DUKE ENERGY PROGRESS, LLC. - FORM 8-K - EX-99.1 - EARNINGS RELEASE EXHIBIT 99

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8-K - Q2 2012 EARNINGS RELEASE 8K - DUKE ENERGY PROGRESS, LLC.	q22012_8k.htm

Progress Energy announces 2012 second-quarter results

Highlights:

Second Quarter 2012

¨	Reports second-quarter GAAP earnings of $0.21 per share, compared to $0.60 per share for the same period last year, primarily due to higher O&M expense resulting from an additional extended nuclear refueling outage in the Carolinas and higher depreciation and amortization expense

¨	Reports second-quarter ongoing earnings of $80 million, or $0.27 per share, compared to $211 million, or $0.71 per share, for the same period last year, primarily due to higher O&M expense, higher depreciation and amortization expense and the unfavorable impact of weather

Year-to-Date 2012

Reports GAAP earnings for the first six months of 2012 of $0.72 per share, compared to $1.22 per share for the same period last year, primarily due to higher O&M expense resulting from two additional extended nuclear refueling outages in the Carolinas, higher depreciation and amortization expense and the unfavorable impact of weather, partially offset by PEF’s lower estimated future joint owner replacement power costs in Florida

Reports ongoing earnings for the first six months of 2012 of $223 million, or $0.75 per share, compared to $413 million, or $1.40 per share, for the same period last year, primarily due to higher O&M expense in the Carolinas, higher depreciation and amortization expense and the unfavorable impact of weather

RALEIGH, N.C. (August 2, 2012) – Duke Energy Corporation [NYSE: DUK] and Progress Energy, Inc. completed their merger on July 2, 2012. In connection with the merger, Progress Energy has become a wholly owned direct subsidiary of Duke Energy. As a result, the Progress Energy financial results for the second quarter 2012 are on a stand-alone basis and are not included in Duke Energy’s results. The financial results of Progress Energy will be included in Duke Energy’s consolidated results beginning with third quarter 2012.

Progress Energy announced second-quarter GAAP earnings of $63 million, or $0.21 per share, compared with GAAP earnings of $176 million, or $0.60 per share, for the same period last year. Second-quarter ongoing earnings were $80 million, or $0.27 per share, compared to $211 million, or $0.71 per share, for the same period last year. The significant drivers in ongoing earnings per share were higher operation and maintenance (O&M) expense, primarily driven by an additional extended nuclear refueling outage in the Carolinas; higher depreciation and amortization expense; and the unfavorable impact of weather. (See the discussion later in this release for a reconciliation of ongoing earnings per share to GAAP earnings per share.)

An earnings conference call for analysts is scheduled for 11 a.m. ET today to discuss Duke Energy’s financial performance for the second quarter 2012 and the recent finalization of the merger with Progress Energy, among other matters. Additional details are provided at the end of this earnings release.

See the second-quarter and year-to-date 2012 business highlights section on pages 2-4 for detailed earnings variance analyses for the Progress Energy Carolinas (PEC), Progress Energy Florida (PEF) and Corporate and Other Businesses segments.

SECOND-QUARTER 2012 BUSINESS HIGHLIGHTS

Below are the second-quarter and year-to-date 2012 earnings variance analyses for the company’s segments. See the reconciliation tables in the ongoing earnings adjustments section on pages 5-6 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 second-quarter ongoing earnings per share of $0.14, compared with $0.37 for the same period last year; GAAP earnings per share of $0.11, compared with $0.36 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 wholesale

·	Reported primary quarter-over-quarter ongoing earnings per share unfavorability of:

§	$(0.18) O&M primarily due to higher nuclear plant outage costs resulting from an additional extended nuclear refueling outage, higher substation and line maintenance costs related to a reliability initiative, and higher employee benefit expenses

§	$(0.05) weather primarily due to 22 percent lower cooling-degree days

§	$(0.02) depreciation and amortization primarily due to higher depreciable asset base driven by placing the combined-cycle unit at the Smith Energy Complex in service in June 2011

§	$(0.01) allowance for funds used during construction (AFUDC) equity

§	$(0.01) interest expense

§	$(0.01) other

·	12,000 net increase in the average number of customers for the three months ended June 30, 2012, compared to the same period in 2011

Progress Energy Florida

·	Reported second-quarter ongoing earnings per share of $0.29, compared with $0.48 for the same period last year; GAAP earnings per share of $0.28, compared with $0.38 for the same period last year.

