Presented below are the Progress Energy Condensed Consolidating Statements of Operations and Comprehensive Income, Balance Sheets and Statements of Cash Flows as required by Rule 3-10 of Regulation S-X. In September 2005, Progress Energy Parent issued a guarantee of certain payments of two wholly owned indirect subsidiaries, FPC Capital I and Funding Corp. The guarantees are in addition to the previously issued guarantees of Progress Energy's wholly owned subsidiary, Florida Progress.

FPC Capital I, a finance subsidiary, was established in 1999 for the sole purpose of issuing $300 million of 7.10% Cumulative Quarterly Income Preferred Securities due 2039, Series A (Preferred Securities), and using the proceeds thereof to purchase from Funding Corp. $300 million of 7.10% Junior Subordinated Deferrable Interest Notes due 2039 (Subordinated Notes). FPC Capital I has no other operations and its sole assets are the Subordinated Notes and Notes Guarantee (as discussed below). Funding Corp. is a wholly owned subsidiary of Florida Progress and was formed for the sole purpose of providing financing to Florida Progress and its subsidiaries. Funding Corp. does not engage in business activities other than such financing and has no independent operations. Since 1999, Florida Progress has fully and unconditionally guaranteed the obligations of Funding Corp. under the Subordinated Notes. In addition, Florida Progress guaranteed the payment of all distributions related to the Preferred Securities required to be made by FPC Capital I, but only to the extent that FPC Capital I has funds available for such distributions (the Preferred Securities Guarantee). The two guarantees considered together constitute a full and unconditional guarantee by Florida Progress of FPC Capital I's obligations under the Preferred Securities. The Preferred Securities and the Preferred Securities Guarantee were listed on the New York Stock Exchange until the February 1, 2013 redemption discussed below.

The Subordinated Notes may be redeemed at the option of Funding Corp. at par value plus accrued interest through the redemption date. The proceeds of any redemption of the Subordinated Notes will be used by FPC Capital I to redeem proportional amounts of the Preferred Securities and common securities in accordance with their terms. Upon liquidation or dissolution of Funding Corp., holders of the Preferred Securities would be entitled to the liquidation preference of $25 per share plus all accrued and unpaid dividends thereon to the date of payment. The annual interest expense related to the Subordinated Notes is reflected in the Consolidated Statements of Operations and Comprehensive Income.

The Progress Energy parent has guaranteed the payment of all distributions related to FPC Capital I's Preferred Securities. At December 31, 2012, FPC Capital I had outstanding 12 million shares of the Preferred Securities with a liquidation value of $300 million. The Progress Energy parent's guarantees are joint and several, full and unconditional, and are in addition to the joint and several, full and unconditional guarantees previously issued to FPC Capital I and Funding Corp. by Florida Progress. Progress Energy's subsidiaries have provisions restricting the payment of dividends to the Progress Energy parent in certain limited circumstances, and as disclosed in Note 4, there were no restrictions on Progress Energy Carolina's or Progress Energy Florida's retained earnings.

On January 2, 2013, Funding Corp. provided to the trustee of the Subordinated Notes notice of its intent to redeem all of the Subordinated Notes on February 1, 2013. The trustee then simultaneously notified the holders of the Preferred Securities that all of the Preferred Securities would be redeemed on the same redemption date. These redemptions occurred on February 1, 2013, and, therefore, the Preferred Securities, the Preferred Securities Guarantee, the Subordinated Notes, and the Notes Guarantee all ceased to be outstanding or in effect on February 1, 2013.

FPC Capital I is a VIE of which neither Progress Energy nor Duke Energy is the primary beneficiary. Separate financial statements and other disclosures concerning FPC Capital I have not been presented because Progress Energy believes that such information is not material to investors.

