Item 1. Business
General The Company was incorporated on April 29, 1925 under the 1925 Florida Corporation Law and is continuing its corporate existence pursuant to such law and its Certificate of Reincorporation, as amended. The Company is a public utility regulated by the Florida Public Service Commission (except for propane gas service)and provides natural and propane gas service, electric service and water service to consumers in Florida. The Company is comprised of the following four divisions and number of customers as of December 31, 1996: (1) West Palm Beach, located in southeast Florida, serves natural gas to 27,396 customers and propane gas to 5,547 customers; (2) Mid-Florida, consisting of the Sanford and DeLand districts, serves 7,785 natural gas customers and 4,349 propane customers; (3) Marianna, located in the Florida panhandle, provides electricity to 11,734 customers; (4) Fernandina Beach, located in extreme northeast Florida, serves 11,585 electric customers and 5,803 water customers. The economies of West Palm Beach, Sanford, and DeLand rely somewhat on the migration of winter residents and tourists during the winter season. Agriculture and citrus processing, together with light industry, provide year-round stability. Marianna's economy is predominantly agricultural including peanuts, soy beans, corn, pork and beef. The area has many small industries. Fernandina's economy is centered around two large paper mills; ITT Rayonier, Inc. and Container Corporation of America. The beach area, Amelia Island, is noted for its fine beaches and resort amenities.
The population by counties, as estimated by the University of Florida's Bureau of Economic and Business Research, in which the service areas are located, as of April 1, 1996, is as follows:
West Palm Beach (Palm Beach County) 982,000 Sanford (Seminole County) 329,000 DeLand (Volusia County) 407,000 Marianna (Jackson, Calhoun & Liberty Counties) 69,000 Fernandina Beach (Nassau County) 51,000
In Fernandina Beach, two large paper mills accounted for 13.5% of total 1996 electric division operating revenues and 7.0% of the Company's total operating revenues. However, such mills accounted for 5.8% of total 1996 electric division operating margin and 2.0% of the Company's total operating margin.
Sources of Gas and Electricity
Natural Gas The Company receives its natural gas at ten City Gate Stations connected to Florida Gas Transmission Company's (FGT) pipeline system. A contract was signed with FGT to construct an additional gate station for our DeLand district's distribution system. The new "DeLand South" station will eliminate a developing gas delivery restriction, provide for future system expansion and improve the reliability of our DeLand system. DeLand is our only system which has relied upon a single gate station for its gas supply. Completion of the new station will provide the necessary redundance to ensure uninterrupted service to our customers and will allow station maintenance to be performed in a timely, economical manner.
FGT is the sole pipeline serving peninsular Florida and is under the jurisdiction of the Federal Energy Regulatory Commission (FERC). The Company contracts with FGT to receive, transport and deliver natural gas which the Company has procured from independent gas marketers and producers to satisfy its traditional sales markets. The Company also receives gas from FGT for delivery to transportation customers who have contracted for their own gas supply and pipeline transportation.
The Company is actively participating in FGT's rate proceeding before the FERC (Docket No. RP96-366). This rate proceeding resulted from FGT's Phase III construction settlement filing as reported in our 1995 Annual Report. Anticipated changes in the character of services provided by FGT, as well as an increase in pipeline rates effective March 1, 1997, should not adversely affect the current competitive advantage natural gas holds over alternative energy sources. The Company is also actively participating in FGT's Gas Industry Standards Board (GISB) proceeding before the FERC (Docket No. RP96-21). The FERC required the GISB filing in an effort to establish a nationwide uniform information network for natural gas producers, pipelines, marketers, distribution companies and other end-users. The GISB's goal is to establish industry-wide time frames for transactions involving purchasing, transporting, delivering, invoicing, etc. of natural gas on a national basis. The GISB is requiring the information network to be fully available to participants 24 hours a day, 365 days a year. The Company is prepared, at minimal costs, to assume the GISB imposed requirements when they become effective for FGT's customers on March 1, 1997.
For six years, the Company has been contracting for its gas supplies from marketers and producers and for transportation of those supplies by FGT. The experience gained during these six years positions the Company to operate effectively within an unbundled industry environment. Purchasing gas supplies directly from marketers and producers has substantially reduced the Company's gas supply costs. Pipeline capacity demand charges have also been reduced by "subletting" temporary excess pipeline capacity to other shippers on FGT's system. Savings realized by these activities are passed through to our customers in the form of lower fuel charges. In addition, the Company continues to pursue off-system sales under conditions set forth in our Florida Public Service Commission approved tariff. Off-system sales allow the Company to sell excess gas to any current user of natural gas within the State of Florida. The tariff directs that profits derived from off-system sales be shared with the Company's system customers. Off-system sales have been transacted with national marketers, electric generators, agricultural firms and other gas distributors. In conjunction with our on-going efforts to control and reduce our cost of gas, the Company expanded its System Control and Data Acquisition System (SCADA). SCADA terminals were installed at interruptible and transportation customer sites to closely monitor and maximize gas sales to such customers without incurring expensive pipeline penalties.
Electricity
The Company purchases most of its electrical power requirements at wholesale rates from two nearby generating utilities. Less than 1% of the Company's requirements are purchased on an "as available" basis from a self-generating paper mill.
Increased competition in the wholesale power market has enabled the Company to negotiate new power supply agreements that will significantly reduce future power costs. Cost savings from these lower power costs will be passed on to our customers placing the Company's residential and commercial electric rates among the lowest of all electric utilities in Florida.
A power supply study for the Fernandina Beach Division was completed in 1995, which evaluated proposals from four utility companies. The Company concluded that continuing with the Jacksonville Electric Authority (JEA) through 2002 would be the most cost effective option. The JEA executed a new agreement with the Company in 1995 which provided for new rates and terms effective January 1, 1996.
The Company recently executed a new power supply agreement with Gulf Power Company to provide electric power to the Marianna Division. The new eleven-year agreement provides improved rates and terms when compared to the previous contract and became effective January 1, 1997.
The following table sets forth the revenues, operating profit and identifiable assets of each of the Company's business segments. (See "Segment Information" in the Notes to Financial Statements.)
