ML19308D638: Difference between revisions
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_ The Company is continuing to offer shareholders the oppor-(, | _ The Company is continuing to offer shareholders the oppor-(, | ||
b , , ion New York Stoek Reshangs M' ' " | b , , ion New York Stoek Reshangs M' ' " | ||
S M "y | S M "y((hGM | ||
. t | . t | ||
: m. ,, _m .,y D W Pahf ] tunity to buy additional shares p mjy : p . m s sayse , %,ws.Mesaysi e j j ..pte Shere _ Wd of common stock through our | : m. ,, _m .,y D W Pahf ] tunity to buy additional shares p mjy : p . m s sayse , %,ws.Mesaysi e j j ..pte Shere _ Wd of common stock through our | ||
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Mkbk PCMk k CORPORATION ' | Mkbk PCMk k CORPORATION ' | ||
((*",k7o, m | |||
H ard 9oart | H ard 9oart | ||
{ Hubbard Construction Board of Directors Company inighway Construction) | { Hubbard Construction Board of Directors Company inighway Construction) | ||
Latest revision as of 07:15, 16 March 2020
| ML19308D638 | |
| Person / Time | |
|---|---|
| Site: | Crystal River  |
| Issue date: | 12/31/1976 |
| From: | FLORIDA POWER CORP. |
| To: | |
| Shared Package | |
| ML19308D637 | List: |
| References | |
| NUDOCS 8003090139 | |
| Download: ML19308D638 (28) | |
Text
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NOTICE - !
THE ATTACHED FILES ARE OFFICIAL RECORDS Oi(
A
\ DIVISION OF DOCUMENT CONTROL.
1976 /\* MUST 016.
BRANCH BE RETURNED PLEASE THEY HAVE BEEN CHARGED TO YOU FOR A LIMITED TIME PERIOD AND TO THE RECORDS FACILITY DO NOT SEND DOCUMENTS I
CHARGED OdT THROUGH THE MAIL. REMOVAL OF AN
~
PAGE(S) FROM DOCUMENT FOR R5 PRODUCTION MUS BE REFERRED TO FILE PERSONNEL.
OFADLINE RETURN DATE _
NE EGULEilY D[Ci.ii 7 i 00'Y 9hl77 l
! 800809 013,f T " *'* '**"*" "
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Contents 1 President's Report to Shareholders 12 Financial Statements 3 Financial Results-Unsatisfactory 22 Summary of Operations 1972-1970 4 Ra'e::--A Closer Look 23 Discussion of the Summary 5 Fuel-Meeting Our Objective of Operations 5 System Operations-Growing Stronger 23 Common Stock Price 7 Energy Sales-Renewed Growth and Dividends Per Share 9 People-Our Human Resource 24 Directors and Officers 10 Return to Coal . . . A Special Section 25 Business and System hiap Highlight 197r.
1976 1975 Revenues increased 9.3% . . . . . . $551,439,000 $504,496.000 Fuel and Purchased Power Were Up 5.8% $274.385,000 S259.340,000 Maintenance-Schedules Were Resumed $23,208,000 $17.611,000 Depreciation-Rates Were Increased . . $41,440,000 S32.826.000 Earnings Per Share Were Disappointing $3.21 S4.02 Dividends On Common Stock Increased . $2.145 $1.9875 Construction Was Down Again . . . . $137,631,000 $144,444.000 Sales of Energy Increased 6.3% . . .14.8 Billion KWH 13.0 Billion KWH Average Customers Were Up 3.7% . . . 644,846 621,780 Average Residential Usage Was Up . . 9,932 KWH 9.701 KWH Peak Demand Increased 7.6% . . . . 3,530,000 KW 3,281,000 KW Florida Power Corporation,320134th Street s'outh Telephone: 813-866-515) hfalling address: P.O. Box 14042, St. Petersburg. F.orida 33733 ggg g g g/77gf Date f# ofDocument
. REGUL4TC.'lY 60CKET FILE
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,, g To Our Shareholders:
The year 1976 was a year of point and From an operating standpoint, we were able counterpoint. There were mixed trends for to further improve our quality of ::,,rvice to our Company, as well as for the United States our custoniers by redecing our outage rate as a whole. In summary. the record contains by 5% during the year. Kilowatt-hour sales more positive than negative factors. I will grew at the rate of 6.3%. New customer discuss a number of these and draw some additions were at an annual rate of 3 7%,
conclusions as to future prospects. ot well ahead of the 2.7% in 1975. The net Earnings for the year were disappointino. The demand M adc energy jnmd to !
level of earnings declined from S4.02 pe share 3## """ "E "
for 1975 to $3.21 per share in 1976. These In 1976 a key factor in our construction results were due to a number of factors program was the push to bring fuel diversity includiig a resumption of heavy " catch-up" to the operations of the Company. We are on maintencr :e and the capacity problems the brink of achieving this through the
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3 associated with fuel conversion at our largest conversion of Crystal River Unit No. 2 to unit. It is encouraging that the quali*y of coal as a basic fuel in late December and earnings improved substantially over 1975. through the introduction into service of the This was reflected by a decline in the Crystal River nuclear unit which will enable allowance' for funds used during constr iction, us to utilize nuclear fuel. This will reduce full normalization of income taxes and higher the very heavy dependence we have had on depreciation rates effective January 1,1976. imported oil. A special section of Qis report As a result of the quality of earnings discusses our commitment to ca improvement. the Board of Directors Construction activities such as this fuel increased the quarterly dividend to F.57 per conversion and the completion of the nuclear share, or an annual rate of $2.28. This is the unit require the best abilities that we can
- 24th consecutive yearin which the Company's bring to the task. The construction program total common stock dividends have been during the year totaled $137.6 million. Toward increased This action reflects the stror g the completion of con'struction on the nuclear
- view of your Boaru .iat shareholders are unit, we were confronted with a wide variety I entitled to reasonable compensation for the of problems. These included difficulties with use of their funds. the large reactor coolant pumps and a g mW g
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structural problem in the concrete dome of latter part of this decade and through most of the reactor containment building. Both of the 1980s. There are many reasons for the these major problems were met and resolved coming shortage, but the major ones are delay during the year. and indecision at alllevels of governmental regulation. A heavy price will be paid in the
, During the rer.r, certam. management form of energy constraints upon the l realignments were accomplished in our
' economy and substantial changes in construction activities in order to handle as life-style on the part of all of us. America effectively as possible the complex is paying an instalment on that price in the interrelationships of licensing, environmental winter of 1976-77.
studies, engineering, construction and start-up of 8enerating units. The coming shortage will not be universally i Plans for construction in 1977 call for mn spread bough b nahn,
{ continuation of work on the 515,000 kilowatt put wH1 h more sem in some areas Gan ,
ni thers. It is our major objective, and one i Anclote Unit No. 2 and the initial steps I
i toward the conversion of the 383,000 kilowatt to which we are fully dedicated, to Crystal River Unit No.1 from oil to coal. In minimize its effects here in that portion of addition, we have under construction Florida which we serve. Our plans are several major transmission lines which focused in this direction-from fuel supply are designed to strengthen our reserve through the finished construction of electric position and resolve potential service supply facilities. They must, however, be reliability problems. carried out in a financially responsible manner, and we are also dedicated to this.
j The construction budget for 1977 of $114.8 milhon will be financed by internally At the AnnualMeeting of Stockholders on March 26,1977, Mr. A. P. Perez will generated funds. We are engaged in preliminary studies for the construction of a retire as an active Director of the Company.
large coal-fired um,t for operation on the liis long, faithful and highly effective system in the early 1980s. Other power service-from Plant Operator to Chairman supply possibilities, including purchase and f the Board-has been marked with joint ventures, are also being studied. accomplishment and steady discharge of his responsibilities through widely varied The reconsibility for maintaining electric circumstances. He has served as an service of a reliable nature in a 20,600 inspiration to all of us, and I want to pay square mile area of Florida is a heavy one. special recognition to his abilities and The long record of accomplishments of success in providing a vital service to our Company, now L. !!= 78th year, sometimes millions of people and the leadership of masks the difficulties encountered. These your Company during periods of difficulty are severe and growing. The importance and stress, of timely design and construction of facilities
- i. of ten overlooked because of our For the Board of Directors, service record.