·	Reported primary quarter-over-quarter ongoing earnings per share favorability of:

§	$0.02 clauses and other margin primarily due to higher open access transmission tariff rates

§	$0.01 wholesale

§	$0.01 AFUDC equity

·	Reported primary quarter-over-quarter ongoing earnings per share unfavorability of:

§	$(0.10) depreciation and amortization primarily due to the prior-year reduction in the cost of removal component of amortization expense as allowed under the 2010 settlement agreement

§	$(0.05) O&M primarily due to the recognition of expense of previously deferred costs associated with the non-selected vendor for the Crystal River Nuclear Plant Unit 3 (CR3) repair option

§	$(0.04) weather primarily due to 11 percent lower cooling-degree days

§	$(0.02) other primarily due to higher property taxes

§	$(0.01) interest expense

§	$(0.01) income taxes

·	12,000 net increase in the average number of customers for the three months ended June 30, 2012, compared to the same period in 2011

Corporate and Other Businesses (includes primarily Holding Company debt)

·	Reported second-quarter ongoing after-tax expenses of $0.16 per share, compared with after-tax expenses of $0.14 per share for the same period last year; GAAP after-tax expenses of $0.18 per share, compared with after-tax expenses of $0.14 per share for the same period last year.

·	Reported primary quarter-over-quarter ongoing after-tax expenses per share unfavorability of:

§	$(0.01) income taxes

§	$(0.01) other

YEAR-OVER-YEAR ONGOING EPS VARIANCE ANALYSIS

Progress Energy Carolinas

·	Reported year-to-date ongoing earnings per share of $0.35, compared with $0.85 for the same period last year; GAAP earnings per share of $0.28, compared with $0.80 for the same period last year.

·	Reported primary year-to-date ongoing earnings per share favorability of:

§	$0.04 retail growth and usage

§	$0.03 clauses and other margin primarily due to increased spending on new and existing DSM programs

·	Reported primary year-to-date ongoing earnings per share unfavorability of:

§	$(0.34) O&M primarily due to higher nuclear plant outage costs resulting from two additional extended nuclear refueling outages, higher employee benefit expenses and higher substation and line maintenance costs related to a reliability initiative

§	$(0.15) weather primarily due to 24 percent lower heating-degree days and 16 percent lower cooling-degree days

§	$(0.04) depreciation and amortization primarily due to higher depreciable asset base driven by placing the combined-cycle unit at the Smith Energy Complex in service in June 2011

§	$(0.02) AFUDC equity primarily due to placing the previously mentioned combined-cycle unit in service

§	$(0.02) interest expense primarily due to higher average long-term debt outstanding

·	10,000 net increase in the average number of customers for the six months ended June 30, 2012, compared to the same period in 2011

Progress Energy Florida

·	Reported year-to-date ongoing earnings per share of $0.72, compared with $0.85 for the same period last year; GAAP earnings per share of $0.71, compared with $0.72 for the same period last year.

·	Reported primary year-to-date ongoing earnings per share favorability of:

§	$0.06 clauses and other margin primarily due to an indemnification charge for the prior-year joint owner replacement power costs related to the continued outage at CR3

§	$0.03 wholesale primarily due to a new contract with a major customer

§	$0.03 O&M primarily due to the reversal of certain regulatory liabilities associated with CR3 in accordance with the 2012 settlement agreement, partially offset by the recognition of expense of previously deferred costs associated with the non-selected vendor for the CR3 repair option

·	Reported primary year-to-date ongoing earnings per share unfavorability of:

§	$(0.15) depreciation and amortization primarily due to the smaller reduction in the cost of removal component of amortization expense as allowed under the 2012 and 2010 settlement agreements

§	$(0.06) other primarily due to a prior-year favorable litigation settlement and higher property taxes

§	$(0.04) weather primarily due to 31 percent lower heating-degree days and 1 percent lower cooling-degree days

·	11,000 net increase in the average number of customers for the six months ended June 30, 2012, compared to the same period in 2011

Corporate and Other Businesses (includes primarily Holding Company debt)

·	Reported year-to-date ongoing after-tax expenses of $0.32 per share, compared with after-tax expenses of $0.30 per share for the same period last year; GAAP after-tax expenses of $0.27 per share, compared with after-tax expenses of $0.30 per share for the same period last year.

