PROGRESS ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2010

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of INCOME
	Three months ended September 30						Nine months ended September 30
(in millions except per share data)	2010			2009			2010			2009
Operating revenues	$	2,962		$	2,824		$	7,869		$	7,578
Operating expenses
Fuel used in electric generation		935			1,075			2,574			2,855
Purchased power		418			125			996			599
Operation and maintenance		474			423			1,459			1,360
Depreciation, amortization and accretion		201			371			680			877
Taxes other than on income		161			152			448			425
Other		20			2			25			14
Total operating expenses		2,209			2,148			6,182			6,130
Operating income		753			676			1,687			1,448
Other income (expense)
Interest income		3			2			6			8
Allowance for equity funds used during construction		22			20			68			95
Other, net		(5	)		1			(5	)		13
Total other income, net		20			23			69			116
Interest charges
Interest charges		197			174			587			534
Allowance for borrowed funds used during construction		(8	)		(6	)		(24	)		(30	)
Total interest charges, net		189			168			563			504
Income from continuing operations before income tax		584			531			1,193			1,060
Income tax expense		219			181			456			352
Income from continuing operations before cumulative effect of change in accounting principle		365			350			737			708
Discontinued operations, net of tax		(2	)		(102	)		(2	)		(103	)
Cumulative effect of change in accounting principle, net of tax		2			-			-			-
Net income		365			248			735			605
Net income attributable to noncontrolling interests, net of tax		(4	)		(1	)		(4	)		(2	)
Net income attributable to controlling interests	$	361		$	247		$	731		$	603
Average common shares outstanding – basic		294			280			289			279
Basic and diluted earnings per common share
Income from continuing operations attributable to controlling interests, net of tax	$	1.23		$	1.24		$	2.53		$	2.53
Discontinued operations attributable to controlling interests, net of tax		-			(0.36	)		-			(0.37	)
Net income attributable to controlling interests	$	1.23		$	0.88		$	2.53		$	2.16
Dividends declared per common share	$	0.620		$	0.620		$	1.860		$	1.860
Amounts attributable to controlling interests
Income from continuing operations, net of tax	$	363		$	349		$	733		$	706
Discontinued operations, net of tax		(2	)		(102	)		(2	)		(103	)
Net income attributable to controlling interests	$	361		$	247		$	731		$	603

See Notes to Progress Energy, Inc. Unaudited Condensed Consolidated Interim Financial Statements.

PROGRESS ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions) June 30, 2010 December 31, 2009
ASSETS
Utility plant
Utility plant in service $ 29,728 $ 28,918
Accumulated depreciation (11,777 ) (11,576 )
Utility plant in service, net 17,951 17,342
Held for future use 48 47
Construction work in progress 1,914 1,790
Nuclear fuel, net of amortization 599 554
Total utility plant, net 20,512 19,733
Current assets
Cash and cash equivalents 690 725
Receivables, net 999 800
Inventory 1,237 1,325
Regulatory assets 324 142
Derivative collateral posted 194 146
Income taxes receivable 21 145
Prepayments and other current assets 195 248
Total current assets 3,660 3,531
Deferred debits and other assets
Regulatory assets 2,211 2,179
Nuclear decommissioning trust funds 1,341 1,367
Miscellaneous other property and investments 437 438
Goodwill 3,655 3,655
Other assets and deferred debits 321 333
Total deferred debits and other assets 7,965 7,972
Total assets $ 32,137 $ 31,236
CAPITALIZATION AND LIABILITIES
Common stock equity
Common stock without par value, 500 million shares authorized, 293
million and 281 million shares issued and outstanding, respectively
$ 7,304 $ 6,873
Unearned ESOP shares (- and 1 million shares, respectively) - (12 )
Accumulated other comprehensive loss (131 ) (87 )
Retained earnings 2,684 2,675
Total common stock equity 9,857 9,449
Noncontrolling interests 2 6
Total equity 9,859 9,455
Preferred stock of subsidiaries 93 93
Long-term debt, affiliate 272 272
Long-term debt, net 11,664 11,779
Total capitalization 21,888 21,599
Current liabilities
Current portion of long-term debt 705 406
Short-term debt - 140
Accounts payable 954 835
Interest accrued 209 206
Dividends declared 182 175
Customer deposits 316 300
Derivative liabilities 250 190
Accrued compensation and other benefits 100 167
Other current liabilities 387 239
Total current liabilities 3,103 2,658
Deferred credits and other liabilities
Noncurrent income tax liabilities 1,288 1,196
Accumulated deferred investment tax credits 113 117
Regulatory liabilities 2,479 2,510
Asset retirement obligations 1,200 1,170
Accrued pension and other benefits 1,330 1,339
Derivative liabilities 324 240
Other liabilities and deferred credits 412 407
Total deferred credits and other liabilities 7,146 6,979
Commitments and contingencies (Notes 12 and 13)
Total capitalization and liabilities $ 32,137 $ 31,236

See Notes to Progress Energy, Inc. Unaudited Condensed Consolidated Interim Financial Statements.

PROGRESS ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of CASH FLOWS

(in millions)
Six months ended June 30 2010 2009
Operating activities
Net income $ 370 $ 357
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation, amortization and accretion 555 576
Deferred income taxes and investment tax credits, net 117 13
Deferred fuel (credit) cost (137 ) 129
Allowance for equity funds used during construction (46 ) (75 )
Other adjustments to net income 136 118
Cash (used) provided by changes in operating assets and liabilities
Receivables (126 ) (36 )
Inventory 87 (118 )
Derivative collateral posted (40 ) 47
Other assets (13 ) 41
Income taxes, net 152 110
Accounts payable 110 (30 )
Other liabilities (6 ) (37 )
Net cash provided by operating activities 1,159 1,095
Investing activities
Gross property additions (1,116 ) (1,172 )
Nuclear fuel additions (119 ) (60 )
Purchases of available-for-sale securities and other investments (3,815 ) (982 )
Proceeds from available-for-sale securities and other investments 3,792 960
Other investing activities 14 (3 )
Net cash used by investing activities (1,244 ) (1,257 )
Financing activities
Issuance of common stock, net 405 545
Dividends paid on common stock (354 ) (347 )
Payments of short-term debt with original maturities greater than 90 days - (129 )
Net decrease in short-term debt (140 ) (521 )
Proceeds from issuance of long-term debt, net 591 1,337
Retirement of long-term debt (400 ) (400 )
Other financing activities (52 ) (51 )
Net cash provided by financing activities 50 434
Net (decrease) increase in cash and cash equivalents (35 ) 272
Cash and cash equivalents at beginning of period 725 180
Cash and cash equivalents at end of period $ 690 $ 452
Supplemental disclosures
Significant noncash transactions
Accrued property additions $ 274 $ 301

See Notes to Progress Energy, Inc. Unaudited Condensed Consolidated Interim Financial Statements.

PROGRESS ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)	September 30, 2010			December 31, 2009
ASSETS
Utility plant
Utility plant in service	$	29,936		$	28,918
Accumulated depreciation		(11,892	)		(11,576	)
Utility plant in service, net		18,044			17,342
Held for future use		48			47
Construction work in progress		2,088			1,790
Nuclear fuel, net of amortization		596			554
Total utility plant, net		20,776			19,733
Current assets
Cash and cash equivalents		691			725
Receivables, net		1,112			800
Inventory		1,214			1,325
Regulatory assets		220			142
Derivative collateral posted		223			146
Income taxes receivable		7			145
Prepayments and other current assets		239			248
Total current assets		3,706			3,531
Deferred debits and other assets
Regulatory assets		2,364			2,179
Nuclear decommissioning trust funds		1,457			1,367
Miscellaneous other property and investments		425			438
Goodwill		3,655			3,655
Other assets and deferred debits		323			333
Total deferred debits and other assets		8,224			7,972
Total assets	$	32,706		$	31,236
CAPITALIZATION AND LIABILITIES
Common stock equity
Common stock without par value, 500 million shares authorized, 293 million and 281 million shares issued and outstanding, respectively	$	7,322		$	6,873
Unearned ESOP shares (- and 1 million shares, respectively)		-			(12	)
Accumulated other comprehensive loss		(164	)		(87	)
Retained earnings		2,863			2,675
Total common stock equity		10,021			9,449
Noncontrolling interests		3			6
Total equity		10,024			9,455
Preferred stock of subsidiaries		93			93
Long-term debt, affiliate		273			272
Long-term debt, net		11,363			11,779
Total capitalization		21,753			21,599
Current liabilities
Current portion of long-term debt		1,005			406
Short-term debt		-			140
Accounts payable		827			835
Interest accrued		196			206
Dividends declared		183			175
Customer deposits		321			300
Derivative liabilities		325			190
Accrued compensation and other benefits		142			167
Other current liabilities		475			239
Total current liabilities		3,474			2,658
Deferred credits and other liabilities
Noncurrent income tax liabilities		1,474			1,196
Accumulated deferred investment tax credits		111			117
Regulatory liabilities		2,554			2,510
Asset retirement obligations		1,220			1,170
Accrued pension and other benefits		1,353			1,339
Derivative liabilities		362			240
Other liabilities and deferred credits		405			407
Total deferred credits and other liabilities		7,479			6,979
Commitments and contingencies (Notes 13 and 14)
Total capitalization and liabilities	$	32,706		$	31,236

See Notes to Progress Energy, Inc. Unaudited Condensed Consolidated Interim Financial Statements.