Nonetheless,it is important to point out that i 1970 was not only our Bicentennial but also ,
probably the year that our nation moved President beyond the point of no return, toward an ;
ener8y shortage which will occur during the February 11,1977 l
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j FINANCIALRESULTS-UNSATISFACTORY y]{ .
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Although energy i ales continued to improve !b. Nd Cfn '" E during 1G/6. along with internal cash flow, our r;;M' L; d MM Qj 'f6.7 ]L- [ ydidkT earning per share declined. The reduction f.W ?),2 in earnings per share to $3.21 from $4.02 in **
1975 reilects a decrease of $7.7 million in
! income available for common stockholders.
Along with increased operating expenses, earnings per share were also affected by the
. greater number of average common shares outstanding in 1976.
i The annual dividend rate was raised from b j $2.10 to $2.28 per common share beginning W L T with the December 20,1976 quarterly M I 6 ,9 ~ $h i
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payment. The year 1976 was the 24th 4[ . W;.T consecutive year that the Company's total <+ "r common stock dividends have increased.
j We did experience an improver.ent in the s.
quality of earning, This was dua primarily to a decrease in the lowance for funds used -
during construction. In addition, we improved our cash flow position which j resulted in more of our construction requirements being internally generated. -.
Revenues and Expenses Inc' ease Located near the gulf beaches, our General Office in Revenues increased $46.9 million during 1976 St. Petersburg is the Company's administrative to $551.4 million from $504.5 million in 1975. C " I C'"'"'-
This growth rate is much less than the 24.6% rise during 1975 when the Company received increased revenues through higher rates and the recovery of increasing fuel costs.
Ft.7NINGS AND DIVIDENDS Operating expenses rose S45.9 million or ped SHARE 11"'o in 1976 to $462 million. Fuel expenses increased S13.7 million, or 5.8% in 1976
$5.00 i compared to a 17.4% increase in 1975. This l Is primarily a result of increases in power generation. Purchased power expenses were 4.00 f.02 slightly above 1975 due to our ability to obtain 3,w Ujs power at favorable interchange rates and 3.00 .' ~ m ',,
, additional requicements during peak periods. ] 'N ^
Maintenance xpenses increased significantly '
2'00 as the Company resumed certain projects previously deferred because of adverse financial conditions. Depreciation expense 1.00 was substantially higher due mainly to an increase in rates effective January 1,1976. o Federal income taxes increased during 1976 72 73 74 75 76
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.p N 4 ems l Mh Six 36.000 kilowatt mid-range combustion turhmes i N due pr narily to the adoption of full wm comp e m apnl in adeng sexWe "eneratmq capukhty to our system.
norn alization accounting in September 1975.
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Capital Requirements Reduced : .' '
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(;onstruction expenditures during 1970 were 3'.T 'N -
$137.6 million. down from $144.4 million in ,N 1975. The maior portion of the 1976 g' y' . My i ,
construction program was represented by expenditures for generating facilities. During
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- gs the remainder of the 1970s, about one-half of the construction expenditures will be used Aj '
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lo-" and 1978 will total about $238 milhon.
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( Jur only major long-term financing during p.
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the 3 ear u as the sale of Sao million of sme .\ rated 8 % "o first mortgage bonds due
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< ompletely repaid short-term borrow mgs.
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Q .il h */) f e RATES-A CLOSER LOOK .
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1)espite intreasmg energy sales and ledm ed 1 M .. *
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i onst ruction requirements. our ability to Fuel was loaded at the Crystal Rwer nuclear m.aintain quality service to customers and unit m December 1976. The umt will go into pros ule a realistic return on sharehoklers' commercial operation m .Nfarch 197-investments is deteriorating. In August 1975, the Florula Public Service Commission allowed the Company a rate of return on experience prior to pl u ing our nuclear unit our retail rate base in a range of 8.57% to into ;he rate base We are presently awaiting aT I)unng the latter part of 19 h our a deusum f rom the Commssion.
rate of return began to dechne and at y ear end it was 7 92"o.
The Company plans to file a petition in early To reverse the decreases in ot .te of return 19- with the Federal Power Commission and our earnings. and to avoid a request for to mcrease our wholesale-for-resale rates to mi reased rates. the Company has requested cooperative and municipal customers. It is the Commission to modify the fuel antu.ipated that the requested rates wouhl adjustment clause. This would recognize the prodm e an annual revenue mcrease in excess sat ings deris ed from nm lear fuel in 197~ of $20 million. The petition will request that as well as the increased capital expenditures the neu cates be effective with the in-service which made these savings possible. This date of the Crystal Ris er nuclear unit. This nonhl also allow a period of operating petition is based on an agreement with these
of its cost, we have sought long-term contracts in all phases of fuel supply. Our oil supply is under contract with two major suppliers.
Although these contracts expire at the end of 1977, new long-term agreements are being arranged. The supply of uranium for the Crystal River nuclear unit is under long-term contracts. The uranium enrichment is to be provided under long-term agreements with the U.S. Energy Research and Develop-ment Administration.
_ The coal supply for our current requirements W at Crystal River Unit No. 2 is being provided by our subsidiary, Electric Fuels
, ., Corporation. They are negotiating long-term I
4 3, , -
contracts to cover this unit and the additional l requirements for the second unit to be converted in 1978. Long-term coal supplies for our planned 1980s units are also being
,- developed by our subsidiary.
.x Most of our natural gas requirements are ,
Fuel delivery to the DeBary Plant by railroad provided under firm contracts which !
, tanl5 cars will he expanded when all of the expire in mid 1979. The Company also has '
units are burning residual oil. interruptible gas supply agreements for some generating units. These units use oil customers which was part of a S5.4 million when gas is unavailable.
rate increase effective January 1,1970. -
FUEI,-MEETING OUR OBJECTIVE During 1976, residual oil represented the Our objective is to obtain an adequate and largest portion of our fuel expense. The price dependable supply of fuel at the lowest of this oil, which was $1.68 per barrelin possible cost. We are reducing our 1972. increased to $10.89 in 1973. During dependence on oil as a fuel by adding nuclear early 1976, changes in several Federal fuel and coal. A major part of our long-term g vernment regulations produced a fuel objective is to expand the present and slight decrease in the price of oil through future use of coal on our system. The mid 1976. During the latter part of the year, progress we are making is discussed below as worldwide demand for residual oil and in a special section on page ten. increased, prices began to follow and offset the earher decreases. By early 1977, the -
Fuel Mix Company was paying $12.17 per barrel for ,
residual oil. We expect that these prices will l Our Company's 1970 fuel mix was 88% oil continue upward.
and 12"b gas. This is changing with the i conversion of our 498,000 kilowatt Crystal SYSTEM OPERATIONS-GROWING River Unit No. 2 to burn coal at year end STRONGER 1976 and the commercial operation of the Crystal River nuclear unit in 1977. Our fuel The renewed demand for the use of electricity since the energy crisis emphasizes mix in 1977 will be 48% oil. 28 "
nuclear.14"o coal and 10% gas. the need for continual review of our future generating requirements. With the Fuel Supplies commercial per tion of the Crystal River nuclear unit in 1977 and our Anclote Unit To obtain fuel that will be needed in the No. 2 in 1978, additional base load units will years ahead, and to secure maximum control not be built until the early 1980s.