1996 1995 1994 (in thousands) Revenues Natural gas $31,854 $26,144 $21,679 Electric 40,701 40,074 37,441 Water 1,854 1,674 1,589 Propane gas 4,401 4,135 4,046
Operating profit Natural gas 3,250 2,902 1,786 Electric 3,141 3,078 2,946 Water 495 328 378 Propane gas 138 212 180
Identifiable assets Natural gas 33,977 32,115 29,093 Electric 33,038 32,155 31,189 Water 4,584 4,508 4,721 Propane gas 6,100 5,866 5,746
Regulation The Florida Public Service Commission, pursuant to State Statutes, has authority encompassing natural gas, electric and water rates, conditions of service, the issuance of securities and certain other matters affecting the operations of the Company.
Franchises The Company holds franchises in each of the incorporated municipalities where natural gas, electric and water operations take place. These franchises generally have terms from 15 to 30 years and terminate at various dates.
Employees On December 31, 1996 the Company had 302 employees, of whom approximately 102 were covered under union contracts with two labor unions, the International Brotherhood of Electri cal Workers and the International Chemical Workers Union. The Company does not engage in research activities.
Competition Generally, in municipalities and other areas where the Company provides natural gas, electric and water services, no other utility directly renders such service.
Item 2.

Item 2. Properties
The Company's properties consist primarily of distribution systems and related facilities. At December 31, 1996 the Company owned 22 miles of electric transmission lines and 997 miles of electric distribution lines. The gas properties distribute gas through 1,136 miles of 3" equivalent gas main. The water property consists of deep wells, pumping equipment, water treatment facilities and a distribution system. The propane gas systems operated by the Company's subsidiary have bulk storage facilities and tank installations on the customers' premises.
Certain properties of the Company and the shares of Flo-Gas Corporation, a wholly-owned subsidiary, are subject to a lien collateralizing the funded indebtedness of the Company under its Mortgage Indenture.
Item 3.

Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5.

Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters
The Company's common shares are traded on the American Stock Exchange under the symbol FPU.
1996 1995 Low High Low High STOCK PRICES Quarter ended March 31 $18.50 - $20.50 $16.00 - $20.00 June 30 18.75 - 20.38 16.63 - 18.75 September 30 19.63 - 20.75 17.13 - 19.13 December 31 19.75 - 21.00 17.63 - 19.38
DIVIDENDS PAID January 1 $.29 $.29 April 1 .30 .29 July 1 .30 .29 October 1 .30 .29
At March 10, 1997, there were 1,008 holders of record of the Registrant's Common Stock.
See "Capitalization, Dividend Restriction" in the Notes to Financial Statements for information concerning restriction on the payment of cash dividends.
Item 6.

Item 7. Management's Discussion and Analysis of Results of Operations and Financial Condition
RESULTS OF OPERATIONS
Overview. The Company is organized into three regulated business segments, natural gas, electric and water and one non-regulated business segment, propane gas. The gas and electric segments aggregate approximately 94% of total operating margin.
Contributing to variations in operating margins are the effects of seasonal weather conditions, the timing of rate increases and the migration of winter residents and tourists to central and southern Florida during the winter season.
From the Florida Public Service Commission (FPSC) perspective, the Company operates four distinct "entities", i.e., Marianna electric, Fernandina Beach electric, Fernandina Beach water, and natural gas, consisting of Palm Beach County, Sanford and DeLand. The Company last received rate increases as follows: natural gas operations, May 1995; Marianna electric division, February 1994; and Fernandina Beach electric division, February 1989. The Company receives an increase each year for its water operation through a price index mechanism provided by the FPSC. The Company does not anticipate a need to file for a rate increase in any of its regulated operations at the present time. See "Rate Matters" in the Notes to Financial Statements (Notes).
Summary of Operating Margins (in thousands) 1996 1995 1994 Natural and Propane Gas Operating margin $15,841 $14,865 $13,142 Less propane gas 2,573 2,488 2,457 Remainder $13,268 $12,377 $10,685
Electric Operating margin $ 9,243 $ 9,013 $ 8,573 Less industrial 537 594 596 Remainder $ 8,706 $ 8,419 $ 7,977
Operating Margin. Operating margin, defined as gross operating revenues less cost of fuel and taxes passed-through to customers which are based on revenues, provides a more meaningful basis for evaluating utility operations since fuel costs and taxes passed-through to customers have no effect on results of operations.
Natural and Propane Gas Service. Total natural and propane gas service operating margin increased $976,000 or about 7% in 1996 as compared with 1995. Excluding propane gas operating margin from total gas operating margin, remaining operating margin increased $891,000 or about 7% compared with 1995. An increase of $124,000 of such increase, or 1%, is due to an industrial customer increasing its consumption by about 240% in 1996. The remaining increase in natural gas operating margin is due primarily to a 1% growth in customers, a 3% growth in average consumption and the effect of an approved final increase in base rates of $1,282,000 annually, which commenced May 1995 (approved lesser interim rates were in effect for the year until May 5th of 1995). Propane gas operating margin increased $85,000, or about 3%. The increase in propane gas operating margin is due principally to slightly higher prices in 1996.
Total natural and propane gas service operating margin increased $1,723,000, or 13%, in 1995 as compared with 1994. Excluding propane gas operating margin from total gas operating margin, remaining operating margin increased $1,692,000, or 16%, in 1995 as compared with 1994. The increase in natural gas operating margin is principally due to an approximate $800,000 of the approved interim increase in base rates effective until May 5, 1995 and the final increase in base rates effective May 6 and a 10% increase in consumption, due mainly to significantly colder weather in 1995 when compared to 1994. Propane gas operating margin increased $31,000, about 1%. The effect of the December cold weather on propane gas operating margins was not realized until January 1996 as consumption is not determinable until the meters are read and the tanks are filled.
In 1996, operating expenses, excluding cost of fuel and taxes passed- through to customers, increased $702,000, about 4% in relation to operating margin. Operating expenses have generally increased in all classifications of expense due to inflationary pressures, with increased costs relating to the Company's new billing system, increased payroll and related costs and expenses related to the Company's natural gas mains and lines offset by an increase in net periodic pension income.
In 1995, operating expenses, excluding cost of fuel and taxes passed- through to customers, increased $575,000, about 4% in relation to operating margin. Operating expenses have increased due to inflationary pressures in all classifications of expense with payroll and related costs, property insurance premiums, pension expense and maintenance costs accounting for most of the increase.
Electric Service. Total electric service operating margin increased $230,000, or about 3% as compared with 1995. Affecting the comparison of operating margins are two industrial customers. Excluding these customers, operating margin increased $287,000, or about 3%. Excluding industrial customers, the increase in operating margin is due principally to a 2% growth in customers and a 1% growth in average consumption.
