PROGRESS ENERGY, INC. 
By RALEIGH, N.C., May 3, 2012 /PRNewswire/ -- Progress Energy (NYSE: PGN) announced first-quarter GAAP earnings of $150 million, or $0.51 per share, compared with GAAP earnings of $184 million, or $0.62 per share, for the same period last year. First-quarter ongoing earnings were $143 million, or $0.48 per share, compared to $202 million, or $0.69 per share, for the same period last year. The significant drivers in ongoing earnings per share were unfavorable impact of weather in the Carolinas, higher operation and maintenance (O&M) expense and higher depreciation and amortization expense. The higher O&M expense is primarily due to an additional planned nuclear refueling outage at Progress Energy Carolinas (PEC), partially offset by the reversal of certain regulatory liabilities in accordance with the 2012 settlement agreement at Progress Energy Florida (PEF). (See the discussion later in this release for a reconciliation of ongoing earnings per share to GAAP earnings per share.)
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"The extremely mild weather through the first quarter of 2012 - although certainly a welcome respite for our customers - resulted in significantly lower energy sales in the Carolinas," said Chairman, President and CEO Bill Johnson. "We remain focused on meeting our financial goals and shareholder expectations for the year through operational excellence, cost management and consistent execution, as we await the last regulatory approvals of our pending merger with Duke Energy."
Progress Energy affirms 2012 ongoing earnings guidance of $3.10 to $3.25 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 and integration costs from our proposed strategic combination with Duke Energy Corporation. Progress Energy is not able to provide a corresponding GAAP equivalent for the 2012 ongoing earnings guidance due to the uncertain nature and amount of these adjustments.
Progress Energy will host a conference call and webcast at 11 a.m. ET today to review first-quarter 2012 financial performance, as well as provide an overall business update. Additional details are provided at the end of this earnings release.
See the first-quarter 2012 business highlights section for detailed first-quarter 2012 earnings variance analyses for the PEC, PEF and Corporate and Other Businesses segments.
RECENT DEVELOPMENTS
Duke Energy - Progress Energy Merger
-- Filed a revised market power mitigation plan with the Federal Energy
Regulatory Commission (FERC) on March 26, 2012. The revised plan
consists of both interim and permanent components. The interim component
consists of several power purchase agreements whereby the companies
propose to sell capacity and firm energy during the summer and winter to
new market participants. The permanent component consists of seven
transmission projects to be constructed, estimated to cost approximately
$110 million. The transmission projects significantly increase power
import capabilities into the PEC and Duke Energy Carolinas service
territories and enhance competitive power supply options for the region.
The companies requested that the FERC issue orders approving the revised
mitigation plan within 60 days, but no later than June 8, 2012. On April
13, 2012, the companies responded to the FERC's subsequent request for
additional information on the transmission-related models provided in
the revised mitigation plan.
-- Filed two additional filings with the FERC on March 26, 2012. The first
filing is a joint dispatch agreement (JDA), pursuant to which PEC and
Duke Energy Carolinas will agree to jointly dispatch their generation
facilities in order to achieve certain of the operating efficiencies
expected to result from the merger. The second filing is a joint open
access transmission tariff (OATT) pursuant to which PEC and Duke Energy
Carolinas will agree to provide transmission service over their
transmission facilities under a single transmission rate.
-- The public comment period for the JDA and OATT closed on April 16, 2012.
Additionally, the public comment for the revised market power mitigation
plan closed on April 25, 2012. The companies have filed responses to
these comments with the FERC, and the FERC now has a complete record to
proceed with their evaluations.
-- On March 22, 2012, the companies submitted a second Hart-Scott-Rodino
filing with the U.S. Department of Justice and have met their
obligations under the Hart-Scott-Rodino Act. Because the merger did not
close before the April 26, 2012, expiration of the original filing,
Progress Energy and Duke Energy made a new filing under the
Hart-Scott-Rodino Act in order to be able to close the merger and
continue to meet their obligations.