CAROLINA POWER & LIGHT COMPANY
d/b/a PROGRESS ENERGY CAROLINAS, INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
June 30, 2010

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of INCOME

Three months ended June 30, Six months ended June 30,
(in millions) 2010 2009 2010 2009
Operating revenues $ 1,117 $ 1,076 $ 2,380 $ 2,254
Operating expenses
Fuel used in electric generation 375 383 858 825
Purchased power 76 57 126 114
Operation and maintenance 300 283 585 542
Depreciation, amortization and accretion 120 118 238 235
Taxes other than on income 51 51 111 105
Other (1 ) 2 - 2
Total operating expenses 921 894 1,918 1,823
Operating income 196 182 462 431
Other income (expense)
Interest income 1 1 2 3
Allowance for equity funds used during construction 15 7 28 16
Other, net 4 4 (3 ) (3 )
Total other income, net 20 12 27 16
Interest charges
Interest charges 53 52 103 109
Allowance for borrowed funds used during construction (5 ) (3 ) (9 ) (6 )
Total interest charges, net 48 49 94 103
Income before income tax 168 145 395 344
Income tax expense 57 51 146 122
Income before cumulative effect of change in accounting
principle
111 94 249 222
Cumulative effect of change in accounting principle, net of tax - - (2 ) -
Net income 111 94 247 222
Net loss attributable to noncontrolling interests, net of tax 1 1 3 1
Net income attributable to controlling interests 112 95 250 223
Preferred stock dividend requirement - - (1 ) (1 )
Net income available to parent $ 112 $ 95 $ 249 $ 222

See Notes to Progress Energy Carolinas, Inc. Unaudited Condensed Consolidated Interim Financial Statements.

PROGRESS ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of CASH FLOWS
(in millions)
Nine months ended September 30	2010			2009
Operating activities
Net income	$	735		$	605
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation, amortization and accretion		804			991
Deferred income taxes and investment tax credits, net		263			50
Deferred fuel (credit) cost		(37	)		81
Allowance for equity funds used during construction		(68	)		(95	)
Litigation expense (Note 14C)		-			115
Other adjustments to net income		197			187
Cash (used) provided by changes in operating assets and liabilities
Receivables		(252	)		(99	)
Inventory		111			(118	)
Derivative collateral posted		(83	)		155
Other assets		(25	)		60
Income taxes, net		213			190
Accounts payable		45			(91	)
Accrued pension and other benefits		(162	)		(264	)
Other liabilities		163			3
Net cash provided by operating activities		1,904			1,770
Investing activities
Gross property additions		(1,643	)		(1,644	)
Nuclear fuel additions		(164	)		(148	)
Purchases of available-for-sale securities and other investments		(5,927	)		(1,271	)
Proceeds from available-for-sale securities and other investments		5,915			1,245
Other investing activities		15			(5	)
Net cash used by investing activities		(1,804	)		(1,823	)
Financing activities
Issuance of common stock, net		419			557
Dividends paid on common stock		(535	)		(520	)
Payments of short-term debt with original maturities greater than 90 days		-			(429	)
Net decrease in short-term debt		(140	)		(471	)
Proceeds from issuance of long-term debt, net		591			1,337
Retirement of long-term debt		(400	)		(400	)
Other financing activities		(69	)		(46	)
Net cash (used) provided by financing activities		(134	)		28
Net decrease in cash and cash equivalents		(34	)		(25	)
Cash and cash equivalents at beginning of period		725			180
Cash and cash equivalents at end of period	$	691		$	155
Supplemental disclosures
Significant noncash transactions
Accrued property additions	$	255		$	265

See Notes to Progress Energy, Inc. Unaudited Condensed Consolidated Interim Financial Statements.

CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY CAROLINAS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions) June 30, 2010 December 31, 2009
ASSETS
Utility plant
Utility plant in service $ 16,553 $ 16,297
Accumulated depreciation (7,631 ) (7,520 )
Utility plant in service, net 8,922 8,777
Held for future use 12 11
Construction work in progress 1,060 702
Nuclear fuel, net of amortization 430 396
Total utility plant, net 10,424 9,886
Current assets
Cash and cash equivalents 206 35
Receivables, net 508 442
Receivables from affiliated companies 15 33
Notes receivable from affiliated companies 2 204
Inventory 591 677
Deferred fuel cost 101 88
Income taxes receivable 26 38
Prepayments and other current assets 61 61
Total current assets 1,510 1,578
Deferred debits and other assets
Regulatory assets 894 873
Nuclear decommissioning trust funds 859 871
Miscellaneous other property and investments 187 199
Other assets and deferred debits 92 95
Total deferred debits and other assets 2,032 2,038
Total assets $ 13,966 $ 13,502
CAPITALIZATION AND LIABILITIES
Common stock equity
Common stock without par value, 200 million shares authorized, 160
million shares issued and outstanding
$ 2,125 $ 2,108
Unearned ESOP shares - (12 )
Accumulated other comprehensive loss (41 ) (27 )
Retained earnings 2,785 2,588
Total common stock equity 4,869 4,657
Noncontrolling interests - 3
Total equity 4,869 4,660
Preferred stock 59 59
Long-term debt, net 3,688 3,703
Total capitalization 8,616 8,422
Current liabilities
Current portion of long-term debt 6 6
Accounts payable 426 355
Payables to affiliated companies 87 72
Interest accrued 72 70
Customer deposits 101 95
Derivative liabilities 48 29
Accrued compensation and other benefits 53 86
Other current liabilities 122 50
Total current liabilities 915 763
Deferred credits and other liabilities
Noncurrent income tax liabilities 1,327 1,258
Accumulated deferred investment tax credits 107 110
Regulatory liabilities 1,307 1,293
Asset retirement obligations 822 801
Accrued pension and other benefits 703 708
Other liabilities and deferred credits 169 147
Total deferred credits and other liabilities 4,435 4,317
Commitments and contingencies (Notes 12 and 13)
Total capitalization and liabilities $ 13,966 $ 13,502

See Notes to Progress Energy Carolinas, Inc. Unaudited Condensed Consolidated Interim Financial Statements.

CAROLINA POWER & LIGHT COMPANY
d/b/a PROGRESS ENERGY CAROLINAS, INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2010

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of INCOME
	Three months ended September 30						Nine months ended September 30
(in millions)	2010			2009			2010			2009
Operating revenues	$	1,414		$	1,307		$	3,794		$	3,561
Operating expenses
Fuel used in electric generation		464			457			1,322			1,282
Purchased power		109			82			235			196
Operation and maintenance		256			225			841			767
Depreciation, amortization and accretion		120			120			358			355
Taxes other than on income		58			56			169			161
Other		5			-			5			2
Total operating expenses		1,012			940			2,930			2,763
Operating income		402			367			864			798
Other income (expense)
Interest income		1			1			3			4
Allowance for equity funds used during construction		17			7			45			23
Other, net		(2	)		(2	)		(5	)		(5	)
Total other income, net		16			6			43			22
Interest charges
Interest charges		51			48			154			157
Allowance for borrowed funds used during construction		(5	)		(3	)	��	(14	)		(9	)
Total interest charges, net		46			45			140			148
Income before income tax		372			328			767			672
Income tax expense		138			120			284			242
Income before cumulative effect of change in accounting principle		234			208			483			430
Cumulative effect of change in accounting principle, net of tax		2			-			-			-
Net income		236			208			483			430
Net (income) loss attributable to noncontrolling interests, net of tax		(2	)		-			1			1
Net income attributable to controlling interests		234			208			484			431
Preferred stock dividend requirement		(1	)		(1	)		(2	)		(2	)
Net income available to parent	$	233		$	207		$	482		$	429

See Notes to Progress Energy Carolinas, Inc. Unaudited Condensed Consolidated Interim Financial Statements.

CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY CAROLINAS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of CASH FLOWS

(in millions)
Six months ended June 30 2010 2009
Operating activities
Net income $ 247 $ 222
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation, amortization and accretion 294 286
Deferred income taxes and investment tax credits, net 55 10
Deferred fuel cost 21 92
Allowance for equity funds used during construction (28 ) (16 )
Other adjustments to net income 47 52
Cash (used) provided by changes in operating assets and liabilities
Receivables (39 ) 42
Receivables from affiliated companies 18 13
Inventory 85 (60 )
Other assets (18 ) 32
Income taxes, net 12 63
Accounts payable 20 (43 )
Payables to affiliated companies 15 (24 )
Other liabilities (12 ) (23 )
Net cash provided by operating activities 717 646
Investing activities
Gross property additions (580 ) (402 )
Nuclear fuel additions (106 ) (42 )
Purchases of available-for-sale securities and other investments (252 ) (517 )
Proceeds from available-for-sale securities and other investments 227 492
Changes in advances to affiliated companies 202 (75 )
Net cash used by investing activities (509 ) (544 )
Financing activities
Dividends paid on preferred stock (1 ) (1 )
Dividends paid to parent (50 ) (200 )
Net decrease in short-term debt - (110 )
Proceeds from issuance of long-term debt, net - 595
Retirement of long-term debt - (400 )
Contributions from parent 14 15
Other financing activities - (1 )
Net cash used by financing activities (37 ) (102 )
Net increase in cash and cash equivalents 171 -
Cash and cash equivalents at beginning of period 35 18
Cash and cash equivalents at end of period $ 206 $ 18
Supplemental disclosures
Significant noncash transactions
Accrued property additions $ 158 $ 128

See Notes to Progress Energy Carolinas, Inc. Unaudited Condensed Consolidated Interim Financial Statements.

CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY CAROLINAS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)	September 30, 2010			December 31, 2009
ASSETS
Utility plant
Utility plant in service	$	16,698		$	16,297
Accumulated depreciation		(7,700	)		(7,520	)
Utility plant in service, net		8,998			8,777
Held for future use		12			11
Construction work in progress		1,184			702
Nuclear fuel, net of amortization		408			396
Total utility plant, net		10,602			9,886
Current assets
Cash and cash equivalents		292			35
Receivables, net		529			442
Receivables from affiliated companies		18			33
Notes receivable from affiliated companies		5			204
Inventory		556			677
Deferred fuel cost		76			88
Income taxes receivable		-			38
Prepayments and other current assets		100			61
Total current assets		1,576			1,578
Deferred debits and other assets
Regulatory assets		950			873
Nuclear decommissioning trust funds		936			871
Miscellaneous other property and investments		185			199
Other assets and deferred debits		94			95
Total deferred debits and other assets		2,165			2,038
Total assets	$	14,343		$	13,502
CAPITALIZATION AND LIABILITIES
Common stock equity
Common stock without par value, 200 million shares authorized, 160 million shares issued and outstanding	$	2,127		$	2,108
Unearned ESOP shares		-			(12	)
Accumulated other comprehensive loss		(50	)		(27	)
Retained earnings		2,992			2,588
Total common stock equity		5,069			4,657
Noncontrolling interests		-			3
Total equity		5,069			4,660
Preferred stock		59			59
Long-term debt, net		3,688			3,703
Total capitalization		8,816			8,422
Current liabilities
Current portion of long-term debt		5			6
Accounts payable		371			355
Payables to affiliated companies		71			72
Interest accrued		63			70
Customer deposits		104			95
Derivative liabilities		63			29
Accrued compensation and other benefits		74			86
Other current liabilities		165			50
Total current liabilities		916			763
Deferred credits and other liabilities
Noncurrent income tax liabilities		1,412			1,258
Accumulated deferred investment tax credits		106			110
Regulatory liabilities		1,396			1,293
Asset retirement obligations		838			801
Accrued pension and other benefits		670			708
Other liabilities and deferred credits		189			147
Total deferred credits and other liabilities		4,611			4,317
Commitments and contingencies (Notes 13 and 14)
Total capitalization and liabilities	$	14,343		$	13,502

See Notes to Progress Energy Carolinas, Inc. Unaudited Condensed Consolidated Interim Financial Statements.

FLORIDA POWER CORPORATION
d/b/a PROGRESS ENERGY FLORIDA, INC.
UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
June 30, 2010

UNAUDITED CONDENSED STATEMENTS of INCOME

Three months ended June 30, Six months ended June 30,
(in millions) 2010 2009 2010 2009
Operating revenues $ 1,252 $ 1,234 $ 2,522 $ 2,496
Operating expenses
Fuel used in electric generation 368 443 781 955
Purchased power 239 200 452 360
Operation and maintenance 208 204 413 406
Depreciation, amortization and accretion 110 105 234 265
Taxes other than on income 83 80 176 168
Other - 7 - 7
Total operating expenses 1,008 1,039 2,056 2,161
Operating income 244 195 466 335
Other income
Interest income 1 - 1 1
Allowance for equity funds used during construction 10 29 18 59
Other, net 1 7 3 7
Total other income, net 12 36 22 67
Interest charges
Interest charges 70 64 134 131
Allowance for borrowed funds used during construction (2 ) (9 ) (7 ) (18 )
Total interest charges, net 68 55 127 113
Income before income tax 188 176 361 289
Income tax expense 69 57 140 81
Net income 119 119 221 208
Preferred stock dividend requirement - - (1 ) (1 )
Net income available to parent $ 119 $ 119 $ 220 $ 207

See Notes to Progress Energy Florida, Inc. Unaudited Condensed Interim Financial Statements.

CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY CAROLINAS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of CASH FLOWS
(in millions)
Nine months ended September 30	2010			2009
Operating activities
Net income	$	483		$	430
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation, amortization and accretion		450			437
Deferred income taxes and investment tax credits, net		123			41
Deferred fuel cost		63			136
Allowance for equity funds used during construction		(45	)		(23	)
Other adjustments to net income		68			76
Cash (used) provided by changes in operating assets and liabilities
Receivables		(89	)		18
Receivables from affiliated companies		15			15
Inventory		120			(64	)
Other assets		(41	)		51
Income taxes, net		59			122
Accounts payable		(18	)		(74	)
Payables to affiliated companies		(1	)		(17	)
Accrued pension and other benefits		(103	)		(179	)
Other liabilities		65			(16	)
Net cash provided by operating activities		1,149			953
Investing activities
Gross property additions		(867	)		(575	)
Nuclear fuel additions		(132	)		(82	)
Purchases of available-for-sale securities and other investments		(352	)		(614	)
Proceeds from available-for-sale securities and other investments		323			585
Changes in advances to affiliated companies		199			(92	)
Other investing activities		-			(1	)
Net cash used by investing activities		(829	)		(779	)
Financing activities
Dividends paid on preferred stock		(2	)		(2	)
Dividends paid to parent		(75	)		(200	)
Net decrease in short-term debt		-			(110	)
Proceeds from issuance of long-term debt, net		-			595
Retirement of long-term debt		-			(400	)
Contributions from parent		14			15
Other financing activities		-			(1	)
Net cash used by financing activities		(63	)		(103	)
Net increase in cash and cash equivalents		257			71
Cash and cash equivalents at beginning of period		35			18
Cash and cash equivalents at end of period	$	292		$	89
Supplemental disclosures
Significant noncash transactions
Accrued property additions	$	160		$	104

See Notes to Progress Energy Carolinas, Inc. Unaudited Condensed Consolidated Interim Financial Statements.

FLORIDA POWER CORPORATION d/b/a PROGRESS ENERGY FLORIDA, INC.
UNAUDITED CONDENSED BALANCE SHEETS

(in millions) June 30, 2010 December 31, 2009
ASSETS
Utility plant
Utility plant in service $ 12,993 $ 12,438
Accumulated depreciation (4,075 ) (3,987 )
Utility plant in service, net 8,918 8,451
Held for future use 36 36
Construction work in progress 854 1,088
Nuclear fuel, net of amortization 169 158
Total utility plant, net 9,977 9,733
Current assets
Cash and cash equivalents 113 17
Receivables, net 488 356
Receivables from affiliated companies 6 8
Inventory 647 648
Regulatory assets 223 54
Derivative collateral posted 174 139
Deferred tax assets 78 115
Prepayments and other current assets 18 80
Total current assets 1,747 1,417
Deferred debits and other assets
Regulatory assets 1,317 1,307
Nuclear decommissioning trust funds 482 496
Miscellaneous other property and investments 43 42
Other assets and deferred debits 127 105
Total deferred debits and other assets 1,969 1,950
Total assets $ 13,693 $ 13,100
CAPITALIZATION AND LIABILITIES
Common stock equity
Common stock without par value, 60 million shares authorized,
100 shares issued and outstanding
$ 1,747 $ 1,744
Accumulated other comprehensive (loss) income (7 ) 3
Retained earnings 2,912 2,743
Total common stock equity 4,652 4,490
Preferred stock 34 34
Long-term debt, net 4,481 3,883
Total capitalization 9,167 8,407
Current liabilities
Current portion of long-term debt - 300
Notes payable to affiliated companies 7 221
Accounts payable 509 451
Payables to affiliated companies 56 62
Interest accrued 76 72
Customer deposits 215 205
Derivative liabilities 179 161
Accrued compensation and other benefits 29 53
Other current liabilities 247 89
Total current liabilities 1,318 1,614
Deferred credits and other liabilities
Noncurrent income tax liabilities 877 767
Regulatory liabilities 1,060 1,103
Asset retirement obligations 378 369
Accrued pension and other benefits 389 395
Capital lease obligations 204 208
Derivative liabilities 223 174
Other liabilities and deferred credits 77 63
Total deferred credits and other liabilities 3,208 3,079
Commitments and contingencies (Notes 12 and 13)
Total capitalization and liabilities $ 13,693 $ 13,100

See Notes to Progress Energy Florida, Inc. Unaudited Condensed Interim Financial Statements.

FLORIDA POWER CORPORATION
d/b/a PROGRESS ENERGY FLORIDA, INC.
UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
September 30, 2010

UNAUDITED CONDENSED STATEMENTS of INCOME
	Three months ended September 30						Nine months ended September 30
(in millions)	2010			2009			2010			2009
Operating revenues	$	1,543		$	1,516		$	4,065		$	4,012
Operating expenses
Fuel used in electric generation		471			618			1,252			1,573
Purchased power		309			43			761			403
Operation and maintenance		234			198			647			604
Depreciation, amortization and accretion		77			247			311			512
Taxes other than on income		102			96			278			264
Other		6			-			6			7
Total operating expenses		1,199			1,202			3,255			3,363
Operating income		344			314			810			649
Other income (expense)
Interest income		-			-			1			1
Allowance for equity funds used during construction		5			13			23			72
Other, net		(3	)		1			-			8
Total other income, net		2			14			24			81
Interest charges
Interest charges		68			63			202			194
Allowance for borrowed funds used during construction		(3	)		(3	)		(10	)		(21	)
Total interest charges, net		65			60			192			173
Income before income tax		281			268			642			557
Income tax expense		101			91			241			172
Net income		180			177			401			385
Preferred stock dividend requirement		-			-			(1	)		(1	)
Net income available to parent	$	180		$	177		$	400		$	384

See Notes to Progress Energy Florida, Inc. Unaudited Condensed Interim Financial Statements.