In these condensed consolidating statements, the Progress Energy Parent column includes the financial results of the parent holding company only. The Subsidiary Guarantor column includes the consolidated financial results of Florida Progress only, which is primarily comprised of its wholly owned subsidiary Progress Energy Florida. The Non-Guarantor Subsidiaries column includes the consolidated financial results of all non-guarantor subsidiaries, which is primarily comprised of Progress Energy's wholly owned subsidiary Progress Energy Carolinas. The Other column includes elimination entries for all intercompany transactions and other consolidation adjustments. Financial statements for Progress Energy Carolinas and Progress Energy Florida are separately presented elsewhere in this Form 10-K. All applicable corporate expenses have been allocated appropriately among the guarantor and non-guarantor subsidiaries. The financial information may not necessarily be indicative of results of operations or financial position had the subsidiary guarantor or other non-guarantor subsidiaries operated as independent entities.

Condensed Consolidating Statement of Operations and Comprehensive Income
Year Ended December 31, 2012
(in millions)			Progress Energy Parent		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Other		Progress Energy, Inc.
Operating Revenues			$	―	$	4,701	$	4,707	$	(3)	$	9,405
Operating Expenses
	Fuel used in electric generation and purchased power			―		2,409		1,895		―		4,304
	Operation, maintenance and other			4		981		1,452		8		2,445
	Depreciation and amortization			―		192		555		―		747
	Property and other taxes			―		347		232		(9)		570
	Impairment charges			―		146		54		―		200
		Total operating expenses		4		4,075		4,188		(1)		8,266
Gains (Losses) on Sales of Other Assets and Other, net				―		2		(4)		―		(2)
Operating (Loss) Income				(4)		628		515		(2)		1,137
Equity in Earnings of Consolidated Subsidiaries				560		―		―		(560)		―
Other Income and Expenses, net				8		42		81		(1)		130
Interest Expense				256		276		208		―		740
Income from Continuing Operations Before Income Taxes				308		394		388		(563)		527
Income Tax (Benefit) Expense from Continuing Operations				(92)		138		123		3		172
Income from Continuing Operations				400		256		265		(566)		355
Income from Discontinued Operations, net of tax				―		35		17		―		52
Net Income				400		291		282		(566)		407
Less: Net Income Attributable to Noncontrolling Interests				―		4		―		3		7
Net Income Attributable to Parent			$	400	$	287	$	282	$	(569)	$	400
Comprehensive Income			$	498	$	308	$	352	$	(653)	$	505
Less: Comprehensive Income Attributable to Noncontrolling Interests				―		4		―		3		7
Comprehensive Income Attributable to Parent			$	498	$	304	$	352	$	(656)	$	498

Condensed Consolidating Statement of Operations and Comprehensive Income
Year Ended December 31, 2011
(in millions)			Progress Energy Parent		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Other		Progress Energy, Inc.
Operating Revenues			$	―	$	4,404	$	4,547	$	(3)	$	8,948
Operating Expenses
	Fuel used in electric generation and purchased power			―		2,288		1,755		―		4,043
	Operation, maintenance and other			10		896		1,147		7		2,060
	Depreciation and amortization			―		169		532		―		701
	Property and other taxes			―		351		218		(7)		562
	Impairment charges			―		―		3		―		3
		Total operating expenses		10		3,704		3,655		―		7,369
Gains on Sales of Other Assets and Other, net				―		2		2		―		4
Operating (Loss) Income				(10)		702		894		(3)		1,583
Equity in Earnings of Consolidated Subsidiaries				798		―		―		(798)		―
Other Income and Expenses, net				(61)		32		81		―		52
Interest Expense				279		262		184		―		725
Income from Continuing Operations Before Income Taxes				448		472		791		(801)		910
Income Tax (Benefit) Expense from Continuing Operations				(127)		170		275		5		323
Income from Continuing Operations				575		302		516		(806)		587
Loss from Discontinued Operations, net of tax				―		(3)		(2)		―		(5)
Net Income				575		299		514		(806)		582
Less: Net Income Attributable to Noncontrolling Interests				―		4		―		3		7
Net Income Attributable to Parent			$	575	$	295	$	514	$	(809)	$	575
Comprehensive Income			$	535	$	271	$	519	$	(783)	$	542
Less: Comprehensive Income Attributable to Noncontrolling Interests				―		4		―		3		7
Comprehensive Income Attributable to Parent			$	535	$	267	$	519	$	(786)	$	535