-- The merger is targeted to close by July 1, 2012.
Financial and Regulatory
-- On Feb. 22, 2012, the Florida Public Service Commission (FPSC)
unanimously approved the comprehensive settlement agreement reached
collaboratively among PEF, the Office of Public Counsel and other
consumer advocates.
-- Filed 2013 nuclear cost-recovery estimates with the FPSC.
Power System
-- Completed scheduled refueling outages at the Robinson Nuclear Plant
(RNP) in March and the Brunswick Nuclear Plant in April. Upgrades made
to RNP during the outage are expected to result in an approximate
20-megawatt (MW) capacity increase for the plant.
-- Entered a scheduled refueling outage at the Harris Nuclear Plant in
April, completing a 525-day breaker-to-breaker run for the plant. There
were no forced outages and the plant had no unplanned power changes
during the 18-month period.
-- Announced plans to convert PEF's 1,011-MW Anclote Units 1 and 2 from oil
and natural gas- fired to 100 percent natural gas-fired and requested
that the FPSC permit recovery of the estimated $79 million conversion
cost through the environmental cost recovery clause.
-- Implementing post-Fukushima lessons learned by conducting in-depth
inspections and analyses of the nuclear fleet, installing equipment to
monitor and respond to potential emergencies, and developing plans for
additional safety and security initiatives.
Alternative Energy and Energy Efficiency
-- Signed contracts to purchase power from the following facilities:
-- 1.26-MW solar photovoltaic (PV) array became operational in April
2012, in New Bern, N.C.
-- 1-MW solar PV array became operational in April 2012 in Raleigh,
N.C.
-- Completed installation of more than 120 plug-in vehicle charging
stations at residential and commercial customer locations in the
Carolinas and Florida since Sept. 2011. A total of 250 charging stations
are planned as part of this charging station research program.
-- Surpassed 275 residential solar PV systems installed in the Carolinas
and Florida through the SunSense Solar PV Program.
-- Filed prepay program in North Carolina and South Carolina that allows
customers in certain areas the option of prepaying for electric service,
giving them greater control over their energy use. The program was
approved in South Carolina on April 11, 2012. It is still under review
at the N.C. Utilities Commission.
Press releases regarding various announcements are available on the company's website at www.progress-energy.com/aboutus/news.
FIRST-QUARTER 2012 BUSINESS HIGHLIGHTS
Below are the first-quarter 2012 earnings variance analyses for the company's segments. See the reconciliation tables in the ongoing earnings adjustments section and on page S-1 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.
Progress Energy Carolinas
-- Reported first-quarter ongoing earnings per share of $0.20, compared
with $0.47 for the same period last year; GAAP earnings per share of
$0.17, compared with $0.44 for the same period last year.
-- Reported primary quarter-over-quarter ongoing earnings per share
favorability of:
-- $0.02 retail growth and usage
-- $0.02 clauses and other margin primarily due to increased spending
on new and existing demand-side management (DSM) programs
-- $0.01 other
-- Reported primary quarter-over-quarter ongoing earnings per share
unfavorability of:
-- $(0.17) O&M primarily due to higher nuclear plant outage costs
resulting from an additional planned nuclear refueling outage in the
first quarter of 2012
-- $(0.10) weather primarily due to 28 percent lower heating-degree
days
-- $(0.02) depreciation and amortization primarily due to higher
depreciable asset base driven by the newly constructed
combined-cycle unit at the Smith Energy Complex, which was placed in
service in June 2011
-- $(0.01) wholesale
-- $(0.01) allowance for funds used during construction equity
-- $(0.01) interest expense
-- 9,000 net increase in the average number of customers for the three
months ended March 31, 2012, compared to the same period in 2011
Progress Energy Florida
-- Reported first-quarter ongoing earnings per share of $0.44, compared
with $0.38 for the same period last year; GAAP earnings per share of
$0.43, compared with $0.34 for the same period last year.