Total electric service operating margin increased $440,000, about 5% in 1995, as compared with 1994. Excluding the two industrial customers, operating margin increased $442,000, about 6%. Other than industrial customers, the increase in operating margin is principally due to a 2% growth in customers and a 6% increase in average consumption per customer. Such increase in average consumption is more than the historical increase, most likely resulting from the colder weather in December.
In 1996, operating expenses increased $167,000, about 2% in relation to operating margin. Operating expenses have generally increased in all classifications of expense due to inflationary pressures.
In 1995, operating expenses, excluding cost of fuel and taxes passed-through to customers, increased $308,000, about 3% in relation to operating margin. Operating expenses have increased due to inflationary pressures in all classifications of expense with payroll and related costs, expensing of overheads no longer appropriate to capitalize, property insurance premiums, pension expense, maintenance costs and fees for an electrical power study for the Fernandina Beach division accounting for most of the increase.
Interest Charges. Interest charges consist of interest on bonds, short-term borrowings and customer deposits. The primary factor causing interest amounts to fluctuate are changes in amounts borrowed under the line of credit and related interest rate changes. See "Notes Payable" and "Capi- talization" in the Notes for additional information.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows. Net cash provided by operating activities decreased $8,000 in 1996 as compared with 1995. While the net change is not particularly significant, there were changes in individual line items that were more so. Accounts receivable increased, due primarily to increased gas and electric fuel costs and customer growth. Inventories and prepayments increased due principally to a change of the insurance renewal date to September 1 from March 18 and estimated income tax payments in excess of accrued liabilities. Accounts payable and accruals increased due primarily to increased gas and electric fuel costs, an increase in accrued insurance, including a reserve for the self-insured portion of casualty claims, accrued workers' compensation and other postretirement benefits and substantially increased off-system sales in December 1996. Environmental insurance proceeds decreased as the majority of settlement amounts were received in previous years.
Cash used in investing activities usually fluctuates within a narrow range as construction expenditures are typically about $6.0 million per year. Included in construction expenditures in 1996 is $1,343,000 relating to the general office addition. Purchase of long-term investments decreased as environmental insurance settlement proceeds decreased.
Cash used by financing activities increased from 1995 principally because short-term borrowings increased $700,000 and there were no repayments of long-term debt.
The Company has a $15,000,000 line of credit with its primary bank of which $7,900,000 is outstanding at December 31, 1996. The line provides for interest at LIBOR plus one-half percent and expires in 1997. The Company expects to renew its line of credit at essentially existing terms and conditions. The Company is approved by the Florida Public Service Commission to borrow up to $15,000,000 on a line of credit basis, $14,000,000 of which is available for general corporate purposes with the remaining $1,000,000 reserved as a contingency for major storm repairs in the Marianna electric division.
The Company usually has no material commitments for construction expenditures; however, the Company started construction of the addition to the general office building in February 1996. The total cost will be approximately $1.6 million including the remodeling of the original building, which is expected to be completed by April 1997. Historically, capital expenditures have averaged $5.9 million over the past five years, excluding the general office building addition. Capital expenditures for 1997 have been budgeted for $7,660,000; however, while the actual amount expended for construction is influenced by many factors, the Company anticipates that expenditures for 1997 will not be significantly different from those amounts historically incurred. For additional information see "Notes Payable" and "Capitalization" in the Notes.
The Company anticipates that its future construction expenditures and commitments are likely to require additional debt and/or equity financing.
Issuance of Additional Bonds. The Company's 1942 Indenture of Mortgage and Deed of Trust, which is a mortgage on all real and personal property, permits the issuance of additional bonds based upon a calculation of unencumbered net real and personal property. At December 31, 1996, such calculation would permit the issuance of approximately $33,000,000 of additional bonds.
OTHER
Environmental Matters. The Company has several contamination sites in various stages of assessment investigation, see "Contingencies" in the Notes. Due to the rate relief granted the Company for environmental costs and insurance settlement proceeds for environmental costs received by the Company which are being held in escrow, the Company believes that any future contamination assessment and remedial costs arising from any of these sites will not be material to the Company's operating results or liquidity.
Quarterly Earnings. The Company's quarterly financial information as summarized in the Notes under the caption "Quarterly Financial Data (Unaudited)" reflects the influence of, among other things, seasonal weather conditions, the timing of rate increases and the migration of winter residents and tourists to central and southern Florida during the winter season.
INDEPENDENT AUDITORS' REPORT
To the Directors and Shareholders of Florida Public Utilities Company:
We have audited the accompanying consolidated balance sheets and statements of capitalization of Florida Public Utilities Company and its wholly-owned subsidiary, Flo-Gas Corporation, as of December 31, 1996 and 1995, and the related consolidated statements of income, common shareholders' equity and cash flows for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Florida Public Utilities Company and its wholly-owned subsidiary, Flo-Gas Corporation, at December 31, 1996 and 1995, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1996 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP Certified Public Accountants West Palm Beach, Florida February 21, 1997
Item 8.

Item 8. Financial Statements and Supplementary Data
CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share data) Years Ended December 31,
1996 1995 1994
Revenues $78,810 $72,027 $64,755 Cost of fuel and taxes based on revenues 52,039 46,626 41,592
Operating Margin 26,771 25,401 23,163
Operating Expenses Operations 11,601 11,196 10,480 Maintenance 2,526 2,409 2,193 Depreciation and amortization 3,876 3,694 3,672 Taxes other than income taxes 1,744 1,582 1,528 Income taxes 1,396 1,356 943 Total operating expenses 21,143 20,237 18,816
Operating Income 5,628 5,164 4,347
Interest Charges and Other Long-term debt 2,235 2,248 2,268 Short-term borrowings 348 273 146 Customer deposits and other interest 275 246 255 Other-net 19 (41) (39) Total interest charges and other 2,877 2,726 2,630
Net Income 2,751 2,438 1,717
Preferred Stock Dividends 29 29 29
Earnings for Common Stock $ 2,722 $ 2,409 $ 1,688
Earnings Per Common Share $ 1.85 $ 1.66 $ 1.18
Dividends Per Common Share 1.20 1.16 1.16
Average Shares Outstanding 1,468,974 1,454,986 1,435,280
See Notes to Financial Statements.
