ex99_1.htm

Exhibit 99.1

Progress Energy announces 2008 second-quarter results;

reaffirms full-year 2008 earnings guidance

Highlights:

¨	Reports second-quarter GAAP earnings of $0.79 per share, compared to a loss of $0.75 per share for the same period last year, primarily due to prior-year losses from the final transactions associated with exiting the merchant energy business

¨	Reports second-quarter ongoing earnings of $0.77 per share, compared to $0.56 per share for the same period last year, reflecting increased wholesale revenues and AFUDC equity, and an increase in net retail rates related to the Hines Energy Complex

¨	Reaffirms 2008 ongoing earnings guidance of $3.05 per share, with a range of 10 cents above and below the target

RALEIGH, N.C. (August 7, 2008) – Progress Energy [NYSE: PGN] announced second-quarter reported GAAP earnings of $205 million, or $0.79 per share, compared with reported GAAP losses of $193 million, or $0.75 per share, for the same period last year. The favorable quarter-over-quarter variance in reported GAAP earnings is primarily due to prior-year losses from the final transactions associated with exiting the merchant energy business. Second-quarter ongoing earnings were $199 million, or $0.77 per share, compared to $142 million, or $0.56 per share, last year. The favorable quarter-over-quarter variance in ongoing earnings is primarily due to increased wholesale revenues and AFUDC equity, and an increase in net retail rates related to the Hines Energy Complex. (See the discussion later in this release for a reconciliation of ongoing earnings per share to reported GAAP earnings per share.)

“Overall, our company performed well operationally and financially during the second quarter,” said Bill Johnson, chairman, president and CEO. “We are continuing to deliver on our strategy to generate solid earnings growth through our two utilities. To help mitigate the effects of weakness in the general economy and lower-than-forecasted customer growth in Florida, we have successfully taken steps to increase wholesale revenues and effectively manage our costs. We are reaffirming our 2008 ongoing earnings guidance of $3.05 per share, with a range of 10 cents above and below that target.”

The 2008 ongoing earnings guidance excludes any impact from CVO mark-to-market adjustment, potential impairments and discontinued operations. Progress Energy is not able to provide a corresponding GAAP equivalent for the 2008 earnings guidance due to the uncertain nature and amount of these adjustments.

See pages 3-5 for detailed second-quarter and year-to-date earnings variance analyses for the Progress Energy Carolinas (PEC), Progress Energy Florida (PEF) and Corporate and Other Businesses segments.

RECENT DEVELOPMENTS

·	Received notice that the Florida Public Service Commission (FPSC) unanimously approved PEF’s need certification petition for two advanced, state-of-the-art nuclear power plant units at a site in Levy County, Florida.

·	Submitted a combined license application with the Nuclear Regulatory Commission for two new reactors at the Levy County, Florida site.

·	Received further evidence of strong policy support for new nuclear and transmission construction in Florida with the legislature’s passage of comprehensive energy legislation.

·	Issued a request for proposals to supply approximately 1,200 MW of generating capacity to PEF beginning in 2013, which will compete with the company’s self-build option consisting of a combined-cycle natural gas unit to be built on company property at its existing Suwannee plant.

·	Received approval from the FPSC to recover half of PEF’s $213 million mid-course fuel cost correction from August to December 2008 and the remaining half in 2009.

·	Received an order from the Federal Energy Regulatory Commission approving an annual increase of approximately $17 million to $19 million in transmission rates for PEC pursuant to the company’s revised Open Access Transmission Tariff filing.

Filed a petition with the North Carolina Utilities Commission (NCUC) to terminate Clean Smokestacks Act amortizations in excess of $569.1 million, and instead allow PEC to place into rate base all capital costs associated with its compliance with the Clean Smokestacks Act in excess of $569.1 million.

·	Received notice that the U.S. Court of Appeals for the D.C. Circuit vacated the Environmental Protection Agency’s 2005 Clean Air Interstate Rule.

