ML18227A991

Submit Financial & Statistical Report, Supplement to 1976 Annual Report

ML18227A991
Person / Time
Site:	Turkey Point
Issue date:	02/11/1977
From:	Florida Power & Light Co
To:	Office of Nuclear Reactor Regulation
References
Download: ML18227A991 (50)

Text

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The past fjve years (Thousands of Dollars) 1976 1975 1974 1973- 1972 Consolidated Summary of Operations Operating Revenues ........... $ 1,189,680 S1,182,644 3851.055 3714,012 S570.843 Operating Expenses:

Fuel 482,347 461,335 400,115 204,606 164,397 Other Operation 178,127'7,062 160,151 137,522 120,410 102,757 Maintenance .. 59,646 57,472 51,290 41,830 Depreciation .. 88,591 82,322 74,775 64,815 52,898 Taxes 182,340 202,380 122,547 122,562 94,564 Total Operating Expenses ...... 998,467 965,834 792,431 563,683 456,446 Operating Income ............. 191,213 216,810 158,624 150,329 114,397 Other Income (Deductions):

Allowance for Funds Used During Construction Income Taxes ..

.......... 65,497 (298) 48,486 5,350 39,907 11,676 25,961 6,765 30,444 8,'540 Other Net 1,005 ~850 ~1.734 626 ~120 Other income Net........... 66,204 52,986 49,849 33,352 38.854 Income Before Interest Charges... 257,417 269,796 208,473 183,681 153,261 Interest Charges .. 140,572 124,575 102,999 75,123 63,444 Net Income 116,845 145,221 105,474 108,558 89,817 Preferred Dividend Requirements .. 22,378 20,066 11,654 6,533 2,076 Net Income Applicable to Common Stock .. $ 94,467 S 125,155 S 93,820 $ 102,025 S 87,741 Average Common Shares Outstanding Thousands ........ 39,542 35,940 34,050 33,057 32.576 Earnings Per Common Share ..... SZ.39 $ 3.48 $ 2.76 $ 3.09 $ 2.69 Common Stock Data Book Value-Year End......... $ 27.81 $ 27.21 $ 25.60 $ 24.19 $ 21.80 Market Price (NYSE ) High/Low 1st Qtr. 287/8/23'/8 23'!4/15% 29'!4/22'!4 40ys/33!8 36/83/31 /8 2nd Qtr. '6'/8/203/4 27 /197/e 22'!4/17 393/a/33'/4 3378/29/e 3rd Qtr. 277/8/22'/2 26 /19'!4 201/4/13 39'!4/32'34 le!28 4th Qtr. 28'/8/235/8 27 /8/22'/e /4

'0/2/14 38 le! 23/4 4478/33/2 Dividends Paid 1st Qtr. $ 0.390 S0.340 S0.305 S0.275 $ 0.275 2nd Qtr. 0.390 0.365 0.340 0.290 0.275 3rd Qtr. 0.390 0.365 0.340 0.290 0.275 4th Qtr. 0.390 0.365 0.340 0.305 0.275 Other Statistics KWH Sales-Thousands Customers Year End

............ 34,929,541 34,110,898 1,840,043 1,772,304 32,711,136 32,467,100 28,927,808 1,721,841 1,634,503 1,514,171 Revenue per KWH-Residential..... 3.50C 3.53C 295C 2,27C 2.07C KWH per Customer-Residential .... 10,968 11,127 11,215 12,040 11,367 Net Warm Weather Capability Year End-KW . 9,740,000 8,927,000 9,015,000 8,309,000 7,257,000 Peak Load-KW-60 minute Total Utility Plant

....... 7,598,000 7,076,000 7,235,000 6,894,000 6,011,000 Thousands....... $ 4,181,839 $ 3,724,270 $ 3,252,397 $ 2,663,945 $ 2,325,935 Capital Expenditures (including nuclear fuel and AFUDC)-Thousands..... $ 469,750 $ 497,233 S 604,946 $ 353,057 '374,917 Employees Year End ............ 9,865 9,911 9,769 9,385 8,405 The principal market for FPL common stock is the New York Stock Exchange.

18

Management's Dlscusslon and Analysis of the Consolidated Summary of Operations Note references are to Notes to Consolidated Financial Statements The following comments concern the of more aggressive credit and collection effects of certain factors on the Company's policies, including requiring larger customer results of operations for 1975 and 1976: deposits from certain existing and new Operating Revenues: customers since June 1975.

Increases in operating revenues In 1975 and Depreciation:

1976 reflect (I) the operation of fuel Depreciation expense has increased as adjustment clauses, (ii) rate changes, (iii) additional facilities have been placed In increases in KWH sales, and (iv) provisions for service. Manatee Unit No. 1 and St. Lucie refunds of revenues (see Note 1 and "Other nuclear Unit No. 1 were placed in commercial Statistics") as follows: service in October 1976 and December 1976,

% Increase (Decrease) respectively. (See Note 1.)

Over Precedin Period Taxes:

1975 1976 Federal and state income taxes are Fuel adjustment and generally related to changes in Income rate changes...... 20.1 (0.2) excluding income taxes; however, the Sales volume........ 4.3 2.4 Company did not.utilize full interperiod Provisions for refunds income tax allocation prior to 1975. Effective of revenues ....... January 1, 1975 the Company began Total ......... 24.4 0.6 deferring income taxes relating to all current book-tax timing differences resulting In an Operating revenues increased In 1975 increase in the amount of deferred Income primarily due to retail rate Increases effective taxes for 1975 and 1976. Taxes other than in May 1975 following interim rate Increases income taxes increased In both years primarily effective during the period from January ~ as a result of increased revenues and through April 1975. additions to property. (See Note 1 and KWH sales volume increased in both years, Schedule of Taxes.)

but has been affected by the energy Allowance for Funds Used During conservation practices of customers. KWH Construction (AFUDC):

sales per residential customer declined in AFUDC has fluctuated primarily as a result both years. of variations in construction expenditures and In 1976 the Company provided for completion of major projects. AFUDC will be estimated refunds (aggregating S22 million) reduced significantly as a result of generating of revenues through 1976 which may facilities being placed In cornmerclal service.

be required after final settlement This will result in a reduction in net income of pending rate actions (see Note 3). unless operating revenues and additional Fuel Costs: rate relief provide sufficient additional Fuel costs increased 15.3% in 1975 and 4.6% income to fully offset this decline In AFUDC.

in 1976, resulting primarily from increased AFUDC has been affected since April 1. 1975 generation in both years, a sharp Increase in by an amendment of the method of the cost of fossil fuels in 1975 and a greater computing AFUDC. (See Schedule of AFUDC,)

percentage of generation provided by fossil Interest Charges and Preferred Dividend units in the latter months of 1976 when the Requirements:

Company's nuclear units were temporarily Significant Increases in the Company's removed from service. annual construction expenditures have Other Operations and Maintenance Expenses: required substantial external financing These expenses have increased due to through the sale of debt and equity securities.

general inflationary pressures, increases in These financings resulted in a significant payroll and related employee benefits costs, increase in both interest expense and and Increases in the number of customers preferred dividend requirements, portions of and the amount of electricity generated. The which have been capitalized through AFUDC.

reduction in the provision for uncollectible (See Schedules of Preferred Stock and accounts for 1976 reflects the implementation Long-Term Debt.)

19

Florida Power & Light Company and Subsidiaries Consolidated Balance Sheet, December 31, 4976 and 1975 (Thousands of Dollars)

ASSETS 1976 1975 ELECTRIC UTILITy PLANT (Notes 1 and 5):

At original cost . $ 3,492,982 $ 2,675,197 Less accumulated depreciation . 625,102 544,440 Net . 2,867,880 2,130,757 Construction work In progress . 602,481 994,081 Nuclear fuel (less accumulated amortization of S1,105 at December 31, 1976) .. 85,271 54,992 Electric utility plant-net .. 3,555,632 3,179,830 INVESTMENTS:

Storm damage reserve fund (Note 1) 13,838 13,838 Construction funds held by Trustee (Note 1) 743 2,637 Other investments, etc 5,480 1,556 Total investments 20,061 18,031 CURRENT ASSETS:

Cash(Note4) .. 4,648 2,543 Temporary investments (at cost which approximates market) 4,000 9,912 Accounts receivable:

Customers (less allowance for uncollectible accounts of S4,566 at December 31, 1976 and S4,743 at December 31, 1975) . 69,428 67,409 Employees and miscellaneous . 6,232 3,512 Income tax refunds 40,329 Materials and supplies at average cost 68,211 68,851 Fossil fuel stock at average cost 53,537 39,585 Prepaid expenses . 12,908 14,509 Other current assets . 4,681 3.811 Total current assets . 263,974 210,132 DEFERRED DEBITS:

deferred income taxes (Note

'ccumulated

1) 16,755 703 Unamortized debt expense . 4,279 4,316 Other . 5,292 3,926 Total deferred debits 26,326 8,945 TOTAL $ 3,865,993 $ 3,416,938 The accompanying Schedules and Notes to Consolidated Financial Statements are an integral part of this statement.

20

LIABILITIES 1976 1975 SHAREHOLDERS'QUITY:

Common stock, no par, authorized 50,000,000 shares; outstanding 40,050,000 shares at December 31, 1976, 37,050,000 shares at December 31, 1975 ...... $ 749,375 S 676,832 Capital stock premium and expense . (3,612) (3,393)

Retained earnings 368,227 334,524 Total common equity 1,113,990 1.007,963 Preferred stock .. 336,250 261.250 Total shareholders'quity .. 1,450,240 1,269,213 LONG-TERM DEBT (Note 1) . 1,779,771 1,665,698 Total capitalization 3,230,011 2,934,911 CURRENT LIABILITIES:

Notes payable (Note 4):

Banks . 10,000 Commercial paper .. 22,000 Other financial Institutions . 10,035 11,500 Long-term debt current portion . 11,687 1,713 Accounts payable-trade . 31,300 25,578 Customers'eposits 70,945 59,884 Income taxes (Note 1) .. 7,810 48,876 Other taxes 28,618 28,976 Interest accrued . 34,943 34,266 Pension cost accrued (Note 1) 19,475 17.209 Contract retentions 10,419 8,498 Tax collections payable . 9,580 11,906 Estimated revenue refunds (Note 3) . 24,558 Other current liabilities ........... 13,868 11,030 Total current Ilabllltjes . 283,238 281,436 DEFERRED CREDITS:

Unamortized investment credit (Note 1) .. 105,724 57,580 Contract retentions and other .. 6,784 6,927 Accumulated deferred income taxes (Note 1) 21 9,733 118,240 Total deferred credits . 332,241 182,747 RESERVES:

Storm damage (Note 1) 13,838 13,838 Injuries and damages and other . 6,665 4,006 Total reserves 20,503 17,844 COMMITMENTSAND CONTINGENCIES (Notes 5 and 6)

TOTAL $ 3,865,993 S3,416,938 2t

Consolidated Statements of Income and Retained Earnings for the years ended December 31, 4976 and 1975 (Thousands of Dollars) 1976 1975 INCOME OPERATING REVENUES (Notes 1 and 3) . $ 1,189,680 $ 1,182,644 OPERATING EXPENSES:

Operations:

Fuel costs 482,347 461,335 Other production . 16,006 18,838 Transmission and distribution . 45,401 36,299 Customers .. 31,055 29,705 Administrative and general 79,753 66,828 Provision for uncollectible accounts. 5,912 8,481 Maintenance . 67,062 59,646 Depreciation (Note 1) .. 88,591 82,322 Federal income taxes (Note 1) 76,573 103,073 State income taxes(Note1) . 8,795 11,749 Taxes. other than Income taxes . 96,972 87,558 Total operating expenses 998,467 965,834 OPERATING INCOME 191,213 216,810 OTHER INCOME (DEDUCTIONS):

Allowance for funds used during construction (Note 1) .... 65,497 48,486 Income taxes (Note 1) .. (298) 5,350 Other net 1,005 ~850 Other Income net 66,204 52,986 INCOME BEFORE INTEREST CHARGES 257,41 7 269,796 INTEREST CHARGES:

Interest on mortgage bonds . 110,637 96,161 Interest on other long-term debt 22,261 22,271 Other interest . 7,674 6,143 Total Interest charges 140,572 124.575 NET INCOME 116,845 145,221 PREFERRED DIVIDEND REQUIREMENTS 22,378 20,066 NET INCOME APPLICABLE TO COMMON STOCK $ 94,467 S 125,155 AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (000) . 39,542 35,940 EARNINGS PER SHARE OF COMMON STOCK (Note 1)........ $ 2.39 $ 3.48 DIVIDENDS PER SHARE OF COMMON STOCK $ 1.56 $ 1.435 RETAINED EARNINGS BALANCE AT BEGINNING OF YEAR . $ 334,524 S260,892 NET INCOME 'I16,845 145,221 Total .. 451,369 406,113 DEDUCT:

Dividends declared-cash:

Preferred stock 21,834 19,443 Common stock 61,308 52,146 Total .. 83,142 71,589 BALANCE AT END OF YEAR . $ 368,227 $ 334,524 DIVIDEND RESTRICTIONS The Charter, Mortgage and Deed of Trust and 10~/4% Note Indenture contain provisions which, under certain conditions, restrict the payment of dividends and other distributions to common shareholders. Under the most restrictive of these provisions S266,167,000 of retained earnings Is available for payment of dividends on Common Stock at December 31, 1976. In the event the Company should be in arrears on its sinking fund obligations, which commence in 1980, for the 10.08% Preferred Stock, the Company may not pay dividends on Common Stock.

The accompanying Schedules and Notes to Consolidated Financial Statements are an integral part of this statement.

Consolidated Statement of Changes In Financial Position for the years ended December 34,1976 and 1975 (Thousands of Dollars) 1976 1975 SOURCES OF FUNDS.'urrent operations:

Net income . $ <<6,845 $ 145,221 Depreciation 88,591 82.322 Amortization of nuclear fuel assemblies owned... 1,105 Charge equivalent to the investment credit and deferred income taxes. less amortization 133,582 54,859 Allowance for funds used during construction (65,497) ~48.486 Total 274,626 233,916 Sale of First Mortgage Bonds . 125,950 276,146-Reimbursement by Trustee from Pollution Control Revenue Bonds for construction expenditures 1,894 16,284 Issuance of other long-term debt .. 200 5,314 Sale of common stock 72,543 62,925 Sale of preferred stock 75,000 75,000 Other sources . 6,911 8,830 TOTAL $ 557,124 $ 678,415 APPLICATION OF FUNDS:

Construction expenditures (excluding AFUDC) $ 372,870 $ 422,151 Nuclear fuel .. 31,384 31,141 Retirement and current maturity of long-term debt... <<,687 70,032 Dividends . 83,142 71,589 Other applications . 6,001 867 Increase In working capital .. 52,040 82,635 TOTAL $ 557,124 $ 678,415 CHANGE IN WORKING CAPITAL EFFECTED BY:

Increase (Decrease) in current assets:

Cash . $ 2,105 S (430)

Temporary investments .. (5,912) 9,912 Accounts receivable 45,068 3,968 Materials and supplies .. (640) 7,999 Fossil fuel stock 13,952 1,664 Other changes-net (730) 5.052 Decrease (Increase) in current liabilities:

Notes payable and current portion of long-term debt .. 3,490 108,853 Accounts payable (5,722) 9,644 Customers'eposits . (11,060) (9.051)

Income taxes .. 41,066 (42,640)

Other taxes, 358 1.690 Interest accrued . (677) (3.179)

Contract retentions . (1,921) (1.786)

Tax collections payable . 2,326 (2,098)

Estimated revenue refunds (24,558)

Other changes net (5,105) ~6,963 INCREASE IN WORKING CAPITAL $ 52,040 $ 82,635 The accompanying Schedules and Notes to Consolidated Rnanclal Statements are an integral part of this statement.

