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Progress Energy Announces 2010 Results and 2011 Earnings Guidance

February 18, 2011

RALEIGH, N.C., Feb. 18, 2011 /PRNewswire/ — Progress Energy (NYSE: PGN) announced full-year GAAP earnings of $856 million, or $2.95 per share, compared with GAAP earnings of $757 million, or $2.71 per share, for the same period last year. Full-year ongoing earnings were $889 million, or $3.06 per share, compared to $846 million, or $3.03 per share, last year. The significant drivers in ongoing earnings per share were favorable weather, partially offset by higher O&M. (See the discussion later in this release for a reconciliation of ongoing earnings per share to GAAP earnings per share.)

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Fourth-quarter GAAP earnings were $125 million, or $0.42 per share, compared with GAAP earnings of $154 million, or $0.55 per share, for the same period last year. Fourth-quarter ongoing earnings were $133 million, or $0.45 per share, compared to $142 million, or $0.50 per share, for the same period last year. The significant drivers in ongoing earnings per share were higher O&M and income taxes, partially offset by favorable weather. (See the discussion later in this release for a reconciliation of ongoing earnings per share to GAAP earnings per share.)

“Our continued financial discipline, coupled with very favorable weather, allowed us to achieve our financial goals and meet our commitment to customers and shareholders in 2010,” said Bill Johnson, Progress Energy chairman, president and CEO. “We delivered strong financial results, while making the investments necessary to meet customer needs now and in the future.

“For 2011 – even as we move forward with approval activities associated with our merger with Duke Energy – we are focused on cost discipline and managing our business effectively and efficiently while meeting our customers’ energy needs every day,” Johnson said.

Progress Energy announces 2011 ongoing earnings guidance of $3.00 to $3.20 per share. The ongoing earnings guidance excludes the impact, if any, from discontinued operations, the effects of certain identified gains and charges and any merger-related costs from our proposed merger with Duke Energy Corporation. Progress Energy is not able to provide a corresponding GAAP equivalent for the 2011 ongoing earnings guidance due to the uncertain nature and amount of these adjustments.

Progress Energy will host a conference call and webcast at 10 a.m. ET today to review fourth-quarter and full-year 2010 financial performance, as well as discuss 2011 earnings guidance and provide an overall business update. Additional details are provided at the end of this earnings release.

See pages 3-6 for detailed fourth-quarter and full-year 2010 earnings variance analyses for the Progress Energy Carolinas (PEC), Progress Energy Florida (PEF) and Corporate and Other Businesses segments.

RECENT DEVELOPMENTS

Duke Energy – Progress Energy Merger

  • Announced definitive merger agreement with Duke Energy (the Merger) to combine the two companies in a stock-for-stock transaction and continue as a wholly-owned subsidiary of Duke Energy. Progress Energy shareholders will receive 2.6125 shares of common stock of Duke Energy in exchange for each share of Progress Energy common stock.
  • The Merger is targeted to close by the end of 2011 and is expected to be accretive to adjusted diluted earnings in the first year after closing.
  • Received notice following the Merger announcement that Standard & Poor’s placed the corporate credit and issue ratings of Progress Energy and its subsidiaries on CreditWatch with positive implications, while Fitch and Moody’s affirmed the ratings of Progress Energy and its subsidiaries with stable outlooks.

Financial and Regulatory

  • Received approval from the Florida Public Service Commission (FPSC) to recover all proposed costs in PEF’s annual filings for fuel and purchased power, environmental projects, conservation programs and new nuclear generation. The overall result of these recoveries is a 6 percent reduction in customer bills in 2011, due primarily to lower fuel and purchased power costs as well as a reduced charge related to the Levy Nuclear Plant cost recovery. Within the fuel clause, PEF received approval to collect, subject to refund, replacement power costs related to the Crystal River 3 (CR3) Nuclear Plant outage.
  • Filed with the FPSC a revised demand-side management plan for PEF, which would result in 1,540 GWh of energy savings from 2011 to 2019, seven times more than PEF’s historic goals.
  • Received approval from the North Carolina Utilities Commission (NCUC) to recover all proposed costs of fuel, energy-efficiency programs and renewable energy resources, resulting in a slight net reduction in customer bills effective December 1, 2010, due primarily to lower fuel costs.
  • Issued $500 million of Progress Energy, Inc. 4.40% Senior Notes due 2021 in January 2011, with proceeds to be used, along with available cash on hand, to retire at maturity the $700 million aggregate principal balance of our 7.10% Senior Notes due March 1, 2011.

State-of-the-Art Power System

  • Expect to complete repairs on CR3 in March, and return the unit to service following successful completion of post-repair testing and start-up activities in April 2011. A number of factors affect the return to service date, including regulatory reviews by the NRC and other agencies, emergent work, final engineering designs, testing, weather and other developments.
  • Completed successful refueling and maintenance outage at the Harris Nuclear Plant, executing several major projects including an electric generator replacement, cooling tower fill project, and a fire protection enhancement.

Alternative Energy and Energy Efficiency

  • Launched the SunSense® Residential Solar PV program in North Carolina, which provides incentives to residential customers who install and own solar photovoltaic systems at their homes.
  • Announced an expanded solar energy program in Florida, which includes new incentives for solar photovoltaic systems.
  • Assisted customers in saving more than 243 million kWh through energy-efficiency programs and measures in 2010 throughout the Carolinas and Florida.

Press releases regarding various announcements are available on the company’s website at www.progress-energy.com/aboutus/news.

2010 BUSINESS HIGHLIGHTS

Below are the fourth-quarter and full-year 2010 earnings variance analyses for the company’s segments. See the reconciliation tables on pages 7-8 and on pages S-1 and S-2 of the supplemental data for a reconciliation of ongoing earnings per share to GAAP earnings per share. Also see the attached supplemental data schedules for additional information on PEC and PEF electric revenues, energy sales, energy supply, weather impacts and other topics.

QUARTER-OVER-QUARTER ONGOING EPS VARIANCE ANALYSIS

Progress Energy Carolinas

  • Reported fourth-quarter ongoing earnings per share of $0.42, compared with $0.38 for the same period last year; GAAP earnings per share of $0.40, compared with $0.30 for the same period last year.
  • Reported primary quarter-over-quarter ongoing earnings per share favorability of:
    • $0.05 weather primarily due to 16 percent higher heating-degree days than 2009; additionally, heating-degree days were 18 percent higher than normal
    • $0.04 clauses, wholesale and other margin due primarily to higher miscellaneous revenues, favorable non-clause-recoverable purchased power and higher clause-recoverable regulatory returns
    • $0.03 retail growth and usage
    • $0.03 AFUDC equity primarily due to increased construction project costs
  • Reported primary quarter-over-quarter ongoing earnings per share unfavorability of:
    • $(0.06) O&M primarily due to higher nuclear plant outage and maintenance costs driven by expanded scope and more emergent work in 2010 compared to 2009, partially offset by lower storm costs. There were no nuclear outages in the fourth quarter 2009.
    • $(0.01) other
    • $(0.01) depreciation and amortization
    • $(0.01) income taxes
    • $(0.02) share dilution
  • 9,000 net increase in the average number of customers for the three months ended
    December 31, 2010, compared to the same period in 2009