·	Reported primary year-to-date ongoing after-tax expenses per share favorability of:

§	$0.01 interest expense

·	Reported primary year-to-date ongoing after-tax expenses per share unfavorability of:

§	$(0.02) income taxes primarily due to the impact at the Corporate level resulting from the deductions for domestic production activities taken by the Utilities

§	$(0.01) other

ONGOING EARNINGS ADJUSTMENTS

For periods ended on or before June 30, 2012, Progress Energy’s management used ongoing earnings per share to evaluate the operations of the company and to establish goals for management and employees. Management believed this non-GAAP measure was appropriate for understanding the business and assessing potential future performance, because excluded items were limited to those that management believed were not representative of fundamental core earnings. Ongoing earnings as presented here may not be comparable to similarly titled measures used by other companies. Ongoing earnings was 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 June 30						Six months ended June 30
	2012			2011			2012			2011
Ongoing earnings per share	$	0.27		$	0.71		$	0.75		$	1.40
Tax levelization		(0.02	)		(0.01	)		(0.04	)		(0.02	)
Discontinued operations		(0.02	)		-			0.02			(0.01	)
CR3 indemnification adjustment (charge)		0.02			(0.09	)		0.02			(0.09	)
Merger and integration costs		(0.04	)		(0.02	)		(0.06	)		(0.07	)
CVO mark-to-market		-			0.01			0.03			0.01
Reported GAAP earnings per share	$	0.21		$	0.60		$	0.72		$	1.22
Shares outstanding (millions)		297			296			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 did not consider this item to be representative of the company’s fundamental core earnings.

Discontinued Operations

Discontinued operations include amounts related to adjustments of prior sales of diversified businesses. In 2012, the company recorded the reversal of certain environmental indemnification liabilities for which the indemnification period has expired. Resolution of guarantees and indemnifications providing for certain legal, tax and environmental matters could result in additional adjustments. Management did not consider this item to be representative of the company’s fundamental core earnings.

CR3 Indemnification Adjustment (Charge)

The company recorded a CR3 indemnification charge, and subsequent adjustment, for estimated future years’ joint owner replacement power costs (through the expiration of the indemnification provisions of the joint owner agreement). Since GAAP requires that the charge be accounted for in the period in

which it becomes probable and estimable rather than the periods to which it relates, management did 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 did 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 did not consider this item to be representative of the company’s fundamental core earnings.

* * * *

An earnings conference call for analysts is scheduled for 11 a.m. ET Thursday, Aug. 2.The conference call will be hosted by Jim Rogers, chairman, president and chief executive officer, and Lynn Good, executive vice president and chief financial officer.

The call can be accessed via the investors' section (http://www.duke-energy.com/investors/) of Duke Energy’s website or by dialing 800-930-1344 in the United States or 913-312-0652 outside the United States. The confirmation code is 9404035. Please call in 10 to 15 minutes prior to the scheduled start time. A replay of the conference call will be available until midnight ET, Aug. 12, 2012, by calling 888-203-1112 in the United States or 719-457-0820 outside the United States and using the code 9404035. A replay and transcript also will be available by accessing the investors' section of the company’s website.

Duke Energy is the largest electric power holding company in the United States with more than $100 billion in total assets. Its regulated utility operations serve approximately 7.1 million electric customers located in six states in the Southeast and Midwest. Its commercial power and international business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.

Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: http://www.duke-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:

·	the impact of compliance with material restrictions of conditions related to the Duke Energy merger imposed by our regulators could exceed our expectations;

·	our ability to successfully integrate our business with Duke Energy and realize cost savings and any other synergies expected from the merger;

·	our ability to maintain relationships with customers, employees or suppliers post-merger;

the scope of necessary repairs of the delamination of our Crystal River Unit No. 3 Nuclear Plant (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, and could result in the early retirement of the unit;

·	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;

·	the Progress Registrants’ ability to control costs, including operations and maintenance (O&M) expense and large construction projects;

·	our subsidiaries’ ability to pay upstream dividends or distributions to Progress Energy, Inc. holding company (the Parent);

·	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 each of the Progress Registrants;

·	the Progress Registrants’ ability to maintain their current credit ratings and the impacts in the event their 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;

·	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 (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.

