Bill JohnsonChairman President and CEOChairman, President and CEO
EEI Financial ConferencePhoenix, AZ
November 11 2008November 11, 2008
Caution Regarding F d L ki St t tForward-Looking StatementsThis presentation includes information that is forward-looking in nature. Many factors could cause the actual results to be materially different than the forward-looking information provided. These factors are discussed in more detail in the Company’s most recent p y10-K and 10-Q forms.
M j Di i T iMajor Discussion TopicsStrategic AgendaSt ateg c ge da
Financial Overview
Balanced Strategy for Growth
Regulation and Public PolicyRegulation and Public Policy
Profile of who we are:T Hi h P f i El t i Utiliti
Progress Energy Carolinas
Two High-Performing Electric UtilitiesNorth Carolina
• 12,400 MW capacity• Over 1.4M customers• 2.2% cust. growth (7-yr CGR)• $4.4B total revenue• $12B total assets• $12B total assets• 5,000 employees• 34,000 sq. mile service area• 18 plants, 82 units
South Carolina
• 9,400 MW capacity• ~1.7M customers
2 2% t th (7 CGR)
Progress Energy Florida
Florida• 2.2% cust. growth (7-yr CGR)• $4.7B total revenue• $13B total assets• 4,000 employees• 20,000 sq. mile service areaService Area , q• 14 plants, 65 units
Service Area
Core Strategic Foc sCore Strategic Focus
Progress Energy Carolinas
PGNPGN● Achieve financial objectives
while excelling in fundamentals
Ad t t l dProgress Energy Florida
PGNPGN ● Adapt to new energy landscape
● Leverage prospects for growth
Integrated Energy Service Company Serving the Carolinas and FloridaServing the Carolinas and Florida
Power Transmission
Power Generation
Power Delivery
Customer Servicey
St t i A dStrategic AgendaAchieve long-term annual EPS growth of 4-5%g g
Excel in the fundamentals
Pursue Balanced Solution to secure energy future
Confront new energy realities together with gy gregulators, policymakers and customers
Sustain financial strength and flexibility during g y gnuclear construction
C iti l S F tCritical Success Factors
Safety & Operational Excellence
Financial
Safety & Operational Excellence
Financial
STRONGERFUTUREFor Customers,
Employee Engagement &
Financial Objectives
A Balanced Solution Strategy
STRONGERFUTUREFor Customers,
Employee Engagement &
Financial Objectives
A Balanced Solution Strategy
Financial Objectives ,
Shareholders and Employees
Performance
Constructive
Customer Satisfaction
Strategy for Growth
,Shareholders and Employees
Performance
Constructive
Customer Satisfaction
Strategy for Growth
Objectives
Constructive Regulation & Public Policy
Constructive Regulation & Public Policy
L T Fi i l Obj tiLong-Term Financial ObjectivesAchieve our 4-5% EPS growth objectiveg j
Preserve an investment grade credit rating
Maintain dividend growth
Keep rate increases reasonable to customersp
Fund Levy and capital investments in the rest of the business
2008 O i E i G id2008 Ongoing Earnings Guidance$2.95 - $3.05 per share$ 95 $3 05 pe s a e
$2.91 trailing 12-month ongoing EPS
4Q-07 actual EPS of $0.40 included:♦2¢ unfavorable weather¢♦13¢ regulatory depreciation / amortization
(Harris, CSA and GridSouth)
St Li idit P iti *Strong Liquidity Position*$ in millions
Program Term Amount Expiration
PGN Revolving Credit Facilities Debt Maturity Profile
Issuer 2009 2010 2011 2012Program Term Amount Expiration
PGN 5 Years $ 1,130 5/3/12
PEC 5 Years 450 6/28/11
Issuer 2009 2010 2011 2012
PGN $ – $ 100 $ 700 $ 450
PEC 400 6 – 500
PEF 5 Years 450 3/28/11
$ 2,030
PEF – 300 300 –
Total $ 400 $ 406 $1,000 $ 950
* As of September 30, 2008.