23

Schedule of Changes in Capital Accounts (In Thousands)

Capital Stock Premium

.. Common Stock .. ....Preferred Stock.... and Shares Amount Shares Amount Expense Balance, December 31, 1974 . 34,050 S 613,907 1,862 S 186,250 S3,090 Sales in 1975 3,000 62,925 750 75,000 303 Balance, December 31, 1975 . 37.050 676,832 2,612 261,250 3,393 Sales In 1976 3,000 72,543 750 75,000 219 Balance, December 31, 1976 . 40.050 S 749,375 3,362 S 336,250 S3,612 Schedule of Preferred Stock

$ 100 par value (5,000,000 shares authorized)

.... December31,1976 .... 1976 Current Shares Cash Redemption Series Outstanding Amount Dividends Price

... (In Thousands) ................

4.50% 100 S 10,000 S 450 S101.00 4.50% A. 50 5,000 225 101.00 4.50% B . 50 5,000 225 101.00 4.50%%d C 62 6,250 281 103.00 4.32% D 50 5,000 216 103.50 4.35% E . 50 5,000 218 102.00 7.28% F . 600 60,000 4,368 115.00 7.40%%d G 400 40,000 2.960 115.00 9.25%%d H. 500 50,000 4,625 115.00 10.08% J . 750 75,000 7,560 111.50 8.70% K (issued October 1976) .. 750 75,000 706 109.85 Total . 3.362 S 336,250 S21,834 f

The 10.08%%d Preferred Stock is entitled to a sinking fund to retire a minimum of 37,500 shares and a maximum of 75,000 shares at S101.50 per share, plus accrued dividends to the redemption date on April 1 of each year, commencing on April 1, 1980. Minimum payments are designed to retire the entire issue by April 1, 1999. Otherwise the issue is not redeemable prior to February 1, 1985.

In May 1975, the Company authorized 10,000,000 shares of Preferred Stock, no par value, and 5,000,000 shares of Subordinated Preferred Stock, no par value,'o be known as "Preference Stock".

None of these shares is outstanding.

24

Schedule of Allowance for Funds Used During Construction (AFUDC) years ended December 3l, 1976 and 1975 (Millions of Dollars) 1976 1975 Monthly average Construction Work in Progress (CWIP) . $ 1,068.0 $ 854.3 Less:

Amount Included In rate base (1) 200.0 150.0 Pollution control projects (3) 23.2 25.9 AFUDC previously capitalized and included ln monthly average CWIP .. 126.7 91.9 Other 31.1 65.5 CWIP base used to compute amount of AFUDC to be capitalized . 687.0 521.0 Capitalization rate (%) (2) 9.33 9.04 Total 47.1 Interest on pollution control revenue bonds charged to specific projects (3) 1.4 Amount of AFUDC charged to CWIP and credited tootherincome .. $ 65.5 S 48.5 Tax effect of debt portion of AFUDC (4):

1) charged to operating expenses (current provision for income taxes) and credited to other income (taxes on other income) S4.6

2) for which deferred taxes have been provided $ 14.8 S8.5 Portion of AFUDC attributable to funds provided by common stock equity:

1) stated as a percent of net income applicable to common stock . 33.0 19.0

2) stated on a per common share basis $ 0.79 S0.66 (1) As part of the 1975 rate increase described in Note 3. effective April 1, 1975 the Company was allowed to include 8200 million of CWIP in its rate base.

(2) Effective April 1, 1975 the AFUDC rate is calculated by applying the capital ratio to the current embedded cost of each component of capital, except for common equity, which is based on the rate allowed In the Company's last rate case. The debt component is not reduced by the applicable income taxes.

(3) Actual Interest costs of pollution control revenue bonds are charged to the specific construc-tion projects for which they are incurred, (4) Allowed by the FPSC as an operating expense for rate making purposes in the Company's 1975 rate case.

25

ScheduIe of Lang-Term Debt December 31, 1976 and 1975 (Thousands of Dollars) 1976 1975 Florida Power 8 Light Company:

First Mortgage Bonds (1):

Maturing 1976 through 1981-3% due July 1977 S S 10,000 3~/e% due June 1978 . 11,000 11.000 3% due June 1979 10,000 10,000 8'/e% due August 1980 50,000 50,000 3/e% due November 1981 . 10,000 10,000 Maturing 1982 through 1989 3i/e% to 9~/e% 315,000 315,000 Maturing 1992 through 2001 4/e% to 8% . 580,000 580,000 Maturing 2002 through 2006-7/2% to 10/e% 545,000 420,000 10/4% Notes due November 1981 . 125,000 125,000 Note, 1% over prime due February 1982 7,560 9,072 Bank Notes (under term loan agreement) due June 1979 (2) .. 50>000 50,000 Installment Purchase and Security Contracts:

Dade County, 5.40% due October 2007 . 33,850 33,850 St. Lucie County, 6% due January 2004 . 25,000 25,000 Promissoiy Notes 4L-8~/e'L due various to September 1987 ... 4,200 4,256 Unamortized premium 6,449 5,889 Total 1,773,059 1,659,067 Land Resources Investment Co.:

Promissory Notes due in monthly installments:

7~/s% -8~/i% Note due August 1990 . 444 467 9~/e% Real Estate Loan due October 1995 5,909 5,953 9% Real Estate Loan due November 1995 209 211 EFC Seivices. Inc.:

8% Real Estate Loan due annually through 1980 .. 150 Total long-term debt (3) S1,779,771 S1,665,698 (1) Certain series of the Company's First Mortgage Bonds have sinking fund requirements through 1995'which may be satisfied by certification of properly additions at the rate of 167% of such requirements. Such requirements are approximately S4 million for each of the next five years.

(2) Interest is based on the current commercial loan interest rate up to a maximum average inter-est rate of 7s/4% over the term of the loan.

(3) Not including amounts classified as current portion of long-term debt. Annual maturltles of long-term debt are approximately S12 million In 1977. S13 million in 1978, S63 million in 1979, S52 million in 1980, and S137 million in 1981.

26

Schedule of Short-Term Debt Phousands of Dollars)

Other Commercial Bank > Financial Paper Borrowings Institutions

.... 1976.

Average aggregate borrowings .. S8,824 S1.583 S11,292 Maximum month-end balances .. S38,300 S25,000 S11,500 Weighted dally average interest rate 5.2% 6.7% 7.2%

Weighted average interest rate on amounts outstanding at end of period 6.3% 7.2%

Maximum combined borrowings at any month-end........... S49,800

, ...... 1 975 .....

Average aggregate borrowings .. S18,581 S6,538 S14,008 Maximum month-end balances .. S87.750 S44,750 S15,800 Weighted daily average

'interest rate 8.0% 10.5% 7.3%

Weighted average interest rate on amounts outstanding at end of period 5.7% 7.5%

Maximum combined borrowings at any month-end S148,300 The FPSC has authorized the Company to incur up to S225 million of short-term debt which may be outstanding at any one time, including commercial paper and borrowings from banks up to S200 million.

27

Schedule of Taxes for the years ended December 31, 1976 and 1975 (Thousands of Dollars) 1976 1975 INCOME TAXES Federal:

Charged to operating expenses:

Current . $ (49,374) $ 52,711 Deferred:

Accelerated depreciation 53,375 29,437 Debt component of AFUDC .. 13,357 7,691 Repair allowance . 20,472 Estimated revenue refunds (1 1,198)

Other . 1,628 4,956 Deferred in prior years:

Accelerated depreciation (862) (628)

Debt component of AFUDC .. (54)

Repair allowance . (764)

Other . 902 (1,426)

Charge equivalent to the investment credit . 51,230 12,527 Amortization of investment credit . (2,139) ~2.195 Total . 76,573 103,073 Credited to other income (245) 4,849 Total Federal ......... 76,818 98,224 State:

Charged to operating expenses:

Current . 212 7,252 Deferred:

Acceieiated depreciation . 5,851 3,228 Debt component of AFUDC 1,484 855 Repair allowance . 2,245 Estimated revenue refunds . (1,228)

Other . 178 543 Deferred in prior years:

Accelerated depreciation . (53) (69)

Debt component of AFUDC (6)

Repair allowance . (84)

Other . 196 Total .. 8,795 11,749 Credited to other income . (53) 501 Total State 8,848 11,248 Total income taxes $ 85,666 $ 109.472 Deferred income taxes and the charge equivalent to Investment credit have increased sig-nificantly and current taxes have decreased significantly for 1976 as compared to 1975 principally due to the effects of (1) recognizing for income tax purposes depreciation and the investment tax credit related to the Company's St. Lucie Unit No. 1 and Manatee Unit No. 1 placed in service in 1976, (2) recognizing in 1976 an additional repair allowance deduction for income tax purposes for 1975 and 1976, and (3) providing deferred taxes on the debt component of AFUDC. See Note 1 Deferred Income Taxes.

28

Schedule cf Taxes (Continued)

Total income taxes are less than the amounts computed by applying the statutory Federal Income tax rate to Income before taxes. The reasons for the differences are as follows:

Year Ended December 31, 1976 1975

% of  % of Pre-Tax Pre-Tax Amount Income Amount Income Computed at statutory rate . S97,205 48.0% S122,253 48.0%

Increases (reductions) In tax resulting from:

Allowance for funds used during construction (17,360) (8.6) (15,173) (6.0)

State income taxes net of Federal tax benefits . 4,601 2.3 5,849 2.3 Other net .. 1,220 0.6 ~3.457 ~1.3 Total income tax expense 885,666 42.3% $ 109.472 43.0%

OTHER TAXES 1976 1975 Taxes other than Federal and State income taxes:

Federal and State payroll . S e,eee S 7.366 Real and personal property . 30,272 24,864 State gross receipts . 18,040 16,832

,. Franchise charges .. 40,650 38,748 Miscellaneous 8,532 12,450 Total othertaxes .. $ 106,382 S100,260 Charged to:

Operating expenses-other taxes $ 96,972 S 87.558 Utility plant and other accounts 9,410 ~

12,702 Total . $ 106,382 S100,260

Florida Power 8r Light Company and Subsidiaries Notes to Consolidated Financial Statements for the years ended December 31, 1976 and 4975

SUMMARY

OF SIGNIFICANTACCOUNTING Book depreciation Is provided on a AND REPORTING POLICIES straight-line service-life basis by primary Regulation accounts as directed by the FPSC using the following rates:

Accounting and reporting policies of the Steam production plant .. 2.86% 4.00%

Company are subject to regulation by the Florida Public Service Commission (FPSC) and Nuclear production plant . 3.20%-6.20%

the Federal Power Commission (FPC). The Other production plant... 4.00%

following summarizes the more significant of Transmission plant....... 1.82L 3.50%

these policies. Distribution plant........ 1.67% -5.25%

Basis of Consolidation General plant.......... 2.38% 9.00%

Transportation equipment . 8.16%

The consolidated financial statements-The nuclear production plant rates include include the accounts of the Company and its, an estimated negative net salvage value of wholly-owned subsidiaries, Fuel Supply 19% for certain components.

Service, Inc. (FSS), Land Resources Investment Substantially all utility plant is subject to the Co. and EFC Services, Inc. (EFC). All significant lien of the Indentures securing the First Intercompany balances and transactions have been eliminated. EFC was organized in Mortgage Bonds.

December 1976 for the purpose of supplying Amortization of Nuclear. Fuel engineering, fabrication and construction The cost of nuclear fuel for St. Lucle Unit services for power plants. See Note 2 for No. 1, with a provision for zero net salvage, is current information on FSS. amortized to operating expense on a unit of Rates and Revenues production method.

Revenues are recognized based on Allowance for Funds Used During monthly cycle billings to customers. Retail Construction (AFUDC) and wholesale rate schedules are approved The Company capitallzes as an additional by the FPSC and FPC, respectively. The rate cost of property an allowance for funds used schedules contain a fuel adjustment clause during construction which represents the which gives effect to changes in efficiency, allowed cost of capital used to finance a the cost of fuel as well as the fuel component portion of construction work in progress. See of purchased power and the generation mix the Schedule of AFUDC for detailed information.

of fossil and nuclear fuels. Generally, the Storm Damage Fund and Related Reserve effects are reflected in customer billings two The storm damage fund is maintained at months after the changes occur. See Note 3 for additional information regarding current an amount equivalent to the reserve. Storm rate matters. damage costs are to be paid from the fund and charged, less related tax effects, to the Electric Utility Plant and Depreciation reserve as incurred. Securities held in the fund The cost of additions, replacements, and are recorded at cost, which approximates renewals of units of property is added to utility market value.

plant. The cost (estimated, if not known) of units of properly retired, less net salvage, is Construction Funds Held by Trustee charged to accumulated depreciation. The Company has entered into Installment Maintenance and repairs of property, and Purchase and Security Contracts relating to replacements and renewals of items the financing of certain pollution control determined to be less than units of properly, facilities. Funds not required for current are charged to operating expenses construction costs are held by the Trustee and maintenance. invested in short-term securities.

Pension and Employee Thrift Plans considered to be units of property for tax The Company has a non-contributory purposes are deducted as a repair allowance employees'ension plan covering on the Company's consolidated tax return.

substantially all employees and a contributory Beginning April 1, 1975 deferred income taxes Employee Thrift Plan which provides for basic were provided on the debt portion of AFUDC.

contributions by eligible employees of up to See Schedules of Income Taxes and AFUDC.

6% of their base salaries which are matched Earnings Per Share 50% by the Company. The Company's policy Earnings per share of common stock (after is to fund each year's accrued pension costs, dividend requirements on preferred stock) is including amortization of the estimated computed based on the average number of unfunded prior service costs over thirty years. common shares outstanding during the period.

Pension and Employee Thrift Plan costs for 1976 and 1975 were $ 17.4 million and S15.1 2. FUEL SUPPLY SERVICE (FSS) million, respectively. The unfunded prior FSS is an equal partner in an oil and gas service cost of the pension plan at October 1, exploration venture. It is estimated that FSS 1976 was approximately S82 million using the will Incur exploration costs and related entry age normal cost method. There was no expenses of approximately S8 million in excess of vested benefits over the fund connection with an exploration program balance as of October 1, 1976. covering a three-year period which In August 1976 the Board of Directors commenced in 1974. Through December 31, approved an Employee Stock Ownership Plan 1976 FSS has incurred S6.1 million of such costs pursuant to the Tax Reduction Act of 1975. substantially all of which has been charged Since the payment to the Plan is In lieu of an to operations.

income tax payment, there is no effect on In December 1976 FSS entered into a joint net income. venture agreement to conduct uranium Federal Investment Tax Credit exploration. Expenses of approximately S8 million are anticipated to be incurred by FSS The normalization method is used to in connection with the five-year exploration account for investment tax credits. The program. The Company has guaranteed most current provision and accrual for Federal of FSS's financial obligations to the ventures.

income taxes are reduced by the amount of FSS is not presently subject to regulation by investment credit generated and utilized for the FPSC or the FPC.

income tax purposes and an equivalent charge is made in the Consolidated 3. REVENUES Statement of Income with the credit being FPSC made to unamortized Investment credit.