Progress Energy Florida

  • Reported fourth-quarter ongoing earnings per share of $0.17, compared with $0.28 for the same period last year; GAAP earnings per share of $0.17, compared with $0.27 for the same period last year.
  • Reported primary quarter-over-quarter ongoing earnings per share favorability of:
    • $0.05 weather primarily due to heating-degree days 125 percent higher than 2009 and 118 percent higher than normal
    • $0.02 clauses, wholesale and other margin primarily due to higher clause-recoverable regulatory revenues and returns
    • $0.02 depreciation and amortization primarily due to a change in depreciation rates resulting from a depreciation study in conjunction with the 2009 base rate case
  • Reported primary quarter-over-quarter ongoing earnings per share unfavorability of:
    • $(0.06) O&M primarily due to higher employee benefits expense and the prior-year pension deferral in accordance with an FPSC order
    • $(0.05) AFUDC equity primarily due to placing CAIR assets in service
    • $(0.02) retail growth and usage
    • $(0.02) interest expense primarily due to higher average debt outstanding and unfavorable AFUDC debt resulting from placing CAIR assets in service
    • $(0.02) income taxes primarily due to lower deductions for domestic production activities
    • $(0.01) retail rates
    • $(0.01) other
    • $(0.01) share dilution
  • 9,000 net increase in the average number of customers for the three months ended
    December 31, 2010, compared to the same period in 2009

Corporate and Other Businesses (includes primarily Holding Company debt)

  • Reported fourth-quarter ongoing after-tax expenses of $0.14 per share compared with after-tax expenses of $0.16 per share for the same period last year; GAAP after-tax expenses of $0.15 per share, compared with after-tax expenses of $0.02 per share for the same period last year.
  • Reported primary quarter-over-quarter ongoing after-tax expenses per share favorability of:
    • $0.02 O&M primarily due to the allocation to the Utilities of the corporate tax impact of withdrawals from an employee benefit trust
    • $0.01 other
    • $0.01 share dilution
  • Reported primary quarter-over-quarter ongoing after-tax expense per share unfavorability of:
    • $(0.02) income taxes primarily due to the impact of withdrawals from an employee benefit trust

YEAR-OVER-YEAR ONGOING EPS VARIANCE ANALYSIS

Progress Energy Carolinas

  • Reported full-year ongoing earnings per share of $2.13, compared with $1.93 for the same period last year; GAAP earnings per share of $2.06, compared with $1.83 for the same period last year.
  • Reported primary year-over-year ongoing earnings per share favorability of:
    • $0.25 weather primarily due to 15 percent higher heating-degree days and 24 percent higher cooling-degree days than 2009; additionally, cooling-degree days were 30 percent higher and heating-degree days were 14 percent higher than normal
    • $0.11 AFUDC equity primarily due to increased construction project costs
    • $0.09 clauses, wholesale and other margin primarily due to higher miscellaneous revenues, favorable non-clause-recoverable purchased power and higher clause-recoverable regulatory returns
    • $0.08 retail growth and usage
    • $0.02 interest expense primarily due to AFUDC debt resulting from increased construction project costs
  • Reported primary year-over-year ongoing earnings per share unfavorability of:
    • $(0.19) O&M primarily due to higher nuclear plant outage and maintenance costs driven by three nuclear refueling and maintenance outages in 2010 compared to two in 2009, as well as extended outages and more emergent work in 2010 compared to 2009
    • $(0.04) income taxes primarily due to the prior-year deduction related to nuclear decommissioning trust funds and changes in tax estimates
    • $(0.03) depreciation and amortization primarily due to the impact of depreciable asset base increases
    • $(0.09) share dilution
  • 10,000 net increase in the average number of customers for 2010, compared to 2009

Progress Energy Florida

  • Reported full-year ongoing earnings per share of $1.59, compared with $1.65 for the same period last year; GAAP earnings per share of $1.56, compared with $1.65 for the same period last year.
  • Reported primary year-over-year ongoing earnings per share favorability of:
    • $0.19 weather primarily due to 89 percent higher heating-degree days than 2009 and 124 percent higher than normal
    • $0.14 depreciation and amortization primarily due to the reduction in the cost of removal component of amortization expense in accordance with the base rate settlement agreement
    • $0.11 retail rates primarily due to the increase in base rates for the repowered Bartow Plant
    • $0.10 clauses, wholesale and other margin primarily due to higher clause-recoverable regulatory revenues and returns, partially offset by lower wholesale revenues related to amended contracts and estimated CR3 joint owner replacement power costs
  • Reported primary year-over-year ongoing earnings per share unfavorability of:
    • $(0.22) AFUDC equity primarily due to placing CAIR assets and the repowered Bartow Plant in service
    • $(0.17) O&M primarily due to the prior-year pension deferral in accordance with an FPSC order, higher employee benefits expense and the prior-year impact of a change in the vacation benefits policy
    • $(0.06) interest expense primarily due to higher average debt outstanding and unfavorable AFUDC debt resulting from placing CAIR assets and the repowered Bartow Plant in service
    • $(0.04) income taxes primarily due to the prior-year deduction related to nuclear decommissioning trust funds
    • $(0.03) other primarily due to higher property taxes resulting from placing the repowered Bartow Plant in service
    • $(0.01) retail growth and usage
    • $(0.07) share dilution
  • 4,000 net increase in the average number of customers for 2010, compared to 2009

Corporate and Other Businesses (includes primarily Holding Company debt)

  • Reported full-year ongoing after-tax expenses of $0.66 per share compared with after-tax expenses of $0.55 per share for the same period last year; GAAP after-tax expenses of $0.67 per share, compared with after-tax expenses of $0.77 per share for the same period last year.
  • Reported primary year-over-year ongoing after-tax expenses per share favorability of:
    • $0.04 O&M primarily due to the allocation to the Utilities of the corporate tax impact of withdrawals from an employee benefit trust
    • $0.02 share dilution
  • Reported primary year-over-year ongoing after-tax expenses per share unfavorability of:
    • $(0.11) interest expense primarily due to higher average debt outstanding at the Parent
    • $(0.05) income taxes primarily due to the impact of withdrawals from an employee benefit trust
    • $(0.01) other

ONGOING EARNINGS ADJUSTMENTS

Progress Energy’s management uses ongoing earnings per share to evaluate the operations of the company and to establish goals for management and employees. Management believes this non-GAAP measure is appropriate for understanding the business and assessing our potential future performance, because excluded items are limited to those that we believe are not representative of our fundamental core earnings. Ongoing earnings as presented here may not be comparable to similarly titled measures used by other companies. The following table provides a reconciliation of ongoing earnings per share to reported GAAP earnings per share.