·	Achieved top-quartile ranking among energy providers in the latest residential customer satisfaction survey from J.D. Power & Associates.

·	Made a number of announcements relating to energy conservation, demand-side management (DSM), and renewable energy:

-	Established a new department, the Efficiency and Innovative Technology Department, to meet growing energy demand and address global climate change through the use of renewable and alternative energy, advanced technologies such as plug-in hybrid vehicles and new energy-efficiency and DSM programs.

-	Filed an application with the NCUC for recovery of PEC’s costs incurred for the adoption and implementation of DSM and energy-efficiency programs in North Carolina.

-	Filed an application with the NCUC for recovery of PEC’s costs associated with compliance with renewable energy portfolio standards in North Carolina.

-	Announced PEC’s power purchase agreement with SAS Institute, Inc. to buy Renewable Energy Certificates and electricity generated by its proposed 1-MW photovoltaic solar electric power farm.

-	Issued second global climate change report, which outlines the company’s initiatives and calls for a national policy to reduce carbon emissions across all sectors of the economy.

Press releases regarding various announcements are available on the company’s Web site at www.progress-energy.com/aboutus/news.

SECOND-QUARTER 2008 BUSINESS HIGHLIGHTS

Below are the second-quarter and year-to-date 2008 earnings variance analyses for the company’s business units. See the reconciliation table on pages 5-6 and pages S-1 and S-2 of the supplemental data for a reconciliation of reported GAAP earnings per share to ongoing 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 information.

QUARTER-OVER-QUARTER ONGOING EPS VARIANCE ANALYSIS

Progress Energy Carolinas

·	Reported ongoing earnings per share of $0.41, compared with $0.34 for the same period last year; reported GAAP earnings per share of $0.40, compared with $0.34 for the same period last year

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

§	$0.03 growth and usage

§	$0.03 wholesale revenues primarily due to increased energy rates and sales with a major customer

§	$0.02 other retail margin related to the expiration of a power buyback agreement and the impact of the comprehensive energy bill implementation

§	$0.01 AFUDC equity related to an increase in eligible construction projects

§	$0.01 other

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

§	$(0.03) depreciation and amortization primarily associated with the accelerated cost recovery program for nuclear generating assets

·	Added 25,000 customers (net) during the last 12 months

Progress Energy Florida

·	Reported ongoing earnings per share of $0.46, compared with $0.27 for the same period last year; reported GAAP earnings per share of $0.48, compared with $0.27 for the same period last year

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

§	$0.05 wholesale revenues primarily due to two new contracts with one major customer

§	$0.05 AFUDC equity related to an increase in eligible construction projects

§	$0.04 weather

§	$0.04 net retail rate increase related to the Hines Energy Complex

§	$0.04 other operating expenses primarily due to prior-year disallowed fuel costs and a gain on a land sale in 2008

§	$0.02 operation and maintenance expense (O&M) primarily due to a favorable sales and use tax audit adjustment

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

§	$(0.02) income taxes primarily due to a prior-year benefit related to the closure of certain federal tax years and positions

§	$(0.01) growth and usage

§	$(0.02) other

·	Added 2,000 customers (net) during the last 12 months

Corporate and Other Businesses (includes primarily Holding Company Debt)

·	Reported ongoing expenses of $0.10 per share, compared with expenses of $0.05 per share for the same period last year; reported GAAP expenses of $0.11 per share, compared with expenses of $0.07 per share for the same period last year

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

§	$0.03 other primarily due to decreased legal expenses and increased investment gains

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

§	$(0.05) income tax expense primarily due to a prior-year benefit from the closure of certain federal tax years and positions related to divested subsidiaries

§	$(0.03) interest expense primarily due to a prior-year benefit from the closure of certain federal tax years and positions primarily related to divested subsidiaries and a decrease in interest allocated to discontinued operations

YEAR-OVER-YEAR ONGOING EPS VARIANCE ANALYSIS

Progress Energy Carolinas

·	Reported year-to-date ongoing and reported GAAP earnings per share of $0.87, compared with $0.82 for the same period last year

