EXHIBIT 99.(a)
Florida Progress Corporation
Investor News
[LOGO OMITTED]
Analyst Contacts:
Greg Beuris (813) 866-4442
Lauran Willoughby (813) 866-4837
Florida Progress reports increase in 1998 first-quarter earnings
St. Petersburg, Florida, April 17, 1998 - Florida Progress Corporation
(NYSE:FPC), parent of St. Petersburg-based Florida Power Corporation,
reported first-quarter 1998 earnings of $50.5 million, or $.52 per share,
compared with $42 million, or $.43 a share in the first quarter of 1997.
Excluding the costs associated with Florida Power's nuclear plant outage,
Florida Progress' first-quarter 1998 earnings were $53.6 million, or $.55
per share, compared with $46.8 million, or $.48 per share for the first
quarter of 1997. The increase in earnings is due primarily to customer
growth and increased customer usage at Florida Power and improved operating
results at Electric Fuels Corporation, the company's energy and
transportation group.
Significant items influencing first-quarter results:
o Crystal River nuclear plant returns to service - On February 15, 1998,
Florida Power's nuclear plant returned to service after an extended
maintenance outage.
o Non-utility earnings up significantly - Electric Fuels' earnings
increased $.05 per share for the quarter compared with the first
quarter of 1997. This increase is attributable primarily to a return to
normal operating conditions for its inland marine transportation group
and improved results from the mining operations in its energy and
related transportation group.
o Customer growth and increased usage boost energy sales - Florida Power
served more than 20,000 new residential and commercial customers during
the first quarter of 1998, compared with the first quarter of 1997. The
addition of these new customers and colder weather resulted in a 4.6
percent increase in retail kilowatt hour sales.
o Good cost control at the utility - Continued cost control kept
operating and maintenance expenses virtually flat for the first quarter
of 1998, compared with the first quarter of 1997, despite a growing
customer base and operating and maintenance costs associated with the
Tiger Bay cogeneration facility acquired in July 1997.
FLORIDA POWER CORPORATION
Excluding the impact of the nuclear plant outage, Florida Power, the
largest subsidiary of Florida Progress, earned $48.9 million, or $.50 per
share, on revenues of $565.2 million for the quarter, compared with
earnings of $46 million, or $.47 per share, on revenues of $553.8 million
for the same period in 1997.
-- more --
For the first quarter of 1998, Florida Power's retail kilowatt-hour sales
increased 4.6 percent over the first quarter of 1997. The increase in
retail sales was attributable largely to a 1.8 percent increase in Florida
Power's residential and commercial customers, continuing its growth rate at
nearly twice the national average. In addition, during the first quarter of
1998, Florida Power's service area experienced more normal weather
conditions as compared to the extremely mild weather experienced in 1997.
Florida Power's continuing efforts to control costs resulted in operating
and maintenance expense during the first quarter of 1998 remaining level
with the same period for 1997, excluding nuclear outage costs. This was
achieved despite the utility absorbing additional operating and maintenance
costs related to the Tiger Bay facility, the addition of more than 20,000
new residential and commercial customers, and general inflationary
pressures.
Depreciation and amortization expense increased approximately $7 million
for the first quarter of 1998 compared with 1997. Most of the increase was
due to the depreciation and amortization expenses associated with the 1997
purchase of the Tiger Bay facility and buy-out of the related purchased
power contracts.
Florida Power incurred approximately $11 million of additional interest
expense in the first quarter of 1998 compared with the first quarter of
1997. The increase was the result of higher debt balances due to financing
the costs associated with the extended nuclear maintenance outage and the
issuance of $450 million of medium-term notes used to finance the Tiger Bay
transaction.
ELECTRIC FUELS CORPORATION
Electric Fuels earned $8.2 million, or $.08 per share, in the first quarter
of 1998 compared with $3.3 million, or $.03 per share, in 1997. Most of the
increase is attributable to improved operations at the inland marine
transportation group.