                                  Progress Energy, Inc.
              Reconciliation of Ongoing Earnings per Share to Reported GAAP
                                   Earnings per Share
                                                           Three months
                                                                  ended
                                                           ------------
                                                            December 31
                                                            -----------
                                                    2010         2009
                                                    ----         ----
    Ongoing earnings per share                     $0.45        $0.50
    Tax levelization                              (0.01)         0.02
    CVO mark-to-market                                 -         0.03
    Change in the tax treatment of the Medicare
     Part D subsidy                                    -            -
    Impairment                                    (0.01)            -
    Plant retirement charges                           -       (0.05)
    Cumulative prior period adjustment                 -       (0.04)
    Discontinued operations                       (0.01)         0.09
                                                   -----         ----
    Reported GAAP earnings per share               $0.42        $0.55
                                                   =====        =====
                                                     294
    Shares outstanding (millions)                    ===
                                                                  281
                                                                  ===


                                                          Years ended
                                                          -----------
                                                          December 31
                                                          -----------
                                                    2010                 2009
                                                    ----                 ----
    Ongoing earnings per share                     $3.06                $3.03
    Tax levelization                                   -                    -
    CVO mark-to-market                                 -                 0.07
    Change in the tax treatment of the Medicare
     Part D subsidy                               (0.08)                    -
    Impairment                                    (0.02)               (0.01)
    Plant retirement charges                           -               (0.06)
    Cumulative prior period adjustment                 -               (0.04)
    Discontinued operations                       (0.01)               (0.28)
                                                   -----                -----
    Reported GAAP earnings per share               $2.95                $2.71
                                                   =====                =====
                                                     291
    Shares outstanding (millions)                    ===
                                                                          279
                                                                          ===

Reconciling adjustments from ongoing earnings to GAAP earnings are as follows:

Tax Levelization

Generally accepted accounting principles require companies to apply an effective tax rate to interim periods that is consistent with a company’s estimated annual tax rate. The company projects the effective tax rate for the year and then, based upon projected operating income for each quarter, increases or decreases the tax expense recorded in that quarter to reflect the projected tax rate. The resulting tax adjustment decreased earnings per share by $0.01 for the quarter and increased earnings per share by $0.02 for the same period last year, but has no impact on the company’s annual earnings. Because this adjustment varies by quarter but has no impact on annual earnings, management does not consider this adjustment to be representative of the company’s fundamental core earnings.

Contingent Value Obligation (CVO) Mark-to-Market

In connection with the acquisition of Florida Progress Corporation, Progress Energy issued 98.6 million CVOs. Each CVO represents the right of the holder to receive contingent payments based on net after-tax cash flows above certain levels of four synthetic fuels facilities purchased by subsidiaries of Florida Progress Corporation in October 1999. The CVO liability is valued at fair value, and unrealized gains and losses from changes in fair value are recognized in earnings each quarter. The CVO mark-to-market had no impact for the quarter and increased earnings per share by $0.03 for the same period last year. Progress Energy is unable to predict the changes in the fair value of the CVOs, and management does not consider this adjustment to be representative of the company’s fundamental core earnings.

Change in the Tax Treatment of the Medicare Part D Subsidy

The federal Patient Protection and Affordable Care Act (PPACA) and the related Health Care and Education Reconciliation Act, which made various amendments to the PPACA, were enacted in March 2010. Under prior law, employers could claim a deduction for the entire cost of providing retiree prescription drug coverage even though a portion of the cost was offset by the retiree drug subsidy received. As a result of the PPACA, as amended, retiree drug subsidy payments will effectively become taxable in tax years beginning after December 31, 2012, by requiring the amount of the subsidy received to be offset against the employer’s deduction. Under GAAP, changes in tax law are accounted for in the period of enactment. The change in the tax treatment of the Medicare Part D subsidy decreased earnings by $0.08 for the year and had no impact for the same period last year. Management does not consider this change in tax treatment to be representative of the company’s fundamental core earnings.

Impairment

The company recorded an impairment of certain miscellaneous investments and other assets which decreased earnings per share by $0.01 for the quarter and had no impact for the same period last year. Management does not consider this adjustment to be representative of the company’s fundamental core earnings.

Plant Retirement Charges

The company recognized charges for the impact of PEC’s decision to retire certain coal-fired generating units, with resulting reduced emissions for compliance with the Clean Smokestacks Act’s emission targets. The charges had no impact for the quarter and decreased earnings per share by $0.05 for the same period last year. Since the coal-fired generating units will be retired prior to their estimated useful lives, management does not consider this charge to be representative of the company’s fundamental core earnings.

Cumulative Prior Period Adjustment

The company recorded a cumulative prior period adjustment charge related to certain employee life insurance benefits. The charge had no impact for the quarter and decreased earnings per share by $0.04 for the same period last year. Management does not consider this adjustment to be representative of the company’s fundamental core earnings.

Discontinued Operations

The company has reduced its business risk by exiting nonregulated businesses to focus on the core operations of the utilities. The discontinued operations of these nonregulated businesses decreased earnings per share by $0.01 for the quarter and increased earnings per share by $0.09 for the same period last year. The prior-year impact was due primarily to adjustments related to a litigation judgment against our former Synthetic Fuels businesses. Due to the disposition of these assets, management does not consider this activity to be representative of the company’s fundamental core earnings.

Progress Energy’s conference call with the investment community will be held February 18, 2011 at 10 a.m. ET (7 a.m. PT). Investors, media and the public may listen to the conference call by dialing (913) 312-0836, confirmation code 3289071. If you encounter problems, please contact Investor Relations at (919) 546-6057.

A webcast of the live conference call will be available at www.progress-energy.com/webcast. The webcast will be archived on the site for at least 30 days following the call for those unable to listen in real time. The webcast will include audio of the conference call and a slide presentation referred to by management during the call. The slide presentation will be available for download beginning at 9:30 a.m. ET today at www.progress-energy.com/webcast.

Progress Energy (NYSE: PGN), headquartered in Raleigh, N.C., is a Fortune 500 energy company with more than 22,000 megawatts of generation capacity and approximately $10 billion in annual revenues. Progress Energy includes two major electric utilities that serve approximately 3.1 million customers in the Carolinas and Florida. The company has earned the Edison Electric Institute’s Edison Award, the industry’s highest honor, in recognition of its operational excellence, and was the first utility to receive the prestigious J.D. Power and Associates Founder’s Award for customer service. The company is pursuing a balanced strategy for a secure energy future, which includes aggressive energy-efficiency programs, investments in renewable energy technologies and a state-of-the-art power system. Progress Energy celebrated a century of service in 2008. Visit the company’s website at www.progress-energy.com.

Caution Regarding Forward-Looking Information:

This release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The matters discussed throughout this document involve estimates, projections, goals, forecasts, assumptions, risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.

Examples of factors that you should consider with respect to any forward-looking statements made throughout this document include, but are not limited to, the following:

  • our ability to obtain the approvals required to complete the Merger and the impact of compliance with material restrictions or conditions potentially imposed by our regulators;
  • the risk that the Merger is terminated prior to completion and results in significant transaction costs to us;
  • our ability to achieve the anticipated results and benefits of the Merger;
  • the impact of business uncertainties and contractual restrictions while the Merger is pending;
  • the impact of fluid and complex laws and regulations, including those relating to the environment and energy policy;
  • our ability to recover eligible costs and earn an adequate return on investment through the regulatory process;
  • the ability to successfully operate electric generating facilities and deliver electricity to customers;
  • the impact on our facilities and businesses from a terrorist attack;
  • the ability to meet the anticipated future need for additional baseload generation and associated transmission facilities in our regulated service territories and the accompanying regulatory and financial risks;
  • our ability to meet current and future renewable energy requirements;
  • the inherent risks associated with the operation and potential construction of nuclear facilities, including environmental, health, safety, regulatory and financial risks;
  • the financial resources and capital needed to comply with environmental laws and regulations;
  • risks associated with climate change;
  • weather and drought conditions that directly influence the production, delivery and demand for electricity;
  • recurring seasonal fluctuations in demand for electricity;
  • the ability to recover in a timely manner, if at all, costs associated with future significant weather events through the regulatory process;
  • fluctuations in the price of energy commodities and purchased power and our ability to recover such costs through the regulatory process;
  • our ability to control costs, including operations and maintenance expense (O&M) and large construction projects;
  • the ability of our subsidiaries to pay upstream dividends or distributions to Progress Energy, Inc. holding company;
  • current economic conditions;
  • the ability to successfully access capital markets on favorable terms;
  • the stability of commercial credit markets and our access to short- and long-term credit;
  • the impact that increases in leverage or reductions in cash flow may have on us;
  • our ability to maintain our current credit ratings and the impacts in the event our credit ratings are downgraded;
  • the investment performance of our nuclear decommissioning trust (NDT) funds;
  • the investment performance of the assets of our pension and benefit plans and resulting impact on future funding requirements;
  • the impact of potential goodwill impairments;
  • our ability to fully utilize tax credits generated from the previous production and sale of qualifying synthetic fuels under Internal Revenue Code Section 29/45K; and
  • the outcome of any ongoing or future litigation or similar disputes and the impact of any such outcome or related settlements.

