UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the plan year ended December 31, 2000
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________ to ____________.
Commission file number 1-8349
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SAVINGS PLAN FOR EMPLOYEES
OF
FLORIDA PROGRESS CORPORATION
----------------------------
Full title of the plan and the address of the
plan, if different from that of the issuer named below
FLORIDA PROGRESS CORPORATION
One Progress Plaza
St. Petersburg, Florida 33701
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Name of issuer of the securities held pursuant to the
plan and address of its principal executive office
SAVINGS PLAN FOR EMPLOYEES OF FLORIDA
PROGRESS CORPORATION
Financial Statements as of and for the
years ended December 31, 2000 and 1999
Additional Information Required for Form 5500
for the year ended December 31, 2000
SAVINGS PLAN FOR EMPLOYEES OF FLORIDA PROGRESS CORPORATION
Table of Contents
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Page Number
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Report of Independent Accountants 1
Basic Financial Statements
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4 - 8
Additional Information *
Schedule I - Schedule of Assets (Held at End of Year) 9
Schedule II - Schedule of Nonexempt Transactions 10
* Other supplemental schedules required by Section 2520.103-10 of the Department
of Labor Rules and Regulations for Reporting and Disclosure under ERISA have
been omitted because they are not applicable.
Report of Independent Accountants
To the Participants and Administrator of
Savings Plan for Employees of Florida Progress Corporation
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of Savings Plan for Employees of Florida Progress Corporation (the "Plan") at
December 31, 2000 and 1999, and the changes in net assets available for benefits
for the years then ended, in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
(held at end of year) and nonexempt transactions are presented for the purpose
of additional analysis, and are not a required part of the basic financial
statements, but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/S/ PRICEWATERHOUSECOOPERS LLP
Philadelphia, Pennsylvania
June 19, 2001
1
SAVINGS PLAN FOR EMPLOYEES OF FLORIDA PROGRESS CORPORATION
Statements of Net Assets Available for Benefits
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(in thousands)
As of December 31,
2000 1999
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Investments, at fair value
Registered investment companies:
Putnam New Opportunities Class A Shares * $ 110,718 * $ 115,796
Vanguard 500 Index Fund * 129,203 * 145,405
Vanguard Extended Market Index Fund 6,899 4,775
Vanguard Federal Money Market Fund * 81,991 -
Vanguard International Growth Fund 6,620 5,573
Vanguard LifeStrategy Conservative Growth Fund 7,452 7,180
Vanguard LifeStrategy Growth Fund 20,764 20,442
Vanguard LifeStrategy Moderate Growth Fund * 33,900 * 36,708
Vanguard Total Bond Market Index Fund 6,823 5,480
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404,370 341,359
Progress Energy Company Stock Fund * 63,359 * 134,104
Florida Progress Contingent Value Obligation Fund 951 -
Participant Loans 17,176 18,099
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485,856 493,562
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Investments, at contract value
Florida Progress Stable Value Fund * 116,488 * 122,896
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Receivables
Employer's contributions 352 -
Employees' contributions 1,099 -
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Total receivables 1,451 -
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Net assets available for benefits $ 603,795 $ 616,458
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* Represents 5% or more of net assets available for benefits.
The accompanying notes are an integral part of the financial statements.
2
SAVINGS PLAN FOR EMPLOYEES OF FLORIDA PROGRESS CORPORATION
Statements of Changes in Net Assets Available for Benefits
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(in thousands)
Year Ended December 31,
2000 1999
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Additions
Investment income:
Interest and dividend income, investments $ 34,642 $ 27,699
Interest income, participant loans 1,453 1,498
Net (depreciation) appreciation in fair value of investments (27,821) 62,592
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8,274 91,789
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Contributions:
Employer 9,781 9,034
Participant 22,624 22,073
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32,405 31,107
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Total additions 40,679 122,896
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Deductions
Payment of benefits 53,307 38,965
Administrative expenses 35 31
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Total deductions 53,342 38,996
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Net (decrease) increase (12,663) 83,900
Net assets available for plan benefits:
Beginning of period 616,458 532,558
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End of period $ 603,795 $ 616,458
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The accompanying notes are an integral part of the financial statements.
3
SAVINGS PLAN FOR EMPLOYEES OF FLORIDA PROGRESS
CORPORATION
Notes to Financial Statements
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NOTE 1 - DESCRIPTION OF PLAN
The following description of the Savings Plan for Employees of Florida Progress
Corporation (the "Plan" or the "Savings Plan") provides only general
information. Participants should refer to the Savings Plan Summary Plan
Description/Prospectus, as amended, which is part of the Employee Handbook and
the "About Your Plan" booklet, which is part of the "The Power to Plan Your
Future" package from The Vanguard Group, Inc. for more complete descriptions of
the Plan's provisions.