In the first quarter of 1997, flooding along the Ohio and Mississippi
rivers significantly affected earnings for the inland marine transportation
group. Normal operating conditions thus far in 1998 combined with a larger
barge fleet have increased earnings from this group by $2.5 million, or
$.03 per share, when compared with the same three-month period last year.
Earnings for Electric Fuels' energy and related services group were up $1.6
million, or $.02 per share, for the first quarter of 1998 compared with
1997. The improvement in earnings was due primarily to lower production
costs at company mines and increased coal sales. The increase in sales
resulted largely from the September 1997 buy-out of a 50-percent partner in
one of its coal properties. Electric Fuels now recognizes 100 percent of
the sales from this mining operation.
Progress Rail, the lead company in Electric Fuels' Rail Services group,
continues to experience increased demand for its railroad related parts and
services. Earnings from this group were up $.5 million for the quarter.
Florida Progress (NYSE:FPC) is a Fortune 500 diversified utility holding
company with assets of $5.8 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
and rail services.
###
FLORIDA PROGRESS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME Page 3
(UNAUDITED) (In millions, except per share amounts)
Three Months Ended Twelve Months Ended
March 31, March 31,
--------------------------------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
REVENUES:
Electric utility $ 565.2 $ 553.8 $ 2,459.8 $ 2,400.1
Diversified 222.3 193.7 895.8 774.9
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787.5 747.5 3,355.6 3,175.0
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EXPENSES:
Electric utility:
Fuel 109.2 94.9 472.4 419.6
Purchased power 99.0 127.2 462.4 536.0
Energy conservation cost 16.6 11.0 72.6 53.9
Operations and maintenance 102.4 102.4 422.3 415.4
Extended nuclear outage - O&M and replacement power costs 5.1 7.9 170.5 7.9
Depreciation 81.0 74.3 332.6 320.9
Taxes other than income taxes 49.5 48.1 195.0 184.5
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462.8 465.8 2,127.8 1,938.2
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Diversified:
Cost of sales 193.8 171.8 775.9 659.6
Provision for loss on coal properties - - - 40.9
Loss related to life insurance subsidiary - - 97.6 -
Other 12.8 14.9 58.6 66.1
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206.6 186.7 932.1 766.6
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INCOME FROM OPERATIONS 118.1 95.0 295.7 470.2
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INTEREST EXPENSE AND OTHER:
Interest expense 47.3 34.3 171.7 135.6
Allowance for funds used during construction (3.9) (2.1) (11.5) (7.9)
Preferred dividend requirements of Florida Power .4 .4 1.5 3.9
(Gain) on sale of business - - - (44.2)
Other expense (income) (.5) .4 .5 (.4)
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43.3 33.0 162.2 87.0
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INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 74.8 62.0 133.5 383.2
Income taxes 24.3 20.0 70.7 138.8
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INCOME FROM CONTINUING OPERATIONS 50.5 42.0 62.8 244.4
DISCONTINUED OPERATIONS, NET OF INCOME TAXES - - - (26.3)
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NET INCOME $ 50.5 $ 42.0 $ 62.8 $ 218.1
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AVERAGE SHARES OF COMMON
STOCK OUTSTANDING 97.1 97.0 97.1 97.0
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EARNINGS (LOSS) PER AVERAGE COMMON SHARE:
CONTINUING OPERATIONS $.52 $.43 $.65 $2.52
DISCONTINUED OPERATIONS - - - (.27)
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$.52 $.43 $.65 $2.25
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Regarding these financial statements:
Prior periods reflect the recapitalization of the spin-off company, Echelon
International, and its associated treatment as discontinued operations.
Effective December 31, 1997, the Company deconsolidated the accounts of
Mid-Continent Life Insurance Company and established a provision for loss for
the full amount of its investment. The deconsolidation has not been reflected in
the consolidated financial statements of prior periods. These are interim
statements. Reference should be made to Florida Progress Corporation's 1997
Annual Report to shareholders. This report does not constitute an offer to sell
or the solicitation of an offer to buy any securities.
