Progress Energy announces 2010 results and
2011 earnings guidance
Highlights:
Full Year 2010
| ¨ | Reports 2010 GAAP earnings of $2.95 per share, compared to $2.71 per share in 2009, primarily due to prior-year activities related to discontinued non-utility businesses |
| ¨ | Reports 2010 ongoing earnings of $889 million, or $3.06 per share, compared to $846 million, or $3.03 per share in 2009 |
Fourth Quarter 2010
| ¨ | Reports fourth-quarter GAAP earnings of $0.42 per share, compared to $0.55 for the same period last year, primarily due to prior-year activities related to discontinued non-utility businesses |
| ¨ | Reports fourth-quarter ongoing earnings of $133 million, or $0.45 per share, compared to $142 million, or $0.50 per share, for the same period last year |
2011 Earnings Guidance
| ¨ | Announces 2011 ongoing earnings guidance of $3.00 to $3.20 per share |
RALEIGH, N.C. (February 18, 2011) – 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.)
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. |
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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 |
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| · | 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 |
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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 |
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| · | 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 |
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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 | Years ended December 31 | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Ongoing earnings per share | $ | 0.45 | $ | 0.50 | $ | 3.06 | $ | 3.03 | ||||||||
| Tax levelization | (0.01 | ) | 0.02 | - | - | |||||||||||
| CVO mark-to-market | - | 0.03 | - | 0.07 | ||||||||||||
| Change in the tax treatment of the Medicare Part D subsidy | - | - | (0.08 | ) | - | |||||||||||
| Impairment | (0.01 | ) | - | (0.02 | ) | (0.01 | ) | |||||||||
| Plant retirement charges | - | (0.05 | ) | - | (0.06 | ) | ||||||||||
| Cumulative prior period adjustment | - | (0.04 | ) | - | (0.04 | ) | ||||||||||
| Discontinued operations | (0.01 | ) | 0.09 | (0.01 | ) | (0.28 | ) | |||||||||
| Reported GAAP earnings per share | $ | 0.42 | $ | 0.55 | $ | 2.95 | $ | 2.71 | ||||||||
Shares outstanding (millions) | 294 | 281 | 291 | 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.
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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 im pact 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.
* * * *
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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 cen tury of service in 2008. Visit the company’s website at www.progress-energy.com.
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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; |
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| · | 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.
# # #
Contacts: Corporate Communications – (919) 546-6189 or toll-free (877) 641-NEWS (6397)
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PROGRESS ENERGY, INC.
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010
| UNAUDITED CONSOLIDATED STATEMENTS of INCOME | ||||||||||||||||
Three months ended December 31 | Years ended 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 | ||||||||
| (in millions) | December 31, 2010 | December 31, 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 million and 281 million shares issued and outstanding, respectively | $ | 7,343 | $ | 6,873 | ||||
| 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 | |||||||||||||||||||
| ($ per share) | Carolinas | Florida | Corporate and Other Businesses | Consolidated | |||||||||||||||
| 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. | ||||||||
S-1
Progress Energy, Inc.
SUPPLEMENTAL DATA - Page S-2
Unaudited
Earnings Variances
Full-Year 2010 vs. 2009
| Regulated Utilities | |||||||||||||||||||
| ($ per share) | Carolinas | Florida | Corporate and Other Businesses | Consolidated | |||||||||||||||
| 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 Medicare Part D subsidy | (0.05 | ) | (0.03 | ) | (0.08 | ) | O | ||||||||||||
| 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. | |||||||
S-2
Progress Energy, Inc.