General
The plan is a qualified defined contribution plan subject to the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA"). The Plan provides
employees of the Participating Companies (as defined below) immediate
eligibility upon employment for making employee contributions (either pre-tax or
after-tax). Employees become eligible to receive matching employer contributions
on employee contributions made after completing at least six months of
uninterrupted employment or having worked at least 1,000 hours in a twelve-month
period. Participation in the Plan is voluntary. The following companies
participated in the Plan at December 31, 2000:
. Electric Fuels Corporation
. Florida Progress Corporation ("Florida Progress")
. Florida Power Corporation
. Progress Telecommunications Corporation
Effective November 30, 2000, CP&L Energy, Inc. ("CP&L Energy") acquired the
Participating Companies.
On December 4, 2000, CP&L Energy changed its name to Progress Energy, Inc.
("Progress Energy").
Contributions
Eligible employees may elect to contribute up to 16% of their annual base pay
and may designate these contributions as either Regular Savings after-tax and/or
401(k) pretax dollars. Each participating company contributes each pay period an
amount equal to 75% of the employees' contributions, up to 6% of base pay.
Participant Accounts
A separate account is maintained for each investment option of a participant by
type of contribution. Each participant's account is credited with the
participant's contribution and allocations of (a) the Participating Companies'
contribution and, (b) Plan earnings, and charged with an allocation of
administrative expenses. Plan earnings are allocated and credited to the account
daily based on the adjusted balance of each participant's account. The benefit
to which a participant is entitled is the benefit that can be provided from the
participant's vested account.
4
SAVINGS PLAN FOR EMPLOYEES OF FLORIDA PROGRESS
CORPORATION
Notes to Financial Statements
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Vesting
Participants are immediately vested in their Regular Savings and 401(k)
contributions and earnings thereon. The Company Match Account and the earnings
thereon, vest gradually based on the following Years of Continuous Service
schedule:
Years of Continuous Service Vested Percentage
Less than 2 0%
2 but less than 3 25%
3 but less than 4 50%
4 but less than 5 75%
5 or more 100%
A Year of Continuous Service is earned when a participant works at least 1,000
hours in a calendar year. A participant will also become fully vested in the
employer contributions and earnings thereon upon death, disability, attainment
of normal retirement or termination of the Plan.
Participant Loans
All actively employed Savings Plan participants with available account balances
may apply for a loan from their own Plan account. No loan shall exceed the
lesser of $50,000 or one-half of the participant's vested Savings Plan account
balance. This amount will be transferred from the participant's account and
placed in a separate Participant Loan Fund. A participant is permitted a maximum
of four outstanding loans at any one time. Each loan shall bear interest, as
determined on a quarterly basis, using the Florida Savings Certificate of
Deposit rate as published in The Wall Street Journal. Interest charged on
employee loans is credited to the individual participant accounts.
A participant can choose repayment terms on a new loan ranging from 6 to 60
months. Repayments are made via payroll deduction for active regular employees,
by Automated Clearing House payment for active non-regular employees and by
direct payment to the Savings Plan for inactive participants. Additionally,
participants can elect to prepay all or a portion of their outstanding loan
balance at any time during the term of the loan. Repayments are returned to each
participant account (reducing the outstanding Participant Loan Fund balance).
Excess loan repayments of principal and interest over new loans issued during
the year are reflected as interfund transfers for reinvestment to the respective
investment funds. New loans are reflected as transfers out of the investment
funds to the Participant Loan Fund.
Payment of Benefits
Upon separation of service due to termination, death, disability or retirement
(after age 55), participants may make a written election to leave their account
balance within the Plan, for any length of time up to age 70 if their vested
balance is greater than $5,000, or elect to receive a lump-sum amount equal to
the value of their account balance, or select from a menu of installment payment
options. Although no further employee contributions or partial withdrawals are
allowed, terminated or retired employees may continue to exchange amounts among
the investment options.
Forfeited Accounts
Forfeitures of non-vested employer contributions by terminated participants may
be used to reduce employer matching contributions. Employer contributions were
reduced by forfeitures of $988 and $142,645 during the years ended December 31,
2000 and 1999, respectively. At December 31, 2000, forfeited nonvested accounts
totaled $197,044.
5
SAVINGS PLAN FOR EMPLOYEES OF FLORIDA PROGRESS
CORPORATION
Notes to Financial Statements
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Plan Termination
It is the intention of the Participating Companies that the Plan continue in
operation; however, the Company has the right to amend the Plan, discontinue its
contributions at any time, and /or to terminate the Plan subject to the
provisions of ERISA. In the event of Plan termination, participants will become
100% vested in their accounts.
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES
The following accounting policies, which conform to accounting principles
generally accepted in the United States of America, have been used consistently
in the preparation of the Plan's financial statements:
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method of
accounting.