C iti l S F tCritical Success Factors
Safety & Operational Excellence
Financial
STRONGERFUTUREFor Customers,
Employee Engagement &
Financial Objectives
A Balanced Solution Strategy
Employee Engagement & ,
Shareholders and Employees
Performance
Constructive
Customer Satisfaction
Strategy for Growth
g gPerformance
Constructive Regulation & Public Policy
C iti l S F tCritical Success Factors
Safety & Operational Excellence
Financial
STRONGERFUTUREFor Customers,
Employee Engagement &
Financial Objectives
A Balanced Solution Strategy A Balanced SolutionStrategy for Growth ,
Shareholders and Employees
Performance
Constructive
Customer Satisfaction
Strategy for GrowthStrategy for Growth
Constructive Regulation & Public Policy
PGN Balanced Solution StrategyPGN Balanced Solution Strategy
E Effi i d Alt ti EEnergy Efficiency and Alternative Energy
Energy Efficiency and DSM Alternative Energy• NCUC approved four new programs
– EnergyWiseResidential Home Advantage
• North Carolina solar– 1 MW on former landfill in
Haywood County– Residential Home Advantage– CIG New Construction– CIG Retrofit-Custom
• NCUC reviewing Distribution System
Haywood County– 1.2 MW at our Sutton Plant near
Wilmington– 1 MW at SAS in Cary
• NCUC reviewing Distribution System Demand-Response (DSDR)
– Invest $260M by 2012– Reduce peak demand by 250 MW
• Plug-in hybrid electric vehicle partnership with NC State University
• Florida PPAs• NCUC hearing on rider scheduled for
December 17-18, 2008
• Florida PPAs– 40 MW biomass– 60 MW municipal solid waste
Note: CIG = Commercial, Industrial, and Government.
Significant Rate Base GrowthE P i t N N l
Progress Energy Florida²Progress Energy Carolinas¹
Even Prior to New Nuclear
$9,000$9,000
2008-2010E CAGR
5%
g gyg gy2008-2010E
CAGR
18%
$6,000
$7,000
$8,000
$ ,
$6,000
$7,000
$8,000
$9,000
1M)
2001-2007 CAGR5.0%
2001-2007 CAGR4 1%1M
)$3,000
$4,000
$5,000
$3,000
$4,000
$5,000
,
Rat
e B
ase
(x 4.1%
Rat
e B
ase
(x
$0
$1,000
$2,000
$0
$1,000
$2,000
Ret
ail R
Ret
ail R
2001 2002 2003 2004 2005 2006 2007 2008E 2009E 2010E2001 2002 2003 2004 2005 2006 2007 2008E 2009E 2010E
Retail rate base Clause-related
1. PEC rate base includes Clean Smokestacks Act expenditures in excess of $584M.2. PEF rate base excludes Levy County nuclear capital expenditures.
CapEx Driving Earnings Growth – On Track
Total Project Cumulative Spent ExpectedMajor Generation Projects
jCapEx
pthrough 9/30/08
pCompletion Date
CarolinasClean Smokestacks $1.5-1.6B $ 986M 2013
Wayne County CT 90M 17M June 2009Richmond County CCGT (incl Transmission) 600M 45M June 2011
FloridaEnvironmental $ 1.2B $ 745M May 2010Bartow Repowering 690M 602M June 2009p g(incl Transmission) 690M 602M June 2009
CR3 Nuclear Uprate 365M 73M Dec. 2011CR3 Steam Generator Replacement 245M 110M Dec. 2009Replacement
Note: Total project capital expenditures based on current estimates and exclude AFUDC.
L N l P j t i Fl idLevy Nuclear Project in FloridaLocation Technology # of units Capacity (MW) In Service
Levy County, Florida
Westinghouse AP1000 2 ~2,200 total Unit 1: 2016
Unit 2: 2017
● 8 miles NE of our Crystal River● 8 miles NE of our Crystal River Energy Complex
● Negotiating joint ownership with multiple parties (1)
● Negotiating engineering, procurement & construction (EPC) agreement with Westinghouse and ShawWestinghouse and Shaw
● Site prep and pre-construction begin ~2010/11; safety-related construction begins 2012/13g
(1) Confidentiality obligations preclude us from discussing this further until the negotiations are completed.
