1
[Florida Progress Corporation Investor News Letterhead]
FLORIDA PROGRESS REPORTS SECOND QUARTER EARNINGS
ST. PETERSBURG, FLORIDA, JULY 16, 1999 - Florida Progress Corporation (NYSE:FPC)
reported second-quarter 1999 earnings of $76.6 million, or $.78 per share,
compared with 1998 earnings of $77.8 million, or $.80 per share. Excluding a
one-time gain of $.04 per share in the second quarter of 1998, Florida Progress'
second quarter earnings increased over 1998, despite milder weather in 1999.
For the six months ended June 30, 1999, Florida Progress reported earnings of
$144.2 million, or $1.48 per share, a 12-percent increase over the six months
ended June 30, 1998 earnings of $128.3 million, or $1.32 per share.
A RECONCILIATION OF FLORIDA PROGRESS'S 1999 SECOND-QUARTER EARNINGS PER SHARE IS
AS FOLLOWS:
1998 FLORIDA PROGRESS 2ND QTR EPS $ 0.80
FLORIDA POWER
Customer & non-weather usage growth 0.10
Estimated weather impact on sales (0.16)
1998 Accelerated amortization 0.09
Operations & maintenance (0.03)
Depreciation & amortization (0.03)
-----
(0.03)
ELECTRIC FUELS 0.04
CORPORATE & OTHER (0.03)
------
1999 FLORIDA PROGRESS 2ND QTR EPS $ 0.78
=====
FLORIDA POWER CORPORATION
Florida Power, the largest subsidiary of Florida Progress, reported earnings of
$65.5 million, or $.67 per share, for the second quarter of 1999, compared with
1998 results of $67.7 million, or $.70 per share. However, 1998 earnings were
higher than normal due to unusually hot weather experienced during the quarter.
During the second quarter of 1999, Florida Power served approximately 25,000, or
1.9 percent, additional retail customers than in 1998. In addition, Florida
Power experienced strong non-weather related usage growth among its residential
and commercial customers.
-- more --
2
PAGE 2
FLORIDA PROGRESS CORPORATION
INVESTOR NEWS -- SECOND QUARTER EARNINGS
Despite the solid customer growth and strong non-weather related usage growth,
Florida Power's total retail kilowatt-hour sales decreased 3.3 percent during
the second quarter of 1999, compared with the same period a year ago. The
decrease was attributable to milder than normal temperatures during the second
quarter of 1999, compared with the extremely hot temperatures in the second
quarter of 1998.
Wholesale kilowatt-hour sales were up 15.7 percent over 1998. The improvement
was largely due to increased sales to Florida Power's largest wholesale
customer, Seminole Electric Cooperative. In January 1999, Florida Power began
supplying additional power to Seminole Electric under a three-year contract.
Operations and maintenance expenses increased $4.6 million over the second
quarter of 1998. The higher costs were largely due to the timing of certain
plant maintenance projects and reliability expenditures. On a year-to-date
basis, Florida Power's operation and maintenance expenses are in line with the
company's expectations.
Depreciation and amortization expense, excluding accelerated amortizations,
increased $4.7 million over the same period a year ago. The increase was
primarily due to additional depreciation expense related to the Hines plant,
which was placed in service in April 1999.
ELECTRIC FUELS CORPORATION
Electric Fuels earned $15.1 million, or $.15 per share, in the second quarter of
1999, compared with $10.6 million, or $.11 per share, in 1998. The 36-percent
increase in earnings per share was primarily due to synthetic fuel sales by the
Energy & Related Services group. In addition, the Rail Services and Inland
Marine Transportation business units also experienced improved operating results
during the quarter.
Earnings at the Energy and Related Services group were up $3.3 million. Sales of
a coal-based synthetic fuel and the related tax credits increased earnings by
$4.4 million for the quarter. Partially offsetting these strong results were
lower contributions from coal sales due to reduced coal prices and depressed
market conditions.
Earnings from the Inland Marine Transportation group were up $.3 million, or 19
percent, as operating conditions returned to normal during the second quarter.