# # #

MEDIA CONTACT:

Tom Shiel: 704-382-2355

24-hour media line: 800-559-3853

ANALYSTS:

Bob Drennan: 704-382-4070

Bill Currens: 704-382-1603

PROGRESS ENERGY, INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

June 30, 2012

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of COMPREHENSIVE INCOME
	Three months ended June 30						Six months ended June 30
(in millions except per share data)	2012			2011			2012			2011
Operating revenues	$	2,273		$	2,256		$	4,365		$	4,423
Operating expenses
Fuel used in electric generation		736			674			1,421			1,392
Purchased power		257			329			467			549
Operation and maintenance		627			510			1,156			1,004
Depreciation, amortization and accretion		231			179			397			333
Taxes other than on income		142			134			280			274
Other		5			2			5			(8	)
Total operating expenses		1,998			1,828			3,726			3,544
Operating income		275			428			639			879
Other income
Interest income		1			-			2			1
Allowance for equity funds used during construction		25			26			49			55
Other, net		1			7			14			10
Total other income, net		27			33			65			66
Interest charges
Interest charges		203			189			397			388
Allowance for borrowed funds used during construction		(11	)		(9	)		(20	)		(18	)
Total interest charges, net		192			180			377			370
Income from continuing operations before income tax		110			281			327			575
Income tax expense		42			101			118			208
Income from continuing operations		68			180			209			367
Discontinued operations, net of tax		(4	)		(2	)		7			(4	)
Net income		64			178			216			363
Net income attributable to noncontrolling interests, net of tax		(1	)		(2	)		(3	)		(3	)
Net income attributable to controlling interests	$	63		$	176		$	213		$	360
Average common shares outstanding – basic		297			296			297			295
Basic and diluted earnings per common share
Income from continuing operations attributable to controlling interests, net of tax	$	0.23		$	0.60		$	0.70		$	1.23
Discontinued operations attributable to controlling interests, net of tax		(0.02	)		-			0.02			(0.01	)
Net income attributable to controlling interests	$	0.21		$	0.60		$	0.72		$	1.22
Dividends declared per common share	$	0.620		$	0.620		$	1.240		$	1.240
Net income amounts attributable to controlling interests
Income from continuing operations, net of tax	$	67		$	178		$	206		$	364
Discontinued operations, net of tax		(4	)		(2	)		7			(4	)
Net income attributable to controlling interests	$	63		$	176		$	213		$	360
Comprehensive income
Comprehensive income	$	60		$	157		$	217		$	346
Comprehensive income attributable to noncontrolling interests, net of tax		(1	)		(2	)		(3	)		(3	)
Comprehensive income attributable to controlling interests	$	59		$	155		$	214		$	343

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)	June 30, 2012			December 31, 2011
ASSETS
Utility plant
Utility plant in service	$	31,601		$	31,065
Accumulated depreciation		(12,151	)		(12,001	)
Utility plant in service, net		19,450			19,064
Other utility plant, net		272			217
Construction work in progress		2,711			2,449
Nuclear fuel, net of amortization		759			767
Total utility plant, net		23,192			22,497
Current assets
Cash and cash equivalents		73			230
Receivables, net		849			889
Inventory, net		1,427			1,438
Regulatory assets		302			275
Derivative collateral posted		124			147
Deferred tax assets		508			371
Prepayments and other current assets		104			133
Total current assets		3,387			3,483
Deferred debits and other assets
Regulatory assets		2,954			3,025
Nuclear decommissioning trust funds		1,757			1,647
Miscellaneous other property and investments		411			407
Goodwill		3,655			3,655
Other assets and deferred debits		368			345
Total deferred debits and other assets		9,145			9,079
Total assets	$	35,724		$	35,059
CAPITALIZATION AND LIABILITIES
Common stock equity
Common stock without par value, 500 million shares authorized, 296 million and 295 million shares issued and outstanding, respectively	$	7,465		$	7,434
Accumulated other comprehensive loss		(164	)		(165	)
Retained earnings		2,596			2,752
Total common stock equity		9,897			10,021
Noncontrolling interests		3			4
Total equity		9,900			10,025
Preferred stock of subsidiaries		93			93
Long-term debt, affiliate		273			273
Long-term debt, net		12,739			11,718
Total capitalization		23,005			22,109
Current liabilities
Current portion of long-term debt		925			950
Short-term debt		345			671
Accounts payable		907			909
Interest accrued		197			200
Dividends declared		1			78
Customer deposits		342			340
Derivative liabilities		326			436
Accrued compensation and other benefits		168			195
Other current liabilities		359			306
Total current liabilities		3,570			4,085
Deferred credits and other liabilities
Noncurrent income tax liabilities		2,670			2,355
Accumulated deferred investment tax credits		99			103
Regulatory liabilities		2,612			2,700
Asset retirement obligations		1,299			1,265
Accrued pension and other benefits		1,656			1,625
Capital lease obligations		310			200
Derivative liabilities		300			352
Other liabilities and deferred credits		203			265
Total deferred credits and other liabilities		9,149			8,865
Commitments and contingencies
Total capitalization and liabilities	$	35,724		$	35,059