CONSOLIDATED BALANCE SHEETS (in thousands) December 31, ASSETS 1996 1995 Utility Plant Electric $ 44,758 $ 42,975 Natural gas 45,367 42,576 Water 6,315 6,083 Propane gas 7,156 6,997 Common 3,088 2,027 Total 106,684 100,658 Less accumulated depreciation 36,808 34,380 Net utility plant 69,876 66,278
Current Assets Cash and overnight investments 841 270 Accounts receivable 8,153 7,382 Allowance for uncollectible accounts (91) (86) Inventories (at average or unit cost) 2,494 2,351 Prepayments and deferrals 1,585 804 Total current assets 12,982 10,721
Other Assets Investments held in escrow for environmental costs 2,881 2,737 Deferred income taxes 2,361 2,453 Regulatory assets-tax 464 1,841 Deferred charges 1,101 1,078 Under recovery of fuel costs 1,329 132 Total other assets 8,136 8,241
Total $ 90,994 $ 85,240
CAPITALIZATION AND LIABILITIES Capitalization Common shareholders' equity $ 24,511 $ 23,302 Preferred stock 600 600 Long-term debt 23,500 23,500 Total capitalization 48,611 47,402
Current Liabilities Notes payable 7,900 5,600 Accounts payable 7,564 5,660 Dividends declared 449 431 Taxes accrued 308 309 Interest accrued 575 549 Tax collections payable 532 653 Insurance accrued 2,325 1,442 Other 796 652 Customer deposits 3,634 3,550 Total current liabilities 24,083 18,846
Other Liabilities Customer advances for construction 982 809 Deferred income taxes 8,583 9,317 Unamortized investment tax credits 1,462 1,582 Environmental insurance proceeds and related earnings 4,531 4,386 Regulatory liabilities-tax 2,742 2,898 Commitments and contingencies Total other liabilities 18,300 18,992
Total $ 90,994 $ 85,240
See Notes to Financial Statements.
CONSOLIDATED STATEMENTS OF CAPITALIZATION (dollars in thousands) December 31, 1996 1995 Common Shareholders' Equity Common stock, $1.50 par value, authorized 2,000,000 shares; issued 1,585,478 shares in 1996; 1,577,782 shares in 1995 $ 2,379 $ 2,367 Paid-in capital 10,992 10,797 Retained earnings 13,151 12,191 Treasury stock - at cost (111,831 shares in 1996; 117,686 shares 1995) (2,011) (2,053) Total common shareholders' equity 24,511 23,302
Preferred Stock 4 3/4% Series A, $100 par value, redemption price $106.00, authorized and outstanding 6,000 shares 600 600
Long-Term Debt First mortgage bonds Series 9.57% due 2018 10,000 10,000 10.03% due 2018 5,500 5,500 9.08% due 2022 8,000 8,000 Total long-term debt 23,500 23,500
Total Capitalization $48,611 $47,402
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY (dollars in thousands) Common Stock Shares Aggregate Paid-in Retained Treasury Stock Issued Par Value Capital Earnings Shares Cost Balance, December 31, 1993 1,552,189 $2,329 $10,309 $11,445 127,322 $(2,122) Net income 1,717 Dividends (1,693) Stock plans 14,930 22 288 (5,462) 39 Balance, December 31, 1994 1,567,119 2,351 10,597 11,469 121,860 (2,083) Net income 2,438 Dividends (1,716) Stock plans 10,663 16 200 (4,174) 30 Balance, December 31, 1995 1,577,782 2,367 10,797 12,191 117,686 (2,053) Net income 2,751 Dividends (1,791) Stock plans 7,696 12 195 (5,855) 42 Balance, December 31, 1996 1,585,478 $2,379 $10,992 $13,151 111,831 $(2,011)
See Notes to Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 1996 1995 1994 Cash Flows from Operating Activities Net income $ 2,751 $ 2,438 $ 1,717 Adjustments to reconcile net income to net cash from operating activities Depreciation 3,876 3,694 3,672 Deferred income taxes 578 367 (611) Investment tax credits (121) (121) (109) Other 406 338 174 Effects of changes in Receivables (936) (1,396) 579 Inventories and prepayments (924) (192) (97) Accounts payable and accruals 2,918 2,606 (329) Environmental insurance proceeds and related earnings 145 1,201 3,185 Over/(under) recovery of fuel costs (1,197) (1,400) 1,092 Other (79) (110) 183 Net cash provided by operating activities 7,417 7,425 9,456
Cash Flows from Investing Activities Construction expenditures (7,653) (6,401) (5,938) Customer advances for construction 175 (319) (172) Purchase of long-term investments (145) (2,737) Net cash used by investing activities (7,623) (9,457) (6,110)
Cash Flows from Financing Activities Net short-term borrowings 2,300 1,600 Proceeds from common stock plans 250 246 349 Dividends paid (1,773) (1,711) (1,673) Repayments of long-term debt (673) (28) Net cash provided (used) by financing activities 777 (538) (1,352)
Net Increase (Decrease) in Cash and Overnight Investments 571 2,570) 1,994 Cash and Overnight Investments at Beginning of Year 270 2,840 846 Cash and Overnight Investments at End of Year $ 841 $ 270 $ 2,840
Supplemental Cash Flow Information Cash was paid during the years as follows: Interest $ 2,585 $ 2,511 $ 2,403 Income Taxes 1,534 1,006 1,779
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
Summary of Significant Accounting and Reporting Polices
Business and Regulation. Florida Public Utilities Company (the Company) is an operating public utility engaged principally in the purchase, transmission, distribution and sale of electricity and in the purchase, transmission, distribution, sale and transportation of natural gas. The Company is subject to the jurisdiction of the Florida Public Service Commission (FPSC) with respect to its electric, natural gas and water operations. The suppliers of electrical power to the Marianna division and of natural gas to the natural gas divisions are subject to the jurisdiction of the Federal Energy Regulatory Commission (FERC). The Fernandina Beach division is supplied most of its electrical power by a municipality which is exempt from FERC and FPSC regulation. The Company also distributes propane gas through a non-regulated subsidiary. The Company's accounting policies and practices conform to generally accepted accounting principles as applied to regulated public utilities and are in accordance with the accounting requirements and rate making practices of the FPSC.
The Company prepares its financial statements in accordance with the provisions of Statement of Financial Accounting Standards No. 71 - "Accounting for the Effects of Certain Types of Regulation" (SFAS 71). In general, SFAS 71 recognizes that accounting for rate regulated enterprises should reflect the relationship of costs and revenues introduced by rate regulation. As a result, a regulated utility may defer recognition of a cost (a regulatory asset) or recognize an obligation (a regulatory liability) if it is probable that, through the rate making process, there will be a corresponding increase or decrease in revenues.