Condensed Consolidating Statement of Operations and Comprehensive Income
Year Ended December 31, 2010
(in millions)			Progress Energy Parent		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Other		Progress Energy, Inc.
Operating Revenues			$	―	$	5,292	$	4,933	$	(2)	$	10,223
Operating Expenses
	Fuel used in electric generation and purchased power			―		2,613		2,008		―		4,621
	Operation, maintenance and other			8		928		1,100		9		2,045
	Depreciation and amortization			―		426		494		―		920
	Property and other taxes			―		362		225		(7)		580
	Impairment charges			―		―		5		―		5
		Total operating expenses		8		4,329		3,832		2		8,171
Losses on Sales of Other Assets and Other, net				―		(5)		(4)		1		(8)
Operating (Loss) Income				(8)		958		1,097		(3)		2,044
Equity in Earnings of Consolidated Subsidiaries				1,027		―		―		(1,027)		―
Other Income and Expenses, net				7		33		74		(5)		109
Interest Expense				282		280		192		(7)		747
Income from Continuing Operations Before Income Taxes				744		711		979		(1,028)		1,406
Income Tax (Benefit) Expense from Continuing Operations				(111)		267		378		5		539
Income from Continuing Operations				855		444		601		(1,033)		867
Income (Loss) from Discontinued Operations, net of tax				1		(1)		(4)		―		(4)
Net Income				856		443		597		(1,033)		863
Less: Net Income Attributable to Noncontrolling Interests				―		4		(1)		4		7
Net Income Attributable to Parent			$	856	$	439	$	598	$	(1,037)	$	856
Comprehensive Income			$	818	$	434	$	582	$	(1,009)	$	825
Less: Comprehensive Income Attributable to Noncontrolling Interests				―		4		(1)		4		7
Comprehensive Income Attributable to Parent			$	818	$	430	$	583	$	(1,013)	$	818

Condensed Consolidating Balance Sheet
December 31, 2012
(in millions)		Progress Energy Parent		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Other		Progress Energy, Inc.
ASSETS
Current Assets
Cash and cash equivalents		$	63	$	149	$	19	$	―	$	231
Receivables, net			―		321		470		(1)		790
Notes receivable from affiliated companies			603		223		162		(988)		―
Inventory			―		613		828		―		1,441
Other			73		393		470		(155)		781
	Total current assets		739		1,699		1,949		(1,144)		3,243
Investments and Other Assets
Nuclear decommissioning trust funds			―		629		1,259		―		1,888
Investment in consolidated subsidiaries			14,238		―		―		(14,238)		―
Goodwill			―		―		―		3,655		3,655
Other			183		228		694		(575)		530
	Total investments and other assets		14,421		857		1,953		(11,158)		6,073
Net Property, Plant and Equipment			―		9,362		13,190		145		22,697
Regulatory Assets and Deferred Debits
Regulatory assets			―		3,321		1,971		―		5,292
Other			23		55		28		(6)		100
	Total regulatory assets and deferred debits		23		3,376		1,999		(6)		5,392
Total Assets		$	15,183	$	15,294	$	19,091	$	(12,163)	$	37,405
LIABILITIES AND EQUITY
Current Liabilities
Notes payable to affiliated companies		$	840	$	235	$	368	$	(988)	$	455
Current maturities of long-term debt			―		435		407		1		843
Other			147		1,098		1,398		(154)		2,489
	Total current liabilities		987		1,768		2,173		(1,141)		3,787
Long-term Debt			3,992		4,885		4,433		1		13,311
Long-term Debt Payable to Affiliated Companies			―		309		―		(35)		274
Deferred Credits and Other Liabilities
Deferred income taxes			―		932		2,162		(536)		2,558
Asset retirement obligations			―		764		1,649		―		2,413
Regulatory liabilities			―		787		1,538		144		2,469
Other			23		943		1,375		(26)		2,315
	Total deferred credits and other liabilities		23		3,426		6,724		(418)		9,755
Preferred Stock of Subsidiaries			―		34		59		―		93
Equity
Common shareholders' equity			10,181		4,868		5,702		(10,570)		10,181
Noncontrolling interests			―		4		―		―		4
	Total equity		10,181		4,872		5,702		(10,570)		10,185
Total Liabilities and Equity		$	15,183	$	15,294	$	19,091	$	(12,163)	$	37,405