These deferred credits are amortized to Effective in May 1975 the FPSC authorized income at a rate approximating the lives of the Company to increase its rates and the related property. charges which, based on 1974 operations, (a) allowed changes in base rates designed Deferred Income Taxes to increase annual revenues by S77 million Deferred income taxes are provided on and (b) authorized separate collection of book-tax timing differences as prescribed by additional revenues equal to franchise and in accordance with the rate-making charges from customers in the franchise policies of the FPSC. Accelerated areas. Approximately S48 million of the depreciation is claimed for tax purposes on Increase in revenues reflected accounting qualified property additions subsequent to and regulatory changes designed to improve January 1, 1970. Amounts charged to CWIP cash flow without affecting the results of for accounting purposes which are not operations.

31

Notes to Consolidated Financial Statements (Continued)

A petition was filed challenging the 5. COMMITMENTS AND CONTINGENCIES granting of interim rate relief for the period Construction Program January 28, 1975 through April 30, 1975. In Commitments in connection with the December 1976 the Supreme Court of Florida construction program for electric utility plants.

Issued a ruling which directed the FPSC to generating units and related facilities were Issue an order which would require the estimated at approximately S1.3 billion at Company to refund with interest a portion of December 31, 1976. These estimates are the revenues collected under the interim rate based on the presently proposed construction order. The Company recorded in December program and are not necessarily contractual 1976 an estimated refund of S13.5 million.

obligations. Certain of these commitments Estimated interest through December 31, 1976 are also subject to escalation for increases in of S1.4 million was also recorded. These labor, services and material costs. The adjustments reduced net income for 1976 by commitments do not include any amounts approximately S7.2 million (S.18 per common relating to the proposed South Dade project.

share). In January 1977 the Company filed a Of the total, S926 million was for generating petition for rehearing. plants, S245 million for nuclear fuel cores, S22=rnillion for cooling water reservoirs and FPC discharge dilution systems, S18 million for Requests for rate increases filed with the turbine generators and combined cycle units FPC in 1973 and 1975'were placed in effect and S49 million for oil facilities, pipelines and subject to refund with interest. In December miscellaneous facilities.

1976 the FPC Issued an order disallowing a In June 1975 the Company entered Into a portion of the increased rates under the 1973 contract for the purchase of two nuclear application. In January 1977 the Company steam supply systems for the Company's filed a motion for stay and the matter is South Dade site for an amount in excess of pending. The Company has negotiated a S100 million. In connection. with the settlement of the 1975 application with its announced delay of the South Dade proJects, wholesale customers which is being submitted work has been suspended and provisions to the FPC for its approval. In 1976 the have been made to permit the Company, at Company provided for estimated refunds of its option. to be released from the contract at S8.5 million with Interest of S1.1 million. The a charge which is not deemed by the Company believes this provision is adequate Company to be material.

to cover refunds of revenues through 1976 which may be required after final settlement of both cases with the FPC. Acquisition of Vero Beach System The City of Vero Beach, Florida has agreed

4. NOTES PAYABLE to sell its electric system to the Company for Unused available bank credit aggregated approximately S40 million; however, the sale is approximately S143.5 million at December 31, subJect to several regulatory approvals.

1976, and is based on informal arrangements Certain customers of the Vero Beach System which are subject to cancellation without have filed a petition to intervene in the notice. Compensating balances maintained Company's proceeding for approval of the in connection with these credits arise in the acquisition before the FPC and have moved normal course of business and are not to have the application for approval rejected.

material to the Company's financial position Following a request from the Florida and borrowing costs. At December 31, 1976 Municipal Utilities Association that, among compensating balances aggregated other things, referred to the Company's offer S2.1 million. to purchase the City's electric system, the

Justice Department is conducting a The Company is committed to pay a preliminary Inquiry concerning alleged minimum annual charge per nuclear unit of anti-competitive activities of the Company. S1,260,000 under the Turkey Point nuclear fuel Rental and Nuclear Fuel Expense supply contract; however, annual charges on The Company has various contracts for a usage basis may be substantially in excess supplies of fuel Including a contract for of the minimum charge and are subject to nuclear fuel services for its two Turkey Point escalation for increases in certain costs to the Plant nuclear units. However. in September supplier. The present value of the minimum 1975 the Company was notified by the lease commitments, including the nuclear supplier that it is taking the position that it is fuel supply contract, and the impact on net excused from the complete performance of income, if certain leases and the nuclear fuel its obligations to supply uranium under the supply contract had been capitalized, are contract. See Note 6-Nuclear Fuel Suit. not material and, therefore, not presented.

Expenses under lease agreements for property and equipment and the nuclear fuel services Nuclear Insurance contract for 1976 and 1975, which were The Company is a member of Nuclear charged to operating expenses, are as Mutual Limited, which provides insurance follows (in thousands): coverage against property damage to Years Ended members'uclear generating facilities. The December 31, Company could be subject to a maximum assessment of approximately S34 million, 1976 1975 based on 1976 premiums, in the event losses Property and equipment: occur at a nuclear plant of a member utility, Basic rentals ......... S 5,984 S 6,197 and Is a self-insurer for any such loss In excess Contingent rentals .... 1,161 980 of S150 million.

Total rent expenses . 7,145 7,177 In the event of public liability losses arising from a nuclear Incident at a facility currently Nuclear fuel:

covered by government indemnification, the Minimum charge 2,520 2,520 Company could also be assessed up to Usage charge........ 15,225 13,314 approximately S30 million in a year under Total nuclear fuel .. 17,745 15,834 regulations adopted by the Nuclear Total .......... S24,890 S23,011 Regulatory Commission (NRC).

The minimum rental commitments under Nuclear Units the property and equipment lease St. Lucle No. 2-Work on this unit was agreements that are non-cancelable as of discontinued November 8, 1976 under a court December 31, 1976 are as follows (in thousands): order resulting from an appeal by intervenors.

Hearings concerning alternative sites, 1977 .. . S 1,741 additional evidence on the Emergency Core 1978 .. 1,630 Cooling System and the issues of need for 1979 .. 1,481 power and energy conservation have been 1980 .. 1,415 held and an initial decision as to whether a 1981 .. 1,281 construction permit should be issued is 1982-1986 5,840 1987-1991 pending. The decision will be subject to 4,512 further review.

1992-1996 936 Remainder 953 Turkey Point Unit Nos. 3 and 4 The Company is experiencing problems with the Total . S19,789 steam generators of these units and has had 33

Notes to Consolidated Financial Statements (Continued) to plug certain pressurized water circulation trebling, in a claim that the Company was tubes. In late 1976 Unit No. 4 was removed part of a conspiracy and S8.5 million in a from service to perform Inspections and claim that the Company Is a monopoly, similar inspections were performed during the resulted in a jury verdict for the Company. In scheduled refueling of Unit No. 3. Additional 1976 plaintiffs appealed and oral arguments tubes were plugged and the units were were held. Trial counsel is of the opinion that returned to service pending further the likelihood of an unfavorable outcome to evaluation. Without prior approval from the the Company In this case is remote. If NRC for continued operation, both units must plaintiffs should be successful in overturning be removed from service in 1977 for additional the judgment, the case would be remanded inspection of their steam generators. Should ta-the trial court for a new trial.

the steam generators'ube bundles have to be replaced, the cost is presently estimated to range between S30 million to S50 million Nuclear Fuel Suit per unit. Procurement of materials may The Company has a contract covering its require one to two years and installation may full nuclear fuel requirements and related requIre that each unit be out of service for up services for Turkey Point Unit Nos. 3 and 4 to approximately two years. Power resources through at least 1982 and 1983, respectively.

could be inadequate during any period that See Note 5-Rental and Nuclear Fuel both units were simultaneously out of service. Expense. The supplier has notified the The Company is increasing the spent fuel Company that it is taking the position that storage capacity at both units. The present (i) its obligations to supply uranium have storage facilities are full and future refuellngs terminated; (ii) the contract terminates in of either unit cannot be accomplished unless 1980; and (iii) at this time it has no plans for

, the modifications of the facilities are removing the spent (used) fuel from the Turkey completed and approved by the NRC or Point site. The Company filed suit against the other storage arrangements are made. supplier seeking to enforce its rights under the contract and/or damages and seeking

6. LEGAL PROCEEDINGS recovery of overbilled amounts. The supplier was ordered to deliver its present uranium Antitrust Suits inventory, including material on order from its Manatee Cablevision Antitrust Suit-A suit suppliers. to various utility customers. The was brought against the Company claiming uranium the Company anticipates receiving damages of approximately S3 million for pursuant to the order is estimated to be alleged violation of the Sherman Act. Plaintiff suff/cient to supply the fuel requirements for also seeks to recover treble damages and the refueling of both units through 1977 and attorneys'ees. The case has been set for trial the Spring 1978 refueling of Unit No. 4. See in 1977. Legal counsel are of the opinion that Note 5 Nuclear Units for additional there are meritorious defenses; however, if information regarding spent fuel storage.

there is any liability, management is of the opinion that, based on review of such litigation with legal counsel, the final Alleged Discrimination Suit disposition of the rnatter will have no material In April 1976 the Company was named as effect on the financial position or results of the defendant in an alleged class action. The operations of the Company. complaint alleges patterns and practices of discrimination by the Company against Gainesville Antitrust Suit-A treble damage blacks and females. The complaint seeks, suit brought against the Company, seeking among other things, injunctive relief, damages of approximately S11 million, before reimbursement for lost pay and benefits, and 34

damages. Discovery is proceeding. The In the opinion of the Company all Company cannot predict the outcome of this adjustments (consisting only of normal action but, based on, the facts that so far recurring accruals except as described in have come to its attention, the Company is Note 3) necessary to present a fair statement of the opinion that the likelihood is remote of such amounts for such periods have that the ultimate outcome of this action will been made.

have a material adverse effect on the The Company is of the opinion that financial condition of the Company. comparisons of quarter to quarter data may

7. QUARTERLY DATA (Unaudited) not give a true indication of overall trends and changes in the Company's operations For the periods shown, Operating Revenues, and may be misleading In understanding the Operating Income, Net Income and Earnings results of operations as the revenues and per share of Common Stock (after dividend expenses of the Company are subject to requirements on Preferred Stock) are as follows: periodic fluctuations due to changes in weather conditions, number of customers, the Quarter Ended proportion of generation by various fuels, and March 31. June 30, other factors.

1976 1976 Operating Revenues . S273~,000 S265,935.000 8. REPLACEMENT COST DATA (Unaudited)

Operating Income .. 53,948,000 33,066,000 Net income Earnings Per Share 36.644.000 16.650.000 One result of inflation experienced by the Company in recent years is replacement of Common Stock . S0.83 S0.28 costs of productive capacity that are Quarter Ended significantly greater than the historical costs Sept, 30. Dec. 31, of such assets reported in the Company's 1976 1976 financial statements. The Company's annual Operating Revenues . S357.741.000 S292 449,000 report to the Securities and Exchange Operating Income .. 58.848.000 45.351.000 Commission for 1976 on Form 10-K contains Net income ......

Earnings Per Share 41.004,000 22.547.000 specific replacement cost information and is of Common Stock . S0.89 S0.40 available upon request.

Acccuntants'pinion HASKINS G SELLS SUITE 2000 FIRST FEDERAL BUILDING CERTIFIED PUBLIC ACCOUNTANTS ONE SOUTHEAST THIRD AVENUE MIAMI>FLORIDA 33131 To the Board of Directors and Shareholders, Florida Power 8L Light Company:

We have examined the consollda ted balance sheet of Florida Power 8. Light Company and subsidiaries as of December 31,1976 and1975 and the related consolidated statements of Income, retained earnings and changes In financial position for the years then ended. Our examination was made In accordance with generally accepted auditing standards and, accordingly. Included such tests of the accounting records and such other auditing procedures as we consldefed necessary In the circumstances.

In our opinion, the aforementioned consolidated financial statements present fairlythe financial position of the Company and its subsidiaries at December 31, 1976 and 1975 and the results of their operations and changes In their financial position for the years then ended, In conformity with generally accepted accounting principles applied on a consistent basis.

February 11, 1977 jg~~

35

directors M.P. Anthony Sewing since February, 1977.

President, Anthony's Inc:

West Palm Beach, Fla.

George F. Bennett Sew Ing since 1970.

President, State Street Investment Corp., and Federal Street Fund, Inc.

Boston, Mass.

David Blumberg Serving since 1973.

President and Director, Planned Development Corp.:

Managing Partner, Cutler Ridge Regional Center.

Miami, Fla.

Jean McArthur Davis Serving since February, 1977.

President. McArlhur Dairy, Inc.;

Director. Southeast Bank of Miami, and Miami Branch of Federal Reserve Board.

Miami, Fla.

+ R.C. Fuller ton Serving since 1964.

Chairman of the Executive Committee.

Coral Gables, Fla.

Robert B. Knight Sewing since February, 1977.

Chairman. National Food Services, Inc.

Coral Gables, Fla.

'John M. McCarty Sewing since 1973.

Attorney. Rancher,'nd Citrus Grower.

Ft. Pierce, Fla.

+Marshall McDonald Serving since 1971.

President Ik Chief Executive Officer.

Miami, Fla.

'+Will M. Preston Sewed 1938-9 &. slnce1968.

Retired. Of Counsel, Steel Hector Ik Davis, the Company's General Counsel.

Miami, Fla.

'Ed H. Price, Jr.

Serving since 1972.

Dlrectbr, Government Relations Division, Troplcana Products, Inc.;

Former Florida State Senator.

Bradenton, Fla.

Joseph P. Taravella Serving since 1972.

President and Chairman of the Board, Coral Ridge Properties.

Inc.; PresIdent, Community Development, Westinghouse Electric Corp.

Coral Springs, Fla.

'+Lewis E. Wadsworth Serving since 1970.

Farmer.

Bunnell, Fla.

+Executive Committee

'Audit Committee

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%PL@

Principal Offices: 9250 West Flagler Street, Miami Mail:P.O. Box 013100, Miami, Florida, 33101 Phone: 305/552-3552

h9%iN Page Operations of the Company .......... 2 Economy...............

Fossil Fuel Supply....,............

4 6

Nuclear Plants and Nuclear Fuel Supply .. 7 Plants Under Construction or Planned... 8 Construction Program..........,... 9 Regulation and Rates Consolidated Balance Sheet..........

10 12 Consolidated Statement of Income ..... 13 Consolidated Statement of Changes in Financial Position...,,......., 14 Long-Term Debt...

Retained Earnings and Coverage Statistics ......,.......

Schedule of Preferred Stock, Capitalization Percentages 15 16 and Common Stock Statistics ....... 17 Schedule of Income Taxes...,,...., . 18 Schedule of Allowance for Funds Used During Construction..... 19 Financial Statistics 20 Utility Plant Statistics . 21 Customers, Sales and Revenue Statistics . 22 Generating and Other Statistics ....... 24 Fuel and Payroll Statistics ........... 25 Summary of Significant Accounting and Reporting Policies ... 26 Officers .. 27 Directors . , ~ .27 System Map 28 bX@gh Percent 1976 1975 Change Customers-year end 1,840,043 1,772,304 4 KWH sales(000) .. . 34,929,541 34,110,898 2 Operating revenue (000) . $ 1,189,680 $ 1,182,644 1 Net income(000) ........,...... $ 116,845 $ 145,221 (20)

Use per residential customer-KWH . 10,968 11,127 (1)

Revenue per KWH-Residential .... 3.504 3.534 (1)

Earnings per share $ 2.39 $ 3.48 (31)

Dividends .. $ 1.56 $ 1.435 9 Book value per common share..... $ 27.81 $ 27.21 2 Net warm weather capability-KW .. 9,740,000 8,927,000 9 Peak load-KW(60 minute net)..... 7,598,000 7,076,000 7 Capital expenditures (005) ...;.... $ 469,750 $ 497,233 (6)

Financing (000) .. $ 272,740 $ 418,925 (35)

This booklet has been prepared primarily for the information of security analysts and institutional investors and is available to other interested persons. It is not intended for use in connection with any sale, or offer for sale, or solicitatlon of an offer to buy any securities.