-- Reported primary quarter-over-quarter ongoing earnings per share
favorability of:
-- $0.08 O&M primarily due to the reversal of certain regulatory
liabilities associated with Crystal River Nuclear Plant Unit 3 (CR3)
in accordance with the 2012 settlement agreement
-- $0.04 clauses and other margin primarily due to a prior-year
indemnification charge for the joint owner replacement power costs
related to the continued outage at CR3
-- $0.02 wholesale primarily due to a new contract with a major
customer
-- Reported primary quarter-over-quarter ongoing earnings per share
unfavorability of:
-- $(0.05) depreciation and amortization primarily due to the smaller
reduction in the cost of removal component of amortization expense
as allowed under the 2010 settlement agreement
-- $(0.02) other primarily due to a prior-year favorable litigation
settlement
-- $(0.01) weather
-- 11,000 net increase in the average number of customers for the three
months ended March 31, 2012, compared to the same period in 2011
Corporate and Other Businesses (includes primarily Holding Company debt)
-- Reported first-quarter ongoing after-tax expenses of $0.16 per share for
this year and for the same period last year; GAAP after-tax expenses of
$0.09 per share, compared with after-tax expenses of $0.16 per share for
the same period last year.
-- Reported primary quarter-over-quarter ongoing after-tax expenses per
share favorability of:
-- $0.01 interest expense
-- Reported primary quarter-over-quarter ongoing after-tax expenses per
share unfavorability of:
-- $(0.01) income taxes
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. Ongoing earnings is computed as GAAP net income attributable to controlling interests (or GAAP earnings) less discontinued operations and the effects of certain identified gains and charges. 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
March 31
------------------
2012 2011
---- ----
Ongoing earnings per share $0.48 $0.69
Tax levelization (0.02) (0.01)
Discontinued operations 0.04 (0.01)
CVO mark-to-market 0.03 -
Merger and integration costs (0.02) (0.05)
----- -----
Reported GAAP earnings per share $0.51 $0.62
===== =====
Shares outstanding (millions) 297 295
=== ===
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. Because this adjustment varies by quarter but has no impact on annual earnings, management does not consider this item to be representative of the company's fundamental core earnings.
Discontinued Operations
The company has completed its business strategy of divesting nonregulated businesses to reduce its business risk and focus on core operations of the Utilities. Resolution of guarantees and indemnifications providing for certain legal, tax and environmental matters could result in additional adjustments. In 2012, the company recorded the reversal of certain environmental indemnification liabilities for which the indemnification period has expired. Management does not consider this item to be representative of the company's fundamental core earnings.
Contingent Value Obligations (CVO) Mark-to-Market
In connection with the acquisition of Florida Progress Corporation, Progress Energy issued CVOs that represent 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 gains and losses from changes in fair value of CVOs not held by Progress Energy are recognized in earnings. Progress Energy is unable to predict the changes in the fair value of the CVOs, and management does not consider this item to be representative of the company's fundamental core earnings.
Merger and Integration Costs
The company recorded charges for merger and integration costs related to the merger. Management does not consider this item to be representative of the company's fundamental core earnings.
Progress Energy's conference call with the investment community will be held May 3, 2012, at 11 a.m. ET (8 a.m. PT). Investors, media and the public may listen to the conference call by dialing 1.913.312.1448, confirmation code 4637848. If you encounter problems, please contact Investor Relations at 1.919.546.6057.
A webcast of the live conference call will be available at www.progress-energy.com/investor. 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 10:30 a.m. ET today at www.progress-energy.com/investor.