Use of Estimates
The preparation of financial statements, in conformity with accounting
principles generally accepted in the United States of America, requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements, as well as reported amounts of additions
and deductions during the reporting period. Actual results could differ from
those estimates.
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value, except for its investment
contracts, which are valued at contract value (Note 4). Shares of registered
investment companies are valued at quoted market prices, which represent the net
asset value of shares held by the Plan at year-end. The Progress Energy Company
Stock Fund is valued at its year-end unit closing price (constituting market
value of shares owned plus un-invested cash position). Participant loans are
valued at cost, which approximates fair value. Purchases and sales of
investments are recorded on a trade-date basis. Interest income is accrued when
earned. Dividend income is recorded on the ex-dividend date. Capital gain
distributions are included in dividend income. When Progress Energy Company
common stock is distributed from the Progress Energy Company Stock Fund to
participants in settlement of their accounts, distributions are recorded at the
value of shares distributed.
Payment of Benefits
Benefits are recorded when paid.
New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities ("SFAS No. 133").
SFAS No. 133 requires that an entity recognize all derivatives and measure those
instruments at fair value. SFAS No. 133 is effective for fiscal years beginning
after June 15, 2000. Pursuant to SFAS No. 137, Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FASB
Statement No. 133, an amendment of FASB Statement No. 133, the Plan is required
to adopt SFAS No. 133 effective January 1, 2001. Management has not yet been
able to determine the impact of SFAS No. 133 on the Plan Financial Statements.
The adoption of this standard will impact the accounting for and disclosure of
synthetic guaranteed investment contracts valued at $94,740,242 as of December
31, 2000.
6
SAVINGS PLAN FOR EMPLOYEES OF FLORIDA PROGRESS
CORPORATION
Notes to Financial Statements
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NOTE 3 - INVESTMENTS
During 2000 and 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) (depreciated)
appreciated in value as follows:
Year Ended December 31,
2000 1999
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(in thousands)
Registered Investment Companies $ (75,695) $ 55,359
Common Stock 47,874 7,233
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$ (27,821) $ 62,592
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All investments are participant-directed.
NOTE 4 - INVESTMENT CONTRACTS WITH FINANCIAL INSTITUTIONS, INSURANCE COMPANIES
AND BANKS
The Florida Progress Stable Value Fund (the "Fund") consists of synthetic
investment contracts with various banks and insurance companies ("Issuers").
Additionally, the Fund holds shares of a money market mutual fund sponsored by
The Vanguard Group with a value of $22,014,812. The Fund is credited with
interest income on its investments and charged for administrative expenses. The
investment contracts included in the Fund are carried at contract value, which
approximates fair value, because the contracts are fully benefit responsive for
normal participant directed-transactions. The synthetic investment contracts
constitute investments in collective investment funds, mutual funds and mortgage
backed securities, $95,899,684, and wrapper contracts, ($1,159,442). The
crediting interest rates of the investment contracts ranged from 5.14% to 7.18%
at December 31, 2000.
NOTE 5 - RELATED PARTY TRANSACTIONS
The Plan invests in shares of mutual funds managed by an affiliate of Vanguard
Fiduciary Trust Company ("VFTC"). VFTC acts as trustee for certain investments
of the Plan. Transactions in such investments qualify as party-in-interest
transactions and are exempt from the prohibited transaction rules.
Pursuant to an acquisition of Florida Progress by Progress Energy during 2000,
participants with investments in the Florida Progress Stock Fund were given the
option of either cashing in their investments or exchanging their existing
Florida Progress Stock Fund shares for shares of the Progress Energy Company
Stock Fund and cash. In addition, Florida Progress Stock Fund shareholders
received shares of the Florida Progress Contingent Value Obligation Fund (the
"CVO Fund"). The CVO Fund invests in contingent value obligations, each of which
represents the right to receive contingent payments based on the performance of
four synthetic fuel facilities owned by Progress Energy Company. While the Plan
does not allow additional
7
SAVINGS PLAN FOR EMPLOYEES OF FLORIDA PROGRESS
CORPORATION
Notes to Financial Statements
- --------------------------------------------------------------------------------
contributions to the CVO Fund, participants are permitted to withdraw all or a
portion of their account balance as desired.
U.S. Trust Company, National Association ("U.S. Trust") serves as an independent
fiduciary of the CVO Fund. Among other responsibilities, U.S. Trust instructs
VFTC as to the management and disposition of the CVO Fund. Transactions in the
CVO Fund qualify as party-in-interest transactions. The Plan has been informed
by legal counsel that the establishment of the CVO Fund represents a prohibited
transaction in accordance with ERISA. The Plan has filed an application for a
prohibited transaction exemption on behalf of the Plan with the United States
Department of Labor, which is currently pending. If the application is not
granted the Plan will divest of the CVO Fund, with the Participating Companies
bearing any fees incurred.