Accordingly, the Company has recognized certain regulatory assets and liabilities. Such regulatory assets relate to deferred income taxes, unamortized debt reacquisition costs and unamortized rate case expense. Such regulatory liabilities relate to deferred income taxes and property damage self-insurance reserves. The Company believes that the FPSC will continue to allow the Company to recover its regulatory assets and liabilities through its rates.
The Company has agreed with the FPSC staff to limit its earned return on equity for its regulated electric and natural gas operations. The disposition of any excess earnings is left to the discretion of the FPSC, with alternatives including a refund to customers, additional contributions to storm damage reserves, or the reduction of any depreciation reserve deficiency. Excess earnings for 1995 at one of the Company's electric divisions was ordered by the FPSC to be added to that division's storm damage reserve. The Company believes it has adequately reserved for 1996 excess earnings.
Various states, other than Florida, have enacted or are considering enacting legislation or other initiatives that would provide utility customers with the ability to choose their supplier, thus establishing competition between the suppliers of utility services. No such proposals are currently being considered in Florida.
Revenues. The Company records utility revenues as service is provided and bills its customers monthly on a cycle billing basis. Accordingly, at the end of each month, the Company accrues for estimated unbilled revenues.
The rates of the Company include base revenues, fuel adjustment charges and the pass-through of certain governmental imposed taxes based on revenues. The base revenues are determined by the FPSC and remain constant until a request for an increase in such rates is filed and approved by the FPSC. From the FPSC perspective, the Company operates four distinct "entities", i.e., Marianna electric, Fernandina Beach electric, Fernandina Beach water, and natural gas, consisting of Palm Beach County, Sanford and DeLand. Thus, for the Company to recover through rate relief the effects of inflation for all such "entities", a request for an increase in base revenues would require the filing of four separate rate cases. At the present time, the Company does not have the resources to file more than one rate case per year. However, the FPSC allows for an annual automatic rate increase for water operations through the use of a price index. Fuel adjustment charges are estimated for customer billing purposes and any under/over-recovery difference between the incurred cost of fuel and estimated amounts billed to customers is deferred for future recovery or refund and either charged or credited to customers. Interest accrues on such under/over-recoveries and is included in the subsequent adjustment.
Consolidation. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Flo-Gas Corporation. All significant intercompany balances and transactions have been eliminated.
Certain reclassifications have been made to the prior years' financial statements and other financial information contained herein to conform with the 1996 presentation.
Utility Plant and Depreciation. Utility plant is stated at original cost. The costs of additions to utility plant include contracted services, direct labor, materials and allowances for borrowed and equity funds used during construction. The costs of units of property retired are removed from utility plant, and such costs plus removal costs, less salvage, are charged to accumulated depreciation. Maintenance and repairs of property and replacement and renewal of items determined to be less than units of property are charged to operating expenses. Substantially all of the utility plant and the shares of Flo-Gas Corporation collateralize the Company's First Mortgage Bonds.
Depreciation is computed using the composite straight-line method at rates prescribed by the FPSC for financial accounting purposes. Such rates are based on estimated service lives of the various classes of property. Depreciation provisions on average depreciable property approximate 4.0% per year.
Income Taxes. Deferred income taxes are provided on all significant temporary differences between the financial statement and tax basis of assets and liabilities at currently enacted tax rates. Investment tax credits have been deferred and are amortized based upon the average useful life of the related property in accordance with the rate treatment.
Deferred Charges. Deferred charges consist principally of unamortized debt issuance expense and early extinguishment premium. Such expenses are being amortized over the lives of the issues to which they pertain.
Use of Estimates. Inherent in the accounting process is the use of estimates when preparing financial statements in accordance with generally accepted accounting principles. Accordingly, the Company has used estimates in the preparation of its financial statements and the only such estimate that might result in a material change is the accrual for uninsured liability claims. The Company is self-insured for the first $250,000 of each liability claim and therefore accrues for estimated losses occurring from both asserted and unasserted claims. The estimate for unasserted claims arising from unreported incidents is based on an analysis of historical claims data. The Company's portion of liability claims incurred for the ten year period ended in 1996 averaged approximately $90,000 per year and the accrual for such claims was approximately $800,000 at December 31, 1996. The Company believes that its accrual for potential liability claims is adequate.
Notes Payable
The Company has a line of credit agreement with its primary bank providing for a $15,000,000 loan with interest at LIBOR plus one-half percent. $14,000,000 of such loan is available for general corporate purposes with the remaining $1,000,000 reserved as a contingency for major storm repairs in the Marianna electric division. At December 31, 1996 there was a balance outstanding of $7,900,000. The weighted-average interest rates at December 31, 1996 and 1995 were 6.2% and 6.4%, respectively.
Capitalization
Common Shares Reserved. The Company has reserved 27,372 common shares for issuance under the Dividend Reinvestment Plan and 16,992 common shares for issuance under the Employee Stock Purchase Plan.
Dividend Restriction. The Indenture of Mortgage and Deed of Trust and supplements thereto provide for restriction of the payment of cash dividends. At December 31, 1996 approximately $3,500,000 of retained earnings were free of such restriction.
Maturities of Long-Term Debt. Sinking fund payments are scheduled to begin in 2008.
Rate Matters
On September 23, 1994, the Company filed a request with the FPSC for an increase in annual natural gas revenues of $2,079,000 and requested that the interim rates be put into effect pending final action on the permanent increase. In December 1994, the FPSC granted an interim rate increase of $387,000. The final order granting a permanent increase of $1,282,000 was effective May 6, 1995. The principal reasons for the increase in base rates were attributed to increased operating and plant replacement costs, a deteriorated return on the Company's investment and an aggressive marketing plan to attract new customers.
On September 1, 1993, the Company filed a request with the FPSC for an increase of $858,000 in annual electric revenues in the Marianna division and requested that the interim rates be put into effect pending final action on the permanent increase. In November 1993, the FPSC granted an interim rate increase of $137,000 that was effective November 18, 1993. On January 18, 1994, the FPSC authorized a permanent increase of $515,000 that became effective February 17, 1994. The principal reason for the final increase being lower than the Company's request was that the FPSC authorized the use of a lower return on common equity capital and approved smaller increases in storm reserve and tree trimming expenses than the Company had requested.
Following FPSC rules for water utilities, the Company in mid-1996 filed for and was granted a price index revenue increase in the Fernandina Beach water division. This increase, approximating $19,000 on an annual basis, was placed into effect on June 4, 1996. A similar price index filing is planned for 1997.