FLORIDA POWER CORPORATION d/b/a PROGRESS ENERGY FLORIDA, INC.
UNAUDITED CONDENSED STATEMENTS of CASH FLOWS

(in millions)
Six months ended June 30 2010 2009
Operating activities
Net income $ 221 $ 208
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation, amortization and accretion 244 280
Deferred income taxes and investment tax credits, net 138 (41 )
Deferred fuel (credit) cost (158 ) 37
Allowance for equity funds used during construction (18 ) (59 )
Other adjustments to net income 62 47
Cash (used) provided by changes in operating assets and liabilities
Receivables (87 ) (76 )
Receivables from affiliated companies 2 8
Inventory 1 (58 )
Derivative collateral posted (27 ) 38
Other assets (10 ) 22
Income taxes, net 122 16
Accounts payable 98 16
Payables to affiliated companies (6 ) (7 )
Other liabilities 28 14
Net cash provided by operating activities 610 445
Investing activities
Gross property additions (543 ) (770 )
Nuclear fuel additions (13 ) (18 )
Purchases of available-for-sale securities and other investments (3,505 ) (415 )
Proceeds from available-for-sale securities and other investments 3,508 420
Other investing activities 15 (4 )
Net cash used by investing activities (538 ) (787 )
Financing activities
Dividends paid on preferred stock (1 ) (1 )
Dividends paid to parent (50 ) -
Net decrease in short-term debt - (371 )
Proceeds from issuance of long-term debt, net 591 -
Retirement of long-term debt (300 ) -
Changes in advances from affiliated companies (214 ) 406
Contributions from parent - 310
Other financing activities (2 ) (2 )
Net cash provided by financing activities 24 342
Net increase in cash and cash equivalents 96 -
Cash and cash equivalents at beginning of period 17 19
Cash and cash equivalents at end of period $ 113 $ 19
Supplemental disclosures
Significant noncash transactions
Accrued property additions $ 113 $ 172

See Notes to Progress Energy Florida, Inc. Unaudited Condensed Interim Financial Statements.

FLORIDA POWER CORPORATION d/b/a PROGRESS ENERGY FLORIDA, INC.
UNAUDITED CONDENSED BALANCE SHEETS
(in millions)	September 30, 2010			December 31, 2009
ASSETS
Utility plant
Utility plant in service	$	13,055		$	12,438
Accumulated depreciation		(4,119	)		(3,987	)
Utility plant in service, net		8,936			8,451
Held for future use		36			36
Construction work in progress		904			1,088
Nuclear fuel, net of amortization		188			158
Total utility plant, net		10,064			9,733
Current assets
Cash and cash equivalents		145			17
Receivables, net		571			356
Receivables from affiliated companies		13			8
Inventory		659			648
Regulatory assets		144			54
Derivative collateral posted		192			139
Deferred tax assets		106			115
Prepayments and other current assets		16			80
Total current assets		1,846			1,417
Deferred debits and other assets
Regulatory assets		1,415			1,307
Nuclear decommissioning trust funds		521			496
Miscellaneous other property and investments		43			42
Other assets and deferred debits		132			105
Total deferred debits and other assets		2,111			1,950
Total assets	$	14,021		$	13,100
CAPITALIZATION AND LIABILITIES
Common stock equity
Common stock without par value, 60 million shares authorized, 100 shares issued and outstanding	$	1,749		$	1,744
Accumulated other comprehensive (loss) income		(13	)		3
Retained earnings		3,090			2,743
Total common stock equity		4,826			4,490
Preferred stock		34			34
Long-term debt, net		4,182			3,883
Total capitalization		9,042			8,407
Current liabilities
Current portion of long-term debt		300			300
Notes payable to affiliated companies		8			221
Accounts payable		438			451
Payables to affiliated companies		44			62
Interest accrued		87			72
Customer deposits		217			205
Derivative liabilities		224			161
Accrued compensation and other benefits		44			53
Other current liabilities		271			89
Total current liabilities		1,633			1,614
Deferred credits and other liabilities
Noncurrent income tax liabilities		981			767
Regulatory liabilities		1,048			1,103
Asset retirement obligations		382			369
Accrued pension and other benefits		435			395
Capital lease obligations		199			208
Derivative liabilities		231			174
Other liabilities and deferred credits		70			63
Total deferred credits and other liabilities		3,346			3,079
Commitments and contingencies (Notes 13 and 14)
Total capitalization and liabilities	$	14,021		$	13,100

See Notes to Progress Energy Florida, Inc. Unaudited Condensed Interim Financial Statements.

FLORIDA POWER CORPORATION d/b/a PROGRESS ENERGY FLORIDA, INC.
UNAUDITED CONDENSED STATEMENTS of CASH FLOWS
(in millions)
Nine months ended September 30	2010			2009
Operating activities
Net income	$	401		$	385
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation, amortization and accretion		328			538
Deferred income taxes and investment tax credits, net		211			(12	)
Deferred fuel credit		(100	)		(55	)
Allowance for equity funds used during construction		(23	)		(72	)
Other adjustments to net income		89			93
Cash (used) provided by changes in operating assets and liabilities
Receivables		(155	)		(115	)
Receivables from affiliated companies		(5	)		9
Inventory		(11	)		(54	)
Derivative collateral posted		(59	)		141
Other assets		(20	)		20
Income taxes, net		117			71
Accounts payable		70			(14	)
Payables to affiliated companies		(18	)		(7	)
Accrued pension and other benefits		(51	)		(74	)
Other liabilities		121			61
Net cash provided by operating activities		895			915
Investing activities
Gross property additions		(774	)		(1,069	)
Nuclear fuel additions		(32	)		(66	)
Purchases of available-for-sale securities and other investments		(5,456	)		(591	)
Proceeds from available-for-sale securities and other investments		5,460			596
Other investing activities		16			(5	)
Net cash used by investing activities		(786	)		(1,135	)
Financing activities
Dividends paid on preferred stock		(1	)		(1	)
Dividends paid to parent		(50	)		-
Net decrease in short-term debt		-			(321	)
Proceeds from issuance of long-term debt, net		591			-
Retirement of long-term debt		(300	)		-
Changes in advances from affiliated companies		(213	)		83
Contributions from parent		-			465
Other financing activities		(8	)		(6	)
Net cash provided by financing activities		19			220
Net increase in cash and cash equivalents		128			-
Cash and cash equivalents at beginning of period		17			19
Cash and cash equivalents at end of period	$	145		$	19
Supplemental disclosures
Significant noncash transactions
Accrued property additions	$	92		$	160
Nuclear repairs insurance recovery		75			-

See Notes to Progress Energy Florida, Inc. Unaudited Condensed Interim Financial Statements.

PROGRESS ENERGY, INC.

CAROLINA POWER & LIGHT COMPANY d/b/a/ PROGRESS ENERGY CAROLINAS, INC.

FLORIDA POWER CORPORATION d/b/a PROGRESS ENERGY FLORIDA, INC.

COMBINED NOTES TO UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS

INDEX TO APPLICABLE COMBINED NOTES TO UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS BY REGISTRANT

Each of the following combined notes to the unaudited condensed interim financial statements of the Progress Registrants are applicable to Progress Energy, Inc. but not to each of PEC and PEF. The following table sets forth which notes are applicable to each of PEC and PEF. The notes that are not listed below for PEC or PEF are not, and shall not be deemed to be, part of PEC’s or PEF’s financial statements contained herein.

Registrant	Applicable Notes

PEC	1, 2, 4 through 910 and 1112 through 1314

PEF	1, 2, 4 through 910 and 1112 through 1314

1516

PROGRESS ENERGY, INC.

CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY CAROLINAS, INC.

FLORIDA POWER CORPORATION d/b/a PROGRESS ENERGY FLORIDA, INC.

COMBINED NOTES TO UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS

1.	~~ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.	A. ORGANIZATION

In this report, Progress Energy, which includes Progress Energy, Inc. holding company (the Parent) and its regulated and nonregulated subsidiaries on a consolidated basis, is at times referred to as “we,” “us” or “our.” When discussing Progress Energy’s financial information, it necessarily includes the results of Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. (PEC) and Florida Power Corporation d/b/a Progress Energy Florida, Inc. (PEF) (collectively, the Utilities). The term “Progress Registrants” refers to each of the three separate registrants: Progress Energy, PEC and PEF. The information in these combined notes relates to each of the Progress Registrants as noted in the Index to Applicable Combined Notes to Unaudited Condensed Interim Financial Stateme nts by Registrant. However, neither of the Utilities makes any representation as to information related solely to Progress Energy or the subsidiaries of Progress Energy other than itself.

PROGRESS ENERGY

The Parent is a holding company headquartered in Raleigh, N.C. As such, we are subject to regulation by the Federal Energy Regulatory Commission (FERC) under the regulatory provisions of the Public Utility Holding Company Act of 2005 (PUHCA 2005).

Our reportable segments are PEC and PEF, both of which are primarily engaged in the generation, transmission, distribution and sale of electricity. The Corporate and Other segment primarily includes amounts applicable to the activities of the Parent and Progress Energy Service Company, LLC (PESC) and other miscellaneous nonregulated businesses (Corporate and Other) that do not separately meet the quantitative disclosure requirements as a reportable business segment. See Note 1011 for further information about our segments.