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On January 19.1977, during a record-breaking cold spellin Florida, the Company's hourly
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peak demand reached 3,899.000 kilowatts.
This unusual weather brought snow and ice 8 conditions into our service area and extended '
into the southern part of the cate, damaging citius groves and vegetable crope. At the .,
time of the peak demand, the Comi.any was forced to interrupt 220,000 kilowatts af
- phosphate mining and chemical custon.ers.
l We were also forced into an unpreceden;ed program of planned outages for short periads -
of time on a rotating basis throughout our c l service area. This reduced the requirements . y.
by an additional 250,000 kilowctts.
f c New Generating Facilities /
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construction of 3'"3,000 kilowatts of capacity at our Deuary plant site. These units are
( .i being operated during the peak hours of the day and when large steam generating units are out of service for maintenance. They l gg are also available during emergency cells provides electrical current to conditions since they can be started
' reduce corrosion of underground cables.
fairly rapidly. The DeBary plant provides our system with a more flexible generating
, capability which is less costly to operate . . . , ,. .. .
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than typical peaking units.
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Nuclear fuel was used to generate ,
electricity for the first time on our system in 8I# ,
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structural problem in the dome of the reactor building was discovered early ir; the p *~~~a- .
year but repairs were completed by
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Sw November. As a result of routine testing procedures, a problem of abnormal shaf t
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vibrations was detected in one of four reactor . . . -
! coolant pumps. The pump was removed for r - "
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J repair and replaced. Additional problems occurred with other coolant pumps but were i /y y_..
r.- g resolved before fuelloading began. - .
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Construction on the Cryatal River nuclear
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- unit was completed in December 1976 at ~
l l which time the Company received a facility ,' .
operating license for fuel loading and initial .1 J # 4 ~. J. . .P '
i testing. In early January 1977, the unit began on-line computer programs reduce low power operation with commercial response time for customer service service expected in March 1977. The nuclear interruptions and trouble calls.
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1 CONSTRUCTION EXPENDITURES
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- I E GENERATICN @ TRANSMISSION M DISTRIBUTION E orHER (Mill ons)
$250 s2.o e unit will have a capacity of 825,000 kilowatts !
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, of which 10%, or 82.500 kilowatts, of I I
200 capacity will be owned by other Florida I
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utilities. When this unit is in full operation, i m M. it will replace over 7 million barrels of l Stu e residual oil annually.
33 i
11144 g The Company also has an oil-fired unit under j construction. The 515,000 kilowatt Anclote l Unit No. 2, originally scheduled for operation 50
- in 1975 and delayed as a result of the economic recession, is scheduled for 72 73 74 75 76 77 78 ,
ESTINATED onstmcM n M od Looking ahead, the Company's outlook for generating capacity will not require new I major generating units until the early 1980s.
This will allow the addition of combustion
- turbine and combined cycle units, which can l be installed in the latter part of the 1970s and ,
j s Environmental engineers early 1980s. In the event that economic '
N; sample water qualityin conditions again force a reduction in energy the intake canal at the demand, these units can be deferred or Ancfore Plant. eliminated without the large investment t
required for major generating units.
ENERGY SALES-RENEWED GROWTil f Energy sales continue to increase steadily following the abrupt decline experienced Solar pancis provide hot water during the energy crisis. While conservation for personnel at our DeBary Plant. measures will continue to affect the Company's energy sales, the current trend in usage indicates a resumption in crowth, 4
although at a lower rate than had been previously experienced.
During 1976, total energy sales were up G.3%
compared to 4.7% during 1975. The
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continuing growth of energy sales in 1976
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represented a leveling off of el ctric rates, (s
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below-average winter temperat ures, a modest economic recovery, and an increase
, . f/( _ in customers.
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h Our average number of custorcers reached l - A ., g 644,840, an increase of 23,066 during 1970.
l a JA ~ , This increase of 3.7% compares favorably j f 9 ,1 with the 2.7% during 1975. Our outlook for j #./ ,
, customer growth during the remainder of the l
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2 1970s is about 4% annually.
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FUEL MIX 100 %
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Residential Sales 80 .
! Our residential customer usage is abo t 20% ,
above the national average. Even with mild 60 Y Em j
I summer weather in 1976, residential sales increased 0.3% or more than double the
- W "M increase during 1975. A portion of these sales 40 I increases are due to the addition of new l customers in our service area. The balance of 20
! the increased sales are due to the rise in the
! average energy usage, which was 9,932 i kilowatt hours in 1970 compared to 9,701 0 76 77 78 i kilowatt-hours in 1975. This is the first ' '
- increase in annual residential usage since EST ATED l the energy crisis.
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l Our public information programs during 1976 '
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! were directed at increasing the efficiency of .
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energy usage by our customers. Customer e 11. ' t_ : x - .
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billinserts and television announcements I e - - Y. :N ? m:1
- pro /ided suggestions and ideas which Tx '[AIIh~*% 5.g!'fV D -e+~~'
j customers could use to conserve energy at f,
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j their home and business. v ; !, . ,_
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Sales to our commercial customers increased v %;; s _ -. : m y ; - v
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i 3.5%, which is well below the 8.0% increase
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EW ?' i WN *I9 Q in 1975. This reflects a continuation of the f; m %[
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/. -l slow economic recovery experienced during L .
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l 1976 and the moderate increase in summer tourist activity, e
A contributing factor to the lower growth rate was the impact of conservation efforts
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- by many retail department tores. In addition, there was a significant slowdown in the Cem.M Florida is home for the National Football h construction of commercial buildings, with League, Tampa Bay Buccancers and the North much of the activity during the year American soccer League, Tampa Bay Rowdies.
directed at remodeling or expansion of existing facilities. . .
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Industrial Sales Rebound # " #
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i Energy sales to our industrial customers
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i increased 8.5% in 1976, a significant -Y Mkg > c improvement over the 2.4% increase in 1975. pc - $j . * .
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The primary reason was the increased g e C
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i New Industry for Florida Economic conditions in Florida are based a on the tourist, construction and agribusiness industries. To help overcome Florida's l current lag in economic recos ery, and the adverse impact of recession on the state's industrial output, a statewide effort has been launched to attract new industry.
i During 1970, the Florida legislature created the Governor's Council on Economic Development which will actively pursue this objective beginning in 1977.
'$$ Economic Recovery N
k, Florida's slow economic upturn continued throughout 1970. Unemployment decreased
, y from 11.1'L early in the year to 9.4% by Crowing tourist activily is reflected in year end. In contrast to the rising national expansion of Sea World. Circus World unemployment rate Florida's rateis and Walt Disney World.
continuing a general decline as construction-related employment begins to improve.
Tourist activity continues to increase, especially during the winter season. Many
" " " 511 e; major attractions in our service area have expanded their facilities. Construction of the i
2 L second phase of Walt Disney World, the Experimental Prototype Community of Tomorrow. is scheduled te begin in 1977. The first step will be the World Showcase. [
a permanent exhibit of cultures and products of many foreign countries which is scheduled to open in 1979.