Segment Information
The Company operates distribution systems providing natural and propane gas service in three locations in central and southern Florida, electric service in two locations in northern Florida and water service in one location in northern Florida. There are no material intersegment sales or transfers.
Operating profit consists of revenues less operating expenses and does not include other income, interest income, interest expense and income taxes.
Identifiable assets are those assets used in the Company's operations in each business segment. Common assets are principally cash and overnight investments, deferred tax assets and common plant.
Business segment information for 1996, 1995 and 1994 is summarized as follows (in thousands): Non- Regulated Regulated 1996 Gas Electric Water Common Propane Gas Consolidated Revenues $31,854 $40,701 $1,854 $ $4,401 $78,810 Operating profit 3,250 3,141 495 138 7,024 Identifiable assets 33,977 33,038 4,584 13,295 6,100 90,994 Depreciation 1,654 1,540 201 137 344 3,876 Construction expenditures 3,369 2,360 257 1,324 343 7,653
Revenues 26,144 40,074 1,674 4,135 72,027 Operating profit 2,902 3,078 328 212 6,520 Identifiable assets 32,115 32,155 4,508 10,596 5,866 85,240 Depreciation 1,578 1,453 204 125 334 3,694 Construction expenditures 3,245 2,533 (17) 312 328 6,401
Revenues 21,679 37,441 1,589 4,046 64,755 Operating profit 1,786 2,946 378 180 5,290 Identifiable assets 29,093 31,189 4,721 11,532 5,746 82,281 Depreciation 1,566 1,449 190 141 326 3,672 Construction expenditures 2,617 2,400 195 351 375 5,938
Income Taxes
The provision (credit) for income taxes consists of the following (in thousands): 1996 1995 1994 Current payable Federal $ 751 $ 871 $1,471 State 188 239 192 939 1,110 1,663 Deferred Federal 532 387 (574) State 46 (20) (37) 578 367 (611)
Investment tax credit (121) (121) (109)
Total $ 1,396 $1,356 $ 943
The difference between the effective income tax rate and the statutory federal income tax rate applied to pretax income is accounted for as follows (in thousands): 1996 1995 1994 Federal income tax at statutory rate $1,406 $1,298 $ 912 Effect of state income taxes 154 145 102 Investment tax credit (121) (121) (109) Other (43) 34 38
Provision for income taxes $1,396 $1,356 $ 943
The tax effects of temporary differences producing accumulated deferred income tax assets and liabilities in the accompanying consolidated balance sheets are as follows (in thousands):
1996 1995 Deferred tax assets Environmental $1,806 $1,689 Alternative minimum tax credit 210 428 Other 345 336 Total deferred tax assets $2,361 $2,453
Deferred tax liabilities Utility plant related $7,625 $8,837 Under recovery of fuel costs 667 176 Other 291 304 Total deferred tax liabilities $8,583 $9,317
Employee Benefit Plans
Pension Plan. The Company has a noncontributory defined benefit pension plan covering substantially all its employees. The benefits are based on the employee's credited service and average compensation, generally during the last five years before retirement. The Company's policy is to fund pension costs in accordance with contribution guidelines established by The Employee Retirement Income Security Act of 1974. Plan assets consist of stocks, bonds and short-term investments.
The components of net pension income are as follows (in thousands): 1996 1995 1994 Service cost $ 539 $ 513 $ 473 Interest cost 935 875 791 Actual return on assets (3,278) (4,499) 230 Net amortization and deferral 1,636 3,061 (1,644) Net periodic pension income $ (168) $ (50) $ (150)
The Plan's funded status at December 31, 1996 and 1995, is as follows (in thousands): 1996 1995 Actuarial present value of benefit obligations: Vested benefit obligation $(10,938) $(10,289) Accumulated benefit obligation $(11,599) $(10,878) Projected benefit obligation $(14,403) $(13,530) Plan assets at fair value 24,178 21,790
Plan assets in excess of projected benefit obligation 9,775 8,260 Unrecognized net gain (9,720) (8,030) Unrecognized prior service cost 1,513 1,354 Unrecognized net asset at January 1, 1986 being recognized over 15 years (733) (916) Prepaid pension cost $ 835 $ 668
Actuarial assumptions: Discount rate 7% 7% Rate of increase in future compensation levels 5.5% 5.5% Expected long-term rate of return on assets 8% 8%
Health Plan. The Company is principally self-insured for its employee and retiree medical insurance plan. The Company's health care liability under the plan is limited to $60,000 per individual per year, with a maximum total liability currently approximating $1,175,000.
A reserve for future benefit payments for active employees is maintained at a level sufficient to provide for estimated outstanding claims under the plan net of amounts contributed by employees. Net health care benefits paid by the Company for active employees were approximately $408,000, $493,000 and $622,000 for 1996, 1995 and 1994, respectively.
Other Postretirement Benefits. As of January 1, 1993, the Company adopted SFAS No. 106, "Employers Accounting for Postretirement Benefits Other Than Pensions". The Statement requires accrual of postretirement benefits during the years an employee provides service. The Company provides postretirement health care benefits for certain retired employees and their eligible dependents and reduced postretirement life insurance benefits for retired employees. The accumulated health care postretirement benefit obligation (transition obligation) under SFAS No. 106 is being amortized over 20 years beginning 1993. The Company is not accruing for reduced postretirement life insurance benefits as the actual outlay to the Company is offset by employee contributions.
The components of postretirement benefit costs are as follows (in thousands):
1996 1995 Service Cost $ 66 $ 69 Interest cost 78 76 Amortization of transition obligation 43 43 Periodic postretirement benefit cost $ 187 $ 188
The Plan's funded status at December 31, 1996 and 1995, is as follows (in thousands): 1996 1995 Accumulated postretirement benefit obligation (APBO): Retirees $ (253) $ (231) Fully eligible active plan participants (135) (108) Other active plan participants (860) (884) Total APBO (1,248) (1,223) Plan assets 0 0 APBO less than plan assets (1,248) (1,223) Unamortized transition obligation 686 730 Unrecognized (gain) loss 1 83 Accrued post benefit obligation $ (561) $ (410)
The measurement of the APBO assumes a 7% discount rate and a health care cost trend rate of 9.5% in 1996 decreasing to 5.5% by the year 2007 and beyond. A one-percentage point increase in the assumed health care cost trend rate would increase the APBO by approximately 13% and the periodic cost by about 13%.