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

§	$0.08 other retail margin related to the expiration of a power buyback agreement and the impact of the comprehensive energy bill implementation

§	$0.06 growth and usage

§	$0.01 AFUDC equity related to an increase in eligible construction projects

§	$0.01 other

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

§	$(0.05) depreciation and amortization primarily associated with the accelerated cost recovery program for nuclear generating assets and higher depreciable base

§	$(0.02) weather

§	$(0.02) O&M primarily due to an increase in estimated environmental remediation expenses and increased spending on vegetation management in compliance with federal regulations

§	$(0.02) changes in income tax estimates

Progress Energy Florida

·	Reported year-to-date ongoing earnings per share of $0.72, compared with $0.51 for the same period last year; reported GAAP earnings per share of $0.74, compared with $0.51 for the same period last year

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

§	$0.10 AFUDC equity related to an increase in eligible construction projects

§	$0.07 wholesale revenues primarily due to two new contracts with one major customer and a contract amendment with another major customer

§	$0.06 net retail rate increase related to the Hines Energy Complex

§	$0.04 weather

§	$0.04 other operating expenses primarily due to prior-year disallowed fuel costs and a gain on a land sale in 2008

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

§	$(0.03) growth and usage

§	$(0.03) income taxes primarily due to a prior-year benefit related to the closure of certain federal tax years and positions

§	$(0.02) depreciation due to higher depreciable base

§	$(0.02) other

Corporate and Other Businesses (includes primarily Holding Company Debt)

·	Reported year-to-date ongoing expenses of $0.25 per share, compared with expenses of $0.17 per share for the same period last year; reported GAAP expenses of $0.26 per share, compared with expenses of $0.19 per share for the same period last year

·	Reported primary year-over-year ongoing expenses per share favorability of:

§	$0.04 other primarily due to decreased legal expenses

·	Reported primary year-over-year ongoing expenses per share unfavorability of:

§	$(0.07) income tax expense primarily due to a prior-year benefit from the closure of certain federal tax years and positions related to divested subsidiaries

§	$(0.05) interest expense primarily due to a prior-year benefit from the closure of certain federal tax years and positions primarily related to divested subsidiaries and a decrease in interest allocated to discontinued operations

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 presentation is appropriate and enables investors to more accurately compare the company’s ongoing financial performance over the periods presented. Ongoing earnings as presented here may not be comparable to similarly titled measures used by other companies. 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
	2008				2007	*	2008				2007	*
Ongoing earnings per share	$	0.77		$	0.56		$	1.34		$	1.15
Tax levelization		0.01			-			0.02			(0.01	)
Discontinued operations		0.02			(1.29	)		0.25			(0.81	)
CVO mark-to-market		(0.01	)		(0.02	)		(0.01	)		(0.01	)
Reported GAAP earnings per share	$	0.79		$	(0.75	)	$	1.60		$	0.32
Shares outstanding (millions)		260			256			259			255

* Previously reported 2007 results have been restated to reflect discontinued operations. See pages S-1 and S-2 of the supplemental data for information regarding 2007’s core and non-core earnings.

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, raises or lowers the tax expense recorded in that quarter to reflect the projected tax rate. The resulting tax adjustment increased earnings per share by $0.01 for the quarter and had no impact on earnings per share for the same period last year, and has no impact on the company’s annual earnings. Because this

adjustment varies by quarter but has no impact on annual earnings, management believes this adjustment is not representative of the company’s ongoing quarterly earnings.

Discontinued Operations

The company has reduced its business risk by exiting nonregulated businesses to focus on the core operations of the utilities. The discontinued operations of these nonregulated businesses increased earnings per share by $0.02 for the quarter and decreased earnings per share by $1.29 for the same period last year. See page S-4 of the supplemental data for further information on the impact of discontinued operations. Due to disposition of these assets, management does not view this activity as representative of the ongoing operations of the company.