Condensed Consolidating Balance Sheet
December 31, 2011
(in millions)		Progress Energy Parent		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Other		Progress Energy, Inc.
ASSETS
Current Assets
Cash and cash equivalents		$	117	$	92	$	21	$	―	$	230
Receivables, net			―		367		516		―		883
Notes receivable from affiliated companies			53		―		219		(272)		―
Inventory			―		659		770		―		1,429
Other			127		418		297		(64)		778
	Total current assets		297		1,536		1,823		(336)		3,320
Investments and Other Assets
Nuclear decommissioning trust funds			―		559		1,088		―		1,647
Investment in consolidated subsidiaries			14,043		―		―		(14,043)		―
Goodwill			―		―		―		3,655		3,655
Other			118		189		675		(478)		504
	Total investments and other assets		14,161		748		1,763		(10,866)		5,806
Net Property, Plant and Equipment			―		10,455		11,677		160		22,292
Regulatory Assets and Deferred Debits
Regulatory assets			―		1,629		1,795		―		3,424
Other			22		51		22		(6)		89
	Total regulatory assets and deferred debits		22		1,680		1,817		(6)		3,513
Total Assets		$	14,480	$	14,419	$	17,080	$	(11,048)	$	34,931
LIABILITIES AND EQUITY
Current Liabilities
Notes payable and commercial paper		$	250	$	233	$	188	$	―	$	671
Notes payable to affiliated companies			―		238		34		(272)		―
Current maturities of long-term debt			450		10		502		(1)		961
Other			199		1,030		1,221		(63)		2,387
	Total current liabilities		899		1,511		1,945		(336)		4,019
Long-term Debt			3,543		4,671		3,704		―		11,918
Long-term Debt Payable to Affiliated Companies			―		309		―		(36)		273
Deferred Credits and Other Liabilities
Deferred income taxes			―		757		1,903		(467)		2,193
Asset retirement obligations			―		369		896		―		1,265
Regulatory liabilities			―		1,024		1,543		160		2,727
Other			17		1,012		1,384		5		2,418
	Total deferred credits and other liabilities		17		3,162		5,726		(302)		8,603
Preferred Stock of Subsidiaries			―		34		59		―		93
Equity
Common shareholders' equity			10,021		4,728		5,646		(10,374)		10,021
Noncontrolling interests			―		4		―		―		4
	Total equity		10,021		4,732		5,646		(10,374)		10,025
Total Liabilities and Equity		$	14,480	$	14,419	$	17,080	$	(11,048)	$	34,931

Condensed Consolidating Statement of Cash Flows
Year Ended December 31, 2012
(in millions)		Progress Energy Parent		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Other		Progress Energy, Inc.
Net cash provided by operating activities		$	327	$	853	$	1,143	$	(483)	$	1,840
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures			―		(809)		(1,557)		―		(2,366)
Purchases of available-for-sale securities			―		(792)		(582)		―		(1,374)
Proceeds from sales and maturities of available-for-sale securities			―		792		532		1		1,325
Notes receivable from affiliated companies			(550)		(223)		56		717		―
Other			25		18		92		(2)		133
Net cash used by investing activities			(525)		(1,014)		(1,459)		716		(2,282)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the:
	Issuance of long-term debt		444		642		988		―		2,074
	Issuance of common stock		6		―		―		―		6
Payments for the redemption of long-term debt			(450)		(10)		(502)		―		(962)
Notes payable and commercial paper			(250)		(233)		(188)		―		(671)
Distributions to noncontrolling interests			―		(4)		―		(3)		(7)
Dividends paid			(445)		―		―		―		(445)
Distributions to parent			―		(173)		(310)		483		―
Notes payable to affiliated companies			840		(3)		334		(716)		455
Other			(1)		(1)		(8)		3		(7)
Net cash provided by financing activities			144		218		314		(233)		443
Net (decrease) increase in cash and cash equivalents			(54)		57		(2)		―		1
Cash and cash equivalents at beginning of period			117		92		21		―		230
Cash and cash equivalents at end of period		$	63	$	149	$	19	$	―	$	231