All financial statements shown should be considered in conjunction with notes in the Company's annual reports.

1976 Classification of Sales Price per Kilowatt Hour Florida Power 6 Light Company Paid by Residential Customers and United States Florida Power 6 Light Company and United States 33%

,) ~~ ~ r Restdentlal ~ ~ ~

P,: I 51 le g 3.0 Z

24'le 2.S Commercially ae ft 2A 39% u.s.A.

7'le f"" ""'ndustrial ~ ~~ ~

2.0 Public Authority FPL andcther""

Florlda Power Total 66 67 68 69 70 71 72 73 74 75 7S 8 Light Industry Sourcet FPI. end Edlecn Etectrlo Inetitute Source: FPL end F dhecn Electric Incutute EarnIngs per Share'nd Operations of the Company Dividends per Share The service territory of 27,650 square mlles 5 Per Share Includes approximately 650 communities and 3.50 covers most of the east coast and the lower west n OMdende Paid coast of Florida, the area around southern and tl Earntnea eastern Lake Okeechobee, and portions of north and north-central Florida.

FPL has three wholly-owned subsidiaries, two 2.00 organized In 1974 and one in 1976. The newest subsidiary, EFC Services, Inc., was organized in December to supply engineering, fabrication and construction services for planned new power plants. Initially EFC will supply fabrication services.

.50 Land Resources Investment Company, a regulated subsidiary, owns and finances certain utility 87 88 69 70 7I 72 73 74 76 78 property. Fuel Supply Service, Inc. (FSS) is

'Beeauttne In 197 I, eltotcance Ior funda utes Irurlne ccnetrucucn wae cepltaaled.

participating in an oil and gas exploration venture in Florida. In December 1976, FSS entered into a joint venture agreement to conduct uranium exploration in the Western United States.

Total capability of FPL's nine power plants ls 9,740 megawatts, of which 2,134 megawatts is nuclear, 2,004 megawatts is gas turbine, and 5,602 megawatts is oil or gas fueled. Two new units were placed in commercial operation in 1976: Manatee Unit No. 1, a 775 megawatt oil-fired plant, in October; St. Lucie No. 1, an 802 megawatt nuclear unit, in late December. Total capability does not include an additional seven fossil units totaling 483 megawatts that were placed in an extended cold standby status in 1976. Reactivation of these units would require several months.

KWH Sales per Residential Customer UtilityPlant Investment Florida Power 8 Ltttht Company and United States 3 Mitticns 13PXI 12,000 FPL 11,000 10.000

(

9.000

'.t 8,~

3 7,000

~ r U.S.A.

0 6,00O 5.000 4,000 68 87 68 69 70 71 72 73 74 75 78 68 67 88 69 70 71 72 73 74 75 76 Sccrcc: Frrl cnd Erlrccn Elcctrtc Incatctc Capitalization Ratios Percent Nuclear units accounted for 23% of FPL's total generation in 1976. With the addition of St. Lucie No. 1, this percentage will increase in 1977.

Residual oil accounted for 53% of total generation:

natural gas, 22%; distillate oil 2%. ~

70 During 1976, customers increased 4% or 67,739, which ranks FPL among the fastest growing utilities in the country. At year end, FPL was serving 1,840,043 customers.

Total KWH sales increased 2% in 1976, as residential, commercial, and industrial sales each increased 2%. Use per residential customer declined 1%, reflecting more efficient use of 10 energy by customers. Despite the decline, FPL's 67 70 73 74 75 average customer used one-third more than the 68 69 71 72 76 national average. The cost per KWH for residential customers declined slightly In 1976 reflecting the elimination of the summer/winter differential in the rates as of May 1976, lower fuel adjustments because of lower average oil prices, and provision for an estimated refund of revenue that was recorded in 1976. (See Regulation 8 Rates)

A record summer peak was reached in 1976. The peak load of 7,598 megawatts was 5% above the previous record of 7,235 megawatts set in 1974.

In January 1977, during a period of extremely cold weather, a peak of 8,606 megawatts was reached, an increase of 13% over the 1976 summer peak.

Population Increase Number of Residential Electric Customers 1970 1976 Per Thousand ol Population Ten Largest States Florida and United States Thousands 1,519 Fla.

U.s.

87 88 59 70 71 72 73 Td 75 78 (1581 Source; V.S. auresu ol the Census Scurtei VS. 8ureeu Ortho Centue. 5drtcn Etsctrlc Institute. snd university of Fiends Construction Contracts Let Nuntber of Dwetltng Units per Thousand Economy ol Population Ten Largest States Florida continues to have a strong appeal as a 1976 9.T desirable place to live. In mid-1976, the Census Bureau estimated the State's population at 8,421,000 people, an increase of 144,000 over 8.0 1975. This increase was exceeded by only two other states, Texas and California, but Florida's percentage increase was 1.7%, which was greater than the percentage increase in California. Since 1970, Florida has added over 1.6 million people, a number greater than any other state including 3S 2.8 California.

1.9 As Florida grows, FPL grows even faster. This is partially because ot the State's population mix, in which approximately 16% of the residents are 65 years of age or over who maintain households of sotucet Mco row IMI, F.w. Dodge Divhhrn only one or two people. Some customers are non-residents who Intermittently occupy second homes that are proliterating throughout the State. In 1976, there were 400 residential electric customers In Florida for each thousand of population compared to 340 nationally.

Construction activity continued to increase from its recession lows. In 1976, contracts were let for 67,419 residential dwelling units, an increase ot nearly 30% over 1975's rate. Even though these numbers are low relative to the 1972-1973 boom years, in 1976 Florida was the third-ranking state in number of contracts let for residential units.

As the construction and manufacturing activity in the State increased in 1976, the unemployment rate in the State fell although it remained above national levels. As the supply ot unsold housing units in the State, particularly the lower East Coast, declines, there is reason to believe that the increase in residential construction seen in late 1976 will continue in 1977.

Manufacturing Employment Number of Tourists Visiting Florida Florida and United States Millions Index: 1966ev100 IrKlox 2SS 140 248 232 23.0 21.8 130 19.1 Fla.

110 u.s.

66 67 68 69 70 7t 72 73 74 78 76 87 68 69 70 71 72 73 74 7S 78 sovree: U.s. Orro Derive oeoertrrtohte ol corrvveroe sovroo:Flortv*oerrertreerrtot corvmeroe Cash ReceIpts from Farm Marketlngs FLORIDA S Millions Manufacturing employment in Florida has increased more rapidly than in the United States rs as a whole over the last 10 years. A sharp or turnaround in the State's attitude towards industrial development has occurred and the State legislature and the Governor have made vigorous efforts to attract new Industry to Florida. FPL is also contributing to this renewed effort with a newly created position of rrv cv Vice President in charge of economic development. A return to aggressive solicitation of new industry has to be viewed as a positive effort to mold the State' economy into a new, more broadly diversified base.

Record numbers of tourists carne to Florida in 1976 with the State entertaining 28.9 million visitors, the greatest number on record. Their expenditures 68 70 67 69 71 72 73 74 7S 76 were estimated at over $ 10 billion. SOVrce: UL Deeertreerrt Ol Asrtextore 1978 prellovrrerv Florida, particularly the Miami area, continues to be a market for foreign visitors, particularly those from Latin America. The cruise ship business, which entertained over one million passengers in 1976, is another rapidly developing sector of the tourist economy.

In 1976, Florida's agricultural output was estimated to be $ 2.6 billion. The freeze in January of 1977 will have adverse consequences on the State' agricultural sector; however, despite the freeze, the citrus crop is expected to equal last year's crop.

Federal aid is already flowing into Florida to help farmers and farm workers. The winter vegetable crops, particularly in Dade County, suffered significant damage; however, much of the acreage has been replanted, with new crops expected in the spring.

Capital Expenditures 3 Millions 605 497 470 375 2,300 178 149 1,050 67 68 70 71 72 73 74 75 78 NoTE: Inctuoe>> nuclear nret end >>low>>nce Ior rvno>> u>>ee curine con>>trvrt>>>>n Low Sulphur Fuel Oil portion of residual oil requirements beginning Cost per Barrel- Port Ever9 lade>>

Month End Price January, 1978. The remainder ot the requirements 316 will be acquired either through other contracts or open market purchases. The Exxon contract is for an Initial period of three years and will continue each 612 year thereafter until cancelled by either party. If either party elects to cancel, the contract will be phased out over a three-year period at reduced quantities. Distillate oil is provided through open market purchases.

The contract price for residual oil increased $ 2.05 per barrel in 1976 from $ 11.17 to $ 13.22 per barrel, with most of the increase occurring in the latter part of the year. Further increases totaling $ 1.75 per barrel 1972 1973 1974 1975 1976 1977 occurred in January and February 1977 raising the Note> Ex>>rue<<re Temper>>rr Entitiement alton>>nce price to $ 14.97 per barrel. Otfsetting part of the cost was the Temporary Entitlement Allowance which ranged from 654 to 834 per barrel. Because of Fossil Fuel Supply lower prices earlier in the year, the average cost per barrel used in 1976 was $ 11.62 per barrel, down from Fossil fuel steam plants, except oil-burning plants at the $ 12.13 per barrel for 1975.

Ft. Myers and Manatee and two oil-burning units at Natural gas is supplied under intrastate firm Sanford, burn both oil and natural gas. FPL uses.7%.

contracts, the earliest ot which expires in 1979. A 1.0%, and 2.5% sultur oil, depending on the location 5% reduction in firm gas deliveries was experienced of the unit. The gas turbines at Ft. Myers burn distillate In 1976 and an additional decline may occur in 1977, oil and the remaining gas turbines burn distillate oil due to declining output from the wells. A 1975 Federal and natural gas. Power Commission "show cause" order to the gas Residual oil is principally supplied under "total transportation company concerning its authorization requirements" contracts expiring December 31, 1977. to transport the gas was dismissed in 1976. FPL did In 1976, a fuel oil purchase contract was entered into not experience a reduction in gas supplies during the with Exxon Corporation to provide a substantial winter of 1976-1977, although, for a limited period ot time, a portion of the natural gas was exchanged for oil, at no additional cost to FPL or its customers.

Percent Generation by Fuel Type 12 24 48 42 24 22 75 78 58 61 68 51

~

~ Oil 1968 1967 1968 1969 1970 1971 1972 1973 1974 1975 1978

~

~

Natural Ges Nuclear Gas Turbine Nuclear Plants and Nuclear Fuel Supply Fuel Cost per Net KWH Generated Mills FPL has three operating nuclear units-Turkey Point Units No. 3 and No. 4 and St. Lucie Unit No. 1. An application to the Nuclear Regulatory Commission 18 (NRC) for a construction permit for St. Lucie No. 2 has been filed. A Limited Work Authorization (LWA) 14 was issued by the NRC in 1975 which allowed 12 construction to begin on certain systems for St. Lucie 10 No. 2. Construction began in June 1976 after State site certification was received. In November 1976, construction on the unit was discontinued under a court order resulting from an appeal by intervenors.

Hearings concerning various issues were held in December 1976 and January 1977 and an initial 66 67 68 69 70 71 72 73 74 75 76 decision as to whether a construction permit should be issued is pending.

St. Lucle Unit No. 1 was placed in commercial service on December 21, 1976, after certain fuel assemblies the position that its obligations to supply uranium were repaired. The unit is authorized to operate at have terminated. The Company has filed suit seeking 100% of rated capacity, although the output of the to enforce its rights under the contract and/or unit may be restricted up to 5% under certain tide damages and is seeking recovery of overbilled and weather conditions. amounts. Westinghouse was ordered by the court to deliver its present uranium inventory, including Problems with the steam generators at Turkey Point material on order from its suppliers, to various utility Units No. 3 and No. 4 are being experienced. Certain customers. The amount of uranium anticipated under pressurized water circulation tubes In the steam the order should be sufficient to supply fuel generators have been plugged and studies are being requirements through the Spring 1978 refueling of performed to determine the percentage of tubes that Unit No. 4.

may be plugged without materially reducing the operating output of th'e units. Inspections were The first and second fuel cores (approximately a performed on each unit in 1976 and both units were five-year supply) for St. Lucie No. 1 are being returned to service. Should the steam generators purchased under contract from another supplier.

have to be replaced, the cost is estimated at $ 30 Approximately 1.2 million pounds of uranium from million to $ 50 million per unit, and installation could other sources are on hand or under contract for require the units to be out of service up to two years. delivery as required.

FPL is increasing the spent fuel storage capacity at Turkey Point and St. Lucie.

Fuel for the Turkey Point units is supplied under a fuel service contract with Westinghouse Electric Corporation, which has notified FPL that it is taking

Scheduled Net KW Fuel Completion Warm Weather Plant Type Date Capability Plants Putnam Plant Residual Olt/

Under Combined Cycle Distillate Oil 1977 484,000 Construction St. Lucie Plant or Unit No. 2 Nuclear 1983 802,000 Planned Manatee Plant Unit No. 2 Residual Oil 1977 775,000 Martin Plant Unit No. 1 Residual Oil 1981 775,000 Unit No. 2 Residual Oil 1982 775,000 Net Capability"'nd Peak Load Megawatts 16,000 15,000 14,000 co St. Lucio No. 2 13,000 CV CV Martin No. 2

~ 60 Minute Net Peak Load 12,000 1977-1983 Projected Midpoint Martin No. 1 of Forecast Band cn O

Reactivate Cold Standby 11,000 CV O 0 Manatee No. 2 10,000 tn cn Putnam cu cn co c71 cn 9,000 co 8,000

~ ceca IA ~

Peak Load CV MW 60 Minute Net OO 1977-1983 Proje cted 71000 CA 1966 2,914 En O 1967 3,160 1968 31789 6,000 Q co cn 1969 4,329 ce 1970 5,001 co CO 1971 5,378 5,000 cu 1972 6,011 CV 00 1973 6,894 4,000 co co 1974 7,235 1975 7,076 1976 7,598 3,000 1977 7,950- 8,230 1978 8,350- 8,880 1979 8,780- 9,540 2,000 1980 9,210- 10,200 1981 9,640- 10,860 1982 10,060- 11,500 1,000 1983 10,470- 12,120 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 (1) Rafed at contfnuoua capability beglnnlng 1978 Jan, 19. 1977 Peak of 8,808 MW

Construction Program In February 1977, steps were initiated to cancel the two South Dade nuclear units. This reflects the Company's concern with the regulatory uncertainty and the large front-end capital commitments associated with nuclear units. The Company is continuing to study all alternative fuel sources that may be available to meet the generation requirements for the mid-1980's and has initiated efforts which could lead to the acquisition of coal supplies.

During 1976, changes were made In the construction program to reflect the conclusion that growth will be lower than previously expected. The completion dates for the two oil-burning units at Martin were changed. This conclusion was based on studies of the effects on electricity consumption of general economic conditions, energy conservation, and increased costs. Peak load forecasts have been developed using a range of growth rates of 4% to 6% for the next ten years.

It is anticipated that the most probable growth rate will be towards the lower end of this band.

However, FPL is keeping its construction program as flexible as possible to be able to respond to new developments and changes.

Another result of reduced growth was a reduction of the work force, primarily in transmission and distribution construction and related areas. Placing seven generating units on cold-standby eliminated additional positions.

The Putnam combined-cycle units are In test operation and are scheduled to be in service for the summer peak of 1977. The second oil-burning unit at Manatee is scheduled for late 1977. St.