Contingent Value Obligation (CVO) Mark-to-Market

In connection with the acquisition of Florida Progress Corporation, Progress Energy issued 98.6 million CVOs. Each CVO represents the right of the holder to receive contingent payments based on 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 unrealized gains and losses from changes in fair value are recognized in earnings each quarter. The CVO mark-to-market decreased earnings per share by $0.01 for the quarter and decreased earnings per share by $0.02 for the same period last year. Progress Energy is unable to predict the changes in the fair value of the CVOs, and management does not consider the adjustment to be a component of ongoing earnings.

* * * *

This earnings announcement, as well as a package of detailed financial information, is available on the company’s Web site at www.progress-energy.com. Additionally, the slides accompanying the presentation may be downloaded beginning at 9:30 a.m. ET today at www.progress-energy.com/webcast.

Progress Energy’s conference call with the investment community will be held August 7, 2008, at

10 a.m. ET (7 a.m. PT). Investors, media and the public may listen to the conference call by dialing 913-312-0691, confirmation code 1644230. If you encounter problems, please contact Investor Relations at 919-546-6057. A playback of the call will be available from 1 p.m. ET August 7 through midnight August 21. To listen to the recorded call, dial 719-457-0820 and enter confirmation code 1644230.

A webcast of the live conference call will be available at www.progress-energy.com/webcast. The webcast will be available in Windows Media format. The webcast will be archived on the site for at least 30 days following the call for those unable to listen in real time.

Progress Energy, headquartered in Raleigh, N.C., is a Fortune 250 energy company with more than 21,000 megawatts of generation capacity and $9 billion in annual revenues. The company is observing its 100th anniversary in 2008. Progress Energy includes two major utilities that serve 3.1 million customers in the Carolinas and Florida. The company is the 2006 recipient of the Edison Electric Institute's Edison Award, the industry's highest honor, in recognition of its operational excellence. The company also is the first utility to receive the prestigious J.D. Power and Associates Founder's Award for customer service. Progress Energy serves two growing areas of the country, and the company is pursuing a balanced strategy for a secure energy future. That balance includes aggressive energy-efficiency programs, investments in renewable energy technologies and a state-of-the-art electricity

system. For more information about Progress Energy, visit the company’s Web site 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 in 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 fluid and complex laws and regulations, including those relating to the environment and the Energy Policy Act of 2005; the anticipated future need for additional baseload generation and associated transmission facilities in our regulated service territories and the accompanying regulatory and financial risks; the financial resources and capital needed to comply with environmental laws and renewable energy portfolio standards and our ability to recover related eligible costs under cost-recovery clauses or base rates; our ability to meet current and future renewable energy requirements; the inherent risks associated with the operation of nuclear facilities, including environmental, health, regulatory and financial risks; the impact on our facilities and businesses from a terrorist attack; weather and drought conditions that directly influence the production, delivery and demand for electricity; recurring seasonal fluctuations in demand for electricity; the ability to recover in a timely manner, if at all, costs associated with future significant weather events through the regulatory process; economic fluctuations and the corresponding impact on our customers, including downturns in the housing and consumer credit markets; 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 and large construction projects; the ability of our subsidiaries to pay upstream dividends or distributions to Progress Energy; the ability to successfully access capital markets on favorable terms; the impact that increases in leverage may have on us; our ability to maintain our current credit ratings and the impact on our financial condition and ability to meet our cash and other financial obligations in the event our credit ratings are downgraded; 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; the investment performance of our nuclear decommissioning trust funds and the assets of our pension and benefit plans; the outcome of any ongoing or future litigation or similar disputes and the impact of any such outcome or related settlements; and unanticipated changes in operating expenses and capital expenditures. 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 United States Securities and Exchange Commission. All such factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor can management assess the effect of each such factor on us.

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 the date on which such statement is made.