.Y ' _ -& .A PEOPLE-OUR IIUMAN RESOURCE
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w g.w.7 Although the average number of customers
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-j"tF increased 3.7%, total employment during 1976 increased by only 2.1'N. The Company's efforts to hold down hiring has placed additional demands on current employees.
The national economic recovery and tha leveling off of gasoline prices has improved Our Affimative Action Program places a year round tourist activity. strong emphasis on finding and utilizing the talent in the minority and female segments of
- t. Petersburg, winter home of the our society. Although employment decisions few York .\rets and St. Louis are based on job related qualifications.
'ardinals. is completing new baseball special emphasis is being placed in icilities at Al Lang Stadimn. developing and promoting these individuals.
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- Conversion of Unit Nos.1 and 2 reactivated the coal
) unloading and coal yard facilitics.
RETURN TO COAL I
I Our 383,000 kilowatt Crystal River Unit No.1 Unit No.1 will undergo the conversion
- recorded the introduction of coal as a boiler process in 1977, with completion in mid 1978. )
l fuel to our system in November 1966. This The cost will reach $18 million on this unit, i 1
was followed by the 498.000 kilowatt renecting the additional cost of building an Unit No. 2 in November 1969. electrostatic precipitator to meet current Due to rising costs and environmental emission standards.
concerns, these units were converted to !
l residual oil by late 1971. The conversion to Coal Supply l , oil provided savings in plant operating costs i I i beig and reduced maintenance expenses, as well as lower fuel handling and delivery costs. provided by the Company's subsidiary, 1 1 Islectric Fuels Corporation, through short-term
) As the cost of residual oilincreased contracts. The subsidiary also began j rapidly, the Company began to consider the negotiations on long term contracts for
] possibilities of reconverting the units back to future supplies to meet our need for j coal. Our study included the environmental additional coal. When Unit No.1 is converted i facilities required anel the possibilities of in 1978, our coal will be provided by both I securing better conirol over a reliable source water and railroad transportation. '
of coal. Ily using domestic coal supplies, the conversion will reduce our country s The coal being burned in Unit No. 2 is a need for higher priced foreign oil. blend of higher sulfur coal found in western Kentucky and southern Illinois. and lower Conversion is on Schedule sunun- 1 usual 1y found in eastern Kentucky and %,est Virgima. The midwest As of year end 1976 Unit No. 2 was again coalis being transported by river barges into supplying coal-fired energy to our system. the New Orleans area and then across the This was completed at a cost of $13 million. Gulf of .\fexico in larger oceangoing barges.
in less than one year, including new The Company, through its subsidiary,is construction and the refitting of existing building two of the larger bages. Two tug '
facilities. Another phase of the conversion boats will also be obtained to power these ;
process centered around the coal yard barges. The subsidiary plans to construct and !
facilities and barge unloading equipment. own railroad cars that will be used in unit i The storage area has been redesigned to trains to dcliver the lower sulfur coal to the accommodate up to 500,000 tons of coal. Crystal River Plant.
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l certification procedures. Until the problems - : - associated with nuclear energy are resolved. Conversion of the Unit No.1 boder coal will continue to play an important part and other plant facihties wdl be in our system operations. completed in 19 8. OI fi3 Mf fl bhd)]h[};0lj "
e Balance Sheets DECEhfDER 31,1976 AND 1975 ASSETS 1978 1975 (Thousands) ELECTRIC PLANT (Notes 1, 6 and 8): In service and held for future use . . . . . . . . $1,262,328 $1,181,832 Less-Accumulated depreciation . . . . . . . . 261,407 223,736
$1,000,921 $ 958,096 Construction work in progress (includes nuclear unit of $365,759,000 in 1976 and $315,128,000 in 1975) . . 454,006 411,193 Nuclear fuel . . . . . . . . . . . . . . . 33,095 30,362
$1,488,022 $1.399,651 OTHER PROPERTY AND INVESThfENTS, at cost:
Nonutility property . . . . . . . . . . . . . $ 4,438 $ 4,226 Other investments . . . . . . . . . . . . . . c36 801
$ 5,274 $ 5,027 CURRENT ASSETS:
Cash (Note 4) . . . . . . . . . . . . . . . $ 11,511 4 10,642 Special deposits . . . . . . . . . . . . . . 643 2,944 Accounts receivable, less reserve of $1,199,000 in 1976 and $1,145,000 in 1975. . . . . . . . . . . . 30,045 34,919 Income taxes receivable . . . . . . . . . . . 13,058 - hiaterials and supplies, at average cost - Fuel. . . . . . . . . . . . . . . . . . 34,649 27.116 Plant materials and operating supplies . . . . . 26,201 31,073 Prepayments . . . . . . . . . . . . . . . 837 614
$ 116,944 $ 107,308 DEFERRED CHARGES:
Unamortized debt expense, being amortized over term of debt . . . . . . . . . . . . . . . . $ 4,676 $ 4,246 Other (Note 6) . . . . . . . . . . . . . . 7,831 8,365
$ 12,507 $ 12.611
$1,622,747 $1,524,597 The accompanying notes are an integral part of these financial statements.
12 g .ama q y ._
FLCRIDA POWER CORPORATION CAPITALIZATION AND LIABILITIES 1978 1975 CAPITALIZATION (see accompanying statements): Common stock equity . . . . . . . . .... $ 442,165 $ 425,633 Cumulative preferred stock . . . . . . .... 175,350 176,920 Long-term debt . . . . . . . . . . . .... 724,617 661,525
$1,342,132 $1,264,076 CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . .... $ 23,093 $ 15,613 Customers' deposits . . . . . . . . . .... 20,903 16,114 Accrued income taxes . . . . . . . . .... 2.919 Accrued other taxes . . . . . . . . .... 11,080 10,143 Accrued interest . . . . . . . . . . .... 10,434 8,966 Other . . . . . . . . . . . . . . .... 3,264 3,981
$ 68,774 $ 57,736 Long-term debt, due within one year . . . .... 12,800 -
Bank loans (Note 4) . . . . . . . . . .... - 40,000 Commercial paper (Note 4) . . . . . . .... 9,000 27.700
$ 90,574 $ 125,436 DEFERRED CREDITS (Note Ig):
Accumulated deferred income taxes . . . .... $ 140,436 $ 108,755 Accumulated deferred investment tax credits .... 46,619 24,007 Other . . . . . . . . . . . . . . .... 2,986 1,421
$ 190,041 $ 135,083 CONSTRUCTION PROGRAM (Note 6)
$1,622.747 $1.524,597 13
o Statements of Income FOR THE YEARS ENDED DECEMBER 31,1976 AND 1975 1976 1975 (Thousands) OPERATING REVENUES (Note ib): Residential . . . . . . . . . . . . . . . . $ 240,968 $ 221.134 Commercial . . . . . . . . . . . . . . . . 142,121 132,530 Industrial . . . . . . . . . . . . . . . . . 75,657 69,986 Other . . . . . . . . . . . . . . . . . . 92,693 80.846
$ 551,439 $ 504,496 OPERATING EXPENSES:
Operation-Fuel (Note 1b) . . . . . . . . . . . . . . $ 248,849 $ 235,138 Purchased power . . . . . . . . . . . . . 25,536 24,202 Other . . . . . . . . . . . . . . . . . 41,371 40,124
$ 315,756 $ 299,464 hiaintenance (Note Ic) . . . . . . . . . . . . 23,208 17,611 Depreciation (Note tc) . . . . . . . . . . . . 41,440 32,826 Taxes other than income taxes . . . . . . . . . 33,197 30,913 Income taxes (Notes 1g and 5)-
Federal . . . . . . . . . . . . . . . . . 43,361 31,978 State . . . . . . . . . . . . . . . . . 5,067 3,329 a
$ 462,029 $ 416,121 OPERATING INCOh1E . . . . . . . . . . . . . $ 89,410 $ 88.375 m
OTHER INCOhfE AND DEDUCTIONS: Allowance for funds used during construction (Note id) $ 21,108 $ 30.416 Gain on reacquired bonds . . . . . . . . . . . 1,214 1,702 hiiscellaneous other income and (deductions) . . . . (1,412) (998)
$ 20,910 $ 31.120 INTEREST CHARGES:
Interest on long-term debt . . . . . . . . . . . $ 46,028 $ 43,892 Other interest expense . . . . . . . . . . . . 5,030 8,500
$ 51,058 52.452 NET INCOME . . . . . . . . . . . . . . . . $ 59,262 $ 67,043 DIVIDENDS ON PREFERRED STOCK . . . . . . . 13,655 13,733 NET INCOME AFTER DIVIDENDS ON PREFERRED STOCK . . . . . . . . . . . . . . . . . $ 45,607 $ 53,310 AVERAGE SHARES OF COhtMON STOCK OUTSTANDING . . . . . . . . . . . . . . 14,199,190 13,240,038 EARNINGS PER AVERAGE COMMON SHARE (Note th) $3.21 $4.02 The accompanying notes are an inte8ral part of these financial statements.