Progress Energy (NYSE: PGN), headquartered in Raleigh, N.C., is a Fortune 500 energy company with 23,000 MW of generation capacity and approximately $9 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 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 scope of necessary repairs of the delamination of PEF's CR3 could
prove more extensive than is currently identified, such repairs could
prove not to be feasible, the cost of repair and/or replacement power
could exceed our estimates and insurance coverage or may not be
recoverable through the regulatory process;
-- 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;
-- our ability to successfully operate electric generating facilities and
deliver electricity to customers;
-- the impact on our facilities and businesses from a terrorist attack,
cyber security threats and other catastrophic events;
-- our 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;
-- our 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 O&M expense and large
construction projects;
-- our subsidiaries' ability to pay upstream dividends or distributions to
Progress Energy, Inc. holding company;
-- current economic conditions;
-- our 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 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 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
March 31, 2012
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of COMPREHENSIVE INCOME
-------------------------------------------------------------------
(in millions except per share data)
Three months ended March 31 2012 2011
--------------------------- ---- ----
Operating revenues $2,092 $2,167
------------------ ------ ------
Operating expenses
Fuel used in electric
generation 685 718
Purchased power 210 220
Operation and maintenance 529 494
Depreciation, amortization
and accretion 166 154
Taxes other than on income 138 140
Other - (10)
----- --- ---
Total operating expenses 1,728 1,716
------------------------ ----- -----
Operating income 364 451
---------------- --- ---
Other income
Interest income 1 1
Allowance for equity funds
used during construction 24 29
Other, net 13 3
---------- --- ---
Total other income, net 38 33
----------------------- --- ---
Interest charges
Interest charges 194 199
Allowance for borrowed
funds used during
construction (9) (9)
---------------------- --- ---
Total interest charges, net 185 190
--------------------------- --- ---
Income from continuing
operations before income
tax 217 294
Income tax expense 76 107
------------------ --- ---
Income from continuing
operations 141 187
Discontinued operations,
net of tax 11 (2)
Net income 152 185
Net income attributable to
noncontrolling interests,
net of tax (2) (1)
Net income attributable to
controlling interests $150 $184
========================== ==== ====
Average common shares
outstanding - basic 297 295
--------------------- --- ---
Basic and diluted earnings per common share
Income from continuing
operations attributable to
controlling interests, net
of tax $0.47 $0.63
Discontinued operations
attributable to
controlling interests, net
of tax 0.04 (0.01)
--------------------------- ---- -----
Net income attributable to
controlling interests $0.51 $0.62
========================== ===== =====
Dividends declared per
common share $0.620 $0.620
---------------------- ------ ------
Net income amounts attributable to controlling interests
Income from continuing
operations, net of tax $139 $186
Discontinued operations,
net of tax 11 (2)
------------------------ --- ---
Net income attributable to
controlling interests $150 $184
========================== ==== ====
Comprehensive income
Comprehensive income $157 $189
Comprehensive income
attributable to
noncontrolling interests,
net of tax (2) (1)
-------------------------- --- ---
Comprehensive income
attributable to
controlling interests $155 $188
====================== ==== ====
The Unaudited Condensed Consolidated Interim 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 CONDENSED CONSOLIDATED BALANCE SHEETS
-----------------------------------------------
(in millions) March 31, 2012 December 31, 2011
ASSETS
Utility plant
Utility plant in service $31,284 $31,065
Accumulated depreciation (12,141) (12,001)
------------------------ ------- -------
Utility plant in
service, net 19,143 19,064
Other utility plant, net 217 217
Construction work in
progress 2,698 2,449
Nuclear fuel, net of
amortization 747 767
-------------------- --- ---
Total utility plant, net 22,805 22,497
