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Press Release

05/03/2012

Progress Energy announces 2012 first-quarter results; affirms full-year 2012 earnings guidance

(View the complete earnings release and financial statements in PDF)

Highlights:

  • Reports first-quarter GAAP earnings of $0.51 per share, compared to $0.62 for the same period last year, primarily due to unfavorable impact of weather in the Carolinas
  • Reports first-quarter ongoing earnings of $0.48 per share, compared to $0.69 for the same period last year, primarily due to unfavorable impact of weather in the Carolinas and higher O&M expense primarily due to an additional planned nuclear refueling outage at Progress Energy Carolinas
  • Affirms 2012 ongoing earnings guidance of $3.10 to $3.25 per share


RALEIGH, N.C. (May 3, 2012) – 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.)

“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’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.

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Contacts: Corporate Communications – 1.919.546.6189 or toll-free 1.877.641.NEWS (6397)

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