14
FLORIDA POWER cocoaxnox StOtements Of Retained EOrnings FOR THE YEARS ENDED DECEMBER 31.1976 AND 1975 1976 1975 (Thousands) Balance at Beginning of Year . . . . . . . . . . . . . . . $190,702 $164,760 Add-Net income after dividends on preferred stock . . . . . . 45,607 53,310
$236,309 $218,070 Cash dividends on common stock; qcarterly dividends equivalent to the following annual rates-
$1.05 . . . . . . . . . . . . . . . . . . . . . $ - $ 18.828
$2.10 . . . . . . . . . . . . . . . . . . . . . 22,356 7.441
$2.28 . . . . . . . . . . . . . . . . . . . . . 8,106 -
Expense of issuing common stock . . . . . . . . . . . . 75 1,099
$ 30,537 $ 27.368 Balance at End of Year . . . . . . . . . . . . . . . . . $205,772 $190,702 StOtements Of Source Of Funds Used FOr Construction FOR THE YEARS ENDED DECEMBER 31,1976 AND 1975 1976 1975 SOURCE OF FUNDS: ('1housands)
Funds Derived from Operations-Net income after dividends on preferred stock . . . . . . $ 45,607 $ 53,310 Less-Dividends on common stock . . . . . . . . . . 30,462 26.269 Earnings retained in the business . . . . . . . . . . . $ 15,145 $ 27,041 llena included in net income not requiring cash outlay-Depreciation . . . . . . . . . . 41,440 32,826 Deferred income taxes and investment tax credit . . . 53,765 26,874 Allowance for funds used during construction . . . . . . (21,108) (30,416)
$ 89,242 $ 56.325 Decrease in Net Current Assets (exclusive of current debt) (a) . . $ 1,402 $ 677 Funds from Financing and Other Sources-First mortgage bonds . . . . . . . . . . . . . . . $ 80,582 $ -
Participation in nuclear unit . . . . . . . . . . . . . 3,852 41,151 Electric consumer capital notes . . . . . . . . . . . . - 23,965 Common stock . . . . . . . . . . . . . . . . . . 1,387 27.611 Net decrease in short-term debt . . . . . . . . . . . . (58,700) (29,515) Long-term debt and preferred stock matured or reacquired for sinking fund . . . . . . . . . . . . . . . . . (6,546) (6,533) Other sources (net) . . . . . . . . . . . . . . . . . 5,304 347
$ 25,879 $ 57,026
$116,523 $114,028 Allowance for Funds Used During Construction . . . . . . 21,108 30,416 FUNDS USED FOR CONSTRUCTION . . . . . . . . . . . $137,631 $144.444 (a) Analysis of Decrease in Net Current Assets-Cash and special deposits . . . . . . . . . . . . . . $ 1,432 $ 427 Accounts receivable . . . . . . . . . . . . . . . 4,874 (4,592)
Income taxes receivable . . . . . . . . . . . . (13,058) 7,724 Materials and supplies . . . . . . . . . . . . . (2,661) 428 Accounts payable . . . . , , ...... 7,480 (605) Accrued taxes and interest . . . . . ...... (514) (7.004) Other (net) . . . . . . . . . . . . . ...... 3,849 4,299
$ 1,402 $ 677 The accompanying notes are an integral part of these financial statements.
15
Statements of Capitalization DECEh!BER 31,1976 AND 1975 1976 1975 (Thousands) COMhf0N STOCK EQUITY (Note 3): Common stock, $2.50 par, authorized 30,000,000 shares Common Stock Listed (443,045 shares reserved for conversion of convertible New york debentures), outstanding 14,229,520 shares in 1976 and Stock Ex hange 14.177,817 in M75 . . . . . . . . . . . . . $ 35,574 $ 35,445 Premium on cap tal stock . . . . . . . . . . . 199,376 198.043 T ans e nt for Other paid-in capital . . . . . . . . . . . . . 1,443 1.443 Retained earnings, including $61,241,000 not available for Trust company dividends on common stock . . . . . . . . . 205,772 190,702 New York, N.Y.
$ 442,165 33 % $ 425,633 34 %
CUhfULATIVE PREFERRED STOCK (Notes 2 r,nd 3):
$100 par, authorized 4,000,000 shares-Shares Outstanding Series December 31,1976 4% 4.75% . . . . . . . 335,000 $ 33,500 $ 33,500 Transfer Agent for 7.40 % . . . . . . . . 300,000 30,000 30,000 Prefer ed Stock 7.76 % . . . . . 500,000 50,000 50,000 Chemical Bank 8.80 % . . . . . . . 200,000 20,000 20,000 new York, N.Y.
10 % . . . . . . . . . 418,500 41,850 43,420
$ 175,350 13 % $ 176,920 14 %
LONG-TERM DEBT (Note 2): First mortgage bonds-3% % due November 1,1978 . . . . . . . . . . $ 5,481 $ 5,629 Trustees for 3% % 'te july t,1981 . . . . . . . . . . . . 8,995 9,245 First Mortgage Bonds hiaturing 1982 through 1991-3% % to 4% % . . . . 71,514 73,741 Morgan Guaranty Trust hiaturing 1992 through 2001--4% % to 9% . . . . . 235,084 237,447 Company of New York hiaturing 2002 through 2006--7%% to 8%% . . . . 310,000 230,000 riorida rirst National Premium, being amortized over term of bonds . . 7,066 6,113 Bank of Jacksonville Par value of bonds reacquired to meet cash sinking fund requirements . . . . . . . . . . . . (5,123) (5.135)
$ 633,017 $ 557,040 Convertible debentures, 4Ye% due August 1,1986 (con- Trustee for vertible into shares of common stock at the rate of Convertible Debentures one share for each $44.00 of principal amount) . . 19,494 19,494 Irving Trust Company Electric consumer capital notes- New York, N.Y.