PEC

PEC is a regulated public utility primarily engaged in the generation, transmission, distribution and sale of electricity in portions of North Carolina and South Carolina. PEC’s subsidiaries are involved in insignificant nonregulated business activities. PEC is subject to the regulatory jurisdiction of the North Carolina Utilities Commission (NCUC), Public Service Commission of South Carolina (SCPSC), the United States Nuclear Regulatory Commission (NRC) and the FERC.

PEF

PEF is a regulated public utility primarily engaged in the generation, transmission, distribution and sale of electricity in west central Florida. PEF is subject to the regulatory jurisdiction of the Florida Public Service Commission (FPSC), the NRC and the FERC.

B.	B. BASIS OF PRESENTATION

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. The December 31, 2009 condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. Because the accompanying interim financial statements do not include all of the information and footnotes required by GAAP for annual financial statements, they should be read in conjunction with the audited financial statements and notes thereto included in the Progress Registrants’ ~~annual~~an nual report on Form 10-K for the fiscal year ended December 31, 2009 (2009 Form 10-K).

1617

The Utilities collect from customers certain excise taxes levied by the state or local government upon the customers. The Utilities account for sales and use tax on a net basis and gross receipts tax, franchise taxes and other excise taxes on a gross basis.

The amount of gross receipts tax, franchise taxes and other excise taxes included in ~~electric~~ operating revenues and taxes other than on income in the ~~statements~~Statements of ~~income~~Income were as follows:


	Three months ended June 30,				Six months ended June 30,				Three months ended September 30						Nine months ended September 30
(in millions)	2010		2009		2010		2009		2010			2009			2010			2009
Progress Energy	$	81	$	77	$	164	$	156		$	101		$	97		$	265		$	253
PEC		27		26		57		52			34			31			91			83
PEF		54		51		107		104			67			66			174			170

Operation and Maintenance

O&M expense was ~~$208~~$234 million for the three months ended ~~June~~September 30, 2010, which represents a $4$36 million increase compared to the same period in 2009. O&M expense increased primarily due to $10 million higher employee benefits expense, the ~~$16~~$10 million ~~prior year~~prior-year pension deferral in accordance with a FPSC order, the $9 million prior-year impact of a change in the vacation benefits policy and the $2 million impairment of other assets. Management does not consider impairments to be representative of PEF’s fundamental core earnings. Therefore, the

7782

~~deferral~~impacts of impairments are excluded in accordance with an FPSC order, partially offset by $10 million favorable ECRC costs due to lower nitrogen oxides (NOx) allowances used resulting from a scrubber placed in service in December 2009. The ECRC expenses are recovered through cost-recovery clauses and, therefore, have no material impact on earnings.computing PEF’s Ongoing Earnings. In aggregate, O&M expenses primarily recoverable through base rates increased ~~$11~~$36 million compared to the same period in 2009.

Depreciation, Amortization and Accretion

Depreciation, amortization and accretion expense was ~~$110~~$77 million for the three months ended ~~June~~September 30, 2010, which represents a $5$170 million ~~increase~~decrease compared to the same period in 2009. Depreciation, amortization and accretion expense ~~increased~~decreased primarily due to ~~$14~~$118 million ~~higher~~lower nuclear cost-recovery amortization ~~partially offset by a $10~~and the $50 million reduction in the cost of removal component of depreciation expense in accordance with the 2010 base rate settlement agreement (See Note ~~3B)~~4B). The nuclear cost-recovery amortization is recovered through a cost-recovery clause and, therefore, has no material impact on earnings. In aggregate, depreciation, amortization and accretion expenses recoverable through base rates and the ECRC decreased $7$52 million compared to the same period in 2009.

~~Other~~

~~Other operating expenses of $7 million for the three months ended June 30, 2009, is primarily due to the regulatory disallowance of fuel costs (See Note 7C in the 2009 Form 10-K).~~

Total Other Income, Net

Total other income, net was ~~$12~~$2 million for the three months ended ~~June~~September 30, 2010, which represents a ~~$24~~$12 million decrease compared to the same period in 2009. This decrease was primarily due to ~~$19~~$8 million unfavorable AFUDC equity and a $5 million ~~lower investment gains~~donation, which resulted in a 100 percent tax credit and, therefore, has no material impact on ~~certain employee benefit trusts resulting from financial market conditions.~~earnings. The unfavorable AFUDC equity is related to lower eligible construction project costs with ~~the repowered Bartow Plant and~~ CAIR projects being placed in service in ~~the second~~late 2009 and ~~fourth quarters of 2009, respectively.~~May 2010.

Total Interest Charges, Net

Total interest charges, net was ~~$68~~$65 million for the three months ended ~~June~~September 30, 2010, which represents a ~~$13~~$5 million increase compared to the same period in 2009. This increase was primarily due to ~~$7 million unfavorable AFUDC debt related to lower eligible construction project costs as discussed above and $6~~$5 million higher interest driven by higher average long-term debt outstanding.

Income Tax Expense

Income tax expense increased ~~$12~~$10 million for the three months ended ~~June~~September 30, 2010, compared to the same period in 2009, primarily due to the ~~$8 million impact of the unfavorable AFUDC equity discussed above and the $4~~$5 million tax impact of higher pre-tax income ~~partially offset by~~and the $2$3 million impact of tax levelization. ~~AFUDC equity is excluded from the calculation of income tax expense.~~ PEF’s income tax expense was ~~increased~~decreased by $2$4 million ~~for the three months ended June 30, 2009, compared to no impact for the three months ended June 30, 2010~~ related to the impact of tax ~~levelization.~~levelization for the three months ended September 30, 2010, compared to a decrease of $7 million for the same period in 2009. GAAP requires companies to apply a levelized effective income tax rate to interim periods that is consistent with the estimated annual effective tax rate. Fluctuations in estimated annual earnings and the timing of various permanent items of ~~inc ome~~income or deduction can cause fluctuations in the effective tax rate for interim periods. Because this adjustment will vary each quarter, but will have no effect on net income for the year, management does not consider this adjustment to be representative of PEF’s fundamental core earnings. Therefore, the impact of tax levelization is excluded in computing PEF’s Ongoing Earnings.

7883

~~Six~~

Nine Months Ended ~~June~~September 30, 2010, Compared to ~~Six~~Nine Months Ended ~~June~~September 30, 2009

REVENUES

A reconciliation of Base Revenues to GAAP operating revenues, including the percentage change by year and by customer class, for the ~~six~~nine months ended ~~June~~September 30 follows:


(in millions)
Customer Class	2010		Change			% Change			2009		2010		Change			% Change			2009
Residential	$	497	$	88			21.5		$	409	$	808	$	102			14.4		$	706
Commercial		169		17			11.2			152		270		18			7.1			252
Industrial		38		4			11.8			34		58		5			9.4			53
Governmental		44		5			12.8			39		69		5			7.8			64
Unbilled		27		(3	)		-			30		24		(4	)		-			28
Total retail base revenues		775		111			16.7			664		1,229		126			11.4			1,103
Wholesale base revenues		81		(32	)		(28.3	)		113		121		(47	)		(28.0	)		168
Total Base Revenues		856		79			10.2			777		1,350		79			6.2			1,271
Clause recoverable regulatory returns		80		60			300.0			20		126		66			110.0			60
Miscellaneous		106		16			17.8			90		167		28			20.1			139
Fuel and other pass-through revenues		1,480		(129	)		-			1,609		2,422		(120	)		-			2,542
Total operating revenues	$	2,522	$	26			1.0		$	2,496	$	4,065	$	53			1.3		$	4,012

PEF’s total Base Revenues were ~~$856 million~~$1.350 billion and ~~$777 million~~$1.271 billion for the ~~six~~nine months ended ~~June~~September 30, 2010 and 2009, respectively. The $79 million increase in Base Revenues was due primarily to the ~~$59~~$67 million favorable impact of weather and the $55 million impact of increased retail base rates from the repowered Bartow Plant (See Note ~~3B)~~4B), ~~the $47 million favorable impact of weather, and the $5 million favorable impact of net retail customer growth and usage,~~ partially offset by ~~$32~~$47 million lower wholesale base revenues. The favorable impact of weather was driven by 74 percent higher heating degree days than 2009. Additionally, heating degree days were ~~128~~127 percent higher than normal in 2010. The favorable impact of net retail customer growth and usage was driven by an increase in the average usage per retail customer and a net 1,000 increase in the average number of customers for 20 10 compared to 2009.normal. PEF’s wholesale base revenues were ~~$81~~$121 million and ~~$113~~$168 million for the ~~six~~nine months ended ~~June~~September 30, 2010 and 2009, respectively. The ~~$32~~$47 million decrease was due primarily to an amended contract with a major customer and decreased revenues from a contract that expired in 2009. Given the current economic conditions, PEF does not believe it is likely to replace in ~~2010~~the near term wholesale contracts that expired in 2009.

PEF’s clause recoverable regulatory returns ~~were $80~~increased $66 million ~~and $20 million for the six months ended June 30,~~in 2010 ~~and 2009, respectively. The $60 million higher revenues~~ primarily ~~relate~~due to higher returns on ECRC assets due to placing a total of approximately ~~$770 million~~$1 billion of CAIR projects into service in late ~~2009.~~2009 and May 2010. We anticipate this trend of higher returns towill continue throughout 2010.