# # #

Contacts: Corporate Communications – (919) 546-6189 or toll-free (877) 641-NEWS (6397)

PROGRESS ENERGY, INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

June 30, 2008

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of INCOME
	Three months ended June 30,						Six months ended June 30,
(in millions except per share data)	2008			2007			2008			2007
Operating revenues	$	2,244		$	2,129		$	4,310		$	4,201
Operating expenses
Fuel used in electric generation		696			716			1,393			1,452
Purchased power		330			283			562			504
Operation and maintenance		488			461			931			881
Depreciation and amortization		208			223			414			442
Taxes other than on income		125			125			246			249
Other		(9	)		20			(7	)		21
Total operating expenses		1,838			1,828			3,539			3,549
Operating income		406			301			771			652
Other income (expense)
Interest income		5			6			12			14
Allowance for equity funds used during construction		27			10			50			20
Other, net		3			(2	)		(2	)		(1	)
Total other income, net		35			14			60			33
Interest charges
Interest charges		154			139			315			284
Allowance for borrowed funds used during construction		(8	)		(4	)		(16	)		(7	)
Total interest charges, net		146			135			299			277
Income from continuing operations before income tax and minority interest		295			180			532			408
Income tax expense		95			41			179			113
Income from continuing operations before minority interest		200			139			353			295
Minority interest in subsidiaries’ income, net of tax		–			(1	)		(4	)		(8	)
Income from continuing operations		200			138			349			287
Discontinued operations, net of tax		5			(331	)		65			(205	)
Net income (loss)	$	205		$	(193	)	$	414		$	82
Average common shares outstanding – basic		260			256			259			255
Basic earnings per common share
Income from continuing operations	$	0.77		$	0.54		$	1.35		$	1.13
Discontinued operations, net of tax		0.02			(1.29	)		0.25			(0.81	)
Net income (loss)	$	0.79		$	(0.75	)	$	1.60		$	0.32
Diluted earnings per common share
Income from continuing operations	$	0.77		$	0.54		$	1.34		$	1.12
Discontinued operations, net of tax		0.02			(1.29	)		0.25			(0.80	)
Net income (loss)	$	0.79		$	(0.75	)	$	1.59		$	0.32
Dividends declared per common share	$	0.615		$	0.610		$	1.230		$	1.220

This financial information 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, 2008			December 31, 2007
ASSETS
Utility plant
Utility plant in service	$	25,880		$	25,327
Accumulated depreciation		(11,102	)		(10,895	)
Utility plant in service, net		14,778			14,432
Held for future use		37			37
Construction work in progress		2,297			1,765
Nuclear fuel, net of amortization		389			371
Total utility plant, net		17,501			16,605
Current assets
Cash and cash equivalents		1,423			255
Receivables, net		934			1,167
Inventory		1,123			994
Deferred fuel cost		295			154
Derivative assets		520			85
Assets to be divested		–			52
Prepayments and other current assets		187			122
Total current assets		4,482			2,829
Deferred debits and other assets
Regulatory assets		854			946
Nuclear decommissioning trust funds		1,302			1,384
Miscellaneous other property and investments		464			448
Goodwill		3,655			3,655
Derivative assets		617			119
Other assets and deferred debits		417			379
Total deferred debits and other assets		7,309			6,931
Total assets	$	29,292		$	26,365
CAPITALIZATION AND LIABILITIES
Common stock equity
Common stock without par value, 500 million shares authorized, 261 million and 260 million shares issued and outstanding, respectively	$	6,102		$	6,028
Unearned ESOP shares (1 million and 2 million shares, respectively)		(25	)		(37	)
Accumulated other comprehensive loss		(28	)		(34	)
Retained earnings		2,558			2,465
Total common stock equity		8,607			8,422
Preferred stock of subsidiaries – not subject to mandatory redemption		93			93
Minority interest		6			84
Long-term debt, affiliate		271			271
Long-term debt, net		9,886			8,466
Total capitalization		18,863			17,336
Current liabilities
Current portion of long-term debt		850			877
Short-term debt		343			201
Accounts payable		1,078			819
Interest accrued		162			173
Dividends declared		161			160
Customer deposits		268			255
Regulatory liabilities		17			173
Derivative collateral liabilities		420			108
Liabilities to be divested		–			8
Other current liabilities		568			528
Total current liabilities		3,867			3,302
Deferred credits and other liabilities
Noncurrent income tax liabilities		252			361
Accumulated deferred investment tax credits		133			139
Regulatory liabilities		3,500			2,554
Asset retirement obligations		1,417			1,378
Accrued pension and other benefits		759			763
Capital lease obligations		236			239
Other liabilities and deferred credits		265			293
Total deferred credits and other liabilities		6,562			5,727
Commitments and contingencies
Total capitalization and liabilities	$	29,292		$	26,365