FLORIDA PROGRESS CORPORATION
CONSOLIDATED BALANCE SHEETS Page 4
(UNAUDITED) (In millions)
March 31
---------------------------
ASSETS 1998 1997
----------- ----------
PROPERTY, PLANT AND EQUIPMENT:
Electric utility plant in service and held for future use $ 6,172.5 $ 5,986.5
Less - Accumulated depreciation 2,570.3 2,394.9
Accumulated decommissioning for nuclear plant 230.6 200.3
Accumulated dismantlement for fossil plants 128.9 123.8
- --------------------------------------------------------------------------------------------------
3,242.7 3,267.5
Construction work in progress 336.3 198.2
Nuclear fuel, net of amortization of $359.9 in 1998 and $356.7 in 1997 63.2 59.9
- --------------------------------------------------------------------------------------------------
Net electric utility plant 3,642.2 3,525.6
Other property, net of depreciation of $224 in 1998 and $178.1 in 1997 455.6 314.3
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4,097.8 3,839.9
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CURRENT ASSETS:
Cash and equivalents 8.2 16.5
Accounts receivable, net 370.9 280.7
Inventories, primarily at average cost:
Fuel 75.6 80.1
Utility materials and supplies 92.1 95.4
Diversified materials 139.6 137.2
Underrecovery of fuel cost 37.7 105.6
Deferred income taxes 40.6 33.7
Other 46.4 15.0
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811.1 764.2
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OTHER ASSETS:
Investments:
Loans receivable, net 31.6 57.6
Marketable securities - 228.2
Nuclear plant decommissioning fund 281.7 219.2
Joint ventures and partnerships 51.8 51.0
Deferred insurance policy acquisition costs - 123.0
Deferred purchased power contract termination costs 344.6 -
Other 217.8 179.6
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927.5 858.6
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$ 5,836.4 $ 5,462.7
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CAPITAL AND LIABILITIES
CAPITAL:
Common stock equity $ 1,773.9 $ 1,912.8
Cumulative preferred stock of Florida Power 33.5 33.5
Long-term debt 2,342.3 1,820.1
- --------------------------------------------------------------------------------------------------
4,149.7 3,766.4
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CURRENT LIABILITIES:
Accounts payable 222.3 189.2
Customers' deposits 99.1 94.3
Income taxes payable 12.5 37.0
Accrued other taxes 32.8 32.4
Accrued interest 48.8 39.1
Other 73.4 74.9
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488.9 466.9
Notes payable 303.2 55.9
Current portion of long-term debt 5.7 24.9
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797.8 547.7
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DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred income taxes 504.4 465.3
Unamortized investment tax credits 83.7 91.5
Insurance policy benefit reserves - 341.3
Other postretirement benefit costs 109.0 102.0
Other 191.8 148.5
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888.9 1,148.6
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$ 5,836.4 $ 5,462.7
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FLORIDA PROGRESS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS Page 5
(UNAUDITED) (In millions)
Three Months Ended Twelve Months Ended
March 31 March 31
------------------------ ------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
OPERATING ACTIVITIES:
Income from continuing operations $ 50.5 $ 42.0 $ 62.8 $ 244.4
Adjustments for noncash items:
Depreciation and amortization 100.9 83.2 381.9 361.9
Extended nuclear outage - replacement power costs - - 73.3 -
Provision for loss on investment in life insurance subsidiary - - 86.9 -