PEF’s miscellaneous revenues increased ~~$16~~$28 million in 2010 primarily due to $17 million higher transmission revenues driven by favorable ~~weather.~~weather and $8 million higher right-of-use revenues related to the use of easements and land.

Fuel and other pass-through revenues include $27 million and $2 million of revenues for the nine months ended September 30, 2010 and 2009, respectively, related to revenue requirements for depreciation and property tax expenses for CAIR projects placed in service.

7984

PEF’s electric energy sales in kWh and the percentage change by customer class for the ~~six~~nine months ended ~~June~~September 30 were as follows:


(in millions of kWh)
Customer Class	2010		Change		% Change		2009		2010		Change			% Change			2009
Residential		9,724		929		10.6		8,795		15,906		1,206			8.2			14,700
Commercial		5,536		34		0.6		5,502		8,991		84			0.9			8,907
Industrial		1,635		12		0.7		1,623		2,471		(15	)		(0.6	)		2,486
Governmental		1,558		21		1.4		1,537		2,450		41			1.7			2,409
Unbilled		730		42		-		688		608		(132	)		-			740
Total retail kWh sales		19,183		1,038		5.7		18,145		30,426		1,184			4.0			29,242
Wholesale		2,034		22		1.1		2,012		3,217		109			3.5			3,108
Total kWh sales		21,217		1,060		5.3		20,157		33,643		1,293			4.0			32,350

Commission File Number	Exact name of registrants as specified in their charters, states of incorporation, addresses of principal executive offices, and telephone numbers	I.R.S. Employer Identification Number


1-15929	Progress Energy, Inc. 410 South Wilmington Street Raleigh, North Carolina 27601-1748 Telephone: (919) 546-6111 State of Incorporation: North Carolina	56-2155481

1-3382	Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. 410 South Wilmington Street Raleigh, North Carolina 27601-1748 Telephone: (919) 546-6111 State of Incorporation: North Carolina	56-0165465

1-3274	Florida Power Corporation d/b/a Progress Energy Florida, Inc. 299 First Avenue North St. Petersburg, Florida 33701 Telephone: (727) 820-5151 State of Incorporation: Florida	59-0247770

Progress Energy, Inc. (Progress Energy)	Yes	x	No	o
Carolina Power & Light Company (PEC)	Yes	x	No	o
Florida Power Corporation (PEF)	Yes	o	No	x

Progress Energy	Large accelerated filer	x	Accelerated filer	o
	Non-accelerated filer	o	Smaller reporting company	o

PEC	Large accelerated filer	o	Accelerated filer	o
	Non-accelerated filer	x	Smaller reporting company	o

PEF	Large accelerated filer	o	Accelerated filer	o
	Non-accelerated filer	x	Smaller reporting company	o

Registrant	Description	Shares
Progress Energy	Common Stock (Without Par Value)	~~292,581,000~~292,938,462

PEC	Common Stock (Without Par Value)	159,608,055 (all of which were held directly by Progress Energy, Inc.)

PEF	Common Stock (Without Par Value)	100 (all of which were held indirectly by Progress Energy, Inc.)

TABLE OF CONTENTS
GLOSSARY OF TERMS		2

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS		56

PART I. FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	67

	Unaudited Condensed Interim Financial ~~Statements:~~Statements

	Progress Energy, Inc. (Progress Energy)
	Unaudited Condensed Consolidated Statements of Income	67
	Unaudited Condensed Consolidated Balance Sheets	78
	Unaudited Condensed Consolidated Statements of Cash Flows	89

	Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. (PEC)
	Unaudited Condensed Consolidated Statements of Income	910
	Unaudited Condensed Consolidated Balance Sheets	1011
	Unaudited Condensed Consolidated Statements of Cash Flows	1112

	Florida Power Corporation d/b/a Progress Energy Florida, Inc. (PEF)
	Unaudited Condensed Statements of Income	1213
	Unaudited Condensed Balance Sheets	1314
	Unaudited Condensed Statements of Cash Flows	1415

	Combined Notes to Unaudited Condensed Interim Financial Statements for Progress Energy, Inc., Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. and Florida Power Corporation d/b/a Progress Energy Florida, Inc.	1516

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	6673

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	~~109~~117

ITEM 4.	CONTROLS AND PROCEDURES	~~113~~120

ITEM 4T.	CONTROLS AND PROCEDURES	~~113~~120

PART II. OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	~~114~~121

ITEM 1A.	RISK FACTORS	~~114~~121

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	~~114~~

~~ITEM 5.~~	~~OTHER~~ ~~INFORMATION~~	~~115~~121

ITEM 6.	EXHIBITS	~~116~~123

SIGNATURES		~~117~~125

TERM	DEFINITION

2009 Form 10-K	Progress Registrants’ annual report on Form 10-K for the fiscal year ended December 31, 2009
401(k)	Progress Energy 401(k) Savings & Stock Ownership Plan
AFUDC	Allowance for funds used during construction
ARO	Asset retirement obligation
ASLB	Atomic Safety and Licensing Board
the Asset Purchase Agreement	Agreement by and among Global, Earthco and certain affiliates, and the Progress Affiliates as amended on August 23, 2000
ASC	FASB Accounting Standards Codification
ASU	Accounting Standards Update
Audit Committee	Audit and Corporate Performance Committee of Progress Energy’s board of directors
BART	Best Available Retrofit Technology
Base Revenues	Non-GAAP measure defined as operating revenues excluding clause recoverable regulatory returns, miscellaneous revenues and fuel and other pass-through revenues
Brunswick	PEC’s Brunswick Nuclear Plant
Btu	British thermal unit
CAA	Clean Air Act
CAIR	Clean Air Interstate Rule
CAMR	Clean Air Mercury Rule
CAVR	Clean Air Visibility Rule
CCRC	Capacity Cost-Recovery Clause
CERCLA or Superfund	Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
Ceredo	Ceredo Synfuel LLC
CIGFUR	Carolina Industrial Group for Fair Utility Rates II
Clean Smokestacks Act	North Carolina Clean Smokestacks Act
the Code	Internal Revenue Code
CO2	Carbon dioxide
COL	Combined license
Corporate and Other	Corporate and Other segment primarily includes the Parent, Progress Energy Service Company and miscellaneous other nonregulated businesses
CR1 and CR2	PEF’s Crystal River Units No. 1 and No. 2 coal-fired steam turbines
CR3	PEF’s Crystal River Unit No. 3 Nuclear Plant
CR4 and CR5	PEF’s Crystal River Units No. 4 and No. 5 coal-fired steam turbines
CUCA	Carolina Utility Customer Association
CVO	Contingent value obligation
D.C. Court of Appeals	U.S. Court of Appeals for the District of Columbia Circuit
DOE	United States Department of Energy
DSM	Demand-side management
Earthco	Four coal-based solid synthetic fuels limited liability companies of which three were wholly owned
ECCR	Energy Conservation Cost Recovery Clause
ECRC	Environmental Cost Recovery Clause

EE	Energy efficiency
EIP	Equity Incentive Plan
EPA	United States Environmental Protection Agency
EPACT	Energy Policy Act of 2005
EPC	Engineering, procurement and construction
ESOP	Employee Stock Ownership Plan
FASB	Financial Accounting Standards Board
FDEP	Florida Department of Environmental Protection
FERC	Federal Energy Regulatory Commission
FGT	Florida Gas Transmission Company, LLC
Fitch	Fitch Ratings
the Florida Global Case	U.S. Global, LLC v. Progress Energy, Inc. et alal.
Florida Progress	Florida Progress Corporation
FPSC	Florida Public Service Commission
FRCC	Florida Reliability Coordinating Council
Funding Corp.	Florida Progress Funding Corporation, a wholly owned subsidiary of Florida Progress
GAAP	Accounting principles generally accepted in the United States of America
GHG	Greenhouse gas
Global	U.S. Global, LLC
GridSouth	GridSouth Transco, LLC
GWh	Gigawatt-hours
H.R. 4173	Wall Street Reform and Consumer Protection Act
Harris	PEC’s Shearon Harris Nuclear Plant
IPP	Progress Energy Investor Plus Plan
the IRP	PEC’s 15-year Integrated Resource Plan
kV	Kilovolt
kVA	Kilovolt-ampere
kWh	Kilowatt-hours
Levy	PEF’s proposed nuclear plant in Levy County, Fla.
LIBOR	London Inter Bank Offered Rate
MACT	Maximum achievable control technology
MD&A	Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in PART I, Item 2 of this Form 10-Q
Medicare Act	Medicare Prescription Drug, Improvement and Modernization Act of 2003
MGP	Manufactured gas plant
MW	Megawatts
MWh	Megawatt-hours
Moody’s	Moody’s Investors Service, Inc.
NAAQS	National Ambient Air Quality Standards
NC REPS	North Carolina Renewable Energy and Energy Efficiency Portfolio Standard
NCUC	North Carolina Utilities Commission
NDT	Nuclear decommissioning trust
NEIL	Nuclear Electric Insurance Limited
NERC	North American Electric Reliability Corporation
North Carolina Global Case	Progress Synfuel Holdings, Inc. et al. v. U.S. Global, LLC
the Notes Guarantee	Florida Progress’ full and unconditional guarantee of the Subordinated Notes
NOx	Nitrogen oxides
NRC	United States Nuclear Regulatory Commission
O&M	Operation and maintenance expense
OATT	Open Access Transmission Tariff
OCI	Other comprehensive income

Ongoing Earnings	Non-GAAP financial measure defined as GAAP net income attributable to controlling interests after excluding discontinued operations and the effects of certain identified gains and charges
OPC	Florida’s Office of Public Counsel