SUPPLEMENTAL DATA - Page S-3
Unaudited - Data is not weather-adjusted
Utility Statistics
| Three Months Ended | Three Months Ended | Percentage Change | |||||||||||||||||||||||
| December 31, 2010 | December 31, 2009(a) | From December 31, 2009 | |||||||||||||||||||||||
| Operating Revenues (in millions) | Carolinas | Florida | Total Utilities | Carolinas | Florida | Total Utilities | Carolinas | Florida | |||||||||||||||||
| Residential | $ | 264 | $ | 237 | $ | 501 | $ | 237 | $ | 240 | $ | 477 | 11.4 | % | (1.3 | ) % | |||||||||
| Commercial | 170 | 89 | 259 | 162 | 88 | 250 | 4.9 | 1.1 | |||||||||||||||||
| Industrial | 87 | 17 | 104 | 86 | 19 | 105 | 1.2 | (10.5 | ) | ||||||||||||||||
| Governmental | 15 | 23 | 38 | 14 | 23 | 37 | 7.1 | - | |||||||||||||||||
| Unbilled | 24 | (7 | ) | 17 | 22 | (19 | ) | 3 | - | - | |||||||||||||||
| Total retail base revenues | 560 | 359 | 919 | 521 | 351 | 872 | 7.5 | 2.3 | |||||||||||||||||
| Wholesale base revenues | 77 | 39 | 116 | 72 | 39 | 111 | 6.9 | - | |||||||||||||||||
| Total base revenues | 637 | 398 | 1,035 | 593 | 390 | 983 | 7.4 | 2.1 | |||||||||||||||||
| Clause-recoverable regulatory returns | 5 | 47 | 52 | 2 | 27 | 29 | 150.0 | 74.1 | |||||||||||||||||
| Miscellaneous revenue | 36 | 49 | 85 | 26 | 49 | 75 | 38.5 | - | |||||||||||||||||
| Fuel and other pass-through revenues | 450 | 695 | 1,145 | 445 | 772 | 1,217 | - | - | |||||||||||||||||
| Total operating revenues | $ | 1,128 | $ | 1,189 | $ | 2,317 | $ | 1,066 | $ | 1,238 | $ | 2,304 | 5.8 | % | (4.0 | ) % | |||||||||
| Energy Sales (millions of kWh) | |||||||||||||||||||||||||
| Residential | 4,013 | 4,618 | 8,631 | 3,564 | 4,699 | 8,263 | 12.6 | % | (1.7 | ) % | |||||||||||||||
| Commercial | 3,263 | 2,905 | 6,168 | 3,111 | 2,977 | 6,088 | 4.9 | (2.4 | ) | ||||||||||||||||
| Industrial | 2,606 | 748 | 3,354 | 2,597 | 799 | 3,396 | 0.3 | (6.4 | ) | ||||||||||||||||
| Governmental | 370 | 836 | 1,206 | 360 | 847 | 1,207 | 2.8 | (1.3 | ) | ||||||||||||||||
| Unbilled | 600 | (150 | ) | 450 | 587 | (609 | ) | (22 | ) | - | - | ||||||||||||||
| Total retail | 10,852 | 8,957 | 19,809 | 10,219 | 8,713 | 18,392 | 6.2 | 2.8 | |||||||||||||||||
| Wholesale | 3,233 | 640 | 3,873 | 3,424 | 727 | 4,151 | (5.6 | ) | (12.0 | ) | |||||||||||||||
| Total energy sales | 14,085 | 9,597 | 23,682 | 13,643 | 9,440 | 23,083 | 3.2 | % | 1.7 | % | |||||||||||||||
| Energy Supply (millions of kWh) | |||||||||||||||||||||||||
| Generated | |||||||||||||||||||||||||
| Steam | 7,023 | 3,325 | 10,348 | 6,471 | 3,370 | 9,841 | |||||||||||||||||||
| Nuclear | 5,169 | - | 5,169 | 6,609 | - | 6,609 | |||||||||||||||||||
| Combustion turbines/combined cycle | 1,256 | 4,977 | 6,233 | 649 | 4,708 | 5,357 | |||||||||||||||||||
| Hydro | 102 | - | 102 | 169 | - | 169 | |||||||||||||||||||
| Purchased | 1,065 | 1,916 | 2,981 | 299 | 1,923 | 2,222 | |||||||||||||||||||
| Total energy supply (company share) | 14,615 | 10,218 | 24,833 | 14,197 | 10,001 | 24,198 | |||||||||||||||||||
| Impact of Weather to Normal on Retail Sales | |||||||||||||||||||||||||
| Heating-degree days | |||||||||||||||||||||||||
| Actual | 1,399 | 366 | 1,209 | 163 | 15.7 | % | 124.5 | % | |||||||||||||||||
| Normal | 1,189 | 168 | 1,175 | 192 | |||||||||||||||||||||
| Cooling-degree days | |||||||||||||||||||||||||
| Actual | 70 | 396 | 52 | 526 | 34.6 | % | (24.7 | ) % | |||||||||||||||||
| Normal | 75 | 442 | 74 | 455 | |||||||||||||||||||||
| Impact of retail weather to normal on EPS | $ | 0.05 | $ | 0.07 | $ | 0.12 | $ | 0.00 | $ | 0.02 | $ | 0.02 | |||||||||||||
(a) Certain amounts for 2009 have been reclassified to conform to the 2010 presentation. |
S-3
Progress Energy, Inc.