Employee Stock Purchase Plan. The Company's Employee Stock Purchase Plan offers common stock at a discount to qualified employees. During 1996, 1995 and 1994, 5,455, 3,774 and 5,062 shares, respectively, were issued under the Plan for aggregate consideration of $90,000, $55,000 and $81,000, respectively.
Financial Instruments
The carrying amounts reported in the balance sheet for cash and overnight investments, investments held in escrow for environmental costs, notes payable, taxes accrued and other accrued liabilities' approximate fair value. The Company does not enjoy a debt rating and therefore the Company has no reasonable way of estimating the current rate at which similar first mortgage bonds would be made to borrowers with similar debt ratings and maturities. However, the current bonds outstanding were issued in 1988 and 1992 and since that time interest rates have declined, and thus it is reasonable to assume that the fair value of existing first mortgage bonds would be more than their carrying value.
Contingencies
The Company is subject to federal and state legislation with respect to soil, groundwater and employee health and safety matters and to environmental regulations issued by the Florida Department of Environmental Protection (FDEP), the United States Environmental Protection Agency and other federal and state agencies. Except as discussed below, the Company does not expect to incur material future expenditures for compliance with existing environmental laws and regulations.
West Palm Beach Site. The Company is currently conducting a contamination assessment investigation of a parcel of property owned by it in West Palm Beach, Florida. After a preliminary contamination assessment investigation indicated soil and groundwater impacts, the Company entered into a consent order with the FDEP. The consent order requires the Company to delineate the extent of soil and groundwater impacts associated with the prior operation of a gasification plant on the property and requires the Company to remediate any soil and groundwater impacts, if necessary. In June 1992 the Company commenced the contamination assessment investigation. The Company completed the additional contamination assessment activities in December 1995, and submitted a report to FDEP summarizing the results of such activities. Following discussions with FDEP, the Company agreed to conduct further limited assessment activities in 1997. Prior to the completion of this work, it is not possible to determine to an acceptable degree of certainty the complete extent or cost of remedial action, if any, which may be required. However, preliminary estimates from the Company's environmental consultant suggest that total contamination assessment and remediation costs for this site may reach approximately $3,250,000. Until the FDEP determines the contamination assessment investigation is completed, it is not possible at this time to determine when and how much of such costs the Company will have to pay. A portion of the on-site impacts have been determined to be eligible for reimbursement from a state fund and the FDEP has determined that a portion of the work conducted off-site is eligible for reimbursement under state law. Due to the rate relief granted to the Company for environmental costs and insurance settlement proceeds for environmental costs received by the Company which are being held in escrow, as well as the potential for reimbursement from the state for a portion of the assessment and remediation, the Company believes that it will not incur material future expenditures to achieve compliance with existing environmental laws and regulations.
Sanford Site. The Company owns a parcel of property located in Sanford, Florida. Prior to the Company's acquisition of this property, it had been the site of a gasification plant. The FDEP issued a Warning Notice to the Company which required the Company to conduct a contamination assessment investigation of the property. A preliminary investigation revealed that soil was impacted throughout the center of the property.
In 1992, the Company brought suit in federal court in Orlando against former owners and operators of the gasification plant to seek recovery of the Company's compliance costs at this property. The Company later entered into a cost sharing agreement with four former owners/operators of the gasification plant. Under that agreement, the parties agreed to share equally in the cost of the contamination assessment investigation of the property. Upon implementation of the cost sharing agreement, the Company dismissed the cost recovery action in 1995.
The initial contamination assessment investigation was completed and a Contamination Assessment Report (CAR) was delivered to FDEP on February 4, 1994. In April 1995, FDEP provided the parties with its response to the CAR requiring additional soil and groundwater sampling. At present, the parties have been unable to reach agreement with FDEP or EPA on the scope of the additional assessment activities in the vicinity of the site. By letter, dated May 9, 1995, EPA, Region IV, extended an offer to the Company to conduct an Expanded Site Investigation (ESI) and a Remedial Investigation/Feasibility Study (RI/FS) in connection with EPA's effort to evaluate whether the site should be proposed for addition to the national priorities list. The Company declined to fund or perform the ESI because the primary scope of the ESI was focused on off-site areas where historical practices may have resulted in contamination many years before FPUC acquired title to the real property on which the gasification plant was located. In July 1995, EPA advised the Company that EPA would proceed with the ESI. Pending completion of the ESI and RI/FS by EPA, we are unable to determine, to an acceptable degree of certainty, the extent or cost of remediation by EPA or FDEP at this site and it is not possible to determine the complete extent or cost of remedial action, if any, which may be required. However, preliminary estimates from the Company's environmental consultant suggest that total contamination assessment and remedial costs for the site may reach approximately $2,750,000. Pending completion of the ESI and RI/FS by EPA, it is not possible to determine when and how much of such costs the Company will have to pay. Due to the rate relief granted to the Company for environmental costs and insurance settlement proceeds for environmental costs received by the Company which are being held in escrow, as well as the potential for recovery of a portion of the assessment and remediation costs from several former owners/operators of the gasification plant, the Company believes that it will not incur material future expenditures to achieve compliance with existing environmental laws and regulations for this site.
Pensacola Site. The Company was a former owner/operator of a gasification plant at this site for several years. The FDEP notified the Company and other alleged responsible parties to conduct additional soils and groundwater sampling to determine the extent of soil and groundwater impacts at a property previously the site of a gasification plant in Pensacola, Florida. The Company and other alleged responsible parties have agreed to share equally the costs of such an investigation.
A contamination assessment report addendum (CARA) describing the results of completed contamination assessment investigations was delivered to FDEP in November 1995. By letter dated March 29, 1996, FDEP notified all parties of FDEP's approval of a monitoring only plan (MOP) as a permanent remedy for the site. The Company has agreed to share the costs of the MOP with the other alleged responsible parties. Due to the rate relief granted to the Company for environmental costs and insurance settlement proceeds for environmental costs received by the Company which are being held in escrow, as well as the potential for recovery of a portion of the assessment and remediation costs from several current and former owners/operators of the site, the Company believes that it will not incur material future expenditures to achieve compliance with existing environmental laws and regulations for this site.
Georgia Transformer Site. In October 1994, the Environmental Protection Agency (EPA) issued a Notice of Potential Liability to the Company in which the EPA identified the Company as a potentially responsible party (PRP) in connection with a site in Georgia where the Company was alleged to have sent transformers for repair. In the notice, the EPA demanded that PRPs for the site reimburse the EPA for response costs that it had incurred through August 1994 in connection with soil remediation efforts.