OPEB	Postretirement benefits other than pensions
the Parent	Progress Energy, Inc. holding company on an unconsolidated basis
PEC	Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc.
PEF	Florida Power Corporation d/b/a Progress Energy Florida, Inc.
PESC	Progress Energy Service Company, LLC
Power Agency	North Carolina Eastern Municipal Power Agency
PPACA	Patient Protection and Affordable Care Act and the related Health Care and Education Reconciliation Act
Preferred Securities	7.10% Cumulative Quarterly Income Preferred Securities due 2039, Series A issued by the Trust
Preferred Securities Guarantee	Florida Progress’ guarantee of all distributions related to the Preferred Securities
Progress Affiliates	Five affiliated coal-based solid synthetic fuels facilities
Progress Energy	Progress Energy, Inc. and subsidiaries on a consolidated basis
Progress Registrants	The reporting registrants within the Progress Energy consolidated group. Collectively, Progress Energy, Inc., PEC and PEF
Progress Fuels	Progress Fuels Corporation, formerly Electric Fuels Corporation
PRP	Potentially responsible party, as defined in CERCLA
PSSP	Performance Share Sub-Plan
PUHCA 2005	Public Utility Holding Company Act of 2005
PVI	Progress Energy Ventures, Inc., formerly referred to as Progress Ventures, Inc.
QF	Qualifying facility
RCA	Revolving credit agreement
Reagents	Commodities such as ammonia and limestone used in emissions control technologies
REC	Renewable Energy Certificate
REPS	Renewable energy portfolio standard
RDS	Retiree Drug Subsidy related to benefits under Medicare Part D
Robinson	PEC’s Robinson Nuclear Plant
ROE	Return on equity
RSU	Restricted stock unit
RTO	Regional transmission organization
SCPSC	Public Service Commission of South Carolina
Section 29	Section 29 of the Code
Section 29/45K	General business tax credits earned after December 31, 2005, for synthetic fuels production in accordance with Section 29
Section 45K	Section 45K of the Code
Section 316(b)	Section 316(b) of the Clean Water Act
(See Note/s “#”)	For all sections, this is a cross-reference to the Combined Notes to the Financial Statements contained in PART I, Item I of this Form 10-Q
SERC	SERC Reliability Corporation
S&P	Standard & Poor’s Rating Services
SNG	Southern Natural Gas Company
SO2	Sulfur dioxide
Subordinated Notes	7.10% Junior Subordinated Deferrable Interest Notes due 2039 issued by Funding Corp.
Synthetic Fuels	Former operations associated with the production of coal-based solid synthetic fuels
Tax Agreement	Intercompany Income Tax Allocation Agreement

Terminals	Coal terminals and docks in West Virginia and Kentucky, which were sold on March 7, 2008
the Trust	FPC Capital I
the Utilities	Collectively, PEC and PEF
VIE	Variable interest entity
Ward	Ward Transformer site located in Raleigh, N.C.
Ward OU1	Operable unit for stream segments downstream from the Ward site
Ward OU2	Operable unit for further investigation at the Ward facility and certain adjacent areas

PROGRESS ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
June 30, 2010

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of INCOME
	Three months ended June 30,						Six months ended June 30,
(in millions except per share data)	2010			2009			2010			2009
Operating revenues	$	2,372		$	2,312		$	4,907		$	4,754
Operating expenses
Fuel used in electric generation		743			826			1,639			1,780
Purchased power		315			257			578			474
Operation and maintenance		505			484			985			937
Depreciation, amortization and accretion		233			226			479			506
Taxes other than on income		133			130			287			273
Other		3			10			5			12
Total operating expenses		1,932			1,933			3,973			3,982
Operating income		440			379			934			772
Other income
Interest income		1			2			3			6
Allowance for equity funds used during construction		25			36			46			75
Other, net		5			13			-			12
Total other income, net		31			51			49			93
Interest charges
Interest charges		199			181			390			360
Allowance for borrowed funds used during construction		(7	)		(12	)		(16	)		(24	)
Total interest charges, net		192			169			374			336
Income from continuing operations before income tax		279			261			609			529
Income tax expense		98			86			237			171
Income from continuing operations before cumulative effect of change in accounting principle		181			175			372			358
Discontinued operations, net of tax		(1	)		(1	)		-			(1	)
Cumulative effect of change in accounting principle, net of tax		-			-			(2	)		-
Net income		180			174			370			357
Net income attributable to noncontrolling interests, net of tax		-			-			-	��		(1	)
Net income attributable to controlling interests	$	180		$	174		$	370		$	356
Average common shares outstanding – basic		290			280			287			278
Basic and diluted earnings per common share
Income from continuing operations attributable to controlling interests, net of tax	$	0.62		$	0.62		$	1.29		$	1.28
Discontinued operations attributable to controlling interests, net of tax		-			-			-			-
Net income attributable to controlling interests	$	0.62		$	0.62		$	1.29		$	1.28
Dividends declared per common share	$	0.620		$	0.620		$	1.240		$	1.240
Amounts attributable to controlling interests
Income from continuing operations, net of tax	$	181		$	175		$	370		$	357
Discontinued operations, net of tax		(1	)		(1	)		-			(1	)
Net income attributable to controlling interests	$	180		$	174		$	370		$	356

See Notes to Progress Energy, Inc. Unaudited Condensed Consolidated Interim Financial Statements.


(in millions)	Total Common Stock Equity			Noncontrolling Interests			Total Equity			Total Common Stock Equity			Noncontrolling Interests			Total Equity
Balance, December 31, 2009	$	9,449		$	6		$	9,455		$	9,449		$	6		$	9,455
Net income (loss)(a)		370			(2	)		368
Cumulative effect of change in accounting principle (See Note 2)											-			(2	)		(2	)
Net income(a)											731			1			732
Other comprehensive loss		(44	)		-			(44	)		(77	)		-			(77	)
Issuance of shares through offerings and stock- based compensation plans (See Note 4D)		443			-			443
Issuance of shares through offerings and stock- based compensation plans (See Note 5D)											461			-			461
Dividends declared		(361	)		-			(361	)		(543	)		-			(543	)
Distributions to noncontrolling interests		-			(2	)		(2	)		-			(2	)		(2	)
Balance, June 30, 2010	$	9,857		$	2		$	9,859
Balance, September 30, 2010										$	10,021		$	3		$	10,024

Balance, December 31, 2008	$	8,687		$	6		$	8,693		$	8,687		$	6		$	8,693
Net income (loss)(a)		356			(1	)		355
Net income(a)											603			-			603
Other comprehensive income		20			-			20			17			-			17
Issuance of shares through offerings and stock- based compensation plans (See Note 4D)		582			-			582
Issuance of shares through offerings and stock- based compensation plans (See Note 5D)											603			-			603
Dividends declared		(356	)		-			(356	)		(529	)		-			(529	)
Distributions to noncontrolling interests		-			(1	)		(1	)		-			(1	)		(1	)
Other		-			2			2			-			1			1
Balance, June 30, 2009	$	9,289		$	6		$	9,295
Balance, September 30, 2009										$	9,381		$	6		$	9,387

(a)	The shares issued under an underwritten public offering were issued on January 12, 2009, at a public offering price of ~~$37.50.~~
							$37.50 per share.

(in millions)		Total		Outstanding		Reserved(a)		Available
October 15, 2010
Parent	Five-year (expiring 5/3/12)(b)	$	500	$	-	$	32	$	468
PEC	Three-year (expiring 10/15/13)		750		-		-		750
PEF	Three-year (expiring 10/15/13)		750		-		-		750
Total credit facilities		$	2,000	$	-	$	32	$	1,968

September 30, 2010
Parent	Five-year (expiring 5/3/12)	$	1,130	$	-	$	32	$	1,098
PEC	Five-year (expiring 6/28/11)		450		-		-		450
PEF	Five-year (expiring 3/28/11)		450		-		-		450
Total credit facilities		$	2,030	$	-	$	32	$	1,998

December 31, 2009
Parent	Five-year (expiring 5/3/12)	$	1,130	$	-	$	177	$	953
PEC	Five-year (expiring 6/28/11)		450		-		-		450
PEF	Five-year (expiring 3/28/11)		450		-		-		450
Total credit facilities		$	2,030	$	-	$	177	$	1,853


(in millions)	Fair Value		Unrealized Losses		Unrealized Gains
June 30, 2010
Common stock equity securities	$	785	$	30	$	242
Preferred stock and other equity securities		17		-		6
Corporate debt securities		95		-		6
U.S. state and municipal debt securities		124		2		4
U.S. and foreign government debt securities		256		1		13
Money market funds and other securities		99		-		1
Total	$	1,376	$	33	$	272

December 31, 2009
Common stock equity securities	$	839	$	22	$	301
Preferred stock and other equity securities		16		-		5
Corporate debt securities		71		1		5
U.S. state and municipal debt securities		118		2		3
U.S. and foreign government debt securities		197		1		8
Money market funds and other securities		161		-		-
Total	$	1,402	$	26	$	322


(in millions)	Fair Value		Unrealized Losses		Unrealized Gains
September 30, 2010
Common stock equity	$	892	$	17	$	323
Preferred stock and other equity		24		-		8
Corporate debt		90		-		8
U.S. state and municipal debt		127		2		6
U.S. and foreign government debt		280		-		14
Money market funds and other		71		-		1
Total	$	1,484	$	19	$	360