Lucie Nuclear Unit No. 2 is now scheduled for completion in 1983, as a result of delays in obtaining the necessary approvals. Estimated capital expenditures for 1977 are $ 411 million, as compared to 1976 expenditures of $ 470 million.

Estimated expenditures by category for 1977 are:

$ 286 million for production, $ 43 million for transmission, $ 64 million for distribution, and $ 18 million for general and other plant.

Regulation and Rates FPL rates, except for wholesale sales, are regulated by the Florida Public Service Commission (FPSC). Rates for wholesale sales are regulated by the Federal Power Commission (FPC).

All rate schedules contain a fuel adjustment clause which gives effect to changes in efficiency and the cost of fuel as well as the generation mix of fossil and nuclear, and includes the fuel portion of purchased power.

A petition was filed in October 1976 with the FPSC seeking additional annual retail revenues of $ 349 million (subsequently updated to $ 350 million based on actual 1976 results). The request was based on a 9.95% rate of return on a 1976 year-end rate base, which includes an additional $ 250 million of construction work in progress. In November, the FPSC suspended all the rate schedules filed with the petition. Under Florida law, the rates automatically go into effect under bond and subject to refund eight months after the petition is filed if the Commission has not acted.

Hearings were held in January and March 1977.

In November 1976, the Company requested interim rate relief of $ 225 million (subsequently updated to

$ 235 million based on actual 1976 test year results) on an annual basis. In February, 1977, the FPSC granted $ 87.9 million effective March14, 1977, to be collected under bond and subject to refund pending the order In the main case.

In 1975, a petition was filed challenging the granting of interim rate relief for the period January 28, 1975 through April 30, 1975. In December 1976, the Supreme Court of Florida issued a ruling directing the FPSC to issue an order requiring a refund of a portion of the revenues collected under the interim rate order.

The estimated refund of $ 13.5 million plus estimated interest through December 1976 of $ 1.4 million was recorded in December as a reduction of revenue. This reduced earnings per share by 184.

Requests for rate increases filed with the FPC in 1973 and 1975 were placed in effect subject to refund with interest. In December 1976, the FPC issued an order disallowing a portion of the increased rates under the 1973 application. A petition for rehearing and motion for stay was granted by the FPC in February 1977. A settlement of the 1975 application has been negotiated with wholesale customers and has been submitted to the FPC. Provisions for estimated refunds have been made.

Florida Public Service Commission Paula F. Hawkins, Chairman (Term expires January 1981)

William H. Bevis (Term expires January, 1979)

William T. Mayo (Term expires January, 1979) 10

COnSOlidated BalanCe Sheet (Year End) 1976 1975 1974 1973 1972 1971 1966 ASSETS: (Thousands of Dollars)

Electric Utility Plant (at original cost):

In service .. $ 3,447,151 $ 2,622,669 $ 2,461,325 $ 2,203,795 $ 1,896,925 $ 1,574,260 $ 938,031 Held for future use............. 45,831 52.528 51,481 29,441 26,063 10,691 4,274 Less accumulated depreciation..... 625,102 544,440 486,212 423.712 371.291 332.485 187,927 Net 2,867,880 2,130,757 2,026,594 1,809,524 1,551,697 1,252,466 754,378 Construction work in progress...... 602,481 994,081 715,740 407,001 379,843 394,484 58,748 Nuclear fuel 86,376 54,992 23,851 23,708 23,104 11,1 38 Less accumulated amortization 1,105 Electric utility plant-net 3,555,632 3,179,830 2,766,185 2,240,233 1.954.644 1.658.088 813.126 Investments:

Storm damage reserve fund 13,838 13,838 13,838 13,233 12,699 12,202 10,305 Construction funds held by Trustee... 743 2,637 18,921 8,802 Other investments, etc........... 5,480 1.556 2.651 1 128

~ 3,346 500 1,356 Total Investments 20,061 18,031 35,410 23.163 16.045 12,702 11,661 Current Assets:

Cash 4,648 2,543 2,972 2,865 1,578 9,155 7,656 Temporary investments.......... 4,000 9,912 24,942 Accounts receivable:

Customers, less allowance....... 69,428 67,409 63,127 49,531 37,933 30,266 13,523 Employees and miscellaneous..... 6,232 3,512 3,826 6,168 4,494 3,398 2,406 Income tax refunds........... 40,329 Fossil fuel stock-at average cost.... 53,537 39,585 37,921 15,336 7,721 4,670 2,557 Materials and supplies-at average cost 68,211 68,851 60,852 51,146 38,781 37,814 19,752 Other current assets 17,589 18,320 13.268 7,374 6,533 4,392 2.223 Total current assets........ 263.974 210.132 181.966 132.420 97.040 89,695 73.059 Deferred Debits .. 26.326 8.945 8,869 4,378 508 578 685 Total . $ 3,865,993 $ 3,416,938 $ 2,992,430 $ 2.400,194 $ 2.068,237 $ 1.761.063 $ 898,531 LIABILITIES:

Shareholders'quity:

Common stock $ 749,375 $ 676,832 $ 613,907 $ 613,907 $ 569,095 $ 502,335 $ 255,283 Capital stock premium and expense... (3,612) (3,393) (3,090) (2,433) (2,199) (2,193) (2,033)

Retained earnings............. 368,227 334,524 260,892 212.107 148.058 95,936 103,024 Total common equity 1,113,990 1,007,963 871,709 823,581 714,954 596,078 356,274 Preferred stock 336.250 261.250 186.250 136,250 96.250 36.250 36.250 Total shareholders'quity 1,450,240 1,269,213 1,057,959 959,831 811,204 632,328 392,524 Long-Term Debt.............. 1.779.771 1.665.698 1.454.591 1,120,645 965.639 860.021 382,802 Total capitalization 3,230,011 2,934.911 2,512.550 2.080,476 1,776,843 1,492,349 775,326 Current Liabilities:

Notes payable 20,035 33,500 132,469 37,000 80,504 58,800 Long-term debt-current portion..... 11,687 1,713 11,597 Accounts payable-trade......... 31,300 25,578 35,222 25,830 18,616 19,946 6,895 Customers'eposits.... "........ 70,94S 7,810 59,884 48,876 50,833 6,236 46,723 15,269 42,209 6,871 38,297 13,621 26,034 21,072 Income taxes .

Othertaxes 28,618 28,976 30,666 23,890 16,813 14,126 8,796 Interest accrued . 34,943 34,266 31,086 21,960 16,429 14,458 4@32 Estimated revenue refunds........ 24,558 Other current liabilities .......... 53,342 48.643 37,796 37,918 26.115 29.776 9,642 Total current liabilities....... 283.238 281.436 335.905 208.590 207,557 189,024 76,771 Deferred Credits:

Unamortized investment credit...... 105,724 57,580 47,248 39,781 30,516 19,278 9,303 Accumulated deferred income taxes 219,733 118,240 73,009 44,312 24,033 15,681 15,066 Contract retentions and other...... 6.784 6,927 7,854 11,839 15,406 14,618 3,570 Total deferred credits....... 332,241 182.747 128.111 95.932 69,955 49,577 27,939 Reserves:

Storm damage 13,838 13,838 13,838 13,233 12,699 12,202 10,305 Injuries and damages and other..... 6,665 4.006 2.026 1,963 1,183 1.295 2.448 Total reserves 20.503 17,844 15.864 15,196 13.882 13,497 12,753 Contributions In Aid Of Construction.... 16,616 5.742 Total $ 3,865.993 $ 3,416,938 $ 2,992,430 $ 2,400,1 94 $ 2.068,237 $ 1,761,063 $ 898,531

NXBRC5 GIi@

%6498 11

Consolidated Statement of Income 1976 1975 1974 1973 1972 1971 1966 (Thousands of Dollars)

OPERATING REVENUES:

Revenue from electric energy sales . $ 1,181,093 $ 1,174.365 $ 943.297 $ 709,853 $ 567,334 $ 482,752 $ 267,577 Other revenues 8,587 8,279 7.758 4.159 3.509 2.078 1.095 Total operating revenues 1 189,680

~ 1,182,644 951,055 714,012 570.843 484,830 268,672 OPERATING EXPENSES:

Fuel-Oil 403,115 391,770 338,695 153,639 122,250 76,993 36,623 Fuel-Gas . 61,487 53,731 47,748 43,192 41,964 45,108 13,724 Fuel-Nuclear 17,745 15,834 13.672 7,775 183 Total fuel . 482,347 461,335 400,115 204,606 164,397 122,101 50,347 Other production-operation......... 26,116 20,641 20,725 17,337 11,256 9,444 4,383 Interchange power-net Transmission-operation ...........

Distribution-operation............

(10,110) 4,662 40,739 (1,803) 3,943 32,356 (4,215) 3,982 30,844 (5,500) 3,406 29,125 3,136 2,765 25,546 700 2,411 22,818 182 1,304 11,132 Customers 31,055 29,705 26,837 23,989 21,086 19,376 11,356 Administrative 8 general 79,753 66,828 52,351 50,301 37,553 31,477 18,137 Provision for uncollectible accounts 5,912 8,481 6,998 1,752 1,415 1,039 570 Maintenance 67.062 59.646 57,472 51.290 41.830 36,948 16,044 Total operation and maintenance . 727,536 681,132 595,109 376,306 308,984 246,314 113,455 Depreciation . 88,591 82,322 74,775 64,815 52,898 47,195 28,598 Taxes other than Income taxes 96,972 87,558 71,241 59,746 47,071 40,677 22,505 Federal Income taxes............. 76,573 103,073 45,978 56,202 42,640 43,026 40,449 State income taxes 8.795 11,749 5.328 6,614 4,853 Total operating expenses ..... 998,467 965.834 792.431 563.683 456.446 377,212 205,007 OPERATING INCOME 191,213 216.810 158.624 150.329 114,397 107,618 63.665 OTHER INCOME (DEDUCTIONS):

Allowance for funds used during construction 65,497 48,486 39,907 25,961 30,444 18,052 Income taxes . (298) 5,350 11,676 6,765 8,540 Other-net 1.005 ~85 0 ~1.734 626 ~120 ~167) 5,555 (393) 300 Other income-net 66.204 52.986 49.849 33,352 38,864 23,440 ~93 INCOME BEFORE INTEREST CHARGES 257.417 269.796 208,473 183.681 153,261 131.058 63572 INTEREST CHARGES:

Interest on mortgage bonds 110,637 96,161 78,723 61,913 53,666 46,077 14,277 Interest on other long-term debt . 22,261 22,271 9,892 7,214 3,004 562 264 Other Interest 7.674 6,143 14,384 5,996 6,774 5,418 1.734 Total Interest charges 140.572 124.575 102.999 75,123 63.444 52,057 16,275 NET INCOME 116,845 145,221 105,474 108,558 89,817 79,001 47,297 Preferred dividend requirements . 22.378 20.066 11.654 6,533 2.076 1,615 1.615 NET INCOME APPLICABLE TO COMMON STOCK . $ 94.467 $ 125.155 $ 93.820 $ 102.025 $ 87,741 $ 77.386 $ 45,682 EARNINGS PER SHARE OF COMMON STOCK $ 2.39 $ 3.48 $ 2.76 $ 3.09 $ 2.69 $ 2.56 $ 1.68 13

Consolidated Statement of Changes in Financial Position Total ~ Total SOURCE OF FUNDS: 1976 1975 1974 1973 1972 1972-1976 1967-1976 Current operations: (Thousands of Dollars)

Net Income $ 116,845 $ 145,221 $ 105,474 $ 108,558 $ 89,817 $ 565,915 $ 853,412 Depreciation 88,591 82,322 74,775 64,815 52,898 363,401 557,063 Amortization of nuclear fuel assemblies owned.............. 1,1 05 1,105 1,105 Charge equivalent to the investment credit and deferred Income taxes, less amortization 133,582 54,859 36,165 ~ 29,543 20,054 274,203 284,793 Allowance for funds used during construction . ~65.497 ~48,486 ~39.907 ~25.961 ~30,444 ~210,295 ~228,347 Total 274,626 233,916 176,507 176,955 132,325 994,329 1,468,026 Sale of First Mortgage Bonds 125,950 276,146 225,151 120,363 50,391 798,001 1,270,644 Reimbursement by Trustee from Pollution Control Revenue Bonds for construction expenditures 1,894 16,284 21,713 27,198 67,089 67,089 Issuance of other long-term debt Sale of common stock

........ 200 72,543 5,314 62,925 129,531 44 44,812 63,608 66,760 198,697 247,040 208,697 344,091 Sale of preferred stock.............. 75,000 75,000 50,000 40,013 '0,079 300,092 300,092 Other sources-net 6,911 8,830 5,343 7,938 2,179 31,201 56,235 Decrease In working capital........... 77,769 11,187 88.956 205.357 Total $ 557.124 $ 678.415 $ 686,014 $ 417,323 $ 386,529 $ 2,725,405 $ 3,920,231 APPLICATION OF FUNDS:

Construction expenditures (excluding AFUDC) $ 372,870 $ 422,151 $ 564,823 $ 332,820 $ 327,302 $ 2,019,966 $ 3,033,103 Nuclear fuel . 31,384 31,141 143 604 11,966 75,238 86,376 Construction funds held by Trustee....... 6,832 6,832 6,832 Retirement and current maturity of long-term debt 11,687 70,032 50,252 750 7,625 140,346 140,346 Dividends 83,142 71,589 56,688 44,509 37,695 293,623 438,203 Other applications 6,001 867 7,276 4,293 1,941 20,378 25,567 Increase in working capital............ 52,040 82.635 34.347 169.022 189,804 Total $ 557,124 $ 678,415 $ 686,014 $ 417,323 $ 386,529 $ 2,725,405 83 920 231 CHANGE IN WORKING CAPITAL EFFECTED BY:

Increase (Decrease) In current assets:

Cash .. S 2,105 S (430) S 107 $ 1,287 $ (7,576) S (4,507) $ (2,996)

Temporary Investments (5,912) 9,912 4,000 (20,942)

Accounts receivable.............. 45,068 3,968 11,254 13,272 8,762 82,324 100,059 Materials and supplies............. (640) 7,999 9,707 12,364 967 30,397 48,459 Fossil fuel stock 13,952 1,664 22,584 7,616 3,052 48,868 50,980 Other changes-net (730) 5,052 51894 841 2,141 13,198 15,368 Decrease (Increase) In current liabilities:

Notes payable and current portion of long-term debt .. 3,490 108,853 (106,656) 43,504 (21,704) 27,487 (31,290)

Accounts payabie (5,722) 9,644 (9,802) (7,214) 1,330 (11,764) (25,867)

Customers'deposits.............. (11,060) (9,051) (4,110) (4,514) (3,912) (32,647) (44,910)

Income taxes 41,066 (42,640) 9,033 (8,398) 6,750 5,811 13,262 Other taxes 358 1,690 (6,776) (7,077) (2,686) (14,491) (19,821)

Interest accrued (677) (3,179) (9,1 26) (5,531) (1,971) (20,484) (30,609)

Contract retentlons . (1,921) (1,786) (2,474) (2,439) 3,092 (5,528) (5,996)

Tax collections payab! e 2,326 (2,098) (3,704) (1,405) (107) (4,988) (8,489)

Estimated revenue refunds (24,558) (24,558) (24,558)

Other changes-net ~5105 ~6,9 63 6,300 ~7,959 675 ~13.052 ~28.2 0 3 INCREASE (DECREASE) IN WORKING CAPITAL S 52.040 $ 82,635 ~$ 7.769 $ 34.347 ~$ 11,187 $ 80,066 ~$ 15,553 14

Retained Earnings and Coverage Statistics CONSOLIDATED STATEMENT OF 1976 1975 1974 1973 1972 1971 1966 RETAfNED EARNINGS (000)

Balance at beginning of year $ 334,524 $ 260,892 $ 212,107 $ 148,058 $ 95,936 $ 200,774 $ 78,371 Net income 116,845 145.221 105.474 108,558 89.817 79,001 47.297 Total - 451,369 406,113 317,581 256,616 185,753 279.775 125,668 Deduct cash dividends Preferred stock:

450%(allseries) 492% series D

.........".. 1 ~ 181 1,181 1,181 1,181 1,1 81 1,181 1,181 216 216 216 216 216 216 216 4.35% series E 218 218 218 218 218 218 218 7.28% series F . 4,368 4,368 4,368 4,465 7.40% series G 2,960 2,960 3,264 9.25% series H 4,625 4,625 2,326 10.08% series J . 7,560 5,875 8.70% series K 706 Common stock .. 61.308 52.146 45,116 38,429 36,080 32.224 21.080 Total dividends 83,142 71,589 56,689 44,509 37,695 33,839 22,695 Transfer to common stock and other-net . ~150,000 51 Balance at end of year ............ $ 368,221 $ 334.524 5260,8$ 2 $ 212,107 $ 148.058 $ 95.936 31D3,D24 Dividend Restrictions The Charter, Mortgage and Deed of Trust and 103/4% Note Indenture contain provisions which, under certaIn conditions, restrict the payment of dividends and other distributions to common shareholders. Under the most restrlctlve of these provisions $ 266,167,000 of retained earnings Is available for payment of dividends on Common Stock at December 31 1976. In the event the Company should be In arrears on its

~

sinking fund obligations, which commence in 1980, for the 10.08% Preferred Stock, the Company may not pay dividends on Common Stock.