------------------------ ------ ------
Current assets
Cash and cash
equivalents 565 230
Receivables, net 758 889
Inventory, net 1,447 1,438
Regulatory assets 250 275
Derivative collateral
posted 166 147
Deferred tax assets 518 371
Prepayments and other
current assets 131 133
--------------------- --- ---
Total current assets 3,835 3,483
-------------------- ----- -----
Deferred debits and
other assets
Regulatory assets 3,123 3,025
Nuclear decommissioning
trust funds 1,762 1,647
Miscellaneous other
property and
investments 413 407
Goodwill 3,655 3,655
Other assets and
deferred debits 382 345
---------------- --- ---
Total deferred debits
and other assets 9,335 9,079
--------------------- ----- -----
Total assets $35,975 $35,059
============ ======= =======
CAPITALIZATION AND
LIABILITIES
Common stock equity
Common stock without par
value, 500 million
shares authorized, 296 $7,451 $7,434
million and 295 million
shares issued and
outstanding,
respectively
Accumulated other
comprehensive loss (160) (165)
Retained earnings 2,718 2,752
----------------- ----- -----
Total common stock
equity 10,009 10,021
------------------ ------ ------
Noncontrolling interests 2 4
Total equity 10,011 10,025
------------ ------ ------
Preferred stock of
subsidiaries 93 93
Long-term debt,
affiliate 273 273
Long-term debt, net 11,742 11,718
------------------- ------ ------
Total capitalization 22,119 22,109
Current liabilities
Current portion of long-
term debt 1,375 950
Short-term debt 1,056 671
Accounts payable 878 909
Interest accrued 193 200
Dividends declared 2 78
Customer deposits 343 340
Derivative liabilities 484 436
Accrued compensation and
other benefits 127 195
Other current
liabilities 304 306
------------- --- ---
Total current
liabilities 4,762 4,085
------------- ----- -----
Deferred credits and
other liabilities
Noncurrent income tax
liabilities 2,637 2,355
Accumulated deferred
investment tax credits 101 103
Regulatory liabilities 2,684 2,700
Asset retirement
obligations 1,282 1,265
Accrued pension and
other benefits 1,611 1,625
Derivative liabilities 364 352
Other liabilities and
deferred credits 415 465
--------------------- --- ---
Total deferred credits
and other liabilities 9,094 8,865
---------------------- ----- -----
Commitments and
contingencies
---------------
Total capitalization and
liabilities $35,975 $35,059
======================== ======= =======
PROGRESS ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of CASH FLOWS
---------------------------------------------------------
(in millions)
Three months ended March 31 2012 2011
--------------------------- ---- ----
Operating activities
Net income $152 $185
Adjustments to reconcile net income to
net cash provided by operating
activities
Depreciation, amortization and accretion 200 199
Deferred income taxes and investment tax
credits, net 107 101
Deferred fuel (credit) cost (6) 70
Allowance for equity funds used during
construction (24) (29)
Other adjustments to net income (7) 56
Cash provided (used) by changes in
operating assets and liabilities
Receivables 78 163
Inventory (10) (49)
Other assets (48) 7
Income taxes, net (7) 57
Accounts payable 23 (89)
Accrued pension and other benefits (33) (224)
Other liabilities (69) (1)
Net cash provided by operating
activities 356 446
------------------------------ --- ---
Investing activities
Gross property additions (562) (501)
Nuclear fuel additions (51) (57)
Purchases of available-for-sale
securities and other investments (363) (1,817)
Proceeds from available-for-sale
securities and other investments 359 1,809
Other investing activities 65 46
-------------------------- --- ---
Net cash used by investing activities (552) (520)
------------------------------------- ---- ----
Financing activities
Issuance of common stock, net 3 8
Dividends paid on common stock (260) (183)
Proceeds from issuance of short-term
debt with original maturities greater
than 90 days 65 -
Net increase in short-term debt 320 79
Proceeds from issuance of long-term
debt, net 444 494
Retirement of long-term debt - (700)
Other financing activities (41) (63)
-------------------------- --- ---
Net cash provided (used) by financing
activities 531 (365)
------------------------------------- --- ----
Net increase (decrease) in cash and cash
equivalents 335 (439)
Cash and cash equivalents at beginning
of period 230 611
-------------------------------------- --- ---
Cash and cash equivalents at end of
period $565 $172
=================================== ==== ====
Progress Energy, Inc.