Due October 1, 1977--8.50 % . . . . . . . . . 12,800 12,826 Due October 1, 1980 - 9.10 % . . . . . . 11,297 11,298 Trustee for Electric Consumer Guarante cf 7%% pollution control revenue bonds due Capital Notes 2004 . . . . . . . . . . . . . . . . . . 10,575 10,575 Southeast National Bank Dank term loan at 115% of prime rate, due 1979. . . . 50,000 50,000 of St. Petersburg Promissory notes, 7%% . . . . . . . . . . . . 234 292
$ 737,417 $ 661,525 Long term debt due within one year . . . . . . . . 12,800 -
$ 724 a17 54 % $ 681,525 52 %
$1,342,132 $1.264,078 The accompanying notes are an integral part of these financial statements.
16
FCRIDA POWER CORPORADON Notes TO Financial Statements (1)
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (a) Electric Plant-Electric plant is stated at the original cost of construction which includes payroll and related costs such as taxes, pensions, and other fringe benefits, general and administrative costs and an allowance for funds used during construction. Substantially all of the Company's electric plant is pledged as collateral for the first mortgage bonds. (b) Operating Revenues and Fuel Expense-The Company recognizes revenues concurrent with billing to customers on a cycle billing basis. The cost of fuel for electric generation is charged to expense as burned. (c) Depreciation and Maintenance-The Company provides for the depreciation of the original cost of properties over their estimated useful lives on a straight-line basis. The annual provisions for depreciation, expressed as a percentage of the average balances of depreciable plant, for the years 1976 and 1975 were 3.65% and 3.17% respectively. Higher depreciation rates put into effect on anuary 1, 1976 resulted in an increase in depreciation expense of approximately $5,400,000.
'The Company charges maintenance with the cost of repairs and minor renewals of property, the plant accounts with the cost of renewals and replacements of property units and accumulated depreciation with cost, less net salvage, of property units retired.
(d) Allowance for Funds Used During Construction (AFDC)-This item represents the estimated cost of funds applicable to utility plant in process of construction. Recognition of this item as a cost of utility plant is appropriate because it constitutes an actual cost of construction and, under established regulatory rate practices, the Company is permitted to earn a return on such costs and to recover them in the rates charged for utility services. Assuming that funds used to finance construction during the years 1976 and 1975 were supplied in the same proportion as the capitalization ratios used in developing the AFDC rate (presently 50% from long-term debt:14% from prefwred stock equity; 28% from common stock equity and 8% from deferred taxes and customers' deposits), the common equity component of AFDC as related to earnings on common stock was 22% for both 1976 and 1975. Concurrent with a rate increace effective on Augus t 22,1975, the rate used in computing AFDC was reduced from 10.5% to 8.66% effective September 1,1975. This revision is the result of changing the cost components used in determining the rate from the incremental to the embedded cost of long-term debt and preferred stock equity. In addition, the construction work in progress base against which this rate is applied was reduced by approximately $106,250,000. The amount excluded from the base for computing AFDC is included in the rate base for ratemaking purposes. AFDC for the year ended December 31,1975 as shown in the statements of source of funds used for construction has been reclassified to include the debt and preferred stock equity components as a reduction from funds derived from operations to conform with the presentation for the year ended December 31,1976. (e) Investment in Subsidiary-In March,1976 the Company formed Electric Fuels Corporation, a wholly-owned subsidiary, for the purpose of securing long-term fuel supplies. The Company accounts for the investment in the subsidiary on the equity method. l 17
i Notes To Financial Statements (f) Pension Coste-The Company has a retirement plan for substantially all employees. The Company's policy is to fund pension costs accrued. Pension costs for the years 1976 and 1975 were $5,640,000 and $5.137.000, respect'.vely. The unfunded past service liability of the plan, which is being funded over 10 years, was approximately $10,280,000 at December 31,1976. The assets of the plan exceed the actuarially computed value of the vested benefits at December 31,1976. (g) Income Taxes-Deferred income taxes result primarily from the use of liberalized depreciation, accelerated amortization and from the deferral of taxes on the interest component of the allowance for funds used during construction and other book-tax timing differences as recognized in rates by the Florida Public Service Commission. Concurrent with a rate inc* ease effective August 22, 1975, the Company adopted full normalization of substantially all current book. tax timing differences. The investment tax credits, including job development investment tax credits, have been deferred and are being amortized through credits to income over the lives of the related property. - (h) Earnings Per Share-Earnings per common share were determined based on the weighted average number of shares outstanding during each year. The dilutive effect of the outstanding convertible debentures is less than 3% for each year. (2) SINKING FUND REQUIREMENTS The annual sinking fund requirement relating to 13:e first mortgage bonds at December 31,1976 is
$10,050,000 of which S4.987,500 must be satisfied :n cash or an equal principal amount of bonds and the balance may be satisfied with bondable additions. At December 31,1976 the Company had reacquired
$5,123,000 principal amount of bonds. This amount will be used to satisfy the 1977 sinking fund requirement and the remainder will be used for futt.re sinking fund requirements. The balance of the 1977 sinking fur.d requirement will be met with bondable additions.
The Company is also required to redeem and retire 15,750 shares of the cumulative preferred stock, 10% series, before August 15 of each year. (3) EQUITY SECURITIES The changes in equity securitics for 1976 and 1975 are as follows: Premium Other Common on Paid-In Preferred Stock Capital Stock Capital Stock (Thousands) Dalance December 31,1974. . . . . . . $32,185 $172,593 $1,369 $178,500 1,303,858 common shares sold . . . . . 3,260 25,450 - - 10% series,15,800 shares reacquired . . - - 74 (1,580) Balance December 31,1975. . . . . . . $35,445 $198,043 $1,443 $176,920 51,703 common shares sold . . . . . . 129 1,333 - - 10% series,15,700 shares reacquired . . . - - - (1,570) Balance December 31,1976. . . . . . . $35,574 $199,376 $1,443 $175,35_0 18
ee. e FLORIDA POWER CORPORATION Cumulative preferred stock at December 31,1976 may be redeemed at the following prices: Current Redemption Scheduled Decreases in Series Price Redemption Price 4% $104.25 4.40 % 102.00 4.58 % 102.50 $101.00 af ter November 15,1977. 4.60 % 103.25 4.75 % 102.00 7.40 % 108.77 $106.92 after August 15,1977, $105.07 after August 15,1982, $103.22 after August 15,1987, and $102.48 after August 15,1992. 7.76% 108.80 $106.86 after February 15,1979, $104.92 after February 15,1984,
$102.98 after February 15,1989, and $102.21 after February 15,1994. .