TIMES INTEREST EARNED Before Taxes Interest on mortgage bonds...... 3.1 3.9 3.2 3.9 3.6 3.7 7.3 Interest on long-term debt....... 2.6 3.2 2.8 3.5 3.4 3.6 7.2 Total Interest charges 2.4 3.0 2.4 3.2 3.0 3.2 6.4 After Taxes Interest on mortgage bonds...... 2.3 2.8 2.6 3.0 2.9 2.8 4.5 Interest on long-term debt....... 1.9 2.3 2.4 2.7 2.7 2.8 4,4 Total interest charges 1.8 2.2 2.0 2.4 2.4 2.5 3.9 FIXED CHARGE COVERAGE (SEC basis) . 2.41 2.99 2.37 3.12 2.99 3.20 6.29 TIMES INTERESTAND PREFERRED DIVIDENDS EARNED (After Taxes) 1.6 1.9 1.8 2.2 2.4 3.6 EMBEDDED COST OF LONG-TERM DEBT

(%)-YEAR END . 7.72 7.61 7.27 6.43 6.18 6.08 4.35 EMBEDDED COST OF PREFERRED STOCK (%)-YEAR END........ 8.27 8.14 7.33 6.58 6.24 4.49 4.49 15

Long-Term Debt December 31 1976 ~

(Thousands of Dollars)

Principal Series Due Amount Florida Power 8 Light Company:

First Mortgage Bonds(1):

3'/i% June 1978 $ 11,000 3% .. June 1979 10,000 8Yi% . August 1980 50,000 3%% . November 1981 10,000 8%i% . May 1982 100,000 3%i% . April 1983 15,000 9Yi% May 1984 100,000 3'/i% . November 1984 10,000 3'/i% . April 1986 15,000 4%i% . December 1986 15,000 4'/i% . May 1987 15,000 4Yi% . April 1988 20,000 5% .. June 1989 25,000 4Yi% . August 1992 25,000 4'/i% . April 1994 35,000 4'/i% . March 1995 40,000 5% .. December 1995 40,000 6% .. December 1996 40,000 6i/i% . December 1997 60,000 7% .. June 1998 60,000 7% .. December 1998 50,000 8% .. June 1999 50,000 7'/i% . January2001 80,000 7/i% . September 2001 100,000 7'/i% . June 2002 50,000 7yi% . January 2003 70,000 8'/i% . January 2004 125,000 10'/i% March 2005 125,000 9.85% November 2005 50,000 9Yi% (issued June 1976) June 2006 125,000 Total first mortgage bonds ., 1,521,000 10i/i% Notes . November 1981 125,000 Note, 1% over prime February 1982 7,560 Bank Notes(under term loan agreement) (2) June 1979 50,000 Installment Purchase and Security Contracts:

Dade County,5.40% . October 2007 33,850 St. Lucle County, 6% . January 2004 25,000 Promissory Notes:

4%-8 Yi% Various to September 1987 4,200 Unamortized premium 6.449 Total 1,773,059 Land Resources Investment Co.:

Promissory Notes due In monthly Installments:

7Yi%-8'/i% . Various to August 1990 444 9yi% Real Estate Loan October 1995 5,909 9% Real Estate Loan . November 1995 209 EFC Serylces, Inc.:

8% Real Estate Loan Total Long Term Debt (3)

Annually through 1980

$ 1 779 771..

150 (1) Certain series of the Company's First Mortgage Bonds have sinking fund requirements through 1995 which may be satisfied by certification of property additions at the rate of 167% of such requirements. Such requirements are approx-Imately $ 4 million for each of the next five years.

(2) Interest Is based on the current commercial loan interest rate up to a maximum average interest rate of 7i/i% over the term of the loan.

(3) Not Including amounts classified as current portion of long-term debt. Annual maturlties of long-term debt are approx-Imately $ 12 million In 1977, $ 13 million In 1978, $ 63 million In 1979, $ 52 million In 1980, and $ 137 million In 1981.

Schedule of Preferred Stock, Capitalization Percentages and Common Stock Statistics SCHEDULE OF PREFERRED STOCK, DECEMBER 31, 1976

($ 100 PAR VALUE, CUMULATIVE,5,000,000 SHARES AUTHORIZED)

Series Shares Amount (Thousands of Dollars) 4.50%(including A, B, C) .. 262,000 $ 26,250 4.32% D 50,000 5,000 4.35% E 50,000 5,000 7.28% F 600,000 60,000 7.40% G 400,000 40,000 9.25% H 500,000 50,000 10.08% J 750,000 75,000 8.70% K (Issued October 1976) 750,000 75,000 Total preferred stock .. 3330,250 The 10.08% Preferred Stock is entitled to a sinking fund to retire a minimum of 37,500 shares and a maximum of 75,000 shares at $ 101.50 per share, plus accrued dividends to the redemption date on April 1 of each year, commencing on April 1, 1980. Minimum payments are designed to retire the entire issue by April 1 1999. Otherwise the issue is not redeemable prior to February 1 1985.

~ ~

In May 1975 the Company authorized 10,000,000 shares of Preferred Stock, no par value, and 5,000,000 shares of Subordinated Preferred Stock, no par value, to be known as "Preference Stock". None of these shares Is outstanding.

1976 1975 1974 1973 1972 1971 1966 CAPITALIZATIONPERCENTAGES-YEAR END Long. term debt (excluding current portion) .. 55.1 56.8 57.9 53.9 54.3 57.6 49.4 Preferred stock 10.4 8.9 7.4 6.5 5.4 2.4 4.7 Common stock equity .. 34.5 34.3 34.7 39.6 40.3 40.0 45.9 COMMON STOCKi Shares-year end (000) . 40,050 37,050 34,050 34,050 32,800 30,800 27,800 Shares-weighted average (000) 39,542 35,940 34,050 33,057 32,576 30,276 27,250 Earnings per share-weighted average........ $ 2.39 $ 3.48 $ 2.76 $ 3.09 $ 2.69 $ 2.56 $ 1.68 Net allowance for funds used during construction per share (included In earnings per share) $ 1.28 $ 1.1 1 $ 1.17 $ 0.79 $ 0.93 $ 0.60 Dividends paid per share .. $ 1.560 $ 1.435 $ 1.325 $ 1.160 $ 1.1 00 $ 1.060 $ 0.775 Dividend payout. % 65.3 412 48.1 37.5 40.9 41.6 46.1 Dividend rate at year end .. $ 1.56 $ 1.46 $ 1.36 $ 1.22 $ 1.10 $ 1.06 $ 0.82 Market value (NYSE)

High 282/0 27yi 29'/0 40% 44% 38Yi 39Yi Low . 20'/0 15% 13Yi 23'/0 28 28Yi 31 Yi Close 270/i 262/i 15Yi 24Y0 39/i 36yi 36%

Price earnings ratio (close) 11.6 7.7 5.6 8.0 14.6 14.2 21.9 Book value-end of year .. $ 27.81 $ 27.21 $ 25.60 $ 24.19 $ 21.80 $ 1925 $ 12.82 Earnings on average equity, Number of shareholders .

%............. 8.9 31,975 13.3 31,047 11.1 13.3 13.4 14.2 13.7 30,297 28,973 28,941 26,719 28,879

'AIIyears adjusted for 2 for 1 stock split May 1972.

Schedule of Income Taxes 1976 1975 1974 1973 1972 1971 1966 FEDERAL: (Thousands of Dollars)

Charged to operating expenses:

Current $ (49,374) $ 52,711 $ 12,736 $ 28,713 $ 23,500 $ 37,582 $ 39,348 Deferred:

-Accelerated Depreciation 53,375 29,437 22,960 19,418 8,332 4,219

-Debt Component of AFUDC..... 13,357 7,691

-Repair Allowance........... 20,472

-Estimated Revenue Refunds..... (11,198)

-Other .. 1,628 4,956 3,701 167 Deferred In prior years:

-Accelerated Depreciation (862) (628)

-Debt Component of AFUDC

-Repair Allowance...........

..... (54)

(764)

-Other .. 902 (1,426) (886) 9,254 (1,360) 10,624 (893) 12,621 (893) 2,921 (923) 2,327 Charge equivalent to the Investment credit 51,230 12,527 Amortization of investment credit...... ~2.139 ~2,195 ~1,787) ~1,360) ~929 (8D33 ~303)

Total 76,573 103,073 45,978 56,202 42,640 43,026 40,449 Credited to other income............ ~245 4.849 10,539 6.109 7,699 5,555 ~393)

Total Federal.............. 76.818 98,224 35,439 50,093 34.941 37,471 40,842 STATE:

Charged to operating expenses:

Current 212 7,252 2,405 4,560 3,939 Deferred:

-Accelerated Depreciation 5,851 3,228 2,518 2,036 914

-Debt Component of AFUDC 1,484 855

-Repair Allowance...... 2,245

-Estimated Revenue Refunds (1,228)

-Other 178 543 405 18 Deferred in prior years:

-Accelerated Depreciation (53) (69)

-Debt Component of AFUDC (6)

-Repair Allowance...... (84)

-Other 196 ~60 4,853 Total 8,795 11,749 5,328 6,614 Credited to other income....... ~(53 501 1.137 656 841 Total State......,... 8,848 11,248 4,191 5.958 4.012 TOTAL INCOME TAXES......... $ 85,666 $ 109.472 $ 39.630 $ 56,051 $ 38,953 $ 37.471 $ 40.842 Deferred income taxes and the charge equivalent to investment credit have increased significantly and current taxes have decreased depreciation and the invest-significantly for 1976 as compared to 1975 principally due to the effects of (1) recognizing for income tax purposes recognizing In1976 an addi-ment tax credit related to the Company's St. Lucie Unit No.1 and Manatee Unit No.1 placed In service in 1976,(2) tional repair allowance deduction for Income tax purposes for 1975 and 1976, and (3) providing deferred taxes on the debt component of AFUDC.

INCOME TAX (as percent of pretax Income)

Computed at statutory rate......... 48.0% 48.0% 48.0% 48.0% 48.0% 48.0% N.A.

Increases (reductions) in tax resulting from:

Pension costs and taxes capitalized . (3.3) (2 4) (3.6) (3.1)

Allowance for funds used during construction......... (8.6) (6.0) (13.2) (7.6) (11.3) (7.4)

Depreciation (.1) (3.5) (3,2) (4.3) (4.0)

State income taxes-net of Federal tax benefits..... ~... 2.3 2.3 1.5 1.9 1.6 Other-net 0.6 ~1.2 ~2.2 ~2.7 ~2)

Total income tax expense 42.3% 43.0% 27.3% 34.0% 30.2%

18

Schedule of Allowance for Funds Used During Construction (AFUDC) 1976 1975 1974 1973 1972 1971(1) 1966 (Dollars In Millions)

Monthly Average Construction Work In Progress(CWIP) .. $ 1,068.0 $ 854.3 $ 608.8 S402.6 $ 446.7 $ 366.4 Less:

Amount included in rate base(2).... 200.0 150.0 Pollution control projects (4) 23.2 25.9 9.3 1.9 9.3 AFUDC previously capitalized and included In monthly average CWIP .. 126.7 91.9 52.9 35.3 29.0 10.2 Other .. 31.1 65.5 50.3 42.3 37.7 14.7 CWIP base used to compute amount ol AFUDC to be capitalized.......... 687.0 521.0 496.3 323.1 370.7 341.5 Capitalization rate (%) (3)........... 9.33 9.04 8.0 8.0 8.0 5.3 Total 64.1 47.1 39.7 25.8 29.7 18.1 Interest on pollution control revenue bonds charged to specific proJects (4)...... 1.4 1.4 Amount of AFUDC charged to CWIP and credited to other income.......... $ 65.5 $ 48.5 $ 39.9 $ 26.0 $ 30.4 $ 18.1 Tax effect of debt portion of AFUDC (5):

1) charged to operating expenses (current provision for income taxes) and credited to other income (taxes on other Income) $ 4.6 $ 10.8 $ 7.1 $ 8.6 $ 5.6

2) for which deferred taxes have been provided . $ 14.$ $ 8.5 Portion of AFUDC attributable to funds provided by common stock equity:

1) stated as a percent of net Income applicable to common stock....... 33.0 19.0 28.6 17.5 24.6 16.5

2) stated on a per common share basis $ 0.7$ $ 0.66 $ 0.79 $ 0.54 $ 0.66 $ 0.42 (1) Effective May 1, 1971, the Company commenced capitalization of AFUDC.

(2) As part of the 1975 rate increase effective April 1 1975 the Company was allowed to include $ 200 million of CWIP ln its rate base.

~

(3) The rate from May 1, 1971 through March 31 1975 was based upon the actual capital ratios at the beginning of each year applied to the cost

~

ratio for each component of capital with interest component being reduced by the applicable income taxes and common equity being based on a reasonable estimate. Effective April 1 1975 the rate Is calculated by applying the capital ratio to the current embedded cost of each

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component of capital, except for common equity, which is based on the rate allowed in the Company's last rate case. The debt component is not reduced by the applicable Income taxes.

(4) Actual interest costs of pollution control revenue bonds are charged to the specific construction projects for which they are incurred.

(5) Allowed by the FPSC as an operating expense for rate making purposes In the Company's 1973 and 1975 rate cases.