Gain on sale of business - - - (44.2)
Provision for loss on coal properties - - - 40.9
Deferred income taxes and investment tax
credits, net (7.3) (12.3) (25.7) (62.0)
Increase in accrued other postretirement benefit costs 1.6 2.0 8.2 15.8
Net change in deferred insurance policy acquisition costs - (2.1) .4 (14.4)
Net change in insurance policy benefit reserves - 16.0 36.7 63.5
Changes in working capital, net of effects from acquisition
or sale of businesses:
Accounts receivable 10.2 (15.5) (82.6) 8.4
Inventories 3.1 (25.0) 30.3 (38.9)
Underrecovery of fuel cost (8.3) (23.0) (18.4) (86.3)
Accounts payable (33.0) (4.0) 29.3 29.9
Income taxes payable 29.9 9.4 (24.6) (6.3)
Accrued other taxes 20.5 19.0 (.5) (3.5)
Other (11.8) (2.2) (8.4) (14.0)
Other operating activities (2.7) 1.7 (42.6) (28.5)
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Cash provided by continuing operations 153.6 89.2 507.0 466.7
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Cash provided by discontinued operations - - - 3.6
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153.6 89.2 507.0 470.3
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INVESTING ACTIVITIES:
Property additions (including allowance for
borrowed funds used during construction) (103.0) (94.8) (521.8) (288.1)
Purchases of loans and securities, net (7.7) (4.5) (14.2) (63.1)
Proceeds from sales of properties and businesses 2.1 2.2 24.2 60.0
Acquisition of businesses (9.1) - (41.8) (53.8)
Acquisition of cogeneration facility and payment of
contract termination costs - - (445.0) -
Investments in joint ventures and partnerships, net (.5) (9.3) (21.7) (18.7)
Investing activities of discontinued operations - - - 49.8
Other investing activities (5.2) (4.9) (22.5) (19.2)
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(123.4) (111.3) (1,042.8) (333.1)
- --------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Issuance of long-term debt 144.1 - 626.9 178.0
Repayment of long-term debt (169.4) (21.5) (182.8) (210.4)
Increase(decrease) in commercial paper with
long-term support (35.7) 54.6 40.3 80.0
Redemption of preferred stock - - - (106.4)
Sale of common stock - - - 9.2
Equity contributions to discontinued operations - - - (23.7)
Dividends paid on common stock (51.9) (51.0) (204.7) (200.8)
Increase in short-term debt 88.4 51.8 247.4 55.9
Financing activities of discontinued operations - - - 95.4
Other financing activities (.6) (.5) .4 (3.8)
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(25.1) 33.4 527.5 (126.6)
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NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 5.1 11.3 (8.3) 10.6
Beginning cash and equivalents 3.1 5.2 16.5 5.9
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ENDING CASH AND EQUIVALENTS $ 8.2 $ 16.5 $ 8.2 $ 16.5
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Florida Progress Corporation
Selected Financial Information (Unaudited) Page 6
Three Months Ended Percent Twelve Months Ended Percent
March 31 Positive March 31 Positive
1998 1997 (Negative) 1998 1997 (Negative)
------------ ----------- ------------------ ----------- ------------ -------------
Earnings (Loss) Per Share:
Florida Power Corporation $.50 $.47 6.4 $2.51 $2.43 3.3
------------ ----------- ----------- ------------
Electric Fuels Corporation .08 .03 166.7 .38 .24 58.3
Mid-Continent Life Insurance Co. - - - - .01 -
Corporate and other (.03) (.02) (50.0) (.20) (.09) (122.2)
------------ ----------- ----------- ------------
Diversified Continuing before non-recurring .05 .01 400.0 .18 .16 12.5
------------ ----------- ----------- ------------
Continuing Ops before non-recurring .55 .48 14.6 2.69 2.59 3.9