8.80 % 107.00 $104.00 after November 15,1980, and $101.00 after November 15, 1985. 10 % 110.00 $107.50 after August 15,1979, $105.00 after August 15,1984, $102.50 after August 15,1989, and $101.00 after August 15,1994. The Company has 1,000,000 shares of authorized but unissued preference stock, $100 par. (4) SHORT-TERM DEBT The Company has established lines of credit which total s100 million, with interest payable at the prime rate. With the exception of basic working funds, substantially all cash of the Company represents compensating balances, which are not legally restricted, maintained in support of these lines of credit. At December 31,1976 the Company had unused lines of credit of $91 million. The maximum amount, average monthly amount and the weighted average interest rate of short-term borrowings durin81970 and 1975 were: 197s te7s (Thousands) Maximum amount . . . . . . . . . $79,450 $100,340 Average monthly amount . . . . . . . $50,238 $ 75,035 Weighted average interest rate . . . . . 6.3% 8.1% (5) INCOME TAX EXPENSE The amounts comprising income tax expense are detailed as follows: 1976 197s Federal State Federal State (Thousands) Payable currently (refund) . . . . . . . . ($ 7,413) $1,877 $11,952 $1,759 Deferred to subsequent years (a) . . . . . . 32,678 3,587 24,711 2,717 Deferred income taxes-credits . . . . . . (5,478) (395) (5,712) (454) Investment tax credit, net of amortization . . . 23,373 - 5,612 - Income tax expense . . . . . $43,160 $5,069 $36,563 $4,022 Taxes included in miscellaneous other income and deductions . . . . . . . . . . . 201 (2) (4,585) (693) Income tax expense on statements of income . $43.361 $5.067 $31,978 $3,329 19
r . Notes To Financial Statements (a) The components of income tax deferred to subsequent years were as follows: 1976 197s Federal State Federal State (Thousands) Excess of accelerated tax over straight-line tax depreciation . . . . . . . . . . . . $16,223 $1,777 $ 9,909 $1,090 Normalization of construction costs and other property related items deducted for tax purposes . . . . . . . . . . . . . 7.739 853 4,675 512 Repair allowance . . . . . . . . . . . 4,649 512 2,280 250 Intcrest component of AFDC . . . . . . . 3,797 416 6,282 694 Other . . . . . . . . . . . . . . . 270 29 1,565 171 .
$32,678 $3,587 $24,711 $2.717 The provision for Federalincome tax. including amounts allocated to miscellaneous other income and deductions, produced an effective income tax rate of 42% in 1976 and 35% in 1975. The effective tax rate is less than the statutory Federalincome tax rate of 48% by 6% in 1976 and 13% in 1975 for reasons shown below:
1976 197s Equity portion of AFDC. which is not taxable income . . . . . 5.7% 7.3%
" Flow thru" for items capitalized on books but deducted on tax return . . . . . . . . . . . . . . . . . . . . -
1.7 Adjustment of income taxes provided in prior periods . . . . . - 2.8 Other. . . . . . . . . . . . . . . . . . . . . . 1.2 J 6.0% 13.0 % Concurrent with a rate increase effective August 22,1975, the Company adopted full normalization of substantially all current book. tax timing differences. It is expected that the deferred taxes not previously provided for currently will be collected in customers' rates when such taxes become payable. Federal income tax expense for 1975 has been reduced by $2,947,000, or $.22 per share, representing an adjustment of income taxes provided in prior years. Adjustments were made upon completion of an audit by the Internal Revenue Service for the 1rs 1969 through 1971. (6) CONSTRUCTION PROGRAM AND RATE MATTERS i In 1975, the Company canceled construction of two nuclear plants previously scheduled for completion in the 1980's. Accumulated costs on the projects of approximately $3,800,000 are included in other deferred charges and are being amortized over a three. year period beginning in 1976. On August 22,1975, the Florida Public Service Commission granted the Company a rate increase designed to increase revence by approximately $52,400,000 including a previously granted Werim increase of $33,300,000. A portion of the rate increase reilects accounting and regulatory c.. ..ges designed to improve cash flow and does not result in an increase in net income. The principal changes l were the inclusion of $106,250,000 of additional construction work in progress in the rate base l with a related reduction in the AFDC, a change in the method of computing the AFDC rate and full normalization of current book. tax timing differences. 20 M" F OMefMWW-W -) Q
FLORIDA POWER coneonarios The Company's construction budget for 1977 is approximately S115 million and substantial commitments have been made in connection therewith. (7) QUARTERLY FINANCIAL DATA (Unaudited}-The following quarterly information has been prepared without audit: Three Months Ended March 31, June 30, September 30, December 31, 1976 1976 1978 1978 (Thousands) Operating revenues . . . . . . . $138,945 $120,342 $153,862 S138.290 Net income . . . . . . . . . $ 18,327 $ 10,686 $ 17,033 $ 13,216 Earnings on common stock . . . . . $ 14,898 $ 7,257 S 13,624 $ 9,828 Earnings per average common share . . $ 1.05 $ .51 $ .96 $ .69 The business of the Company is seasonalin nature and it is management's opinion that comparisons of earnings for the quarters do not give a true indication of overall trends and changes in the Company's operations. (8) REPLACEMENT COST INFORMATION (Unaudited) The impact of the rate of inflation experienced in recent years has resulted in replacement costs of productive capacity that are significantly greater than the historical costs of such assets reported in the Company's financial statements. Ilowever, only historical costs are considered for ratemaking purposes. When existing electric plant is replaced, it is expected that the replacement costs of this property will be included in the rate base. The Company's Annual Report on Form 10-K (a copy of which is available on request) contains information with respect to the estimated replacement cost of electric plant at December 31,1976. and the related estimated effect of such costs on depreciation expense for the year then ended. Report of Independent Certified Public Accountants To the Stockholders of Florida Power Corporation: We have examined the balance sheets and statements of capitalization of Florida Power Corporation (a Florida corporation) as of December 31,1976 and 1975, and the related statements of income, retained earnings and source of funds used for construction 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 considered necessary in the circumstances. In our opinion, the financial statements referred to above present fairly the financial nosition of Florida Power Corporation as of December 31,1976 and 1975, and the results of its o.;erations and the source of funds used for construction for the years then ended, in conformity with generally accepted accounting principles consistently applied during the periods. Tampa, Florida, January 28,1977. ARTHUR ANDERSEN & CO. l l 21