SUPPLEMENTAL DATA - Page S-4
Unaudited - Data is not weather-adjusted
Utility Statistics
| Year Ended | Year Ended | Percentage Change | |||||||||||||||||||||||
| December 31, 2010 | December 31, 2009(a) | From December 31, 2009 | |||||||||||||||||||||||
| Operating Revenues (in millions) | Carolinas | Florida | Total Utilities | Carolinas | Florida | Total Utilities | Carolinas | Florida | |||||||||||||||||
| Residential | $ | 1,242 | $ | 1,045 | $ | 2,287 | $ | 1,128 | $ | 946 | $ | 2,074 | 10.1 | % | 10.5 | % | |||||||||
| Commercial | 726 | 359 | 1,085 | 707 | 340 | 1,047 | 2.7 | 5.6 | |||||||||||||||||
| Industrial | 365 | 75 | 440 | 356 | 72 | 428 | 2.5 | 4.2 | |||||||||||||||||
| Governmental | 65 | 92 | 157 | 59 | 87 | 146 | 10.2 | 5.7 | |||||||||||||||||
| Unbilled | 10 | 17 | 27 | 5 | 9 | 14 | - | - | |||||||||||||||||
| Total retail base revenues | 2,408 | 1,588 | 3,996 | 2,255 | 1,454 | 3,709 | 6.8 | 9.2 | |||||||||||||||||
| Wholesale base revenues | 305 | 160 | 465 | 308 | 207 | 515 | (1.0 | ) | (22.7 | ) | |||||||||||||||
| Total base revenues | 2,713 | 1,748 | 4,461 | 2,563 | 1,661 | 4,224 | 5.9 | 5.2 | |||||||||||||||||
| Clause-recoverable regulatory returns | 13 | 173 | 186 | 9 | 87 | 96 | 44.4 | 98.9 | |||||||||||||||||
| Miscellaneous revenue | 138 | 216 | 354 | 114 | 189 | 303 | 21.1 | 14.3 | |||||||||||||||||
| Fuel and other pass-through revenues | 2,058 | 3,117 | 5,175 | 1,941 | 3,314 | 5,255 | - | - | |||||||||||||||||
| Total operating revenues | $ | 4,922 | $ | 5,254 | $ | 10,176 | $ | 4,627 | $ | 5,251 | $ | 9,878 | 6.4 | % | 0.1 | % | |||||||||
| Energy Sales (millions of kWh) | |||||||||||||||||||||||||
| Residential | 19,108 | 20,524 | 39,632 | 17,117 | 19,399 | 36,516 | 11.6 | % | 5.8 | % | |||||||||||||||
| Commercial | 14,184 | 11,896 | 26,080 | 13,639 | 11,884 | 25,523 | 4.0 | 0.1 | |||||||||||||||||
| Industrial | 10,665 | 3,219 | 13,884 | 10,368 | 3,285 | 13,653 | 2.9 | (2.0 | ) | ||||||||||||||||
| Governmental | 1,574 | 3,286 | 4,860 | 1,497 | 3,256 | 4,753 | 5.1 | 0.9 | |||||||||||||||||
| Unbilled | 172 | 458 | 630 | 360 | 131 | 491 | - | - | |||||||||||||||||
| Total retail | 45,703 | 39,383 | 85,086 | 42,981 | 37,955 | 80,936 | 6.3 | 3.8 | |||||||||||||||||
| Wholesale | 13,999 | 3,857 | 17,856 | 13,966 | 3,835 | 17,801 | 0.2 | 0.6 | |||||||||||||||||
| Total energy sales | 59,702 | 43,240 | 102,942 | 56,947 | 41,790 | 98,737 | 4.8 | % | 3.5 | % | |||||||||||||||
| Energy Supply (millions of kWh) | |||||||||||||||||||||||||