SUPPLEMENTAL DATA - Page S-1
Unaudited
Earnings Variances
First Quarter 2012 vs. 2011
Regulated Utilities
-------------------
($ per share) Carolinas Florida Corporate and Consolidated
Other Businesses
2011 GAAP earnings 0.44 0.34 (0.16) 0.62
Tax levelization 0.01 0.01 (0.01) 0.01 A
Discontinued operations 0.01 0.01
Merger and integration costs 0.02 0.03 0.05 B
2011 ongoing earnings 0.47 0.38 (0.16) 0.69
---- ---- ----- ----
Weather - retail (0.10) (0.01) (0.11) C
Growth and usage - retail 0.02 0.02
Wholesale (0.01) 0.02 0.01 D
Clauses and other margin 0.02 0.04 0.06 E
O&M (0.17) 0.08 (0.09) F
Other 0.01 (0.02) (0.01) G
AFUDC equity (0.01) (0.01)
Depreciation and amortization (0.02) (0.05) (0.07) H
Interest expense (0.01) 0.01 -
Income taxes (0.01) (0.01)
Share dilution -
2012 ongoing earnings 0.20 0.44 (0.16) 0.48
---- ---- ----- ----
Tax levelization (0.02) (0.02) A
Discontinued operations 0.04 0.04 I
CVO mark-to-market 0.03 0.03 J
Merger and integration costs (0.01) (0.01) (0.02) B
2012 GAAP earnings 0.17 0.43 (0.09) 0.51
---- ---- ----- ----
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 Comprehensive 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 merger and integration costs related to the proposed
strategic combination with Duke Energy Corporation.
C - See S-2 for impact of retail weather to normal on EPS.
Carolinas - Unfavorable primarily due to 28 percent lower heating-
degree days.
D - Florida -Favorable primarily due to a new contract with a major
customer.
E - Carolinas -Favorable primarily due to increased spending on new and
existing DSM programs.
Florida - Favorable primarily due to a prior-year indemnification
charge for the joint owner replacement power costs related to the
continued outage at CR3.
F - Carolinas -Unfavorable primarily due to higher nuclear plant outage
costs resulting from an additional nuclear refueling outage in the
first quarter of 2012.
Florida -Favorable primarily due to the reversal of certain
regulatory liabilities associated with CR3 in accordance with the
2012 settlement agreement.
G - Florida - Unfavorable primarily due to a prior-year favorable
litigation settlement.
H - Carolinas - Unfavorable primarily due to higher depreciable asset
base driven by the newly constructed combined-cycle unit at the
Smith Energy Complex, which was placed in service in June 2011.
Florida -Unfavorable primarily due to the smaller reduction in the
cost of removal component of amortization expense as allowed under
the 2010 settlement agreement.
I - Corporate and Other -Impact of reversal of certain environmental
indemnification liabilities for which the indemnification period
has expired.
J - Corporate and Other -Impact of change in fair value of CVOs not
held by Progress Energy.
Progress Energy, Inc.