Financial Statistics DISTRIBUTION OF INCOME BEFORE 1976 1975 1974 1973 1972 1971 1966 INTEREST-PERCENT interest charges .. 54.6 46.2 49.4 40.9 41.4 39.7 25.6 Preferred dividend requirements 8.7 7.4 5.6 3.6 1.4 1.2 2.5 Net income applicable to common stock 36.7 46.4 45.0 55.5 57.2 59.1 71.9 PERCENT OF OPERATING REVENUE Operating Expenses Fuel-oil 33.9 33.1 35.6 21.5 21.4 15.9 13.6 Fuel-gas 5.1 4.6 5.0 6.0 7.4 9.3 5.1 Fuel-nucfear .. 1.5 1.3 1.5 1.1 Nil Totalfuel . 40.5 ~ 39.0 42.1 28.6 28.8 25.2 18.7 Other generation expenses 8 interchange 1.3 1.6 1.7 1.6 2.5 2.1 1.7 Transmission-operation............ .4 .3 ,4 .5 .5 .5 .5 Distribution-operation............. 3.4 2.7 3.2 4.1 4.5 4.7 4.1 Customers, sales and administrative and general-operation... 9.8 8.9 9.1 10.6 10.5 10.7 11.2 Maintenance 5.6 5.1 6.0 7.2 7.3 7.6 6.0 Depreciation 7.5 7.0 7.9 9.1 9.3 9.7 10.6 Taxes other than Income 8.2 7.4 7.5 8.4 8.3 8.4 8.4 Income taxes 72 9.7 5.4 8.8 8.3 8.9 15,1 Total operating expenses 83.9 81.7 83.3 78.9 80.0 77.8 76.3 Operating Income 16.1 18.3 16.7 21.1 20.0 222 237 Other Income-net 5.5>> 4.5>> 5.2>> 4.6>> 6.8>> 4.8>>

Income before interest 21.6 22.8 21.9 25.7 26.8 27.0 23.7 Interest charges .. 11.8 10.5 10.8 10.5 11.1 10.7 6.1 Net Income 9.8>> 12.3>> 11 1>> 15.2>> 15.7>> 16.3>> 17.6 Preferred dividend requirements 1.9 1.7 1.2 .9 .4 .3 .6 Net income applicable to common stock.... 7.9>> 10.6>> 9.9>> 14.3>> 15.3>> 16.0>> 17.0 OPERATING REVENUE, EXPENSES AND INCOME-MILLSPER KWH SOLD Revenue Revenue from energy sales......... 33.8 34.4 28.9 21.9 19.6 18.7 19.5 Other revenue .. 3 3 2 .1 .1 .1 Total operating revenue 34.1 34.7 29.1 22.0 19.7 18.8 19.5 Operating expenses Fuel-oil 11.5 11.5 10.3 4.7 4.2 3.0 2.7 Fuel-gas 1.8 1.6 ~1.5 1.3 1.5 1.8 1.0 Fuel-nuclear .. .5 .4 .4 3 Nil Total fuel 13.8 13.5 12.2 6.3 5.7 4.8 3.7 Other generation expense and interchange .5 .5 .5 .4 .5 .4 ,3 Transmission-operation........... .1 .1 .1 .1 .1 .1 Distribution-operation............ 1.2 1.0 .9 .9 .9 .9 .8 Customers, sales and administrative & general-operation... 3.3 3.1 2.6 2.3 2.1 2.0 2.2 Maintenance 1.9 1.8 1.8 1.6 1.4 1.4 1.2 Total operation and maintenance .. 20.8 20.0 18.1 11.6 10.7 9.5 8.3 Depreciation 2.5 2.4 2.3 2.0 1.8 1.8 2.1 Taxes other than Income 2.8 2.5 2.2 1.8 1.6 1.6 1.6 Income taxes .. 2.5 3.4 1.6 2.0 1.6 1.7 2.9 Total operating expenses 28.6 28.3 24.2 17.4 15.7 14.6 14.9 Operating income . 5.5 6.4 4.9 4.6 .4.0 4.2 4.6 Other income-net 1.9 1.5 1.5 1.0 1.3 .9 Income before interest 7.4 7.9 6.4 5.6 5.3 5.1 4.6 Interest charges .. 4.1 3.6 3.1 2.3 2.2 2.0 1.2 Net Income 3.3 4,3 3.3 3,3 3.1 3.1 3,4 Preferred dividend requirements .6 .6 .4 .2 .1 .1 .1 Net Income applicable to common 2.7 3.7 2.9 3.1 3.0 3.0 3.3

>>Includes Allowance for Funds Used During Construction.

20

Utility Plant Statistics DETAIL OF UTILITYPLANT IN SERVICE 1976 1975 1974 1973 1972 1971 1966 (000) YEAR END Production Steam $ 747,522 $ 528,908 $ 542,408 $ 540,429 $ 492,219 $ 439,598 $ 305,154 Nuclear 726,073 244,361 235,512 231,254 108,724

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Gas turbines 171,797 170.973 166,236 109.942 109.833 70,906 Total production........ 1,645.392 944.242 944.156 881.625 710.776 510.504 305.154 Transmission . 491,497 435,053 407,754 341,1 98 308,799 283,906 195,773 Distribution 1,165,586 1,104,132 1,053,394 930,745 828,588 719,799 401,397 General and other 144,676 139,242 85,973 75,315 71,083 60,051 35,707

,Contributions in aid of construction-Unclassified .. ~29,952 ~25,088 ~22.324 Total plant in service ..... $ 3.447.151 82,622.669 82.461,325 $ 2,203,795 81,896,925 81,574.260 8938.031 DEPRECIABLE PLANT $ 3,367.053 $ 2,552.434 $ 2.400,306 $ 2,144.350 81.850.942 31,535.745 $ 911,069 CAPITAL EXPENDITURES (000)

Construction . $ 438,366 $ 466,091 $ 604,803 $ 352,453 $ 362,951 $ 330.965 $ 109,614 Nuclear fuel . 31.384 31.142 143 604 11,966 11.138 Total $ 469.750 $ 497,233 $ 604,946 $ 353,057 $ 374.917 $ 342,103 $ 109,614

SUMMARY

OF NET CHANGE IN PLANT (000)

Nuclear fuel $ 31,384 $ 31,142 $ 143 $ 604 $ 11,966 $ 11,138 $

Gross additions (net of transfers)...... 442,153 471,719 607,239 355,349 361,989 330,965 109,614 Equipment refunds and adjustments .... (295)

Contributions in aid of construction..... ~3,575 ~2.438 ~3,041 ~1,506) ~22.327 Total 470,022 500,423 604,341 354,447 351,634 342,103 109,319 Less plant retired or sold........... 12.453 28.550 15,889 16,438 16.272 14,817 9,799 Net change In total plant...... $ 457,569 $ 471,873 $ 588.452 $ 338.009 $ 335.362 $ 327.286 $ 99,520 PLANT RATIOS (all at Year End)

Accumulated depreciation as a percent of-Total plant (excluding nuclear fuel).... 15.3 14,6 15.1 16.0 16.1 16.8 18.8 Plant In service............... 18.1 20.8 19.8 19.2 19.6 21.1 20.0 Depreciable plant.............. 18.6 21.3 20.3 19.7 20.1 21.6 20.6 Plant In service per-Dollar of revenue.............. 3.49 Thousand KWH sold KW of capacity

$ 2.90 98.69 353.92

$ 2.22 76.89 293.79

$ 2.59 75.24 273.03

$ 3.09 67.88 265.23

$ 3.32 65.57 261.39

$ 3.25 61.04 273.26 68.29 275.00 Customer 1,873.41 1,479.81 1,429.47 1,348.30 1,252.78 1,125.52 910.67 Percentage of mortgage debt to-Total utility plant (excluding nuclear fuel) 37.1 38.5 37.2 38.3 38.7 42.6 37.4 Net utility plant (excluding nucfear fuel) . 43.8 45.2 43.8 45.6 46.2 51.1 46.1 Percentage of total debt to-Total utility plant (excluding nuclear fuel) 43.5 45.4 45.1 42.4 41.9 43.4 38.2 Net utility plant (excluding nuclear fuel) . 51.3 53.3 53.0 50.6 50.0 52.2 47.1 CWIP as percent of net utility plant (exluding nuclear fuel)........... 17.4 31.8 26.1 18.4 19.7 24.0 7.2 Operating Income as a percent of net utility plant (including nuclear fuel) ....... 5.4 6.8 5.7 6.7 5.9 6.5 7.8

Customers, Sales and Revenue Statistics (See notes below for various reclasslflcatlons of customers.)

1976 1975 1974 1973 1972 1971 1966 CUSTOMERS-YEAR END Residentlaf . 1,647,632 1,587,709 1,541,861 1,460,029 1,349,667 1,247,352 916,247 Commercial 179,914 173,346 169,222 167,732 144,948 134,223 99,594 Industrial 10,736 9,525 9,090 5,129 5,291 5,135 4,379 Other Sales To Public Authorities 1,718 1,684 1,628 1,570 14,228 11,944 9,796 Other Electric Utilities 43 40 40 43 37 37 24 Total 1,040,043 1.772.304 1.721.841 1.634.503 1,514.171 1.398,691 1.030.040 CUSTOMERS-YEAR END PERCENTAGE CHANGE FROM PREVIOUS YEAR Residential......... ~.... 3.8 3.0 5.6 8.2 15.7 8.2 8.0 7.6 7.8 5.3 3.4 CommercIal 3.8 2.4 .9 Industrial 12.7 4.8 77.2 (3.1) 3.0 .9 (1)

Other Sales To Public Authorities . 2.0 3.4 3.7 (89.0) 19.1 1.8 9.0 Other Electric Utilities 7.5 (7.0) 16.2 19.4 (4.0)

Total 3.8 2.9 5.3 7.9 8.3 7.5 5.1 CUSTOMERS-AVERAGE Residential .. 1,607,015 1,555,834 1,498,262 1,397,228 1,289,027 1,194,015 887,896 Commercial 177,046 171,575 168,991 158,977 139,743 129,371 98,327 Industrial . 9,994 8,977 7,147 5,275 5,208 5,116 4,361 Other Sales To Public Authorities 1,700 1,653 1,596 6,129 12,099 11,880 9,412 Other Electric Utilities 42 40 39 39 37 34 24 Total 1.795.797 1,738,079 1,676,035 1.567,648 1,446,114 1,340,416 1.000.020 KWH SALES (000)

Residential 17,625,344 17,312,499 16,802,406 16,822,976 14,652,751 13,080,408 6.495,328 Commercial 12,117,063 11,850,752 11,041,205 10,180,485 8,389,494 7,394,967 4.176,799 Industrial . 2,596,480 2,534,485 2,645,724 2,754,969 2,468,343 2,236,290 1.867,558 Other Sales To Public Authorities 789,869 809,421 746,991 1,358,640 2.295,132 2,129,657 874,717 Other Efectric Utilities....... 1,800,785 1,603,741 1.474.810 1,350,030 1.122.088 947,230 321,480 Total 34.929,541 34,110.898 32,711,136 32.467.100 28,927.808 25.788.552 13.735.882 KWH SALES-PERCENT Residential 50.5 50.8 51.4 51.8 50.7 50.7 47.3 Commercial 34.7 34.7 33.7 31.3 2930 28.7 30.4 Industrial . 7.4 7.4 8.1 8.5 8.5 8.7 13.6 Other Sales To Public Authorities 2.3 2.4 2.3 4.2 7.9 8.2 6.4 Other Electric Utilities 5.1 4.7 4.5 4.2 3.9 3.7 23 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 KWH SALES-PERCENT CHANGE FROM PREVIOUS YEAR Residential 1.8 3.0 (.1) 14.8 12.0 10.7 17.2 Commercial 2.2 7.3 8.5 21.3 13.4 14.2 10.1

'Industrial . 2.4 (4.2) (4.0) 11.6 10.4 9.4 8.6 Other Sales To Public Authorities . (2.4) 8.4 (45.0) (40.8) 7.8 6.7 11.6 Other Electric Utilities 12.3 8.7 9.2 20.3 18.5 20.5 27.4 Total 2.4 4.3 .8 12.2 12.2 11.6 13,6 During May and June, 1973, approximateiy 12,600 customers were transferred from Other Sales To Public Authorities as follows:

7,000 to Residential; 5,600 to CommercIal.

During 1974, customers previously being classified as Residential and Commercial were transferred to Industrial.

22

Customers, Sales and Revenue Statistics (See notes below for various reclasslfications of customers.)

REVENUE FROM ENERGY SALES (000) 1976 1975 1974 1973 1972 1971 1966 Residential $ 616,794 $ 610,952 $ 496,307 $ 382,215 $ 302,850 $ 258,271 $ 132,983 Commercial............., 426,737 426,191 333,062 238,867 178,795 151,842 90,129 Industrial 73,070 73,790 63,301 46,594 36,246 30,874 25,326 Other Sales To Public Authorities .. 28,161 27,958 21,457 25,824 37,477 32,664 16,353 Other Electric Utilities 36.331 35,474 29,170 16,353 11.966 9.101 2.786 Total 51,181,093 81.1 74,365 3 943.297 3 709,853 8 567.334 8 482,752 8 267.577 747 REVENUE FROM ENERGY SALES (%)

Residential 52.2 52.0 52.6 53.8 53.4 53.5 49.7 Commercial............. 36.1 36.3 35.3 33.7 31.5 31.4 33.7 Industrial .. 6.2 6.3 6.7 6.6 6.4 6.4 9.5 Other Sales To Public Authorities . 2.4 2.4 2.3 3.6 6.6 6.8 6.1 Other Electric Utilities 3.1 3.0 3.1 23 2.1 1.9 1.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 REVENUE FROM ENERGY SALES PERCENT CHANGE FROM PREVIOUS YEAR Residential 1.0 23.1 29.9 26.2 17.3 15.6 14.2 Commercial............, .1 28.0 39.4 33.6 17.8 17.7 (2)

Industrial . (1.0) 16.6 35.9 28.6 17.4 16.3 7.0 Other Sales To Public Authorities . .7 30.3 (16.9) (31.1) 14.7 14.3 7.0 Other Electric Utilities 2.4 21.6 78.4 36.7 31.5 33.8 24.3 Total 0.6 24,5 32.9 25.1 17.5 16.5 7.9 REVENUE FROM ENERGY SALES C PER KWH Residential 3.50 3.53 2.95 2.27 2.07 1.97 2.05 Commercial.............. 3.52 3.60 3.02 2.35 2.13 2.05 2.16 Industrial . 2.81 2.91 2.39 1.69 1.47 1.38 1.36 Other Sales To Public Authorities .. 3.57 3.45 2.87 1.90 1.63 1.53 1.87 Other Electric Utilities 2.02 2.21 1.98 1.21 1.07 .96 .87 Total 3.38 3.44 2.88 2.19 1.96 1.87 1.95 REVENUE FROM ENERGY SALES PER CUSTOMER Residential $ 383.81 $ 392.68 $ 331.26 $ 273.55 $ 234.94 $ 216.30 $ 149.77 Commercial.............. 2,410.32 2,483.99 1,970.89 1,502.53 1,279.46 1,173.69 916.63 Industrial . 7,311.42 8,219.91 8,856.98 8,832.98 6,959.68 6,034.79 5.807.38 Other Sales To Public Authorities .. 16,565.30 16,913.18 13,444.26 4,213.49 3,097.53 2,749.49 1,737.46 Other Electric Utilities 865,019,86 886,852.00 747,938.28 419,302.62 323,405.41 267,676.47 116,083.33 Total $ 657.?0 $ 675.67 $ 562,81 S 452.81 $ 392.32 5 360.1 5 $ 267.57 KWH SALES PER CUSTOMER Residential 10,968 11,1 27 11,215 12,040 11,367 10,955 7,315 Commercial.............. 68,440 69,070 65,336 64,037 60,035 57,161 42,479 industrial . 259,804 282,331 370,187 522,269 473,952 437,117 428,241 Other Sales To Public Authorities .. 464,629 489,668 468,039 221,674 189,696 179,264 92,936 Other Electric Utilities 42,875,836 40,093,541 37,815,649 34,616,165 30,326,703 27,859,706 13,395,000 Total 19,451 19,626 19,517 20,711 20,004 19,239 13,736 During May and June, 1973, approximately 12,600 customers were transferred from Other Sales To Public Authorities as follows:

7,000 to Residential; 5,600 to Commercial.