PROGRESS ENERGY, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of CASH FLOWS
(in millions)
Six months ended June 30	2008			2007
Operating activities
Net income	$	414		$	82
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		467			504
Deferred income taxes and investment tax credits, net		98			132
Deferred fuel (credit) cost		(166	)		83
Deferred income		–			(64	)
Allowance for equity funds used during construction		(50	)		(20	)
Other adjustments to net income		(9	)		85
Cash provided (used) by changes in operating assets and liabilities
Receivables		224			13
Inventory		(116	)		(56	)
Prepayments and other current assets		(28	)		(58	)
Income taxes, net		(60	)		(508	)
Accounts payable		293			24
Derivative collateral liabilities		312			(89	)
Other current liabilities		10			202
Other assets and deferred debits		(33	)		(127	)
Other liabilities and deferred credits		1			(26	)
Net cash provided by operating activities		1,357			177
Investing activities
Gross property additions		(1,260	)		(899	)
Nuclear fuel additions		(43	)		(97	)
Proceeds from sales of discontinued operations and other assets, net of cash divested		64			646
Purchases of available-for-sale securities and other investments		(836	)		(382	)
Proceeds from sales of available-for-sale securities and other investments		816			433
Other investing activities		(15	)		(8	)
Net cash used by investing activities		(1,274	)		(307	)
Financing activities
Issuance of common stock		42			122
Dividends paid on common stock		(320	)		(311	)
Payments of short-term debt with original maturities greater than 90 days		(176	)		–
Net increase in short-term debt		318			169
Proceeds from issuance of long-term debt, net		1,798			–
Retirement of long-term debt		(427	)		(2	)
Cash distributions to minority interests of consolidated subsidiaries		(85	)		(10	)
Other financing activities		(65	)		(17	)
Net cash provided (used) by financing activities		1,085			(49	)
Net increase (decrease) in cash and cash equivalents		1,168			(179	)
Cash and cash equivalents at beginning of period		255			265
Cash and cash equivalents at end of period	$	1,423		$	86

Progress Energy, Inc.

SUPPLEMENTAL DATA - Page S-1

Unaudited

Earnings Variances

Second Quarter 2008 vs. 2007

	Utility Statistics


	Three Months Ended						Three Months Ended								Percentage Change
	June 30, 2008						June 30, 2007								From June 30, 2007
Operating Revenues (in millions)	Carolinas		Florida		Total Progress Energy		Carolinas		Florida			Total Progress Energy			Carolinas			Florida
Retail
Residential	$	334	$	553	$	887	$	327	$	533		$	860			2.1	%		3.8	%
Commercial		269		281		550		261		281			542			3.1			-
Industrial		187		80		267		174		78			252			7.5			2.6
Governmental		23		70		93		22		74			96			4.5			(5.4	)
Total Retail		813		984		1,797		784		966			1,750			3.7			1.9
Wholesale		189		141		330		158		102			260			19.6			38.2
Unbilled		24		27		51		28		19			47			-			-
Miscellaneous revenue		22		42		64		26		42			68			(15.4	)		-
Total Electric	$	1,048	$	1,194	$	2,242	$	996	$	1,129		$	2,125			5.2	%		5.8	%

