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progress energy 08
 

progress energy 08

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    progress energy 08 progress energy 08 Presentation Transcript

    • Bill Johnson Chairman, Chairman President and CEO EEI Financial Conference Phoenix, AZ November 11 2008 11,
    • Caution Regarding Forward-Looking Statements F d L ki St t t This 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 py 10-K and 10-Q forms.
    • Major Di M j Discussion Topics iTi St ateg c ge da Strategic Agenda Financial Overview Balanced Strategy for Growth Regulation and Public Policy
    • Profile of who we are: Two High-Performing Electric Utilities T Hi h P f i El t i Utiliti North Carolina Progress Energy Carolinas • 12,400 MW capacity • Over 1.4M customers • 2.2% cust. growth (7-yr CGR) • $4.4B total revenue • $12B total assets • 5,000 employees South • 34,000 sq. mile service area • 18 plants, 82 units Carolina Progress Energy Florida • 9,400 MW capacity Florida • ~1.7M customers • 2 2% cust. growth (7 2.2% t th (7-yr CGR) • $4.7B total revenue • $13B total assets • 4,000 employees • 20,000 sq. mile service area , q Service Area • 14 plants, 65 units
    • Core Strategic Focus Foc s Progress Energy ● Achieve financial objectives Carolinas while excelling in fundamentals PGN ● Ad t to new energy landscape Adapt t ld Progress Energy ● Leverage prospects for growth Florida Integrated Energy Service Company Serving the Carolinas and Florida Power Power Power Customer Generation Transmission Delivery y Service
    • Strategic A St t i Agenda d Achieve 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 g regulators, policymakers and customers Sustain financial strength and flexibility during g y g nuclear construction
    • Critical S C iti l Success Factors Ft Safety & Operational Excellence Financial Financial Objectives Objectives STRONGER A Balanced A Balanced Solution Financial Employee FUTURE Solution Engagement & Strategy Objectives For Customers, , Strategy Shareholders Performance for Growth for Growth and Employees Customer Customer Satisfaction Satisfaction Constructive Regulation & Public Policy
    • Long-Term Financial Objectives L T Fi i l Obj ti Achieve our 4-5% EPS growth objective g j Preserve an investment grade credit rating Maintain dividend growth Keep rate increases reasonable to customers p Fund Levy and capital investments in the rest of the business
    • 2008 O Ongoing E i Earnings G id i Guidance $ 95 $3 05 per share $2.95 - $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)
    • Strong Liquidity Position* St Li idit P iti * $ in millions PGN Revolving Credit Facilities Debt Maturity Profile Program Term Amount Expiration Issuer 2009 2010 2011 2012 PGN 5 Years $ 1,130 5/3/12 PGN $ – $ 100 $ 700 $ 450 PEC 5 Years 450 6/28/11 PEC 400 6 – 500 PEF 5 Years 450 3/28/11 PEF – 300 300 – Total $ 400 $ 406 $1,000 $ 950 $ 2,030 * As of September 30, 2008.
    • Critical S C iti l Success Factors Ft Safety & Operational Excellence Financial Objectives Employee STRONGER A Balanced Employee FUTURE Solution Strategy g g Engagement & Engagement & For Customers, , Shareholders Performance Performance for Growth and Employees Customer Satisfaction Constructive Regulation & Public Policy
    • Critical S C iti l Success Factors Ft Safety & Operational Excellence Financial Objectives STRONGER A Balanced Employee A Balanced Solution FUTURE Solution Engagement & For Customers, , Strategy Strategy for Growth Shareholders Performance for Growth and Employees Customer Satisfaction Constructive Regulation & Public Policy
    • PGN Balanced Solution Strategy
    • Energy Efficiency and Alternative Energy E Effi i d Alt ti E Energy Efficiency and DSM Alternative Energy • NCUC approved four new programs • North Carolina solar – EnergyWise – 1 MW on former landfill in – Residential Home Advantage Haywood County – CIG New Construction – 1.2 MW at our Sutton Plant near – CIG Retrofit-Custom Wilmington – 1 MW at SAS in Cary • NCUC reviewing Distribution System • Plug-in hybrid electric vehicle Demand-Response (DSDR) – Invest $260M by 2012 partnership with NC State University – Reduce peak demand by 250 MW • Florida PPAs • NCUC hearing on rider scheduled for – 40 MW biomass December 17-18, 2008 – 60 MW municipal solid waste Note: CIG = Commercial, Industrial, and Government.