PROGRESS ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of CASH FLOWS
(in millions)
Six months ended June 30	2012			2011
Operating activities
Net income	$	216		$	363
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation, amortization and accretion		481			425
Deferred income taxes and investment tax credits, net		169			178
Deferred fuel credit		(79	)		(29	)
Allowance for equity funds used during construction		(49	)		(55	)
Other adjustments to net income		39			167
Cash (used) provided by changes in operating assets and liabilities
Receivables		(9	)		(5	)
Inventory		8			(127	)
Other assets		14			16
Income taxes, net		1			56
Accounts payable		70			1
Accrued pension and other benefits		(74	)		(259	)
Other liabilities		(36	)		49
Net cash provided by operating activities		751			780
Investing activities
Gross property additions		(1,080	)		(1,004	)
Nuclear fuel additions		(65	)		(93	)
Purchases of available-for-sale securities and other investments		(625	)		(3,387	)
Proceeds from available-for-sale securities and other investments		610			3,364
Other investing activities		81			82
Net cash used by investing activities		(1,079	)		(1,038	)
Financing activities
Issuance of common stock, net		6			26
Dividends paid on common stock		(446	)		(366	)
Payments of short-term debt with original maturities greater than 90 days		(65	)		-
Proceeds from issuance of short-term debt with original maturities greater than 90 days		65			-
Net (decrease) increase in short-term debt		(326	)		314
Proceeds from issuance of long-term debt, net		1,432			494
Retirement of long-term debt		(450	)		(700	)
Other financing activities		(45	)		(69	)
Net cash provided (used) by financing activities		171			(301	)
Net decrease in cash and cash equivalents		(157	)		(559	)
Cash and cash equivalents at beginning of period		230			611
Cash and cash equivalents at end of period	$	73		$	52

Progress Energy, Inc.

SUPPLEMENTAL DATA - Page S-1

Unaudited

Earnings Variances
Second Quarter 2012 vs. 2011

	Regulated Utilities
($ per share)	Carolinas			Florida			Corporate and Other Businesses			Consolidated

2011 GAAP earnings		0.36			0.38			(0.14	)		0.60
Tax levelization								0.01			0.01		A
Merger and integration costs		0.01			0.01						0.02		B
CVO mark-to-market								(0.01	)		(0.01	)	C
CR3 indemnification charge					0.09						0.09		D
2011 ongoing earnings		0.37			0.48			(0.14	)		0.71

Weather - retail		(0.05	)		(0.04	)					(0.09	)	E

Growth and usage - retail		0.02									0.02

Wholesale		0.01			0.01						0.02

Clauses and other margin		0.02			0.02						0.04		F

O&M		(0.18	)		(0.05	)					(0.23	)	G

Other		(0.01	)		(0.02	)		(0.01	)		(0.04	)	H

AFUDC equity		(0.01	)		0.01						-

Depreciation and amortization		(0.02	)		(0.10	)					(0.12	)	I

Interest expense		(0.01	)		(0.01	)					(0.02	)

Income taxes					(0.01	)		(0.01	)		(0.02	)

2012 ongoing earnings		0.14			0.29			(0.16	)		0.27
Tax levelization		(0.01	)		(0.01	)					(0.02	)	A
Discontinued operations								(0.02	)		(0.02	)
CR3 indemnification adjustment					0.02						0.02		D
Merger and integration costs		(0.02	)		(0.02	)					(0.04	)	B
2012 GAAP earnings		0.11			0.28			(0.18	)		0.21