The improvement was due to the company's growing barge fleet, which currently
stands at 1,200 barges.
Results at the Rail Services group increased $1.0 million, compared with 1998.
The 20-percent increase was due to higher earnings from the mechanical and
trackwork divisions, as a result of strong demand for railcar parts and a return
to normal sales levels for trackwork.
Rail Services also experienced an increase in scrap tons sold in its recycling
division, however, the increased sales were offset by lower margins. The group's
lower margins were the result of scrap steel prices that were 30 percent below
1998 second-quarter prices.
-- more --
3
PAGE 3
FLORIDA PROGRESS CORPORATION
INVESTOR NEWS -- SECOND QUARTER EARNINGS
CORPORATE AND OTHER
Corporate and other expenses increased $.03 per share, resulting in a $.04 loss
in the second quarter of 1999, compared with a $.01 loss 1998. The increased
loss was largely due to the absence of a one-time gain recognized in the second
quarter of 1998 for the buy-out of a purchased power contract associated with a
cogeneration facility in which a Florida Progress subsidiary is a minority
partner.
Florida Progress (NYSE:FPC) is a Fortune 500 diversified utility holding company
with assets of $6.3 billion. Its principal subsidiary is Florida Power, one of
the nation's leading electric utilities committed to serving its 1.3 million
customers in Florida with competitively priced energy, excellent reliability,
and outstanding customer service. Diversified operations include rail services,
marine operations and coal mining.
###
4
FLORIDA PROGRESS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME PAGE 4
(UNAUDITED) (In millions, except per share amounts)
Three Months Ended Six Months Ended Twelve Months Ended
June 30 June 30 June 30
---------------------- ---------------------- ----------------------
1999 1998 1999 1998 1999 1998
-------- -------- -------- -------- -------- --------
REVENUES:
Electric utility $671.7 $663.8 $1,242.4 $1,229.0 $2,661.6 $2,526.4
Diversified 304.6 239.3 554.3 461.6 1,064.8 935.8
- ---------------------------------------------------------------------------------------------------------------------------------
976.3 903.1 1,796.7 1,690.6 3,726.4 3,462.2
- ---------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Electric utility:
Fuel 143.5 135.9 257.2 245.1 607.8 489.5
Purchased power 108.4 110.8 198.7 209.8 422.7 456.4
Energy conservation cost 19.4 19.0 36.5 35.6 80.5 75.0
Operations and maintenance 120.8 116.2 217.9 218.6 470.9 427.8
Extended nuclear outage -
O&M and replacement power costs -- -- -- 5.1 -- 80.6
Depreciation and amortization 93.2 90.4 174.0 171.4 349.7 348.8
Taxes other than income taxes 51.1 51.4 103.0 100.9 205.7 197.8
- ---------------------------------------------------------------------------------------------------------------------------------
536.4 523.7 987.3 986.5 2,137.3 2,075.9
- ---------------------------------------------------------------------------------------------------------------------------------
Diversified:
Cost of sales 269.7 192.8 494.8 386.6 935.4 799.6
Loss related to life insurance subsidiary -- -- -- -- -- 97.6
Other 15.8 18.9 30.4 31.6 55.1 62.4
- ---------------------------------------------------------------------------------------------------------------------------------
285.5 211.7 525.2 418.2 990.5 959.6
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME FROM OPERATIONS 154.4 167.7 284.2 285.9 598.6 426.7
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE AND OTHER:
Interest expense 43.9 47.7 88.9 95.0 181.0 183.6
Allowance for funds used during construction (1.2) (4.1) (6.3) (8.0) (15.2) (13.3)
Distributions on mandatorily redeemable
preferred securities of subsidiary trust 4.6 -- 4.6 -- 4.6 --
Other expense (income) 1.0 1.1 (3.3) 1.1 (4.6) 4.5
- ---------------------------------------------------------------------------------------------------------------------------------
48.3 44.7 83.9 88.1 165.8 174.8
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 106.1 123.0 200.3 197.8 432.8 251.9
Income taxes 29.5 45.2 56.1 69.5 135.2 117.6
- ---------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 76.6 $ 77.8 $ 144.2 $ 128.3 $ 297.6 $ 134.3
- ---------------------------------------------------------------------------------------------------------------------------------
AVERAGE SHARES OF COMMON
STOCK OUTSTANDING 98.0 97.0 97.8 97.1 97.4 97.1
- ---------------------------------------------------------------------------------------------------------------------------------
EARNINGS PER AVERAGE COMMON SHARE
(BASIC and DILUTED) $ .78 $ .80 $ 1.48 $ 1.32 $ 3.06 $ 1.39
- ---------------------------------------------------------------------------------------------------------------------------------
Regarding these financial statements:
In June 1998, Florida Power restated its financial results for the second, third
and fourth quarters of 1997 to reflect recognition of the extended nuclear
outage costs as incurred. The change affected the financial results for the
interim reporting periods but did not have any affect on the results for the
fiscal year ended 1997. 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
1998 Annual Report to shareholders. This report does not constitute an offer to
sell or the solicitation of an offer to buy any securities.