Energy Sales (millions of kWh)
Retail
Residential		3,586		4,755		8,341		3,575		4,502			8,077			0.3	%		5.6	%
Commercial		3,384		3,069		6,453		3,347		2,947			6,294			1.1			4.1
Industrial		3,122		1,009		4,131		2,986		938			3,924			4.6			7.6
Governmental		335		800		1,135		332		811			1,143			0.9			(1.4	)
Total Retail		10,427		9,633		20,060		10,240		9,198			19,438			1.8			4.7
Wholesale		3,441		1,930		5,371		3,166		1,447			4,613			8.7			33.4
Unbilled		245		715		960		403		751			1,154			-			-
Total Electric		14,113		12,278		26,391		13,809		11,396			25,205			2.2	%		7.7	%

Energy Supply (millions of kWh)
Generated - steam		7,036		5,146		12,182		7,127		4,887			12,014
nuclear		6,093		1,703		7,796		5,457		1,715			7,172
combustion turbines/combined cycle		503		3,276		3,779		769		2,729			3,498
hydro		114		-		114		107		-			107
Purchased		917		2,750		3,667		822		2,718			3,540
Total Energy Supply (Company Share)		14,663		12,875		27,538		14,282		12,049			26,331

Impact of Weather to Normal on Retail Sales
Heating Degree Days - Actual		211		22				269		29						(21.6	) %		(24.1	) %
- Normal		227		26				240		25
Cooling Degree Days - Actual		573		977				525		854						9.1	%		14.4	%
- Normal		538		928				521		930
Impact of retail weather to normal on EPS	$	0.01	$	0.01	$	0.02	$	0.01	$	(0.02	)	$	(0.01	)


	Six Months Ended									Six Months Ended								Percentage Change
	June 30, 2008									June 30, 2007								From June 30, 2007
Operating Revenues (in millions)	Carolinas			Florida			Total Progress Energy			Carolinas		Florida			Total Progress Energy			Carolinas			Florida
Retail
Residential	$	760		$	1,016		$	1,776		$	751	$	1,025		$	1,776			1.2	%		(0.9	) %
Commercial		531			524			1,055			515		528			1,043			3.1			(0.8	)
Industrial		355			148			503			339		152			491			4.7			(2.6	)
Governmental		46			137			183			44		141			185			4.5			(2.8	)
Total Retail		1,692			1,825			3,517			1,649		1,846			3,495			2.6			(1.1	)
Wholesale		370			245			615			352		181			533			5.1			35.4
Unbilled		7			33			40			3		27			30			-			-
Miscellaneous revenue		46			87			133			49		86			135			(6.1	)		1.2
Total Electric	$	2,115		$	2,190		$	4,305		$	2,053	$	2,140		$	4,193			3.0	%		2.3	%

Energy Sales (millions of kWh)
Retail
Residential		8,264			8,760			17,024			8,316		8,657			16,973			(0.6	) %		1.2	%
Commercial		6,662			5,729			12,391			6,591		5,570			12,161			1.1			2.9
Industrial		5,894			1,874			7,768			5,807		1,833			7,640			1.5			2.2
Governmental		668			1,567			2,235			659		1,560			2,219			1.4			0.4
Total Retail		21,488			17,930			39,418			21,373		17,620			38,993			0.5			1.8
Wholesale		7,213			3,320			10,533			7,122		2,617			9,739			1.3			26.9
Unbilled		4			935			939			60		941			1,001			-			-
Total Electric		28,705			22,185			50,890			28,555		21,178			49,733			0.5	%		4.8	%

Energy Supply (millions of kWh)
Generated - steam		14,581			9,869			24,450			14,699		9,451			24,150
nuclear		12,418			3,031			15,449			11,582		3,347			14,929
combustion turbines/combined cycle		951			5,569			6,520			1,245		4,516			5,761
hydro		287			-			287			320		-			320
Purchased		1,633			4,901			6,534			1,734		5,033			6,767
Total Energy Supply (Company Share)		29,870			23,370			53,240			29,580		22,347			51,927