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 merger with Duke Energy.
C -	Corporate and Other - Impact of change in fair value of CVOs not held by Progress Energy.
D -	Florida - Impact of CR3 indemnification charge, and subsequent adjustments, for estimated future years' joint owner replacement power costs (through the expiration of the indemnification provisions of the joint owner agreement).
E -	See S-3 for impact of retail weather to normal on EPS.
	Carolinas - Unfavorable primarily due to 22 percent lower cooling-degree days.
	Florida - Unfavorable primarily due to 11 percent lower cooling-degree days.
F -	Carolinas - Favorable primarily due to increased spending on new and existing demand-side management programs.
	Florida - Favorable primarily due to higher open access transmission tariff rates.
G -	Carolinas - Unfavorable primarily due to higher nuclear plant outage costs resulting from an additional extended nuclear refueling outage, higher substation and line maintenance costs related to a reliability initiative and higher employee benefit expenses.
	Florida - Unfavorable primarily due to the recognition of expense of previously deferred costs associated with the non-selected vendor for the CR3 repair option.
H -	Florida - Unfavorable primarily due to higher property taxes.
I -	Carolinas - Unfavorable primarily due to higher depreciable asset base driven by placing the combined-cycle unit at the Smith Energy Complex in service in June 2011.
	Florida - Unfavorable primarily due to the prior-year reduction in the cost of removal component of amortization expense as allowed under the 2010 settlement agreement.

S-1

Progress Energy, Inc.

SUPPLEMENTAL DATA - Page S-2

Unaudited

Earnings Variances
Year-to-Date June 30, 2012 vs. 2011

	Regulated Utilities
($ per share)	Carolinas			Florida			Corporate and Other Businesses			Consolidated

2011 GAAP earnings		0.80			0.72			(0.30	)		1.22
Tax levelization		0.01			0.01						0.02		A
Discontinued operations								0.01			0.01
Merger and integration costs		0.04			0.03						0.07		B
CVO mark-to-market								(0.01	)		(0.01	)	C
CR3 indemnification charge					0.09						0.09		D
2011 ongoing earnings		0.85			0.85			(0.30	)		1.40

Weather - retail		(0.15	)		(0.04	)					(0.19	)	E

Growth and usage - retail		0.04									0.04

Wholesale					0.03						0.03		F

Clauses and other margin		0.03			0.06						0.09		G

O&M		(0.34	)		0.03						(0.31	)	H

Other					(0.06	)		(0.01	)		(0.07	)	I

AFUDC equity		(0.02	)								(0.02	)	J

Depreciation and amortization		(0.04	)		(0.15	)					(0.19	)	K

Interest expense		(0.02	)					0.01			(0.01	)	L

Income taxes								(0.02	)		(0.02	)	M

2012 ongoing earnings		0.35			0.72			(0.32	)		0.75
Tax levelization		(0.03	)		(0.01	)					(0.04	)	A
Discontinued operations								0.02			0.02
Merger and integration costs		(0.04	)		(0.02	)					(0.06	)	B
CVO mark-to-market								0.03			0.03		C
CR3 indemnification adjustment					0.02						0.02		D
2012 GAAP earnings		0.28			0.71			(0.27	)		0.72

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 merger with Duke Energy.
C -	Corporate and Other - Impact of change in fair value of CVOs not held by Progress Energy.
D -	Florida - Impact of CR3 indemnification charge, and subsequent adjustments, for estimated future years' joint owner replacement power costs (through the expiration of the indemnification provisions of the joint owner agreement).
E -	See S-4 for impact of retail weather to normal on EPS.
	Carolinas - Unfavorable primarily due to 24 percent lower heating-degree days and 16 percent lower cooling-degree days.
	Florida - Unfavorable primarily due to 31 percent lower heating-degree days and 1 percent lower cooling-degree days.
F -	Florida - Favorable primarily due to a new contract with a major customer.
G -	Carolinas - Favorable primarily due to increased spending on new and existing demand-side management programs.
	Florida - Favorable primarily due to an indemnification charge for the prior-year joint owner replacement power costs related to the continued outage at CR3.
H -	Carolinas - Unfavorable primarily due to higher nuclear plant outage costs resulting from two additional extended nuclear refueling outages, higher employee benefit expenses and higher substation and line maintenance costs related to a reliability initiative.
	Florida - Favorable primarily due to the reversal of certain regulatory liabilities associated with CR3 in accordance with the 2012 settlement agreement, partially offset by the recognition of expense of previously deferred costs associated with the non-selected vendor for the CR3 repair option.
I -	Florida - Unfavorable primarily due to a prior-year favorable litigation settlement and higher property taxes.
J -	AFUDC equity is presented gross of tax as it is excluded from the calculation of income tax expense.
	Carolinas - Unfavorable primarily due to placing the combined-cycle unit at the Smith Energy Complex in service in June 2011.
K -	Carolinas - Unfavorable primarily due to higher depreciable asset base driven by placing the previously mentioned combined-cycle unit in service.
	Florida - Unfavorable primarily due to the smaller reduction in the cost of removal component of amortization expense as allowed under the 2012 and 2010 settlement agreements.
L -	Carolinas - Unfavorable primarily due to higher average long-term debt outstanding.
M -	Corporate and Other - Unfavorable primarily due to the impact at the Corporate level resulting from the deductions for domestic production activities taken by the Utilities.