Summary of Operations 1972-1976 (Thousands) 1976 1975 1974 1973 1972 Operating Revenues . . . . . . . $ 551,439 $ 504,496 $ 404,993 $ 255,045 $ 201,857 Operating Expenses Fuel . . . . . . . . . . . . $ 248,849 $ 235,138 $ 200,270 $ 75,087 $ 41,001 Other Operating Expenses . . . . 164,752 145,676 138,090 107,411 84,705 Income Taxes . . . . . . . . 48,428 35,307 10,930 19,813 22,978 Total Operating Expenses . $ 462,029 $ 410,121 $ 349,290 $ 202,311 $ 148,744 Operating Income . . . . . . . . $ 89,410 $ 88,375 $ 55,703 $ 52,734 $ 53,113 Other Income (Net) . . . . . . . . 20,910 31,120 39,888 28,022 15,490 Interest Charges . . . . . . . . . (51,053) (52,452) (53,763) (30,623) (20.596) Net Income . . . . . . . . . . . $ 59,262 $ 67,043 $ 41,828 $ 44,133 $ 42,007 Dividends on Preferred Stock . . . . 13,655 13,733 11,785 5,718 4,524 Net Income after Dividends on Preferred Stock . . . . . . . . . . . $ 45,607 $ 53,310 $ 30,043 $ 38,415 $ 37,483 Average Shares of Common Stock Outstanding (000) . . . . . . . . 14,199 13,246 12,436 11,303 10,574 Earnings per Average Common Share . $3.21 $4.02 $2.42 $3,40 $3.54 Dividends per Common Share . . . . $2.145 $1.9875 $1.95 $1.80 $1.74 Other Financial and Operating Data 1972-1976 1976 1975 1974 1973 1972 CAPITALIZATION (Thousands) Long. Term Debt . . . . . . . . $ 724,617 $ 601,525 $ 642,808 $ 586,971 $ 469,202 Preferred Stock . . . . . . 175,350 176,920 178,500 133,500 83,500 Common Stock Equity . . . . . 442,165 425,633 370,907 347,967 281,757 Total . . . . . . . . . $1,342,132 $1,264,078 $1,192,215 $1,068,438 $ 834,519 E:.ZCTRIC SALES (Thousands of KWH) Residential . . . . . . . . . . 5,750,889 5,411,991 5,285,716 5,793,242 4,717,235 Commercial . . . . . . . . . . 3,298,036 3,187,479 2,935,162 2,836,292 2,403,398 Industrial . . . . . . . . . . 2,690,525 2,479,378 2,421,715 2,349,572 2,196,766 Other. . . . . . . . . . . . 3,077,572 2,864,816 2.671.120 2,594,171 2,204,689 Total . . . . . . . . . . 14,817.022 13,943,664 13.313,713 13.573,277 11.522,088 RESIDENTIAL SERVICE (Average Annual) KWH Sales per Customer . . . . . 9,932 9,701 9,758 11,450 10,277 Revenue per Customer . . . . . . $416.15 $396.37 $333.37 $248.34 $214.92 Revenue per KWH . . . . . . . 4.199 4.09C 3.42C 2.17C 2.09C OPERATING DATA Investment in Electrin Plant (000) . . $1,749,429 $1,623,387 $1,529,801 $1,332,487 $1,105,597 Net Generating Capability (KW) . . 3,895,000 3,712,000 3,625,000 2,720,000 2.540.000 l Net System Peak Load (KW) . . . . 3,530,000 3,281,000 2,989,000 2,862,000 2.497,000 BTU per KWH of Net Output . . . 10,136 10,024 to 367 10,662 10.545 Fuel Cost per Million BTU . . . . $1.67 $1.68 $1.51 S.54 S.32 Average Number of Customers . . . 644,846 621,78J) 605,332 566,935 515,312 Number of Employees . . . . . . 3,443 3,372 3,478 3,576 3,080 22
FLORIDA POWER CORPMAEON Discussion of the Summary of Operations Operating Revenues. In 1975, operating revenues due primarily to the addition of tha Anclote Plant, and increased due to rate relief effective February 1, because depreciation and taxes other than income 1975, and August 22,1975, increased customers, and taxes were up $4.2 million and $6.7 million, warmer weather, which resulted in a 8reater air respectively. In 1976, the increase in other operating conditioning load. In 1976, the increase was mainly expenses reflects substantialincreases in attributed to increased kilowatt-hour sales as a maintenance, due to the resumption of regular result of colder weather, which produced a greater maintenance schedules, and in depreciation heating load, and improved economic conditions. expenses, primarily due to the establishment-of Operating revenues increased approximately $46.9 higher depreciation rates. Income taxes increased million in 1976 and $99.5 million in 1975. The in 1975 when the Company's taxable earnings principal factors causing these increases were as improved and continued to increase in 1976 due
- follows: primarily to the adoption of full normalization increases in of substantially all book-tax timing differences.
Mihns of Dc!!ars Other Income. In 1975, the decline was caused by a ts7s 197s reduction in the allowance for funds used during Increase in revenue due to increae construction, and the absence of the profit on the in price per kilowatt-hour sold . $13.8 $79.0 sale of nuclear fuel materials which occurred in 1974. Increase in revenue due to kilowatt- In 1976, the reduction in other income is mainly hours sold . . ...... 31.1 18.9 attributable to a $9.3 million reduction in allowance Increase in other revenues . . . 2.0 1.6 I 'I".nds used during construction (see Note ld to the Fmancial Statements for an explanation of the
$46.9 $99.5 allowance for funds used during construction).
Operating Expenses. In 1975, increased costs of Interest Charges and Preferred Dividends. In 1975 fuel and increased consumption were partially and 1976, lower rates and reduced amounts of _, offset by a decrease in the fuel burned per net short-term debt outstanding reduced interest kilowatt-hour generated. For 1976, the increase in charges. Dividends on preferred stock increased in fuel costs is due entirely to increased consumption 1975 because of the sale of the 10% series preferred since the unit cost of fuel decreased slightly. Other stock in the middle of 1974, but decreased slightly operating expenses in 1975 increased despite a in 1976 due to the operation of a sinking fund for the reduction of $7 million in the cost of purchased power, 10% series preferred stock. pm nwmmw. .mmmmmg.wn:- ~ ,
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. 27% < 229%1 wa l23%ie.a(g,g~.i.57- fmm '.525 m] $3,000 quarterly. No com-mission or service charge is The Company will provide a copy of its annual report on Form 10-K, associated with this Plan, without exhibits, filed with the Securities and Exchange Commission Information concerning l and a detailed to year statistical report. Address request to J. G. Loader, stockholder participation in
! Secretary, Florida Power Corporation, P. O. Box 14042 St. Petersburg. the Plan is available by i Florida 33733. contacting the Secretary. 23
i l Mkbk PCMk k CORPORATION ' ((*",k7o, m H ard 9oart { Hubbard Construction Board of Directors Company inighway Construction) Orlando, Flornda
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Richard E. Raymond Senior Vice President System Engmeersng and Operations 4 j < I. j { Sam T. Dell SeLior Partner k w' De'I. G raham. Willcox
';' ' Barber. Rappenecker, Ryals & Henderson, P.
(Attorneys of Law] Gainesville, Florida Georar W Jenkins S. [ 1:haitteen of the Fxer u tn e }' ( 's s 'T1(Tli f f!'P. I'. s hlt X
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Lakelund Flor ni" Jack B. Critchfield 1 Vice President President Finance and Control Rollins Coffege Richard C. Johnson Winter Park. Florida Chairman of the Board Cotamunity Banks of l ' Flori<.a. inc. g Semmcle. Florida l
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', k / .> ' \ A. P. Perez B. L. Griffin R. W. Neiser Retsred Chmrman Vice President, "cojects Assistant Vnce Pressdent an l
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of the Board Assistant General Counsel i Andrew H. Hines. Jr. M. F. Hebb, Jr. President J. T. Rodgers !
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A. J. Ormston N. B. Spake l Vice President. Asssstant Assistant Vice " resident to the Semor Vice President System Engineermg , 1
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- The Company communities. The renders territory comprises electric,servicejo approximately almost 20,600645,000 square miles customers in over over:
with a population 350 ci,tiesQowns(2,8 located in 32 of 67 Fioricia bountlesi. in'. addition to the p'ower plarits l'ndidated on the map',[eiec'trIc pow ~ef can be supplied by interconnected electr.ic utility systems throughout Florida and the southeast. [ m r . 2 < w 'O. 4 a s:% i.,
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Generating Plants and Capability KHewette indes Winter Not Maximum to Map Name Dependable CapebiHty 1 Crystal River 881,000 , 2 Port St. Joe Peabng Unit. 17,000 3 Suwannee River. . 147,000 4 George E. Turner ... . 177.000 George E. Turner Peaking Units 193,000 , 5 Rio Pinar Peaking Uriit.. , 17,000 , m 6 Intercession City Peaking Units 348,000 i$ 7 Avon Park. . 44,000
; Avon Park Peaking Units. 70,000 8 Bayboro Peaking Units. 224.000 ,,
9 Paul L. Bartow . . . 448,000 Paul L Bartow Pnaking Units . 204.,000 . 10 A. W. Higgins . .4 . . . 124,000 /- 5 A. W. Higgins Peaking Units. '150,000 11 ArWo" . '.... -515,000 e 12 Mar, , tid-Range Combusthi .t. ' " >: ; , e
. pies ...4.f... ..336,000 ' g- g latai,atLocember 31/1976. .y 3.895.000 > M9j jp;, j w' ! .fp.w ' .fc ,,; . , - , . g .4/.7 Under Construction .
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