Condensed Consolidating Statement of Cash Flows
Year Ended December 31, 2011
(in millions)		Progress Energy Parent		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Other		Progress Energy, Inc.
Net cash provided by operating activities		$	756	$	706	$	1,251	$	(1,098)	$	1,615
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures			―		(815)		(1,441)		―		(2,256)
Purchases of available-for-sale securities			―		(4,438)		(579)		―		(5,017)
Proceeds from sales and maturities of available-for-sale securities			―		4,441		529		―		4,970
Notes receivable from affiliated companies			(38)		48		(104)		94		―
Contributions to consolidated subsidiaries			(11)		―		―		11		―
Other			(24)		103		11		1		91
Net cash used by investing activities			(73)		(661)		(1,584)		106		(2,212)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the:
	Issuance of long-term debt		495		296		495		―		1,286
	Issuance of common stock		53		―		―		―		53
Payments for the redemption of long-term debt			(700)		(309)		(2)		1		(1,010)
Notes payable and commercial paper			250		233		185		(1)		667
Distributions to noncontrolling interests			―		(4)		―		(3)		(7)
Dividends paid			(734)		―		―		―		(734)
Distributions to parent			―		(513)		(585)		1,098		―
Notes payable to affiliated companies			―		63		31		(94)		―
Contributions from parent			―		10		1		(11)		―
Other			(40)		1		(2)		2		(39)
Net cash (used) provided by financing activities			(676)		(223)		123		992		216
Net increase (decrease) in cash and cash equivalents			7		(178)		(210)		―		(381)
Cash and cash equivalents at beginning of period			110		270		231		―		611
Cash and cash equivalents at end of period		$	117	$	92	$	21	$	―	$	230

Condensed Consolidating Statement of Cash Flows
Year Ended December 31, 2010
(in millions)		Progress Energy Parent		Subsidiary Guarantor		Non-Guarantor Subsidiaries		Other		Progress Energy, Inc.
Net cash provided by operating activities		$	16	$	1,181	$	1,556	$	(222)	$	2,531
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures			―		(1,055)		(1,415)		25		(2,445)
Purchases of available-for-sale securities			―		(6,391)		(618)		―		(7,009)
Proceeds from sales and maturities of available-for-sale securities			―		6,395		595		―		6,990
Notes receivable from affiliated companies			15		(2)		188		(201)		―
Return of investment in consolidated subsidiaries			54		―		―		(54)		―
Contributions to consolidated subsidiaries			(171)		―		―		171		―
Other			113		63		4		(116)		64
Net cash provided (used) by investing activities			11		(990)		(1,246)		(175)		(2,400)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the:
	Issuance of long-term debt		―		591		―		―		591
	Issuance of common stock		434		―		―		―		434
Payments for the redemption of long-term debt			(100)		(308)		(1)		(1)		(410)
Notes payable and commercial paper			(140)		―		―		―		(140)
Distributions to noncontrolling interests			―		(3)		―		(3)		(6)
Dividends paid			(717)		―		―		―		(717)
Distributions to parent			―		(102)		(154)		256		―
Notes payable to affiliated companies			―		(201)		―		201		―
Contributions from parent			―		33		152		(185)		―
Other			―		(3)		(123)		129		3
Net cash (used) provided by financing activities			(523)		7		(126)		397		(245)
Net (decrease) increase in cash and cash equivalents			(496)		198		184		―		(114)
Cash and cash equivalents at beginning of period			606		72		47		―		725
Cash and cash equivalents at end of period		$	110	$	270	$	231	$	―	$	611