Many of these risks similarly impact our nonreporting subsidiaries.

These and other risk factors are detailed from time to time in our filings with the SEC. All such factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control.

Any forward-looking statement is based on information current as of the date of this document and speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after that date on which such statement is made.

                               PROGRESS ENERGY, INC.
                    UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 December 31, 2010

    UNAUDITED CONSOLIDATED STATEMENTS of INCOME
                                   Three months ended       Years ended
                                   ------------------       -----------
                                      December 31           December 31
                                      -----------           -----------
    (in millions except per
     share data)                      2010       2009     2010      2009
    -----------------------           ----       ----     ----      ----
    Operating revenues              $2,321     $2,307  $10,190    $9,885
    Operating expenses
      Fuel used in electric
       generation                      726        897    3,300     3,752
      Purchased power                  283        312    1,279       911
      Operation and
       maintenance                     568        534    2,027     1,894
      Depreciation,
       amortization and
       accretion                       240        109      920       986
      Taxes other than on
       income                          132        132      580       557
      Other                              5         (1)      30        13
        Total operating expenses     1,954      1,983    8,136     8,113
    Operating income                   367        324    2,054     1,772
    Other income (expense)
      Interest income                    1          6        7        14
      Allowance for equity
       funds used during
       construction                     24         29       92       124
      Other, net                         5         (7)       -         6
        Total other income, net         30         28       99       144
    Interest charges
      Interest charges                 192        184      779       718
      Allowance for borrowed
       funds used during
       construction                     (8)        (9)     (32)      (39)
        Total interest charges,
         net                           184        175      747       679
    Income from continuing
     operations before
     income tax                        213        177    1,406     1,237
    Income tax expense                  83         45      539       397
    Income from continuing
     operations                        130        132      867       840
    Discontinued operations,
     net of tax                         (2)        24       (4)      (79)
    Net income                         128        156      863       761
    Net income attributable
     to noncontrolling
     interests, net of tax              (3)        (2)      (7)       (4)
    -----------------------            ---        ---      ---       ---
    Net income attributable
     to controlling
     interests                        $125       $154     $856      $757
    =======================           ====       ====     ====      ====
    Average common shares
     outstanding - basic               294        281      291       279
    ---------------------              ---        ---      ---       ---
    Basic and diluted earnings per
     common share
      Income from continuing
       operations attributable
       to controlling
       interests, net of tax         $0.43      $0.46    $2.96     $2.99
      Discontinued operations
       attributable to
       controlling interests,
       net of tax                    (0.01)      0.09    (0.01)    (0.28)
      -----------------------        -----       ----    -----     -----
        Net income attributable
         to controlling
         interests                   $0.42      $0.55    $2.95     $2.71
        =======================      =====      =====    =====     =====
    Dividends declared per
     common share                   $0.620     $0.620   $2.480    $2.480
    ----------------------          ------     ------   ------    ------
    Amounts attributable to
     controlling interests
      Income from continuing
       operations, net of tax         $127       $130     $860      $836
      Discontinued operations,
       net of tax                       (2)        24       (4)      (79)
      ------------------------         ---        ---      ---       ---
        Net income attributable
         to controlling
         interests                    $125       $154     $856      $757
        =======================       ====       ====     ====      ====

The Unaudited Consolidated Financial Statements should be read in conjunction with the Company’s Annual Report to shareholders. These statements have been prepared for the purpose of providing information concerning the Company and not in connection with any sale, offer for sale, or solicitation of an offer to buy any securities.


    PROGRESS ENERGY, INC.
    UNAUDITED CONSOLIDATED BALANCE SHEETS
                                                    December 31, December 31,
    (in millions)                                           2010         2009
    ASSETS
    Utility plant
      Utility plant in service                           $29,708      $28,353
      Accumulated depreciation                           (11,567)     (11,176)
      ------------------------                           -------      -------
       Utility plant in service, net                      18,141       17,177
      Other utility plant, net                               220          212
      Construction work in progress                        2,205        1,790
      Nuclear fuel, net of amortization                      674          554
      ---------------------------------                      ---          ---
    Total utility plant, net                              21,240       19,733
    ------------------------                              ------       ------
    Current assets
      Cash and cash equivalents                              611          725
      Receivables, net                                     1,033          800
      Inventory                                            1,226        1,325
      Regulatory assets                                      176          142
      Derivative collateral posted                           164          146
      Income taxes receivable                                 52          145
      Prepayments and other current assets                   214          248
      ------------------------------------                   ---          ---
    Total current assets                                   3,476        3,531
    --------------------                                   -----        -----
    Deferred debits and other assets
      Regulatory assets                                    2,374        2,179
      Nuclear decommissioning trust funds                  1,571        1,367
      Miscellaneous other property and investments           413          438
      Goodwill                                             3,655        3,655
      Other assets and deferred debits                       325          333
      --------------------------------                       ---          ---
    Total deferred debits and other assets                 8,338        7,972
    --------------------------------------                 -----        -----
       Total assets                                      $33,054      $31,236
       ============                                      =======      =======
    Capitalization and Liabilities
    Common stock equity
      Common stock without par value, 500 million
       shares authorized, 293                             $7,343       $6,873
        million and 281 million shares issued and
         outstanding, respectively
      Unearned ESOP shares (0 and 1 million
       shares, respectively)                                   -          (12)
      Accumulated other comprehensive loss                  (125)         (87)
      Retained earnings                                    2,805        2,675
      -----------------                                    -----        -----
       Total common stock equity                          10,023        9,449
       -------------------------                          ------        -----
    Noncontrolling interests                                   4            6
       Total equity                                       10,027        9,455
       ------------                                       ------        -----
    Preferred stock of subsidiaries                           93           93
    Long-term debt, affiliate                                273          272
    Long-term debt, net                                   11,864       11,779
    -------------------                                   ------       ------
       Total capitalization                               22,257       21,599
    Current liabilities
      Current portion of long-term debt                      505          406
      Short-term debt                                          -          140
      Accounts payable                                       994          835
      Interest accrued                                       216          206
      Dividends declared                                     184          175
      Customer deposits                                      324          300
      Derivative liabilities                                 259          190
      Accrued compensation and other benefits                175          167
      Other current liabilities                              298          239
      -------------------------                              ---          ---
       Total current liabilities                           2,955        2,658
       -------------------------                           -----        -----
    Deferred credits and other liabilities
      Noncurrent income tax liabilities                    1,696        1,196
      Accumulated deferred investment tax credits            110          117
      Regulatory liabilities                               2,635        2,510
      Asset retirement obligations                         1,200        1,170
      Accrued pension and other benefits                   1,514        1,339
      Derivative liabilities                                 278          240
      Other liabilities and deferred credits                 409          407
      --------------------------------------                 ---          ---
       Total deferred credits and other liabilities        7,842        6,979
       --------------------------------------------        -----        -----
    Commitments and contingencies
    -----------------------------
       Total capitalization and liabilities              $33,054      $31,236
       ====================================              =======      =======