Impact of Weather to Normal on Retail Sales
Heating Degree Days - Actual		1,775			286						1,848		322						(4.0	) %		(11.2	) %
- Normal		1,880			386						1,876		385
Cooling Degree Days - Actual		582			1,185						554		1,066						5.1	%		11.2	%
- Normal		550			1,137						533		1,137
Impact of retail weather to normal on EPS	$	(0.02	)	$	(0.02	)	$	(0.04	)	$	0.00	$	(0.06	)	$	(0.06	)

Progress Energy, Inc.
SUPPLEMENTAL DATA - Page S-4
Unaudited

Adjusted O&M Reconciliation (A)
	Six months ended
(in millions)	June 30, 2008			June 30, 2007			Growth
Reported GAAP O&M	$	931		$	881			5.7	%
Adjustments
Carolinas
O&M recoverable through clauses		(12	)		(1	)
Timing of nuclear outages (B)		-			(28	)
Estimated environmental remediation expenses		(4	)		1
Florida
Storm damage reserve		(55	)		-
Energy conservation cost recovery clause (ECCR)		(32	)		(31	)
Environmental cost recovery clause (ECRC)		(14	)		(22	)
Sales and use tax audit adjustments		5			(4	)
Adjusted O&M	$	819		$	796			2.9	%

Impact of Discontinued Operations
	Six months ended
(Basic earnings per share)	June 30, 2008			June 30, 2007
CCO Operations	$	(0.01	)	$	(1.02	)
Coal Mining Operations		0.01			(0.03	)
Rail		0.01			-
Terminals and Synthetic Fuels		0.24			0.24
Total Discontinued Operations	$	0.25		$	(0.81	)



Financial Statistics
	June 30, 2008			June 30, 2007
Return on average common stock equity (12 months ended)		9.9	%		7.9	%
Book value per common share	$	33.10		$	32.11
Capitalization
Common stock equity		42.9	%		46.5	%
Preferred stock of subsidiary and minority interest		0.5	%		0.7	%
Total debt		56.6	%		52.8	%
Total Capitalization		100.0	%		100.0	%


	Regulated Utilities					Corporate
($ per share)	Carolinas			Florida		and Other Businesses		Core Business			Non-Core Businesses			Consolidated

2007 GAAP earnings		0.34		0.27		(0.07	)	0.54			(1.29	)		(0.75	)
Tax levelization								-		A				-
Discontinued operations								-			1.29		B	1.29
CVO mark-to-market						0.02		0.02		C				0.02
2007 ongoing earnings		0.34		0.27		(0.05	)	0.56			-			0.56

Weather - retail				0.04				0.04						0.04

Other retail - growth and usage		0.03		(0.01	)			0.02						0.02

Net retail rates				0.04				0.04		D				0.04

Other retail margin		0.02		0.01				0.03		E				0.03

Wholesale		0.03		0.05				0.08		F				0.08

O&M		(0.01	)	0.02				0.01		G				0.01

Other operating		0.01		0.04				0.05		H				0.05

Other		0.01		(0.02	)	0.03		0.02		I				0.02

AFUDC equity		0.01		0.05				0.06		J				0.06

Depreciation & amortization		(0.03	)	(0.01	)			(0.04	)	K				(0.04	)

Interest charges				0.01		(0.03	)	(0.02	)	L				(0.02	)

Income taxes		0.01		(0.02	)	(0.05	)	(0.06	)	M				(0.06	)

Share dilution		(0.01	)	(0.01	)			(0.02	)					(0.02	)

2008 ongoing earnings		0.41		0.46		(0.10	)	0.77			-			0.77
Tax levelization		(0.01	)	0.02				0.01		A				0.01
Discontinued operations								-			0.02		B	0.02
CVO mark-to-market						(0.01	)	(0.01	)	C				(0.01	)
2008 GAAP earnings		0.40		0.48		(0.11	)	0.77			0.02			0.79