Financial Information by Business Segment

6 Months Ended

Jun. 30, 2011

Financial Information By Business Segment Disclosure Abstract

Financial Information by Business Segment

11. FINANCIAL INFORMATION BY BUSINESS SEGMENT

Our reportable segments are PEC and PEF, both of which are primarily engaged in the generation, transmission, distribution and sale of electricity in portions of North Carolina and South Carolina and in portions of Florida, respectively. These electric operations also distribute and sell electricity to other utilities, primarily on the east coast of the United States.

In addition to the reportable operating segments, the Corporate and Other segment includes the operations of the Parent and PESC and other miscellaneous nonregulated businesses that do not separately meet the quantitative thresholds for disclosure as separate reportable business segments.

Products and services are sold between the various reportable segments. All intersegment transactions are at cost.

(in millions)			PEC		PEF	Corporate and Other		Eliminations			Totals
At and for the three months ended June 30, 2011
Revenues
	Unaffiliated	$	1,060	$	1,193	$	3	$	0	$	2,256
	Intersegment		0		0		60		(60)		0
	Total revenues		1,060		1,193		63		(60)		2,256
Ongoing Earnings			112		141		(42)		0		211
Total Assets			15,154		13,907		20,631		(16,572)		33,120

For the three months ended June 30, 2010
Revenues
	Unaffiliated	$	1,117	$	1,252	$	3	$	0	$	2,372
	Intersegment		0		0		53		(53)		0
	Total revenues		1,117		1,252		56		(53)		2,372
Ongoing Earnings			112		119		(50)		0		181

At and for the six months ended June 30, 2011
Revenues
	Unaffiliated	$	2,193	$	2,224	$	6	$	0	$	4,423
	Intersegment		0		1		134		(135)		0
	Total revenues		2,193		2,225		140		(135)		4,423
Ongoing Earnings			251		252		(90)		0		413
Total Assets			15,154		13,907		20,631		(16,572)		33,120

For the six months ended June 30, 2010
Revenues
	Unaffiliated	$	2,380	$	2,522	$	5	$	0	$	4,907
	Intersegment		0		0		114		(114)		0
	Total revenues		2,380		2,522		119		(114)		4,907
Ongoing Earnings			260		232		(97)		0		395

Management uses the non-GAAP financial measure “Ongoing Earnings” as a performance measure to evaluate the results of our segments and operations. Ongoing Earnings is computed as GAAP net income attributable to controlling interests less discontinued operations and the effects of certain identified gains and charges, which are considered Ongoing Earnings adjustments. Some of the excluded gains and charges have occurred in more than one reporting period but are not considered representative of fundamental core earnings. Management has identified the following Ongoing Earnings adjustments: tax levelization, which increases or decreases the tax expense recorded in the reporting period to reflect the annual projected tax rate, because it has no impact on annual earnings; CVO mark-to-market adjustments because we are unable to predict changes in their fair value; CR3 indemnification charge for estimated future years' joint owner replacement power costs (through the expiration of the indemnification provisions of the joint owner agreement) because 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; and the impact from changes in the tax treatment of the Medicare Part D subsidy because GAAP requires that the impact of the tax law change be accounted for in the period of enactment rather than the affected tax year. Additionally, management does not consider impairments, charges (and subsequent adjustments, if any) recognized for the retirement of generating units prior to the end of their estimated useful lives, merger and integration costs, and operating results of discontinued operations to be representative of our ongoing operations and excluded these items in computing Ongoing Earnings.

Reconciliations of consolidated Ongoing Earnings to net income attributable to controlling interests follow:

		For the three months ended June 30
(in millions)			2011		2010
Ongoing Earnings		$	211	$	181
Tax levelization			(4)		0
CVO mark-to-market (Note 10D)			4		0
Impairment, net of tax benefit of $1			0		(1)
Plant retirement adjustment, net of tax expense of $-			0		1
Merger and integration costs, net of tax benefit of $4 (Note 2)			(7)		0
CR3 indemnification charge, net of tax benefit of $18 (Note 13B)			(26)		0
Continuing income attributable to noncontrolling interests, net of tax			2		0
Income from continuing operations before cumulative effect of change in accounting principle			180		181
Discontinued operations, net of tax			(2)		(1)
Net income attributable to noncontrolling interests, net of tax			(2)		0
	Net income attributable to controlling interests	$	176	$	180

		For the six months ended June 30
(in millions)			2011		2010
Ongoing Earnings		$	413	$	395
Tax levelization			(6)		(2)
CVO mark-to-market (Note 10D)			4		0
Impairment, net of tax benefit of $1			0		(2)
Plant retirement adjustment, net of tax expense of $1			0		1
Change in tax treatment of the Medicare Part D subsidy (Note 9)			0		(22)
Merger and integration costs, net of tax benefit of $4 (Note 2)			(21)		0
CR3 indemnification charge, net of tax benefit of $18 (Note 13B)			(26)		0
Continuing income attributable to noncontrolling interests, net of tax			3		2
Income from continuing operations before cumulative effect of change in accounting principle			367		372
Discontinued operations, net of tax			(4)		0
Cumulative effect of change in accounting principle, net of tax			0		(2)
Net income attributable to noncontrolling interests, net of tax			(3)		0
	Net income attributable to controlling interests	$	360	$	370