    PROGRESS ENERGY, INC.
    UNAUDITED CONSOLIDATED STATEMENTS of CASH FLOWS
    (in millions)
    Years ended December 31                                   2010    2009
    -----------------------                                   ----    ----
    Operating activities
    Net income                                                $863    $761
    Adjustments to reconcile net income to net cash
     provided by operating activities
      Depreciation, amortization and accretion               1,083   1,135
      Deferred income taxes and investment tax credits, net    478     220
      Deferred fuel (credit) cost                               (2)    290
      Allowance for equity funds used during construction      (92)   (124)
      Loss on sales of assets                                    9       2
      Pension, postretirement and other employee benefits      198     135
      Other adjustments to net income                           40     134
      Cash (used) provided by changes in operating assets
       and liabilities
       Receivables                                            (200)     26
       Inventory                                                98     (99)
       Derivative collateral posted                            (23)    200
       Other assets                                             (1)     14
       Income taxes, net                                        90     (14)
       Accounts payable                                        125     (26)
       Accrued pension and other benefits                     (164)   (285)
       Other liabilities                                        35     (98)
       Net cash provided by operating activities             2,537   2,271
       -----------------------------------------             -----   -----
    Investing activities
    Gross property additions                                (2,221) (2,295)
    Nuclear fuel additions                                    (221)   (200)
    Purchases of available-for-sale securities and other
     investments                                            (7,009) (2,350)
    Proceeds from available-for-sale securities and
     other investments                                       6,990   2,314
    Other investing activities                                  61      (1)
    --------------------------                                 ---     ---
       Net cash used by investing activities                (2,400) (2,532)
       -------------------------------------                ------  ------
    Financing activities
    Issuance of common stock, net                              434     623
    Dividends paid on common stock                            (717)   (693)
    Payments of short-term debt with original maturities
     greater than 90 days                                        -    (629)
    Net decrease in short-term debt                           (140)   (381)
    Proceeds from issuance of long-term debt, net              591   2,278
    Retirement of long-term debt                              (400)   (400)
    Cash distributions to noncontrolling interests              (6)     (6)
    Other financing activities                                 (13)     14
    --------------------------                                 ---     ---
       Net cash (used) provided by financing activities       (251)    806
       ------------------------------------------------       ----     ---
    Net (decrease) increase in cash and cash equivalents      (114)    545
    Cash and cash equivalents at beginning of year             725     180
    ----------------------------------------------             ---     ---
    Cash and cash equivalents at end of year                  $611    $725
    ========================================                  ====    ====


    Progress Energy, Inc.
    SUPPLEMENTAL DATA - Page S-1
    Unaudited
                                       Earnings Variances
                                  Fourth Quarter 2010 vs. 2009

                              Regulated
                              Utilities
                                 ---------
                                                 Corporate
    ($ per share)          Carolinas    Florida      and     Consolidated
                                                    Other
                           ---------             Businesses

    2009 GAAP earnings          0.30       0.27       (0.02)         0.55
    Tax levelization           (0.01)      0.01       (0.02)        (0.02) A
    CVO mark-to-market                                (0.03)        (0.03) B
    Plant retirement
     charges                    0.05                                 0.05  C
    Cumulative prior
     period adjustment          0.04                                 0.04  D
    Discontinued
     operations                                       (0.09)        (0.09) E
    2009 ongoing earnings       0.38       0.28       (0.16)         0.50
                                ----       ----       -----          ----

    Weather - retail            0.05       0.05                      0.10  F

    Growth and usage -
     retail                     0.03      (0.02)                     0.01

    Retail rates                          (0.01)                    (0.01)

    Clauses, wholesale and
     other margin               0.04       0.02                      0.06  G

    O&M                        (0.06)     (0.06)       0.02         (0.10) H

    Other                      (0.01)     (0.01)       0.01         (0.01)

    AFUDC equity                0.03      (0.05)                    (0.02) I

    Depreciation and
     amortization              (0.01)      0.02                      0.01  J

    Interest expense                      (0.02)                    (0.02) K

    Income taxes               (0.01)     (0.02)      (0.02)        (0.05) L

    Share dilution             (0.02)     (0.01)       0.01         (0.02)

    2010 ongoing earnings       0.42       0.17       (0.14)         0.45
                                ----                  -----          ----
    Tax levelization           (0.01)                               (0.01) A
    Discontinued
     operations                                       (0.01)        (0.01) E
    Impairment                 (0.01)                               (0.01) M
    2010 GAAP earnings          0.40       0.17       (0.15)         0.42
                                ----       ----       -----          ----


    Corporate and Other Businesses includes small subsidiaries, Holding
    Company interest expense, discontinued operations, CVO mark-to-
    market, purchase accounting  transactions and corporate
    eliminations.
    Certain line items presented gross on the Consolidated Statements of
    Income are netted in this analysis to highlight earnings drivers.

    A -Tax levelization impact, related to cyclical nature of energy
    demand/earnings and various permanent items of income or
           deduction.
    B - Impact of change in fair value of outstanding CVOs.
    C -  Impact of decision to retire in-service generating units prior
    to the end of their estimated useful lives.
    D - Related to certain employee life insurance benefits.
    E - Discontinued operations in 2009 consists primarily of
    adjustments related to a litigation judgment against our former
           Synthetic Fuels businesses.
    F -  Carolinas - Favorable primarily due to 16 percent higher
    heating-degree days than 2009; additionally, heating-degree
           days were 18 percent higher than normal.
           Florida - Favorable primarily due to heating-degree days 125
           percent higher than 2009 and 118 percent higher than normal.
    G -  Carolinas - Favorable primarily due to higher miscellaneous
    revenues, favorable non-clause-recoverable purchased
            power and higher clause-recoverable regulatory returns.
            Florida - Favorable primarily due to higher clause-recoverable
            regulatory revenues and returns.
    H - Carolinas -Unfavorable primarily due to higher nuclear plant
    outage and maintenance costs driven by expanded scope
           and more emergent work in 2010 compared to 2009, partially
           offset by
           lower storm costs. There were no nuclear outages
           in the fourth quarter 2009.
           Florida - Unfavorable primarily due to higher employee benefits
           expense and the prior-year pension deferral in accordance
           with an FPSC order.
           Corporate and Other -Favorable primarily due to the allocation to
           the Utilities of the corporate tax impact of withdrawals
           from an employee benefit trust.
    I -  AFUDC equity is presented gross of tax as it is excluded from
    the calculation of income tax expense.
          Carolinas -Favorable primarily due to increased construction
          project
          costs.
          Florida -Unfavorable primarily due to placing CAIR assets in
          service.
    J - Florida -Favorable primarily due to a change in depreciation
    rates resulting from a depreciation study in conjunction with
           the 2009 base rate case.
    K - Florida -Unfavorable primarily due to higher average debt
    outstanding and unfavorable AFUDC debt resulting from
           placing CAIR assets in service.
    L - Florida -Unfavorable primarily due to lower deductions for
    domestic production activities.
          Corporate and Other -Unfavorable primarily due to the impact of
          withdrawals from an employee benefit trust.
    M - Impairment of certain miscellaneous investments and other
    assets.