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
	June 30, 2012								June 30, 2011						From June 30, 2011
Operating Revenues (in millions)	Carolinas			Florida		Total Utilities			Carolinas		Florida		Total Utilities		Carolinas			Florida
Residential	$	228		$	232	$	460		$	248	$	240	$	488		(8.1	) %		(3.3	) %
Commercial		169			89		258			174		91		265		(2.9	)		(2.2	)
Industrial		86			19		105			88		19		107		(2.3	)		-
Governmental		13			23		36			15		23		38		(13.3	)		-
Unbilled		16			17		33			7		27		34	NM			NM
Total retail base revenues		512			380		892			532		400		932		(3.8	)		(5.0	)
Wholesale base revenues		82			34		116			71		29		100		15.5			17.2
Total base revenues		594			414		1,008			603		429		1,032		(1.5	)		(3.5	)
Clause-recoverable regulatory returns		11			44		55			7		46		53		57.1			(4.3	)
Miscellaneous		33			65		98			32		56		88		3.1			16.1
Fuel and other pass-through revenues		444			666		1,110			418		662		1,080	NM			NM
Total operating revenues	$	1,082		$	1,189	$	2,271		$	1,060	$	1,193	$	2,253		2.1	%		(0.3	) %

Energy Sales (millions of kWh)
Residential		3,544			4,525		8,069			3,907		4,681		8,588		(9.3	) %		(3.3	) %
Commercial		3,354			2,961		6,315			3,440		3,032		6,472		(2.5	)		(2.3	)
Industrial		2,683			808		3,491			2,682		849		3,531		-			(4.8	)
Governmental		381			813		1,194			374		822		1,196		1.9			(1.1	)
Unbilled		198			397		595			74		664		738	NM			NM
Total retail kWh sales		10,160			9,504		19,664			10,477		10,048		20,525		(3.0	)		(5.4	)
Wholesale		3,306			433		3,739			2,969		808		3,777		11.4			(46.4	)
Total kWh sales		13,466			9,937		23,403			13,446		10,856		24,302		0.1	%		(8.5	) %

Energy Supply (millions of kWh)
Generated
Steam		4,987			3,531		8,518			4,941		3,710		8,651
Nuclear		5,086			-		5,086			6,170		-		6,170
Combustion turbines/combined cycle		2,463			5,146		7,609			1,850		5,592		7,442
Hydro		172			-		172			182		-		182
Purchased		1,308			1,981		3,289			981		2,384		3,365
Total energy supply (company share)		14,016			10,658		24,674			14,124		11,686		25,810

Impact of Weather to Normal on Retail Sales
Heating-degree days
Actual		166			9					144		10				15.3	%		(10.0	) %
Normal		210			24					216		24
Cooling-degree days
Actual		583			973					749		1,093				(22.2	) %		(11.0	) %
Normal		586			944					570		944
Impact of retail weather to normal on EPS	$	(0.01	)	$	0.00	$	(0.01	)	$	0.04	$	0.04	$	0.08

NM - not meaningful

S-3

Progress Energy, Inc.