C iti l S F tCritical Success Factors
Safety & Operational Excellence
Financial
STRONGERFUTUREFor Customers,
Employee Engagement &
Financial Objectives
A Balanced Solution Strategy
Constructive Regulation & ,
Shareholders and Employees
Performance
Constructive
Customer Satisfaction
Strategy for GrowthPublic Policy
Constructive Regulation & Public Policy
R l t U d tRegulatory UpdateCarolinas♦ Clean Smokestacks amortization♦ Harris depreciation♦ Proposed fuel settlement in North Carolina♦ Proposed fuel settlement in North Carolina
Florida♦ Cost recovery includes the following clauses:
– Levy Nuclear– CR3 Uprate
– Fuel
Approved on Oct. 14, 2008
– Capacity– Environmental– Energy Conservation
Hearings held Nov. 4-6, 2008
♦ Rates effective January 1, 2009
Supportive Florida Legislation 2006:N l I t t RNuclear Investment Recovery
Pre-construction and licensing♦ Capacity cost recovery clause (CCRC)♦ Costs are recovered dollar for dollar
During constructionDuring construction♦ AFUDC is recovered through CCRC♦ 8.848% AFUDC rate is locked until commercial operation♦ Annual prudence reviews
Completion♦ Base rate adjustment at in-service for capital costs♦ Base rate adjustment at in-service for capital costs♦ ROE and capital structure based on last approved
(currently 11.75% ROE on 57.83% common equity)
P j t ll ti tProject cancellation cost recovery
Conclusion
N T Fi i l O tl kNear-Term Financial OutlookMaintain strong liquidity positiona ta st o g qu d ty pos t o
On track to achieve 2008 ongoing earnings guidance of $2 95 $3 05 per shareguidance of $2.95 - $3.05 per share
L T Fi i l Obj tiLong-Term Financial ObjectivesAchieve our 4-5% EPS growth objectivec e e ou 5% S g o t object e
Preserve an investment grade credit rating
Maintain dividend growth
Keep rate increases reasonable to customersKeep rate increases reasonable to customers
Fund Levy and capital investments in the rest f th b iof the business
Appendix
C dit F iliti C ti *Credit Facilities Consortium*Bank Total
$ in millions
Bank TotalJ.P. Morgan Chase $ 225.0
Bank Tokyo-Mitsubishi 200.0
Barclays Capital 190.5
Bank of America 190 0Bank of America 190.0
Citigroup 180.0
Wachovia 175.5
Royal Bank of Scotland 169.0
Bank of New York Mellon 120 0Bank of New York Mellon 120.0
SunTrust 115.0
Morgan Stanley 100.0
Goldman Sachs 100.0
D t h B k 95 0Deutsche Bank 95.0
UBS 80.0
BNP Paribas 50.0
BB&T 25.0
*As of September 30, 2008.
First Tennessee 15.0
Total $ 2,030.0
C t C dit R ti *Current Credit Ratings*Moody’s Investors Standard Fitch
Services & Poor’s RatingsProgress Energy
Outlook Stable Stable StableCorporate Credit Rating -- BBB+ BBBSenior Unsecured Debt Baa2 BBB BBBC i l P P 2 A 2 F 2Commercial Paper P-2 A-2 F-2
Progress Energy CarolinasCorporate Credit Rating A3 BBB+ A-Commercial Paper P-2 A-2 F-1Senior Secured Debt A2 A- A+S i U d D bt A3 BBB+ ASenior Unsecured Debt A3 BBB+ APreferred Stock Baa2 BBB- A-
Progress Energy FloridaCorporate Credit Rating A3 BBB+ A-Commercial Paper P-2 A-2 F-1Senior Secured Debt A2 A A+Senior Secured Debt A2 A- A+Senior Unsecured Debt A3 BBB+ APreferred Stock Baa2 BBB- A-
FPC Capital IPreferred Stock** Baa2 BBB- --
Progress Capital HoldingsProgress Capital HoldingsSenior Unsecured Debt*** Baa1 BBB --
* As of November 5, 2008.** Guaranteed by Progress Energy, Inc. and Florida Progress Corporation.
*** Guaranteed by Florida Progress Corporation.