    Progress Energy, Inc.
    SUPPLEMENTAL DATA - Page S-2
    Unaudited
                                        Earnings Variances
                                      Full-Year 2010 vs. 2009

                             Regulated
                             Utilities
                                ---------
                                                Corporate
    ($ per share)          Carolinas    Florida     and      Consolidated
                                                   Other
                           ---------             Businesses

    2009 GAAP earnings          1.83       1.65       (0.77)         2.71
    CVO mark-to-market                                (0.07)        (0.07) A
    Impairment                                         0.01          0.01  B
    Plant retirement
     charges                    0.06                                 0.06  C
    Cumulative prior
     period adjustment          0.04                                 0.04  D
    Discontinued
     operations                                        0.28          0.28  E
    2009 ongoing earnings       1.93       1.65       (0.55)         3.03
                                ----       ----       -----          ----

    Weather - retail            0.25       0.19                      0.44  F

    Growth and usage -
     retail                     0.08      (0.01)                     0.07

    Retail rates                           0.11                      0.11  G

    Clauses, wholesale and
     other margin               0.09       0.10                      0.19  H

    O&M                        (0.19)     (0.17)       0.04         (0.32) I

    Other                                 (0.03)      (0.01)        (0.04) J

    AFUDC equity                0.11      (0.22)                    (0.11) K

    Depreciation and
     amortization              (0.03)      0.14                      0.11  L

    Interest expense            0.02      (0.06)      (0.11)        (0.15) M

    Income taxes               (0.04)     (0.04)      (0.05)        (0.13) N

    Share dilution             (0.09)     (0.07)       0.02         (0.14)

    2010 ongoing earnings       2.13       1.59       (0.66)         3.06
                                ----       ----       -----          ----
    Impairment                 (0.02)                               (0.02) B
    Discontinued
     operations                                       (0.01)        (0.01) E
    Change in the tax
     treatment of the          (0.05)     (0.03)                    (0.08) O
      Medicare Part D
       subsidy
    2010 GAAP earnings          2.06       1.56       (0.67)         2.95
                                ----       ----       -----          ----


    Corporate and Other Businesses includes small subsidiaries, Holding
    Company interest expense, discontinued operations, CVO mark-to-
    market, purchase accounting transactions and corporate eliminations.
    Certain line items presented gross on the Consolidated Statements of
    Income are netted in this analysis to highlight earnings drivers.

    A -  Impact of change in fair value of outstanding CVOs.
    B -  Impairment of certain miscellaneous investments and other assets.
    C -  Impact of decision to retire in-service generating units prior
    to the end of their estimated useful lives.
    D -  Related to certain employee life insurance benefits.
    E - Discontinued operations in 2009 consists primarily of
    adjustments related to a litigation judgment against our former
          Synthetic Fuels businesses.
    F -  Carolinas - Favorable primarily due to 15 percent higher
    heating-degree days and 24 percent higher cooling-degree
          days than 2009; additionally, cooling-degree days were 30 percent
          higher and heating-degree days were 14 percent
          higher than normal.
          Florida - Favorable primarily due to 89 percent higher heating-
          degree days than 2009 and 124 percent higher than normal.
    G - Florida -Favorable primarily due to the increase in base rates
    for the repowered Bartow Plant.
    H -  Carolinas - Favorable primarily due to higher miscellaneous
    revenues, favorable non-clause-recoverable purchased
          power and higher clause-recoverable regulatory returns.
          Florida - Favorable primarily due to higher clause-recoverable
          regulatory revenues and returns, partially offset by lower
          wholesale revenues related to amended contracts and estimated CR3
          joint owner replacement power costs.
    I - Carolinas -Unfavorable primarily due to higher nuclear plant
    outage and maintenance costs driven by three nuclear
          refueling and maintenance outages in 2010 compared to two in
          2009, as
          well as extended outages and more emergent
          work in 2010 compared to 2009.
          Florida - Unfavorable primarily due to the prior-year pension
          deferral in accordance with an FPSC order, higher employee
          benefits expense and the prior-year impact of a change in the
          vacation benefits policy.
          Corporate and Other -Favorable primarily due to the allocation to
          the Utilities of the corporate tax impact of withdrawals
          from an employee benefit trust.
    J - Florida -Unfavorable primarily due to higher property taxes
    resulting from placing the repowered Bartow Plant in service.
    K - AFUDC equity is presented gross of tax as it is excluded from
    the calculation of income tax expense.
          Carolinas -Favorable primarily due to increased construction
          project
          costs.
          Florida -Unfavorable primarily due to placing CAIR assets and the
          repowered Bartow Plant in service.
    L - Carolinas -Unfavorable primarily due to the impact of
    depreciable asset base increases.
           Florida -Favorable primarily due to the reduction in the cost of
           removal component of amortization expense in
           accordance with the base rate settlement agreement.
    M -Carolinas -Favorable primarily due to AFUDC debt resulting from
    increased construction project costs.
           Florida -Unfavorable primarily due to higher average debt
           outstanding and unfavorable AFUDC debt resulting from
           placing CAIR assets and the repowered Bartow Plant in service.
           Corporate and Other -Unfavorable primarily due to higher average
           debt outstanding at the Parent.
    N -  Carolinas - Unfavorable primarily due to the prior-year
    deduction related to nuclear decommissioning trust funds and
           changes in tax estimates.
           Florida - Unfavorable primarily due to the prior-year deduction
           related to nuclear decommissioning trust funds.
           Corporate and Other -Unfavorable primarily due to the impact of
           withdrawals from an employee benefit trust.
    O -Change in the tax treatment of the Medicare Part D subsidy
    related to the Patient Protection and Affordable Care Act
           and the related Health Care and Education Reconciliation Act
           enacted
           in March 2010.

    Progress Energy, Inc.
    SUPPLEMENTAL DATA - Page S-3
    Unaudited - Data is not weather-adjusted Utility Statistics
                                               Three Months Ended
                                               December 31, 2010
                                               -----------------
    Operating Revenues (in                                             Total
     millions)                        Carolinas       Florida       Utilities
                                      ---------       -------       ----------
    Residential                            $264          $237             $501
    Commercial                              170            89              259
    Industrial                               87            17              104
    Governmental                             15            23               38
    Unbilled                                 24            (7)              17
    --------                                ---           ---              ---
        Total retail base revenues          560           359              919
    Wholesale base revenues                  77            39              116
    -----------------------                 ---           ---              ---
        Total base revenues                 637           398            1,035
    Clause-recoverable regulatory
     returns                                  5            47               52
    Miscellaneous revenue                    36            49               85
    Fuel and other pass-through
     revenues                               450           695            1,145
         Total operating revenues        $1,128        $1,189           $2,317
         ------------------------        ------        ------           ------

    Energy Sales (millions of kWh)
    Residential                           4,013         4,618            8,631
    Commercial                            3,263         2,905            6,168
    Industrial                            2,606           748            3,354
    Governmental                            370           836            1,206
    Unbilled                                600          (150)             450
                                            ---          ----              ---
        Total retail                     10,852         8,957           19,809
    Wholesale                             3,233           640            3,873
    ---------                             -----           ---            -----
        Total energy sales               14,085         9,597           23,682
        ------------------               ------         -----           ------