SUPPLEMENTAL DATA - Page S-4

Unaudited - Data is not weather-adjusted

Utility Statistics


	Six Months Ended								Six Months Ended								Percentage Change
	June 30, 2012								June 30, 2011								From June 30, 2011
Operating Revenues (in millions)	Carolinas			Florida		Total Utilities			Carolinas			Florida		Total Utilities			Carolinas			Florida
Residential	$	505		$	424	$	929		$	580		$	459	$	1,039			(12.9	) %		(7.6	) %
Commercial		331			167		498			341			169		510			(2.9	)		(1.2	)
Industrial		165			36		201			171			37		208			(3.5	)		(2.7	)
Governmental		27			44		71			30			43		73			(10.0	)		2.3
Unbilled		9			29		38			(28	)		12		(16	)	NM			NM
Total retail base revenues		1,037			700		1,737			1,094			720		1,814			(5.2	)		(2.8	)
Wholesale base revenues		151			68		219			144			55		199			4.9			23.6
Total base revenues		1,188			768		1,956			1,238			775		2,013			(4.0	)		(0.9	)
Clause-recoverable regulatory returns		22			93		115			14			91		105			57.1			2.2
Miscellaneous		67			118		185			63			106		169			6.3			11.3
Fuel and other pass-through revenues		890			1,215		2,105			878			1,253		2,131		NM			NM
Total operating revenues	$	2,167		$	2,194	$	4,361		$	2,193		$	2,225	$	4,418			(1.2	) %		(1.4	) %

Energy Sales (millions of kWh)
Residential		7,979			8,230		16,209			9,346			8,962		18,308			(14.6	) %		(8.2	) %
Commercial		6,470			5,526		11,996			6,727			5,578		12,305			(3.8	)		(0.9	)
Industrial		5,112			1,565		6,677			5,170			1,621		6,791			(1.1	)		(3.5	)
Governmental		744			1,566		2,310			760			1,549		2,309			(2.1	)		1.1
Unbilled		65			731		796			(595	)		309		(286	)	NM			NM
Total retail kWh sales		20,370			17,618		37,988			21,408			18,019		39,427			(4.8	)		(2.2	)
Wholesale		6,264			731		6,995			6,178			1,286		7,464			1.4			(43.2	)
Total kWh sales		26,634			18,349		44,983			27,586			19,305		46,891			(3.5	) %		(5.0	) %

Energy Supply (millions of kWh)
Generated
Steam		10,181			6,162		16,343			11,377			6,452		17,829
Nuclear		9,758			-		9,758			12,351			-		12,351
Combustion turbines/combined cycle		5,080			10,113		15,193			2,782			10,477		13,259
Hydro		390			-		390			363			-		363
Purchased		2,377			3,418		5,795			2,028			3,813		5,841
Total energy supply (company share)		27,786			19,693		47,479			28,901			20,742		49,643

Impact of Weather to Normal on Retail Sales
Heating-degree days
Actual		1,384			211					1,827			305					(24.2	) %		(30.8	) %
Normal		1,915			299					1,917			299
Cooling-degree days
Actual		642			1,298					764			1,310					(16.0	) %		(0.9	) %
Normal		599			1,159					582			1,159
Impact of retail weather to normal on EPS	$	(0.11	)	$	0.01	$	(0.10	)	$	0.04		$	0.05	$	0.09

NM - not meaningful

S-4

Progress Energy, Inc.

SUPPLEMENTAL DATA - Page S-5

Unaudited

O&M Expenses Primarily Recoverable through Base Rates (a)
	Three months ended June 30,						Six months ended June 30,
(in millions)	2012			2011			2012			2011
Reported GAAP O&M	$	627		$	510		$	1,156		$	1,004
Adjustments
Carolinas
Fuel clauses		(6	)		(7	)		(14	)		(14	)
Environmental clause		(1	)		-			(1	)		(1	)
DSM/EE and REPS cost recovery clauses (b)		(9	)		(7	)		(19	)		(15	)
Florida
Energy conservation cost recovery clause (ECCR)		(22	)		(23	)		(41	)		(46	)
Environmental cost recovery clause (ECRC)		(10	)		(11	)		(18	)		(20	)
Nuclear cost recovery		-			(1	)		(1	)		(2	)
O&M Expenses Primarily Recoverable through Base Rates	$	579		$	461		$	1,062		$	906

(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
	June 30, 2012			June 30, 2011
Return on average common stock equity (rolling 12 months) (a)		4.3	%		8.4	%
Book value per common share (a)	$	33.29		$	33.95
Capitalization
Total equity		40.2	%		43.5	%
Preferred stock of subsidiaries		0.4	%		0.4	%
Total debt		59.4	%		56.1	%
Total Capitalization		100.0	%		100.0	%

(a)	Effective July 2, 2012, each outstanding share of Progress Energy common stock was converted into 0.87083 shares of Duke Energy stock.

S-5

DUKE ENERGY PROGRESS, LLC. - FORM 8-K - EX-99.1 - EARNINGS RELEASE EXHIBIT 99 - August 2, 2012

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