During 1974, customers previously being classified as Residential and Commercial were transferred to Industrial.

23

Generating and Other Statistics KWH GENERATED-INTERCHANGED (000) 1976 1975 1974 1973 1972 1971 1966 Steam-residual oil........ 20,535,424 18,832,184 17,745,767 21,1 67,946 20,517,627 17;099,550 11,342,333 Steam-gas . 8,277.336 8,835,555 9.154.695 8,794,363 9,229.634 9.948.178 3.684.402 Total steam 28.812.760 27.667.739 26.900.462 29.962.309 29.747.261 27.047,728 15.026.735 Gas turbine-distillate 655,225 971,553 683,554 226,130 892,577 495,097 Gas turbine-gas ......... 198.553 174,925 161,524 716,476 497,794 224.846 Total gas turbines..... 853,778 1.146.478 845.078 942,606 1.390.371 719.943 Nuclear 8.204.631 8.369.810 7.877.326 4.431.556 43.394 CombIned 87.050 cycle-oil'enerated-net.......... 31.181.026 27.767,671 15,026,735 37.958.219 37,184,027 35.622,866 35.336,471 Nuclear start-up tests 442,843 249,497 22,632 Interchanged-net (376,303) (32,627) (157,812) (401,364) 294,675 116,220 29,333 Company use and losses 3.095,218 3,040,502 2.753,918 2,717,504 2.570.525 2.095.339 1.320.186 Energy sold 34,929,541 34.110,898 32,711,136 32.467,100 28,927,808 25,788.552 13,735,882 GENERATION BY FUEL TYPE (%)

Residual Oil . 53.4 50.6 49.8 59.9 65.8 61.6 75.5 Natural Gas . 21.6 23.8 25.7 24.9 29.6 35.8 24.5 Gas turbines . 2.2 3.1 2.4 2.7 4.5 2.6 Nuclear 22.5 22.5 22.1 12.5 Combined cycle-oil ~ .3

'Test operation NET CAPABILITY-KW(year end)

Lauderdale 1,162,000 1.183,000 1,183,000 1,178,000 1,178,000 734,000 290,000 Riviera 544,000 692,000 692,000 694,000 694,000 694,000 694,000 Miami . 45,000 45,000 45,000 45,000 45,000 Cutler 287,000 330,000 327,000 327,000 327,000 327,000 Sanford 873,000 918,000 918,000 903,000 524,000 145,000 145,000 Palatka .. 113,000 113,000 114,000 114,000 114,000 114,000 Ft. Myers . 1,176,000 1,207,000 1,207,000 525,000 525,000 525,000 145,000 Port Everglades......... 1,599,500 1,657,500 1,657,500 1,643,500 1,643,500 1,643,500 1,241,000 Cape Canaveral......... 729,000 762,000 762,000 760,000 760,000 760,000 410,000 Manatee . 775,000 St. Lucie . 802,000 Turkey Point . 2.079 500 2.107.500 2.107500 2.119,500 1 446,500 773.500 Total 9,740,00D 8,927,00D 9015,000 8,3090DO 7257000 5.761,0DO 3,411,000 Rated at continuous capability beginning 1976.

An additional seven fossil fuel units with a total of 483 MW of installed generation have been placed on extended cold stand. by status.

CAPABILITYAT THE TIME OF PEAK 8,646,000 9,015,000 9,015,000 8,309,000 6,057,000 5,761,000 3,411,000 PEAK DEMAND-KW(60 minute-net) 7,598,000 7,076,000 7,235,000 6,894,000 6,011,000 5,378,000 2,827,000 RESERVE CAPABILITY-%at time of peak . 13.8 27.4 24.6 20.5 .8 7.1 20.7 LOAD FACTOR-(60 minute)......... 57 60 56 58 60 59 59 SUBSTATIONS Number 374 347 319 309 290 297 249 Capacity-MVA 51,116 47,047 44,518 42,032 37,342 35.1 38 21,705 MILES OF ELECTRIC LINES Transmission 3,933 3,819 3,700 3,531 3,460 3,452 2,912 Distribution 32,677 31,755 30,453 29,118 27,647 26,405 21,248 Total 36.610 35.574 34.153 32.649 31.107 29.857 24.160 CUSTOMERS PER MILE-DISTRIBUTION (YEAR END) .. 50 56 57 56 55 53 48 24

Fuel and Payroll Statistics 1976 1975 1974 1973 1972 1971 1966 FUEL Barrels oil used (000) 34,696 32.302 30,058 34,663 35,133 27,632 17,687 Cost per barrel $ 11.62 $ 12.13 $ 11.27 $ 4.43 $ 3.48 $ 2.79 $ 2.07 MCF gas used (000) 92,152 97,155 100,495 105,632 106,743 113,310 40,475 Cost per MCF . $ 0.666 $ 0.553 $ 0.475 $ 0.409 $ 0.392 $ 0.398 $ 0.339 Nuclear fuel consumed(MmBtu).... 98,699,396 95,042,765 86,512,131 48,837,000 639,000 Total barrels equivalent used (000)... 64,276 62,061 58,973 58,395 51,407 44,800 23,820 Average cost per barrel equivalent... $ 7.50 $ 7.43 $ 6.78 $ 3.50 $ 3.20 $ 2.73 $ 2.1 1 Average cost per barrel equivalent-%

Increase(decrease).......... 0.9 9.6 93.7 9.4 17.2 27.0 (5)

FUEL COST PER MILLIONBTU Steam-residual oil .. 186.7C 196.5C 183.6C Steam-gas Gas turbines-distillate

.......oil... 66.6C 231 ZC 55.2C 209.7C 47.5C 198.1C 72.3C 40.9C 96.8C 55.2C 39.2C 82.1C 44.1C 39.8C 88.9C 32.9C 33.9C Gas turbines-gas 68.9C 57.9C 47.7C 40.5C 40.2C 39.6C Combined cycle-oil ~ 2363C Nuclear 18.0C 16.7C 15.8c 15.9C 28.7C All fuels 119.2C 118.1 C 107.9C 55.8C 51.0C 42.9C 33.2C KWH PER BARREL EQUIVALENT..... 597 599 604 605 607 620 631 HEAT RATE (BTU PER KWH)

Steam-fossil 10,161 10,098 10,125 10,085 10,126 10,132 10,096 Gas turbines . 14,1 99 14,194 14,063 15,907 14,919 15,067 Combined 10,382 cycle'uclear 11,414 11,355 10,968 11,160 14,721 System . 10,533 10,507 10,408 10,381 10.346 10,259 10,096 FUEL COST-MILLS PER KWH Steam-residual oil 18.54 19.32 18.06 7.11 5.45 4.34 3.23 Steam-gas .. 7.15 5.89 5.07 4.37 4.20 4.23 3.72 Gas turblnest . 26.40 25.83 23.01 8.36 9.81 8.09 Combined cycle'..., .. 24.53 Nuclear 2.05 1.89 1.74 1.75 4.22 All fuels 12.56 12.41 11.23 5.79 5.27 4.40 3.35 fDistillate oil and natural gas

~Test operation PAYROLL STATISTICS Number of employees (year end).... 9,865 9,911 9,769 9,385 8,405 7,688 5,349 Payroll and Benefits (000)

Charged to construction S 46,994 $ 43,749 $ 39,553 $ 36,059 $ 31,680 $ 27,813 $ 11,194 Charged to operation, maintenance, clearing and other.......... 161,685 136 920 121 677 110 9'16 88,503 78,554 44.173 Total $ 208.679 $ 180,678 $ 161.430 $ 146,976 $ 120.183 $ 106,367 $ 55.367 Percent of operation 8 maintenance expenses from payroll and benefits Number of customers per employee

........... 20.5 18.7 18.9 27.2 27.5 31.2 36.7 (yearend).....,.....,........ 187 179 176 174 180 182 193 25

Summary of Significant whIch represents the allowed cost of capital used to finance Accounting and Reporting Policies a portion of construction work in progress. See the (All Financial Statements shown should be considered Schedule of AFUDC for detailed Information.

In conjunction with Notes In the Company's Annual Reports for appropriate years.) Storm Damage Fund and Related Reserve The storm damage fund is maintained at an amount equivalent to the reserve. Storm damage costs are to be Regulation paid from the fund and charged, less related tax effects, to the reserve as incurred. Securities held In the fund are Accounting and reporting policies of the Company are recorded at cost, which approximates market value.

subject to regulation by the Florida Public Service CommIssion(FPSC) and the Federal Power Commission Construction Funds Held by Trustee (FPC). The following summarizes the more significant of these policies. The Company has entered into Installment Purchase and Security Contracts relating to the financing of certaIn Basis of Consolidation pollution control facilities. Funds not required for current construction costs are held by the Trustee and invested in The consolidated financial statements Include the short-term securities.

accounts of the Company and its wholly-owned subsidiaries, Fuel Supply Service, Inc. (FSS), Land Pension and Employee Thrift Plans Resources Investment Co. and EFC Services, Inc. (EFC). All significant intercompany balances and transactions have The Company has a non-contributory employees'ension been eliminated. EFC was organized in December 1976 for plan covering substantially all employees and a the purpose of supplying engineering, fabrication and contributory Employee Thrift Plan which provides for basic construction services for power plants. contributions by eligible employees of up to 6% of their base salaries which are matched 50% by the Company. The Rates and Revenues Company's policy is to fund each year's accrued pension costs, Including amortization of the estimated unfunded Revenues are recognized based on monthly cycle prior service costs over thirty years. Pension and Employee billings to customers. Retail and wholesale rate schedules Thrift Plan costs for 1976 and 1975 were $ 17.4 million and are approved by the FPSC and FPC, respectively. The rate $ 15.1 million, respectively. The unfunded prior service cost schedules contain a fuel adjustment clause which gives of the pension plan at October 1, 1976 was approximately effect to changes In efficiency, the cost of fuel as well as $ 82 million using the entry age normal cost method. There the fuel component of purchased power and the generation was no excess of vested benefits over the fund balance as mix of fossil and nuclear fuels. Generally, the effects of October 1, 1976.

are reflected in customer billings two months after the changes occur. in August 1976 the Board of Directors approved an Employee Stock Ownership Plan pursuant to the Tax Electric UtilityPlant and Depreciation Reduction Act of 1975. Since the payment to the Plan is in lieu of an Income tax payment, there is no effect on The cost of additions, replacements, and renewals of net Income.

units of property is added to utility plant. The cost (estimated, if not known) of units of property retired, less Federal Investment Tax Credit net salvage, Is charged to accumulated depreciation.

Maintenance and repairs of property, and replacements and The normalization method Is used to account for renewals of items determined to be less than units of investment tax credits. The current provision and accrual property, are charged td operating expenses-maintenance. for Federal Income taxes are reduced by the amount of investment credit generated and utilized for income tax Book depreciation Is provided on a straight-line purposes and an equivalent charge is made in the service-life basis by primary accounts as directed by the Consolidated Statement of Income with the credit being FPSC using the following rates: made to unamortized investment credit. These deferred Steam production plant Nuclear production plant

........ 2.86%-4.00%

3.20%-6.20%

credits are amortized to income at a rate approximating the lives of the related property.

Other production plant.......... 4.00%

Transmission plant............ 1.82%-3.50% Deferred Income Taxes Distribution plant............. 1.67%-5.25%

2.38%-9.00%

Deferred income taxes are provided on book-tax timing General plant differences as prescribed by and In accordance with the Transportation equipment........ 8.16% rate-making policies of the FPSC. Accelerated depreciation The nuclear production plant rates include an estimated Is claimed for tax purposes on qualified property additions negative net salvage value of 19% for certaIn components. subsequent to January 1, 1970. Amounts charged to CWIP for accounting purposes which are not considered to be Substantially all utility plant is subject to the lien of the units of property for tax purposes are deducted as a repair Indentures securing the First Mortgage Bonds.

allowance on the Company's consolidated tax return.

Beginning April 1 1975 deferred income taxes were Amortization of Nuclear Fuel ~

provided on the debt portion of AFUDC. See Schedules of The cost of nuclear fuel for St. Lucie Unit No. 1, with a Income Taxes and AFUDC.

provision for zero net salvage, is amortized to operating expense on a unit of production method. Earnings Per Share Earnings per share of common stock (after dividend Allowance for Funds Used During Construction (AFUDC) requirements on preferred stock) is computed based on the The Company capitallzes as an additional cost of average number of common shares outstanding during property an allowance for funds used during construction the period.

26

Officers Directors MARSHALLMcDONALD President & Chief Executive Officer M. P. ANTHONY E. A, ADOMAT Serving since February, 1977.

Executive Vice President President, Anthony', Inc.

West Palm Beach, Fla.

F, E. AUTREY Executive Vice President GEORGE F. BENNETT Serving since 1970.

J. J. HUDIBURG President, Executive Vice President State Street Investment Corp., and R. G. MULHOLLAND Federal Street Fund, Inc.

Senior Vice President Boston, Mass.

J. G. SPENCER, JR. DAVID BLUMBERG Senior Vice President Serving since 1973.

R. W. WALL,JR. President and Director, Senior Vice President and Assista nt Secretary Planned Development Corp.;

Managing Partner, H. L. ALLEN Cutler Ridge Regional Center.

Group Vice President Miami Fla.

~

Procurement, Generation, & Proje cfs JEAN McARTHUR DAVIS L. C, HUNTER Sewing since February 1977.

Group Vice President President, McArthur Dairy, Inc.;

Divisional Operations Director, Southeast Bank of Miami and E. L. B I VANS Miami Branch of Federal Reserve Board, Vice President Miami, Fla.

System Planning t R. C. FULLERTON H. J. DAGER, JR. Serving since 1964.

Vlcc President Chairman of the Executive Committee.

Power Plant Engineering, Coral Gables, Fla.

Construction and Project Manage ment ROBERT B. KNIGHT TRACY DANESE Serving since February, 1977.

Vice President Chairman, National Food Sewices, Inc.

Public Affairs Coral Gables, Fla.

D. D. DUNLOP 'JOHN M. McCARTY Vice President Sewing since 1973.

Fuel Resources and Attorney, Rancher, and Research and Development Citrus Grower.

R. J. GARDNER Ft. Pierce, Fla.

Vice President tMARSHALLMcDONALD Strategic Planning Serving since 1971.

W. M. KLEIN President & Chief Executive Officer.

Vice President Miami, Fla.

Economic Development otWILL M. PRESTON A. D. SCHMIDT Served 1938-9 & since 1968 Vice President Retired. Of Counsel, Power Resources Steel Hector & Davis, the Company's General Counsel.

R. E. TALLON Miami, Fla.

Vice President Land Management and Commerci al Operations 'ED H. PRICE, JR.

Serving since 1972.

R. E. UHRIG Director, Government Relations Division, Vice President Tropicana Products, Inc.; former Nuclear and General Engineering Florida State Senator.

MICHAELC. COOK Bradenton, Fla.

Treasurer JOSEPH P. TARAVELLA H. P. WILLIAMS,JR. Serving since 1972.

Comptroller President and Chairman of the ASTRID PFEIFFER Board, Coral Ridge Properties, Inc.;

Secretary President, Community Development, Westinghouse Electric Corp.

W. H. BRUNETTI Coral Springs, Fla.

Assistant Comptroller 4 jLEWIS E. WADSWORTH T. R. CROOK Sewing since 1970.

Assistant Comptroller Farmer.

REGIA.ANDERSON Bunnell, Fla.

Assistant Treasurer J. L. HOWARD t Executive Committee

'Audit Committee Assistant Treasurer S. P. KEMP Assistant Secretary J. E. MOORE Assistant Secretary 27

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