SUPPLEMENTAL DATA - Page S-2
Unaudited - Data is not weather-adjusted
Utility Statistics
Three Months Ended Three Months Ended Percentage Change
March 31, 2012 March 31, 2011 From March 31, 2011
-------------- -------------- -------------------
Operating Revenues (in millions) Carolinas Florida Total Utilities Carolinas Florida Total Utilities Carolinas Florida
--------- ------- --------------- --------- ------- --------------- --------- -------
Residential $277 $192 $469 $332 $220 $552 (16.6)% (12.7)%
Commercial 162 78 240 167 78 245 (3.0) -
Industrial 79 17 96 83 18 101 (4.8) (5.6)
Governmental 14 21 35 15 20 35 (6.7) 5.0
Unbilled (7) 12 5 (35) (15) (50) NM NM
-------- --- --- --- --- --- --- --- ---
Total retail base revenues 525 320 845 562 321 883 (6.6) (0.3)
Wholesale base revenues 69 34 103 73 25 98 (5.5) 36.0
----------------------- --- --- --- --- --- --- ---- ----
Total base revenues 594 354 948 635 346 981 (6.5) 2.3
Clause-recoverable regulatory returns 11 48 59 7 45 52 57.1 6.7
Miscellaneous 34 53 87 31 51 82 9.7 3.9
Fuel and other pass-through revenues 446 550 996 460 590 1,050 NM NM
--- ---
Total operating revenues $1,085 $1,005 $2,090 $1,133 $1,032 $2,165 (4.2)% (2.6)%
------------------------ ------ ------ ------ ------ ------ ------ ----- -----
Energy Sales (millions of kWh)
Residential 4,435 3,705 8,140 5,439 4,281 9,720 (18.5)% (13.5)%
Commercial 3,116 2,565 5,681 3,287 2,547 5,834 (5.2) 0.7
Industrial 2,429 757 3,186 2,488 772 3,260 (2.4) (1.9)
Governmental 363 752 1,115 386 727 1,113 (6.0) 3.4
Unbilled (133) 334 201 (669) (356) (1,025) NM NM
---- --- --- ---- ---- ------ --- ---
Total retail kWh sales 10,210 8,113 18,323 10,931 7,971 18,902 (6.6) 1.8
Wholesale 2,958 299 3,257 3,209 478 3,687 (7.8) (37.4)
--------- ----- --- ----- ----- --- -----
Total kWh sales 13,168 8,412 21,580 14,140 8,449 22,589 (6.9)% (0.4)%
--------------- ------ ----- ------ ------ ----- ------ ----- -----
Energy Supply (millions of kWh)
Generated
Steam 5,194 2,631 7,825 6,436 2,742 9,178
Nuclear 4,672 - 4,672 6,182 - 6,182
Combustion turbines/combined cycle 2,616 4,967 7,583 931 4,885 5,816
Hydro 218 - 218 180 - 180
Purchased 1,070 1,436 2,506 1,047 1,429 2,476
--------- ----- ----- ----- ----- ----- -----
Total energy supply (company share) 13,770 9,034 22,804 14,776 9,056 23,832
---------------------------------- ------ ----- ------ ------ ----- ------
Impact of Weather to Normal on Retail Sales
Heating-degree days
Actual 1,218 202 1,683 295 (27.6)% (31.5)%
Normal 1,705 276 1,701 276
Cooling-degree days
Actual 59 325 15 217 293.3% 49.8%
Normal 13 216 12 216
Impact of retail weather to normal on EPS ($0.10) $0.00 ($0.10) $0.00 $0.01 $0.01
----------------------------------------- ------ ----- ------ ----- ----- -----
NM - not meaningful
Progress Energy, Inc.
SUPPLEMENTAL DATA - Page S-3
Unaudited
O&M Expenses Primarily Recoverable through Base Rates (a)
--------------------------------------------------------
Three months ended
March 31
-------------------
(in millions) 2012 2011
------------ ---- ----
Reported GAAP O&M $529 $494
Adjustments
Carolinas
Fuel clauses (7) (6)
Environmental clause (1) (1)
DSM/EE and REPS cost
recovery clauses (b) (10) (8)
Florida
Energy conservation cost
recovery clause (ECCR) (19) (23)
Environmental cost recovery
clause (ECRC) (8) (8)
Nuclear cost recovery (1) (1)
O&M Expenses Primarily
Recoverable through Base
Rates $483 $447
------------------------- ---- ----
(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
--------------------
Three months ended
March 31
-------------------
2012 2011
---- ----
Return on average common
stock equity (rolling 12
months) 5.4% 8.5%
Book value per common share $33.68 $34.01
Capitalization
Total equity 40.4% 43.9%
Preferred stock of
subsidiaries 0.4% 0.4%
Total debt 59.2% 55.7%
---------- ---- ----
Total Capitalization 100.0% 100.0%
-------------------- ----- -----
SOURCE Progress Energy