The Company, along with the PRPs, has entered into settlement agreement in 1995 with the EPA and the Company paid its share of the response costs in the amount of approximately $8,300. Since the EPA and the State of Georgia are currently evaluating whether additional contamination assessment and remedial action may be required at this site, it is not possible to determine the nature and extent of soil or groundwater impacts on the site, nor is it possible to determine the extent or cost of additional remedial action which may be required. Based on the Company's volumetric share of materials sent to the site, the Company believes that it will not incur significant future expenditures to satisfy its obligations at this site.
Insurance Claims and Rate Relief. The Company notified its insurance carriers of environmental impacts detected at each of the former manufactured gas plant (MGP) sites discussed above.
As a result of negotiations with the Company's major insurance carriers that concluded in 1995, such carriers agreed to pay settlement proceeds totaling approximately $4,200,000 for certain environmental costs. In addition, the Florida Public Service Commission has allowed the Company to recover through rate relief environmental expenses of approximately $2,400,000 over a ten-year period at the rate of approximately $240,000 per year.
Due to the rate relief granted the Company for environmental costs and insurance settlement proceeds for environmental costs received by the Company which are being held in escrow, the Company believes that any future contamination assessment and remedial costs arising from any of these sites will not be material to the Company's operating results or liquidity.
Quarterly Financial Data (Unaudited)
The quarterly financial data presented below reflects the influence of, among other things, seasonal weather conditions, the timing of rate increases and the migration of winter residents and tourists to central and southern Florida during the winter season (in thousands, except per share amounts):
FIRST SECOND THIRD FOURTH 1996 QUARTER QUARTER QUARTER QUARTER
Revenues $23,519 $17,918 $18,756 $18,617 Operating margin 7,995 6,187 6,177 6,412 Operating profit 3,221 1,368 1,188 1,247 Net income 1,564 418 341 428 Earnings per share1 1.06 .28 .23 .29
Revenues $18,565 $17,681 $17,729 $18,052 Operating margin 7,044 5,876 5,980 6,501 Operating profit 2,453 1,204 1,216 1,647 Net income 1,113 352 354 619 Earnings per share .76 .24 .24 .42
1The sum of the quarterly earnings per share amounts does not equal the annual earnings per share amount reflected in the consolidated statement of income due to the effect of changes in average common shares outstanding during the fiscal year.
Item 9.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
PART III
Item 10.

Item 10. Directors and Executive Officers of the Registrant
Information concerning directors and nominees of the Registrant is included under the caption "Nominees and Continuing Directors" in the Registrant's Proxy Statement for the 1997 Annual Meeting of Shareholders and is incorporated by reference herein.
The following table sets forth certain information about the executive officers of the Registrant as of March 10, 1997.
Name Age Position Date
R. L. Terry 77 Chairman of the Executive Committee 1985 - Present
F. C. Cressman 63 President 1985 - Present Chief Executive Officer 1991 - Present
John T. English 53 Senior Vice President 1993 - Present
Charles L. Stein 47 Vice President 1993 - Present
Darryl L. Troy 55 Vice President 1993 - Present
Jack R. Brown 62 Treasurer 1988 - Present Corporate Secretary 1995 - Present
Mr. English was Vice President preceding his appointment as Senior Vice President.
Mr. Stein was Manager of Gas Operations preceding his appointment as Vice President.
Mr. Troy was Assistant Secretary and Assistant Treasurer preceding his appointment as Vice President.
There are no family relationships between the executive officers.
All executive officers are elected for a one year term.
Item 11.

Item 11. Executive Compensation
Information concerning executive compensation is included under the caption "Executive Compensation" in the Registrant's Proxy Statement and is incorporated by reference herein.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management
Information concerning the security ownership of certain of the Registrant's beneficial owners and management is included under the captions "Security Ownership of Certain Beneficial Owners" and "Nominees and Continuing Directors" in the Registrant's Proxy Statement and is incorporated by reference herein.
Item 13.

Item 13. Certain Relationships and Related Transactions
Information concerning certain relationships and related transactions is included under the caption "Transactions with Management" in the Registrant's Proxy Statement and is incorporated by reference herein.
PART IV
Item 14.

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. Financial Statements The following consolidated financial statements of Florida Public Utilities Company are included in the Registrant's 1996 Annual Report to Shareholders. Independent Auditors' Report Consolidated Statements of Income Consolidated Balance Sheets Consolidated Statements of Capitalization Consolidated Statements of Common Shareholders' Equity Consolidated Statements of Cash Flows Notes to Financial Statements
2. Financial Statement Schedules
All schedules are omitted because of the absence of the conditions under which they are required or because the required information is included in the financial statements and related notes thereto.
3. Exhibits
See Exhibit Index following signatures.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended December 31, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FLORIDA PUBLIC UTILITIES COMPANY (Registrant)
By /s/ Jack R. Brown Jack R. Brown (Principal Financial and Accounting Officer)
Date March 21, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
/s/ Robert L. Terry Date: March 21, 1997 Robert L. Terry Chairman of the Executive Committee and Director
/s/ Franklin C. Cressman Date: March 21, 1997 Franklin C. Cressman President and Chief Executive Officer and Director
/s/ E. James Carr, Jr. Date: March 21, 1997 E. James Carr, Jr. Director
/s/ Daniel Downey Date: March 21, 1997 Daniel Downey Director
/s/ John T. English Date: March 21, 1997 John T. English Senior Vice President and Director
/s/ Richard C. Hitchins Date: March 21, 1997 Richard C. Hitchins Director
/s/ Gordon O. Jerauld Date: March 21, 1997 Gordon O. Jerauld Director
FLORIDA PUBLIC UTILITIES COMPANY
EXHIBIT INDEX (a) Exhibits
Regulation S-K Item Number 21. Subsidiary of the registrant
23. Independent auditors' consent
27. Financial data schedule
EXHIBIT 21
Subsidiary of the registrant
Name Jurisdiction of Incorporation
Flo-Gas Corporation Florida
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Post-Effective Amendment No. 16 to Registration Statement No. 2-24986 of Florida Public Utilities Company on Form S-8 of our report dated February 21, 1997, appearing in this Annual Report on Form 10-K of Florida Public Utilities Company for the year ended December 31, 1996.
DELOITTE & TOUCHE LLP Certified Public Accountants West Palm Beach, Florida March 18, 1997