Fourth Quarter 2008

Reports fourth-quarter GAAP earnings of $0.41 per share, compared to $0.40 per share for the same period last year

Reports fourth-quarter ongoing earnings of $123 million, or $0.47 per share, compared to $104 million, or $0.40 per share, for the same period last year

Full Year 2008

Reports 2008 GAAP earnings of $3.19 per share, compared to $1.97 per share in 2007, primarily driven by the divestiture of non-utility businesses

Reports 2008 ongoing earnings of $776 million, or $2.98 per share, compared to $695 million, or $2.72 per share, for the same period last year

Affirms 2009 ongoing earnings guidance range of $2.95 to $3.15 per share

Fourth-quarter ongoing earnings were $123 million, or $0.47 per share, compared to $104 million, or $0.40 per share, last year. The significant drivers in ongoing earnings were favorable AFUDC equity, lower depreciation and amortization and higher other retail margin, which were partially offset by lower excess generation revenues and increased interest expense.

Full-year reported GAAP earnings were $830 million, or $3.19 per share, compared with reported GAAP earnings of $504 million, or $1.97 per share, for the same period last year. Reported GAAP earnings for 2007 reflected a loss on the divestiture of non-utility businesses. Full-year ongoing earnings were $776 million, or $2.98 per share, compared to $695 million, or $2.72 per share, last year. The company benefited from favorable AFUDC equity, an increase in net retail base rates related to the Hines Energy Complex and higher other retail margin, which were partially offset by increased interest expense and income taxes.

Progress Energy affirmed its 2009 ongoing earnings guidance range of $2.95 to $3.15 per share. The ongoing earnings guidance excludes the impact, if any, from CVO mark-to-market adjustment, potential impairments and discontinued operations. Progress Energy is not able to provide a corresponding GAAP equivalent for the 2009 earnings guidance due to the uncertain nature and amount of these adjustments.

“Despite the global financial crisis and economic slowdown, we successfully delivered on our 2008 financial goals with full-year ongoing earnings of $2.98,” said Bill Johnson, chairman, president and CEO. “We know that 2009 will be a challenging year for our company and our customers. We are aggressively controlling costs to effectively manage our business, maintain high levels of reliability and minimize the impact of rising costs of fuels and new energy policies on our customers.”

RECENT DEVELOPMENTS

Increased quarterly dividend to 62.0 cents per share from 61.5 cents per share, representing the 21st consecutive year of dividend growth for the company’s common stock.

Issued 14.375 million shares of common stock for net proceeds of around $523 million in January 2009, which were used to reduce borrowings under Progress Energy’s revolving credit facility and for general corporate purposes.

Filed proposal with Florida Public Service Commission (FPSC) to decrease customer bills in 2009 by around 11% through reduced fuel cost projections and deferred nuclear pre-construction cost recovery.

Filed with the FPSC a test year letter requesting a permanent base rate increase in 2010 of around $475 million to $550 million annually. This letter formally indicates PEF’s intent to initiate a base rate proceeding and is required because the current base rate settlement agreement will expire at the end of this year. Also, PEF indicated that it may seek limited and/or interim base rate relief for 2009.

Met a new peak-demand record set by PEF’s customers in early February 2009, as well as an unprecedented one-day usage record, reflecting increasing energy needs.

Signed a contract with Westinghouse Electric Company LLC and Stone & Webster, Inc., a subsidiary of The Shaw Group, Inc., for the engineering, procurement and construction of two 1,105-net megawatt nuclear reactors for a proposed advanced-design nuclear power plant in Levy County, Fla.

Received final orders from the FPSC for all of PEF’s proposed 2009 recovery for fuel, environmental and energy-efficiency costs.

Announced agreement with the Florida Department of Environmental Protection (FDEP) to retire the two oldest coal-fired units at the Crystal River Energy Complex in Citrus County (around 866 megawatts) if the Levy County nuclear plant is built. The coal units would be retired after the second new nuclear unit at Levy completes its first fuel cycle, which the company estimates to be around 2020.

Received recommendation from the FDEP staff to receive a site certification for Levy.

Received notice that the U.S. Court of Appeals for the D.C. Circuit remanded the 2005 Clean Air Interstate Rule (CAIR) without vacatur to the Environmental Protection Agency (EPA), which leaves the existing rule in effect while the EPA remedies CAIR’s existing flaws, as identified by the court.

Submitted Crystal River Nuclear Plant’s (CR 3) license-renewal application to the U.S. Nuclear Regulatory Commission (NRC), requesting 20 additional years of operation through 2036, with a decision expected in 2011.

Received approval from the NRC for the renewal of the Harris Nuclear Plant’s operating license for 20 additional years through 2046.

Signed a contract for PEC to continue to supply power to the N.C. Electric Membership Corporation (NCEMC) for a 20-year period beginning in 2013, increasing supply up to a total of around 2,750 megawatts by the end of the contract term. Current contracts from PEC supply NCEMC with around 1,245 megawatts.

Received from the North Carolina Utilities Commission (NCUC) a certificate of environmental compatibility and public convenience and necessity to construct around 64 miles of 230-kilovolt transmission line in eastern North Carolina.

Met a new peak-demand record set by PEC’s customers in Western N.C. in January 2009.

Received final order from the NCUC to spread the recovery of PEC’s deferred fuel and fuelrelated cost balance over three years with interest.

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

Received approval from the NCUC for recovery of costs associated with compliance with renewable energy portfolio standards in North Carolina.

Entered into a settlement agreement with several interveners, which was filed with the NCUC, to recover all DSM/EE program and measure costs with a potential return, net lost revenues for three years and performance incentives.

Filed with South Carolina Public Service Commission a settlement agreement with interveners to recover all DSM/EE program and measure costs, net lost revenues for three years and performance incentives.

Filed three new energy-efficiency programs with the NCUC, including a residential solar water heating program.

Partnered with Ford Motor Company and Electric Power Research Institute to test a Ford Escape plug-in hybrid vehicle (PHEV) as part of a national PHEV demonstration program.

Successfully completed negotiations on a new three-year contract with the International Brotherhood of Electrical Workers, which represents around 2,000 craft and technical employees at PEF.

Progress Energy’s two utilities achieved top-quartile ranking in the latest business customer satisfaction survey from J.D. Power & Associates. PEC was ranked highest in the competitive South region.