    • Significant Rate Base Growth Even Prior to New Nuclear E Pi t N Nl Progress Energy Carolinas¹ g gy Progress Energy Florida² g gy 2008-2010E 2008-2010E CAGR CAGR 18% 5% $, $9,000 $9,000 2001-2007 CAGR $8,000 $8,000 5.0% $7,000 $7,000 Retail Rate Base (x 1M) Retail Rate Base (x 1M) 2001-2007 CAGR $6,000 , $6,000 4.1% 4 1% $5,000 $5,000 $4,000 $4,000 $3,000 $3,000 R R $2,000 $2,000 $1,000 $1,000 $0 $0 2001 2002 2003 2004 2005 2006 2007 2008E 2009E 2010E 2001 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 j Cumulative Spent p Expected p Major Generation Projects CapEx through 9/30/08 Completion Date Carolinas Clean Smokestacks $1.5-1.6B $ 986M 2013 Wayne County CT 90M 17M June 2009 Richmond County CCGT 600M 45M June 2011 (incl Transmission) Florida Environmental $ 1.2B $ 745M May 2010 Bartow Repowering p g 690M 602M June 2009 (incl Transmission) CR3 Nuclear Uprate 365M 73M Dec. 2011 CR3 Steam Generator 245M 110M Dec. 2009 Replacement Note: Total project capital expenditures based on current estimates and exclude AFUDC.
    • Levy Nuclear Project in Florida L Nl P j t i Fl id Location Technology # of units Capacity (MW) In Service Levy County, Westinghouse Unit 1: 2016 2 ~2,200 total Florida AP1000 Unit 2: 2017 ● 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 Shaw ● Site prep and pre-construction begin ~2010/11; safety-related construction begins 2012/13 g (1) Confidentiality obligations preclude us from discussing this further until the negotiations are completed.
    • Critical S C iti l Success Factors Ft Safety & Operational Excellence Financial Objectives Constructive STRONGER A Balanced Employee FUTURE Regulation & Solution Engagement & For Customers, , Strategy for Growth Policy Public Shareholders Performance and Employees Customer Satisfaction Constructive Regulation & Public Policy
    • Regulatory Update R lt Udt Carolinas ♦ Clean Smokestacks amortization ♦ Harris depreciation ♦ Proposed fuel settlement in North Carolina Florida ♦ Cost recovery includes the following clauses: – Levy Nuclear Approved on – CR3 Uprate Oct. 14, 2008 – Fuel – Capacity Hearings held – Environmental Nov. 4-6, 2008 – Energy Conservation ♦ Rates effective January 1, 2009
    • Supportive Florida Legislation 2006: Nuclear I Nl Investment Recovery t tR Pre-construction and licensing ♦ Capacity cost recovery clause (CCRC) ♦ Costs are recovered dollar for dollar During 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 ♦ ROE and capital structure based on last approved (currently 11.75% ROE on 57.83% common equity) Project P j t cancellation cost recovery ll ti t
    • Conclusion
    • Near-Term Financial Outlook N T Fi i l O tl k Maintain st o g liquidity pos t o a ta strong qu d ty position On track to achieve 2008 ongoing earnings guidance of $2 95 - $3 05 per share $2.95 $3.05
    • Long-Term Financial Objectives L T Fi i l Obj ti Achieve ou 4-5% EPS g o t object e c e e our 5% S growth objective Preserve an investment grade credit rating Maintain dividend growth Keep rate increases reasonable to customers Fund Levy and capital investments in the rest of the business f th b i
    • Appendix
    • Credit F iliti C C dit Facilities Consortium* ti * $ in millions Bank Total J.P. Morgan Chase $ 225.0 Bank Tokyo-Mitsubishi 200.0 Barclays Capital 190.5 Bank of America 190.0 190 0 Citigroup 180.0 Wachovia 175.5 Royal Bank of Scotland 169.0 Bank of New York Mellon 120.0 120 0 SunTrust 115.0 Morgan Stanley 100.0 Goldman Sachs 100.0 Deutsche Bank D thB k 95.0 95 0 UBS 80.0 BNP Paribas 50.0 BB&T 25.0 First Tennessee 15.0 Total $ 2,030.0 *As of September 30, 2008.
    • Current C dit R ti C t Credit Ratings* * Moody’s Investors Standard Fitch Services & Poor’s Ratings Progress Energy Outlook Stable Stable Stable Corporate Credit Rating -- BBB+ BBB Senior Unsecured Debt Baa2 BBB BBB Commercial P C i l Paper P-2 P2 A-2 A2 F-2 F2 Progress Energy Carolinas Corporate Credit Rating A3 BBB+ A- Commercial Paper P-2 A-2 F-1 Senior Secured Debt A2 A- A+ Senior Unsecured D bt SiU d Debt A3 BBB+ A Preferred Stock Baa2 BBB- A- Progress Energy Florida Corporate Credit Rating A3 BBB+ A- Commercial Paper P-2 A-2 F-1 Senior Secured Debt A2 A- A A+ Senior Unsecured Debt A3 BBB+ A Preferred Stock Baa2 BBB- A- FPC Capital I Preferred Stock** Baa2 BBB- -- Progress Capital Holdings Senior Unsecured Debt*** Baa1 BBB -- * As of November 5, 2008. ** Guaranteed by Progress Energy, Inc. and Florida Progress Corporation. *** Guaranteed by Florida Progress Corporation.