During the year 2000, the Plan had purchases of $83,575,089 and sales of
$201,244,028 of Company stock.
NOTE 6 - PLAN EXPENSES
The Participating Companies pay a portion of the expenses for services necessary
for the administration of the Plan.
NOTE 7 - TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter
dated June 13, 1996, that the Plan is a qualified employees' trust under Section
401(a) of the Internal Revenue Code ("Code"). As such, the Plan is exempt from
federal income taxes under Section 501(a). The Plan has been amended since
receiving the determination letter. However, the Plan's management believes
that the Plan is designed and is currently being operated in compliance with the
applicable requirements of the Code.
8
Additional Information
Required for Form 5500
SAVINGS PLAN FOR EMPLOYEES OF FLORIDA PROGRESS CORPORATION Schedule I
Schedule of Assets (Held at End of Year)
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(in thousands)
Savings Plan for Employees of Florida Progress Corporation, EIN 59-6769223
Attachment to Form 5500, Schedule H, Part IV, line i
Identity of Issue Investment Type Current Value
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Putnam New Opportunities Class A Shares Registered Investment Company $ 110,718
* Vanguard 500 Index Fund Registered Investment Company 129,203
* Vanguard Extended Market Index Fund Registered Investment Company 6,899
* Vanguard Federal Money Market Fund Registered Investment Company 104,006
* Vanguard International Growth Fund Registered Investment Company 6,620
* Vanguard LifeStrategy Conservative Growth Fund Registered Investment Company 7,452
* Vanguard LifeStrategy Growth Fund Registered Investment Company 20,764
* Vanguard LifeStrategy Moderate Growth Fund Registered Investment Company 33,900
* Vanguard Total Bond Market Index Registered Investment Company 6,823
* Progress Energy Company Common Stock 63,359
* Savings Plan for Employees of Florida Progress Corporation Participant Loans (7.75% - 9.5%) 17,176
* Florida Progress Corporation Contingent Value Obligations 951
AIG Financial 6.78% Synthetic Guaranteed Investment Contract 7,636
AIG Financial 6.65% 9/30/05 Synthetic Guaranteed Investment Contract 4,066
AIG Financial 5.14% 12/31/03 Synthetic Guaranteed Investment Contract 5,137
CDC 5.87%, 11/25/04 Synthetic Guaranteed Investment Contract 5,028
CDC 6.78% Synthetic Guaranteed Investment Contract 11,704
Commonwealth Life 5.20%, 9/30/01 Synthetic Guaranteed Investment Contract 10,062
Natwest Markets 6.60%, 6/30/04 Synthetic Guaranteed Investment Contract 6,341
Rabobank 6.20%, 9/30/03 Synthetic Guaranteed Investment Contract 8,544
Rabobank 6.85% Synthetic Guaranteed Investment Contract 5,930
State Street Bank 5.69%, 6/30/03 Synthetic Guaranteed Investment Contract 8,367
Union Bank of Switzerland 7.02% 6/30/05 Synthetic Guaranteed Investment Contract 4,589
Union Bank of Switzerland 6.92% 3/31/05 Synthetic Guaranteed Investment Contract 5,410
Union Bank of Switzerland 7.18% 12/31/04 Synthetic Guaranteed Investment Contract 4,981
Union Bank of Switzerland 5.13% 6/30/03 Synthetic Guaranteed Investment Contract 3,120
West Deutsche Landesbank 6.77%, 12/31/01 Synthetic Guaranteed Investment Contract 3,824
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Total assets $ 602,610
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* Party in Interest
9
SAVINGS PLAN FOR EMPLOYEES OF FLORIDA PROGRESS CORPORATION Schedule II
Schedule of Nonexempt Transactions
Year Ended December 31, 2000
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Savings Plan for Employees of Florida Progress Corporation, EIN 59-6769223
Attachment to Form 5500, Schedule G, Part III
Description of Transactions
Including Maturity Date, Rate of Current
Identity of Party Relationship of Plan, Employer, Interest, Collateral, Par or Maturity Cost of Asset Value of
Involved or Other Party-In-Interest Value Asset
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Florida Progress Investment in a non-qualified employer security:
Corporation Plan Sponsor Florida Progress Contingent Value Obligation Fund $ 1,364,450 $ 951,360
10
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
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the Investment Committee of the Savings Plan for Employees of Florida Progress
Corporation has duly caused this Annual Report to be signed on its behalf by the
undersigned hereunto duly authorized.
SAVINGS PLAN FOR EMPLOYEES OF
FLORIDA PROGRESS CORPORATION
/s/ Brenda F. Castonguay, Plan Administrator
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Brenda F. Castonguay, Plan Administrator
Date: June 26, 2001
EXHIBITS INDEX
Exhibit Number
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Exhibit No. 23 Consent of PRICEWATERHOUSECOOPERS LLP