    Energy Supply (millions of kWh)
    Generated
      Steam                               7,023         3,325           10,348
      Nuclear                             5,169             -            5,169
      Combustion turbines/combined        1,256         4,977            6,233
             cycle
      Hydro                                 102             -              102
     Purchased                            1,065         1,916            2,981
     ---------                            -----         -----            -----
        Total energy supply              14,615        10,218           24,833
        -------------------              ------        ------           ------
              (company share)
              ---------------

    Impact of Weather to Normal on
     Retail Sales
    Heating-degree days
      Actual                              1,399           366
      Normal                              1,189           168
    Cooling-degree days
      Actual                                 70           396
      Normal                                 75           442
    Impact of retail weather to
     normal on EPS                        $0.05         $0.07            $0.12
    ---------------------------           -----         -----            -----


                                             Three Months Ended
                                            December 31, 2009(a)
                                            --------------------
    Operating Revenues (in                                          Total
     millions)                      Carolinas       Florida      Utilities
                                    ---------       -------      ----------
    Residential                          $237          $240            $477
    Commercial                            162            88             250
    Industrial                             86            19             105
    Governmental                           14            23              37
    Unbilled                               22           (19)              3
    --------                              ---           ---             ---
        Total retail base revenues        521           351             872
    Wholesale base revenues                72            39             111
    -----------------------               ---           ---             ---
        Total base revenues               593           390             983
    Clause-recoverable regulatory
     returns                                2            27              29
    Miscellaneous revenue                  26            49              75
    Fuel and other pass-through
     revenues                             445           772           1,217
         Total operating revenues      $1,066        $1,238          $2,304
         ------------------------      ------        ------          ------

    Energy Sales (millions of kWh)
    Residential                         3,564         4,699           8,263
    Commercial                          3,111         2,977           6,088
    Industrial                          2,597           799           3,396
    Governmental                          360           847           1,207
    Unbilled                              587          (609)            (22)
                                          ---          ----             ---
        Total retail                   10,219         8,713          18,932
    Wholesale                           3,424           727           4,151
    ---------                           -----           ---           -----
        Total energy sales             13,643         9,440          23,083
        ------------------             ------         -----          ------

    Energy Supply (millions of kWh)
    Generated
      Steam                             6,471         3,370           9,841
      Nuclear                           6,609             -           6,609
      Combustion turbines/combined        649         4,708           5,357
             cycle
      Hydro                               169             -             169
     Purchased                            299         1,923           2,222
     ---------                            ---         -----           -----
        Total energy supply            14,197        10,001          24,198
        -------------------            ------        ------          ------
              (company share)
              ---------------

    Impact of Weather to Normal on
     Retail Sales
    Heating-degree days
      Actual                            1,209           163
      Normal                            1,175           192
    Cooling-degree days
      Actual                               52           526
      Normal                               74           455
    Impact of retail weather to
     normal on EPS                      $0.00         $0.02           $0.02
    ---------------------------         -----         -----           -----


                                         Percentage Change
                                          From December 31,
                                                   2009
                                            ------------------
    Operating Revenues (in
     millions)                        Carolinas       Florida
                                      ---------       -------
    Residential                            11.4%        (1.3)%
    Commercial                              4.9           1.1
    Industrial                              1.2         (10.5)
    Governmental                            7.1             -
    Unbilled                                  -             -
    --------                                ---           ---
        Total retail base revenues          7.5           2.3
    Wholesale base revenues                 6.9             -
    -----------------------                 ---           ---
        Total base revenues                 7.4           2.1
    Clause-recoverable regulatory
     returns                              150.0          74.1
    Miscellaneous revenue                  38.5             -
    Fuel and other pass-through
     revenues                                 -             -
         Total operating revenues           5.8%        (4.0)%
         ------------------------           ---         -----

    Energy Sales (millions of kWh)
    Residential                            12.6%        (1.7)%
    Commercial                              4.9          (2.4)
    Industrial                              0.3          (6.4)
    Governmental                            2.8          (1.3)
    Unbilled                                  -             -
                                            ---           ---
        Total retail                        6.2           2.8
    Wholesale                              (5.6)        (12.0)
    ---------
        Total energy sales                  3.2%          1.7%
        ------------------                  ---           ---

    Energy Supply (millions of kWh)
    Generated
      Steam
      Nuclear
      Combustion turbines/combined
             cycle
      Hydro
     Purchased
     ---------
        Total energy supply
        -------------------
              (company share)
              ---------------

    Impact of Weather to Normal on
     Retail Sales
    Heating-degree days
      Actual                               15.7%        124.5%
      Normal
    Cooling-degree days
      Actual                               34.6%       (24.7)%
      Normal
    Impact of retail weather to
     normal on EPS
    ---------------------------

    (a) Certain amounts for 2009 have been reclassified to conform to the
    2010 presentation.

    Progress Energy, Inc.
    SUPPLEMENTAL DATA - Page S-4
    Unaudited - Data is not weather-adjusted Utility Statistics
                                                   Year Ended
                                               December 31, 2010
                                               -----------------
    Operating Revenues (in                                             Total
     millions)                        Carolinas       Florida       Utilities
                                      ---------       -------       ----------
    Residential                          $1,242        $1,045           $2,287
    Commercial                              726           359            1,085
    Industrial                              365            75              440
    Governmental                             65            92              157
    Unbilled                                 10            17               27
    --------                                ---           ---              ---
        Total retail base revenues        2,408         1,588            3,996
    Wholesale base revenues                 305           160              465
    -----------------------                 ---           ---              ---
        Total base revenues               2,713         1,748            4,461
    Clause-recoverable regulatory
     returns                                 13           173              186
    Miscellaneous revenue                   138           216              354
    Fuel and other pass-through
     revenues                             2,058         3,117            5,175
    ---------------------------
        Total operating revenues         $4,922        $5,254          $10,176
        ------------------------         ------        ------          -------

    Energy Sales (millions of kWh)
    Residential                          19,108        20,524           39,632
    Commercial                           14,184        11,896           26,080
    Industrial                           10,665         3,219           13,884
    Governmental                          1,574         3,286            4,860
    Unbilled                                172           458              630
    --------                                ---           ---              ---
        Total retail                     45,703        39,383           85,086
    Wholesale                            13,999         3,857           17,856
    ---------                            ------         -----           ------
        Total energy sales               59,702        43,240          102,942
        ------------------               ------        ------          -------

    Energy Supply (millions of kWh)
    Generated
      Steam                              30,528        14,443           44,971
      Nuclear                            21,624             -           21,624
      Combustion turbines/combined
       cycle                              5,429        22,427           27,856
      Hydro                                 608             -              608
     Purchased                            3,985         9,488           13,473
     ---------                            -----         -----           ------
        Total energy supply              62,174        46,358          108,532
        -------------------              ------        ------          -------
                 (company share)
                 ---------------

    Impact of Weather to Normal on
     Retail Sales
    Heating-degree days
      Actual                              3,512         1,046
      Normal                              3,092           467
    Cooling-degree days
      Actual                              2,239         3,045
      Normal                              1,717         3,000
    Impact of retail weather to
     normal on EPS                        $0.28         $0.26            $0.54
    ---------------------------           -----         -----            -----