| Generated | |||||||||||||||||||||||||
| Steam | 30,528 | 14,443 | 44,971 | 27,261 | 13,159 | 40,420 | |||||||||||||||||||
| Nuclear | 21,624 | - | 21,624 | 24,467 | 4,945 | 29,412 | |||||||||||||||||||
| Combustion turbines/combined cycle | 5,429 | 22,427 | 27,856 | 3,634 | 17,620 | 21,254 | |||||||||||||||||||
| Hydro | 608 | - | 608 | 651 | - | 651 | |||||||||||||||||||
| Purchased | 3,985 | 9,488 | 13,473 | 3,251 | 8,745 | 11,996 | |||||||||||||||||||
| Total energy supply (company share) | 62,174 | 46,358 | 108,532 | 59,264 | 44,469 | 103,733 | |||||||||||||||||||
| Impact of Weather to Normal on Retail Sales | |||||||||||||||||||||||||
| Heating-degree days | |||||||||||||||||||||||||
| Actual | 3,512 | 1,046 | 3,058 | 554 | 14.8 | % | 88.8 | % | |||||||||||||||||
| Normal | 3,092 | 467 | 3,074 | 577 | |||||||||||||||||||||
| Cooling-degree days | |||||||||||||||||||||||||
| Actual | 2,239 | 3,045 | 1,810 | 3,114 | 23.7 | % | (2.2 | ) % | |||||||||||||||||
| Normal | 1,717 | 3,000 | 1,704 | 2,981 | |||||||||||||||||||||
| Impact of retail weather to normal on EPS | $ | 0.28 | $ | 0.26 | $ | 0.54 | $ | 0.03 | $ | 0.07 | $ | 0.10 | |||||||||||||
(a) Certain amounts for 2009 have been reclassified to conform to the 2010 presentation. |
S-4
Progress Energy, Inc.
SUPPLEMENTAL DATA - Page S-5
Unaudited
O&M Expenses Primarily Recoverable through Base Rates (a) | ||||||||||||||||
| Three months ended December 31, | Years ended December 31, | |||||||||||||||
| (in millions) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
| Reported GAAP O&M | $ | 568 | $ | 534 | $ | 2,027 | $ | 1,894 | ||||||||
| Adjustments | ||||||||||||||||
| Carolinas | ||||||||||||||||
| Fuel clauses | (5 | ) | (5 | ) | (24 | ) | (21 | ) | ||||||||
| Environmental clause | (1 | ) | - | (3 | ) | (2 | ) | |||||||||
DSM/EE and REPS cost recovery clauses (b) | (6 | ) | (4 | ) | (26 | ) | (13 | ) | ||||||||
| Florida | ||||||||||||||||
| Energy conservation cost recovery clause (ECCR) | (22 | ) | (19 | ) | (93 | ) | (75 | ) | ||||||||
| Environmental cost recovery clause (ECRC) | (15 | ) | (14 | ) | (66 | ) | (87 | ) | ||||||||
| Nuclear cost recovery | (1 | ) | (1 | ) | (5 | ) | (4 | ) | ||||||||
| O&M Expenses Primarily Recoverable through Base Rates | $ | 518 | $ | 491 | $ | 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, 2010 | December 31, 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. |
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