately $173 million in additional
nuclear outage operation and maintenance costs and non-recoverable
replacement power costs associated with the outage. These costs were
incurred not only to address certain backup safety system design issues,
but also to perform work that should enable the plant to be a productive
asset in the future.
o More than 22,000 new customers in 1997- Strong customer growth and good
cost control contributed to increased earnings, before non-recurring
charges, for Florida Power. Customer growth in the central Florida area
around Orlando represented more than one-third of Florida Power's new
customers in 1997. Florida Power maintained good cost control, with 1997
Operations and Maintenance expenses increasing two percent, or $8.9
million, over the previous year.
o Loss provision for Mid-Continent Life Insurance Company- Although
Mid-Continent was placed in receivership in April 1997, the Oklahoma
Insurance Commissioner has not yet filed a plan of rehabilitation as
ordered by an Oklahoma district court judge. In addition, the commissioner
filed a lawsuit in December 1997 against Florida Progress and other
defendants. As a result of the passage of time without a rehabilitation
plan and other actions of the commissioner, Florida Progress established a
loss provision for the full amount of its $87 million investment and
accrued for estimated legal costs, which reduced 1997 earnings by $93.5
million, or $.96 per share.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: this news release contains forward looking statements, including
statements regarding the restart of the Crystal River 3 nuclear power unit and
the future productivity of the plant. These statements involve risks and
uncertainties that could cause actual results or outcomes to differ materially
from expectations. Key factors that have a direct impact on the actual results
at Florida Power include various factors that could impact the successful
execution of the nuclear restart plan and the future productivity of the plant.
These and other factors are described in the company's Securities and Exchange
Commission filings.
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Florida Progress 1997 Earnings
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Florida Progress is a Fortune 500 diversified electric utility holding
company with assets of $5.8 billion. Its principal subsidiary is Florida Power
Corporation, the state's second-largest electric utility with 1.3 million
customers. Diversified operations include coal mining, marine operations and
rail services.
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Three Months Ended Twelve Months Ended
December 31 December 31
------------------------------ ------------------------------
1997 1996 1997 1996
-------------- -------------- ------------- ------------
Revenues $848,300,000 $774,900,000 $3,315,600,000 $3,157,900,000
-------------- -------------- -------------- -------------
Income (loss)from:
Florida Power 42,400,000 42,800,000 240,900,000 232,600,000
Electric Fuels 10,500,000 7,100,000 32,100,000 27,100,000
Corporate & Other (9,700,000) (2,600,000) (18,700,000) (7,300,000)
Continuing operations before -------------- -------------- -------------- --------------
non-recurring items 43,200,000 47,300,000 254,300,000 252,400,000
Non-recurring items (94,700,000) (1,700,000) (200,000,000) (1,700,000)
-------------- -------------- -------------- --------------
Continuing operations (51,500,000) 45,600,000 54,300,000 250,700,000
Discontinued operations - (1,300,000) - (26,300,000)
-------------- -------------- -------------- --------------
Net Income (loss) $(51,500,000) $ 44,300,000 $ 54,300,000 $ 224,400,000
============== ============== ============== ==============
Earnings (loss) per share (EPS):
Florida Power $ .44 $ .44 $2.48 $2.40
Electric Fuels .11 .07 .33 .28
Corporate & other (.10) (.02) (.19) (.07)
Income from continuting operations -------- -------- -------- -------
before non-recurring items $ .45 $ .49 $2.62 $2.61
Non-recurring items (.98) (.02) (2.06) (.02)
======== ======== ======== =======
Continuing operations (.53) .47 .56 2.59
Discontinued operations - (.01) - (.27)
-------- -------- -------- -------
Consolidated ($.53) $.46 $.56 $2.32
======== ======== ======== =======
Average Common
Shares Outstanding 97,061,777 97,026,036 97,054,280 96,835,632
Prior periods reflect the recapitalization of the spin-off company, Echelon and
its associated treatment as discontinued operations.