5
FLORIDA PROGRESS CORPORATION PAGE 5
SELECTED FINANCIAL INFORMATION (UNAUDITED)
Three Months Ended Percent Six Months Ended Percent Twelve Months Ended Percent
June 30 Positive June 30 Positive June 30 Positive
1999 1998 (Negative) 1999 1998 (Negative) 1999 1998 (Negative)
---- ---- ---------- ---- ---- ---------- ---- ---- ----------
Earnings (Loss) Per Share:
Florida Power Corporation $ .67 $ .70 (4.3) $ 1.31 $ 1.17 12.0 $ 2.70 $ 2.60 3.8
------ ------ ------ ------ ------ ------
Electric Fuels Corporation .15 .11 36.4 .24 .19 26.3 .48 .40 20.0
Corporate and other (.04) (.01) n/m* (.07) (.04) n/m* (.12) (.17) 29.4
------ ------ ------ ------ ------ ------
Diversified continuing
before non-recurring .11 .10 10.0 .17 .15 13.3 .36 .23 56.5
------ ------ ------ ------ ------ ------
Continuing operations
before non-recurring .78 .80 (2.5) 1.48 1.32 12.1 3.06 2.83 8.1
Impact of nuclear outage -- -- -- -- -- -- -- (.48) --
Loss related to life
insurance subsidiary -- -- -- -- -- -- -- (.96) --
------ ------ ------ ------ ------ ------
Total $ .78 $ .80 (2.5) $ 1.48 $ 1.32 12.1 $ 3.06 $ 1.39 120.1
====== ====== ====== ====== ====== ======
Avg. shares outstanding
(millions) 98.0 97.0 1.0 97.8 97.1 .7 97.4 97.1 .3
Dividends per share $ .545 $ .535 1.9 $ 1.09 $ 1.07 1.9 $ 2.16 $ 2.12 1.9
Book value per share:
Florida Power Corporation $18.82 $18.37 2.4
Consolidated $19.70 $18.55 6.2
June 30 June 30
June 30 1999 1998
1999 1998 Amount Percent Amount Percent
---- ---- --------------------------------------------
Equity investments Capitalization
(percent): (in millions):
Florida Power Corporation 88 89 Common stock $1,934.8 41.2 $1,799.8 39.2
Electric Fuels Corporation 12 11 Preferred stock 333.5 7.1 33.5 .7
--- ---
Total 100 100 Long-term debt 2,282.5 48.6 2,372.1 51.7
=== ===
Short-term debt 140.9 3.1 386.7 8.4
-------------------------------------------
Total $4,691.7 100.0 $4,592.1 100.0
===========================================
Note: In June 1998, Florida Power restated its financial results for the
second, third and fourth quarters of 1997 to reflect recognition of the
extended nuclear outage costs as incurred. The change affected the
financial results for the interim reporting periods but did not have
any affect on results for the fiscal year ended 1997.