Impact of nuclear outage (.03) (.05) - (1.08) (.05) -
Provision for loss on coal properties - - - - (.26) -
Gain on sale of business - - - - .24 -
Loss related to life insurance subsidiary - - (.96) -
------------ ----------- ----------- ------------
Total Continuing Operations .52 .43 20.9 .65 2.52 (74.2)
Discontinued Operations - - - - (.27) -
============ =========== =========== ============
$.52 $.43 20.9 $.65 $2.25 (71.1)
============ =========== =========== ============
Avg. shares outstanding (millions) 97.1 97.0 .1 97.1 97.0 .1
Dividends per share $.535 $.525 1.9 $2.11 $2.07 1.9
Book value per share:
Florida Power Corporation $18.18 $18.73 (3.0)
Consolidated $18.28 $19.71 (7.3)
March 31 March 31
March 31 1998 1997
1998 1997 Amount Percent Amount Percent
------------ ----------- --------------------------------------------
Equity investments (percent): Capitalization (in millions):
Florida Power Corporation 90 87 Common stock $1,773.9 39.8 $1,912.8 49.7
Electric Fuels Corporation 10 9 Preferred stock 33.5 .8 33.5 .9
Mid-Continent Life Insurance Co. - 4 Long-term debt 2,342.3 52.5 1,820.1 47.3
------------ -----------
Total 100 100 Short-term debt 308.9 6.9 80.8 2.1
------------ -----------
--------------------------------------------
Total $4,458.6 100.0 $3,847.2 100.0
--------------------------------------------
Note: Prior periods reflect the recapitalization of the spin-off company, Echelon International, 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 Twelve Months Ended
March 31 Percent March 31 Percent
1998 1997 Change 1998 1997 Change
------------- ------------- --------------- ------------- -------------- ------------
Revenues:
Residential $308.7 $290.7 6.2 $1,333.0 $1,279.0 4.2
Commercial 123.7 124.2 (.4) 567.9 546.4 3.9
Industrial 47.8 51.9 (7.9) 203.8 210.9 (3.4)
Other retail sales 30.0 29.8 .7 133.6 128.7 3.8
------------- ------------- ------------- --------------
510.2 496.6 2.7 2,238.3 2,165.0 3.4
Sales for resale 36.9 37.1 (.5) 150.5 154.0 (2.3)
------------- ------------- ------------- --------------
547.1 533.7 2.5 2,388.8 2,319.0 3.0
Other electric revenues 21.4 12.8 67.2 84.9 58.1 46.1
Deferred fuel (3.3) 7.3 - (13.9) 23.0 -
------------- ------------- ------------- --------------
Total $565.2 $553.8 2.1 $2,459.8 $2,400.1 2.5
------------- ------------- ------------- --------------
Kilowatt-hour sales billed:
Residential 3,555.8 3,296.3 7.9 15,339.3 14,858.2 3.2
Commercial 2,030.9 1,994.4 1.8 9,293.8 8,953.5 3.8
Industrial 982.9 1,049.9 (6.4) 4,120.8 4,272.7 (3.6)
Other retail sales 529.9 517.4 2.4 2,337.9 2,268.3 3.1
------------- ------------- ------------- --------------
7,099.5 6,858.0 3.5 31,091.8 30,352.7 2.4
Sales for resale 655.2 531.9 23.2 2,562.9 2,487.0 3.1
------------- ------------- ------------- --------------
Total electric sales 7,754.7 7,389.9 4.9 33,654.7 32,839.7 2.5
------------- ------------- ------------- --------------
System Requirements (KWH) 7,844 7,520 4.3 34,928 34,006 2.7
KWH Sales (Billed & Unbilled):
Retail 7,098 6,787 4.6 31,176 30,183 3.3
Wholesale 650 438 48.4 2,645 2,296 15.2
Billing Degree Days:
Cooling 25 25 - 3,434 3,707 (7.4)
Heating 462 296 56.1 609 502 21.3
Note:
Revenues include amounts resulting from fuel, purchased power, and energy
conservation clauses; which are designed to permit full recovery of these
costs. 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 and
wholesale KWH sales includes both billed and unbilled sales. From 1995
through 1997, Florida Power, as ordered by state regulators, conducted a
three-year test of residential revenue decoupling. Under the plan, abnormal
weather variances did not impact earnings with respect to residential
revenues.