                                                   Year Ended
                                              December 31, 2009(a)
                                              --------------------
    Operating Revenues (in                                             Total
     millions)                        Carolinas       Florida       Utilities
                                      ---------       -------       ----------
    Residential                          $1,128          $946           $2,074
    Commercial                              707           340            1,047
    Industrial                              356            72              428
    Governmental                             59            87              146
    Unbilled                                  5             9               14
    --------                                ---           ---              ---
        Total retail base revenues        2,255         1,454            3,709
    Wholesale base revenues                 308           207              515
    -----------------------                 ---           ---              ---
        Total base revenues               2,563         1,661            4,224
    Clause-recoverable regulatory
     returns                                  9            87               96
    Miscellaneous revenue                   114           189              303
    Fuel and other pass-through
     revenues                             1,941         3,314            5,255
    ---------------------------
        Total operating revenues         $4,627        $5,251           $9,878
        ------------------------         ------        ------           ------

    Energy Sales (millions of kWh)
    Residential                          17,117        19,399           36,516
    Commercial                           13,639        11,884           25,523
    Industrial                           10,368         3,285           13,653
    Governmental                          1,497         3,256            4,753
    Unbilled                                360           131              491
    --------                                ---           ---              ---
        Total retail                     42,981        37,955           80,936
    Wholesale                            13,966         3,835           17,801
    ---------                            ------         -----           ------
        Total energy sales               56,947        41,790           98,737
        ------------------               ------        ------           ------

    Energy Supply (millions of kWh)
    Generated
      Steam                              27,261        13,159           40,420
      Nuclear                            24,467         4,945           29,412
      Combustion turbines/combined
       cycle                              3,634        17,620           21,254
      Hydro                                 651             -              651
     Purchased                            3,251         8,745           11,996
     ---------                            -----         -----           ------
        Total energy supply              59,264        44,469          103,733
        -------------------              ------        ------          -------
                 (company share)
                 ---------------

    Impact of Weather to Normal on
     Retail Sales
    Heating-degree days
      Actual                              3,058           554
      Normal                              3,074           577
    Cooling-degree days
      Actual                              1,810         3,114
      Normal                              1,704         2,981
    Impact of retail weather to
     normal on EPS                        $0.03         $0.07            $0.10
    ---------------------------           -----         -----            -----


                                         Percentage Change
                                          From December 31,
                                                   2009
                                            ------------------
    Operating Revenues (in
     millions)                        Carolinas       Florida
                                      ---------       -------
    Residential                            10.1%         10.5%
    Commercial                              2.7           5.6
    Industrial                              2.5           4.2
    Governmental                           10.2           5.7
    Unbilled                                  -             -
    --------                                ---           ---
        Total retail base revenues          6.8           9.2
    Wholesale base revenues                (1.0)        (22.7)
    -----------------------                ----         -----
        Total base revenues                 5.9           5.2
    Clause-recoverable regulatory
     returns                               44.4          98.9
    Miscellaneous revenue                  21.1          14.3
    Fuel and other pass-through
     revenues                                 -             -
    ---------------------------
        Total operating revenues            6.4%          0.1%
        ------------------------            ---           ---

    Energy Sales (millions of kWh)
    Residential                            11.6%          5.8%
    Commercial                              4.0           0.1
    Industrial                              2.9          (2.0)
    Governmental                            5.1           0.9
    Unbilled                                  -             -
    --------                                ---           ---
        Total retail                        6.3           3.8
    Wholesale                               0.2           0.6
    ---------
        Total energy sales                  4.8%          3.5%
        ------------------                  ---           ---

    Energy Supply (millions of kWh)
    Generated
      Steam
      Nuclear
      Combustion turbines/combined
       cycle
      Hydro
     Purchased
     ---------
        Total energy supply
        -------------------
                 (company share)
                 ---------------

    Impact of Weather to Normal on
     Retail Sales
    Heating-degree days
      Actual                               14.8%         88.8%
      Normal
    Cooling-degree days
      Actual                               23.7%        (2.2)%
      Normal
    Impact of retail weather to
     normal on EPS
    ---------------------------

    (a) Certain amounts for 2009 have been reclassified to conform to the
    2010 presentation.

    Progress Energy, Inc.
    SUPPLEMENTAL DATA - Page S-5
    Unaudited
    O&M Expenses Primarily Recoverable
     through Base Rates (a)
    ----------------------------------
                                                      Three months
                                                          ended
                                                      December 31,
                                                      ------------
    (in millions)                                 2010         2009
    -------------                                 ----         ----
    Reported GAAP O&M                             $568         $534
    Adjustments
      Carolinas                                    317          305
        Fuel clauses                                (5)          (5)
        Environmental clause                        (1)           -
        DSM/EE and REPS cost recovery clauses
         (b)                                        (6)          (4)
      Florida                                      265          235
        Energy conservation cost recovery clause
         (ECCR)                                   (22)         (19)
        Environmental cost recovery clause
         (ECRC)                                   (15)         (14)
        Nuclear cost recovery                       (1)          (1)
                                                   ---          ---
    O&M Expenses Primarily Recoverable
     through Base Rates                           $518         $491
    ----------------------------------            ----         ----


    O&M Expenses Primarily Recoverable
     through Base Rates (a)
    ----------------------------------
                                                        Years ended
                                                       December 31,
                                                       ------------
    (in millions)                                    2010           2009
    -------------                                    ----           ----
    Reported GAAP O&M                              $2,027         $1,894
    Adjustments
      Carolinas                                     1,158          1,072
        Fuel clauses                                  (24)           (21)
        Environmental clause                           (3)            (2)
        DSM/EE and REPS cost recovery clauses
         (b)                                          (26)           (13)
      Florida                                         912            839
        Energy conservation cost recovery clause
         (ECCR)                                       (93)           (75)
        Environmental cost recovery clause
         (ECRC)                                       (66)           (87)
        Nuclear cost recovery                          (5)            (4)
                                                      ---            ---
    O&M Expenses Primarily Recoverable
     through Base Rates                            $1,810         $1,692
    ----------------------------------             ------         ------
    (a) The preceding table provides a reconciliation of reported GAAP
    O&M to O&M Primarily Recoverable through Base Rates.
          O&M Primarily Recoverable through Base Rates excludes certain
          expenses that are recovered through cost-recovery clauses
          which have no material impact on earnings.  Management believes this
          presentation is appropriate and enables investors to more
          accurately compare the company's O&M expense over the periods
          presented.  O&M Primarily Recoverable through Base Rates
          as presented here may not be comparable to similarly titled measures
          used by other companies.
    (b)  DSM = Demand-side management
           EE = Energy efficiency
           REPS = Renewable energy portfolio standard


    Financial Statistics
    --------------------
                                          December 31,   December 31,
                                               2010          2009 (a)
                                          ------------- -------------
    Return on average common stock equity
     (rolling 12 months)                        8.7%         8.1%
    Book value per common share              $34.05       $33.53
    Capitalization
      Total equity                             43.6%        42.3%
      Preferred stock of subsidiaries           0.4%         0.4%
      Total debt                               56.0%        57.3%
      ----------                               ----         ----
         Total Capitalization                 100.0%       100.0%
         --------------------                 -----        -----
    (a)  Restated to include prior period adjustment that is not material
    to previously issued or current period financial statements.

SOURCE Progress Energy


Source: newswire



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