* Not meaningful
6
FLORIDA POWER CORPORATION
SELECTED STATISTICAL DATA (UNAUDITED) PAGE 6
(In millions, except billing degree days)
Three Months Ended Six Months Ended Twelve Months Ended
June 30 Percent June 30 Percent June 30 Percent
1999 1998 Change 1999 1998 Change 1999 1998 Change
---- ---- ------ ---- ---- ------ ---- ---- ------
Revenues:
Residential $ 326.9 $ 335.5 (2.6) $ 625.6 $ 644.2 (2.9) $ 1,406.0 $ 1,362.5 3.2
Commercial 153.3 153.7 (.3) 284.7 277.4 2.6 616.2 576.2 6.9
Industrial 51.7 55.2 (6.3) 101.0 103.0 (1.9) 212.4 203.9 4.2
Other retail sales 34.9 35.0 (.3) 66.0 65.0 1.5 143.3 134.5 6.5
-------- -------- --------- --------- --------- ---------
566.8 579.4 (2.2) 1,077.3 1,089.6 (1.1) 2,377.9 2,277.1 4.4
Wholesale sales 43.8 43.8 -- 92.6 80.7 14.7 217.7 174.0 25.1
-------- -------- --------- --------- --------- ---------
610.6 623.2 (2.0) 1,169.9 1,170.3 -- 2,595.6 2,451.1 5.9
Other electric revenues (1) 47.6 47.9 (.6) 71.2 69.3 2.7 68.9 92.8 (25.8)
Deferred fuel (2) 13.5 (7.3) -- 1.3 (10.6) -- (2.9) (17.5) --
-------- -------- --------- --------- --------- ---------
Total $ 671.7 $ 663.8 1.2 $ 1,242.4 $ 1,229.0 1.1 $ 2,661.6 $ 2,526.4 5.4
======== ======== ========= ========= ========= =========
Kilowatt-hour sales billed:
Residential 3,780.8 3,859.7 (2.0) 7,199.6 7,415.5 (2.9) 16,310.4 15,835.3 3.0
Commercial 2,545.3 2,497.7 1.9 4,723.5 4,528.6 4.3 10,194.2 9,522.5 7.1
Industrial 1,082.5 1,120.2 (3.4) 2,110.1 2,103.1 .3 4,382.4 4,166.9 5.2
Other retail sales 618.6 608.0 1.7 1,178.4 1,137.9 3.6 2,526.1 2,376.1 6.3
-------- -------- --------- --------- --------- ---------
8,027.2 8,085.6 (.7) 15,211.6 15,185.1 .2 33,413.1 31,900.8 4.7
Wholesale sales 962.3 733.8 31.1 1,969.9 1,389.0 41.8 4,445.4 2,989.6 48.7
-------- -------- --------- --------- --------- ---------
Total electric sales 8,989.5 8,819.4 1.9 17,181.5 16,574.1 3.7 37,858.5 34,890.4 8.5
======== ======= ======== ======== ========= =========
System Requirements (KWH) 9,960 9,947 .1 17,983 17,790 1.1 37,956 36,340 4.4
KWH Sales (Billed & Unbilled):
Retail 8,479 8,767 (3.3) 15,688 15,865 (1.1) 33,274 32,205 3.3
Wholesale 1,193 1,031 15.7 2,160 1,682 28.4 4,302 3,217 33.7
-------- -------- --------- --------- --------- ---------
9,672 9,798 (1.3) 17,848 17,547 1.7 37,576 35,422 6.1
======== ======== ========= ========= ========= =========
Billing Degree Days:
Cooling 495 819 (39.6) 495 843 (41.3) 3,811 3,782 .8
Heating 50 70 (28.6) 379 532 (28.8) 404 666 (39.3)
Note:
(1) In the 4th quarter of 1998, the FPSC approved the establishment of a
regulatory liability for 1998 deferred earnings, which resulted in a
$10 million charge to Other electric revenues. In the second quarter of
1999, Florida Power recognized the $10 million in revenues and applied
it to the amortization of the Tiger Bay regulatory asset, which
resulted in no earnings impact. Other electric revenues include
unbilled revenues.
(2) Revenues include amounts resulting from fuel, purchased power, and
energy conservation clauses; which are designed to permit full recovery
of these costs.