December 31, 2009
Common stock equity	$	839	$	22	$	301
Preferred stock and other equity		16		-		5
Corporate debt		71		1		5
U.S. state and municipal debt		118		2		3
U.S. and foreign government debt		197		1		8
Money market funds and other		161		-		-
Total	$	1,402	$	26	$	322


(in millions)
Due in one year or less	$	21	$	43
Due after one through five years		232		242
Due after five through 10 years		141		110
Due after 10 years		96		115
Total	$	490	$	510


PROGRESS ENERGY
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Nuclear decommissioning trust funds
Common stock equity	$	785	$	-	$	-	$	785	$	892	$	-	$	-	$	892
Preferred stock and other equity		17		-		-		17		19		5		-		24
Corporate debt		-		83		-		83		-		86		-		86
U.S. state and municipal debt		-		124		-		124		-		127		-		127
U.S. and foreign government debt		101		142		-		243		89		180		-		269
Money market funds and other		2		87		-		89		1		58		-		59
Total nuclear decommissioning trust funds		905		436		-		1,341		1,001		456		-		1,457
Derivatives
Commodity forward contracts		-		14		-		14		-		11		-		11
Interest rate contracts		-		1		-		1
Other marketable securities
Corporate debt		-		12		-		12		-		4		-		4
U.S. state and municipal debt		-		1		-		1
U.S. and foreign government debt		1		12		-		13		-		11		-		11
Money market funds and other		22		10		-		32		18		7		-		25
Total assets	$	928	$	486	$	-	$	1,414	$	1,019	$	489	$	-	$	1,508

Liabilities
Derivatives
Commodity forward contracts	$	-	$	444	$	62	$	506
Interest rate contracts		-		63		-		63
Contingent value obligations derivatives		-		15		-		15
Total liabilities	$	-	$	522	$	62	$	584


PROGRESS ENERGY
	Pension Benefits						Other Postretirement Benefits						Pension Benefits						Other Postretirement Benefits
(in millions)	2010			2009			2010			2009			2010			2009			2010			2009
Service cost	$	12		$	10		$	2		$	2		$	12		$	11		$	3		$	1
Interest cost		35			34			8			9			35			36			13			6
Expected return on plan assets		(39	)		(35	)		(1	)		(1	)		(40	)		(31	)		(1	)		-
Amortization of actuarial loss(a)		12			12			-			1
Amortization of actuarial loss (gain)(a)														13			16			6			(2	)
Other amortization, net (a)		2			2			1			1			2			2			1			1
Net periodic cost before deferral(b)	$	22		$	23		$	10		$	12		$	22		$	34		$	22		$	6

The following table presents the fair value of derivative instruments at June 30, 2010 and December 31, 2009:

Instrument / Balance sheet location		June 30, 2010				December 31, 2009						September 30, 2010				December 31, 2009
(in millions)		Asset		Liability		Asset			Liability			Asset		Liability		Asset		Liability
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments										Derivatives designated as hedging instruments
Interest rate derivatives
Prepayments and other current assets		$	-			$	5					$	-			$	5
Other assets and deferred debits			1				14						-				14
Derivative liabilities, current				$	32			$	-					$	70			$	-
Derivative liabilities, long-term					31				-						43				-
Total derivatives designated as hedging instruments			1		63		19		-				-		113		19		-

Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments										Derivatives not designated as hedging instruments
Commodity derivatives(a)
Prepayments and other current assets			9				11						7				11
Other assets and deferred debits			5				9						4				9
Derivative liabilities, current					217					189					254				189
Derivative liabilities, long-term					289					236					316				236
CVOs(b)
Other liabilities and deferred credits					15					15					15				15
Fair value of derivatives not designated as hedging instruments			14		521		20			440			11		585		20		440
Fair value loss transition adjustment(c)
Derivative liabilities, current					1					1					1				1
Derivative liabilities, long-term					4					4					3				4
Total derivatives not designated as hedging instruments			14		526		20			445			11		589		20		445
Total derivatives		$	15	$	589	$	39		$	445		$	11	$	702	$	39	$	445

Instrument	Amount of Gain or (Loss) Recognized in Income on Derivatives				Amount of Gain or (Loss) Recognized in Income on Derivatives
(in millions)	2010		2009		2010		2009
Commodity derivatives(a)	$	1	$	1	$	-	$	1
Fair value loss transition adjustment(a)		-		1		1		1
CVOs(a)		-		1		-		3
Total	$	1	$	3	$	1	$	5

Derivatives not designated as hedging instruments for the three months ended September 30
Instrument	Realized Gain or (Loss)(a)						Unrealized Gain or (Loss)(b)
(in millions)	2010			2009			2010			2009
Commodity derivatives	$	(17	)	$	(29	)	$	(38	)	$	(8	)

(in millions)	PEC		PEF		Corporate and Other			Eliminations			Totals			PEC		PEF		Corporate and Other			Eliminations			Totals
At and for the three months ended June 30, 2010
At and for the three months ended September 30, 2010													At and for the three months ended September 30, 2010
Revenues
Unaffiliated	$	1,117	$	1,252	$	3		$	-		$	2,372		$	1,414	$	1,543	$	5		$	-		$	2,962
Intersegment		-		-		53			(53	)		-			-		-		66			(66	)		-
Total revenues		1,117		1,252		56			(53	)		2,372			1,414		1,543		71			(66	)		2,962
Ongoing Earnings (loss)		112		119		(50	)		-			181
Ongoing Earnings															233		177		(49	)		-			361
Assets		13,966		13,693		20,690			(16,212	)		32,137			14,343		14,021		21,017			(16,675	)		32,706

For the three months ended June 30, 2009
For the three months ended September 30, 2009													For the three months ended September 30, 2009
Revenues
Unaffiliated	$	1,076	$	1,234	$	2		$	-		$	2,312		$	1,307	$	1,516	$	1		$	-		$	2,824
Intersegment		-		-		55			(55	)		-			-		-		52			(52	)		-
Total revenues		1,076		1,234		57			(55	)		2,312			1,307		1,516		53			(52	)		2,824
Ongoing Earnings (loss)		94		121		(34	)		-			181
Ongoing Earnings															212		170		(40	)		-			342

At and for the six months ended June 30, 2010
At and for the nine months ended September 30, 2010													At and for the nine months ended September 30, 2010
Revenues
Unaffiliated	$	2,380	$	2,522	$	5		$	-		$	4,907		$	3,794	$	4,064	$	11		$	-		$	7,869
Intersegment		-		-		114			(114	)		-			-		1		179			(180	)		-
Total revenues		2,380		2,522		119			(114	)		4,907			3,794		4,065		190			(180	)		7,869
Ongoing Earnings (loss)		260		232		(97	)		-			395
Ongoing Earnings															493		409		(146	)		-			756
Assets		13,966		13,693		20,690			(16,212	)		32,137			14,343		14,021		21,017			(16,675	)		32,706

For the six months ended June 30, 2009
Revenues
Unaffiliated	$	2,254	$	2,496	$	4		$	-		$	4,754
Intersegment		-		-		120			(120	)		-
Total revenues		2,254		2,496		124			(120	)		4,754
Ongoing Earnings (loss)		223		212		(72	)		-			363


For the nine months ended September 30, 2009
Revenues
Unaffiliated	$	3,561	$	4,012	$	5		$	-		$	7,578
Intersegment		-		-		171			(171	)		-
Total revenues		3,561		4,012		176			(171	)		7,578
Ongoing Earnings		435		382		(113	)		-			704

	For the three months ended June 30,						For the three months ended September 30
(in millions)	2010			2009			2010			2009
Ongoing Earnings	$	181		$	181		$	361		$	342
Tax levelization		-			(5	)		4			7
CVO mark-to-market (Note 9D)		-			1
CVO mark-to-market (Note 10D)								-			3
Impairment, net of tax benefit of $1		(1	)		(2	)		(2	)		-
Plant retirement adjustment, net of tax expense of $-		1			-
Income from continuing operations before cumulative effect of change in accounting principle		181			175
Discontinued operations, net of tax		(1	)		(1	)
Net income attributable to controlling interests	$	180		$	174

	For the six months ended June 30,
(in millions)		2010			2009
Ongoing Earnings	$	395		$	363
Tax levelization		(2	)		(12	)
CVO mark-to-market (Note 9D)		-			8
Impairment, net of tax benefit of $1		(2	)		(2	)
Plant retirement adjustment, net of tax expense of $1		1			-
Change in tax treatment of the Medicare Part D subsidy (Note 8)		(22	)		-
Plant retirement charge, net of tax benefit of $2								-			(3	)
Continuing income attributable to noncontrolling interests, net of tax		2			1			2			1
Income from continuing operations before cumulative effect of change in accounting principle		372			358			365			350
Discontinued operations, net of tax		-			(1	)		(2	)		(102	)
Cumulative effect of change in accounting principle, net of tax		(2	)		-			2			-
Net income attributable to noncontrolling interests, net of tax		-			(1	)		(4	)		(1	)
Net income attributable to controlling interests	$	370		$	356		$	361		$	247


	For the nine months ended September 30
(in millions)	2010			2009
Ongoing Earnings	$	756		$	704
Tax levelization		3			(4	)
CVO mark-to-market (Note 10D)		-			11
Impairment, net of tax benefit of $3 and $1, respectively		(5	)		(2	)
Plant retirement adjustment (charge), net of tax (expense) benefit of $(1) and $2, respectively		1			(3	)
Change in tax treatment of the Medicare Part D subsidy (Note 9)		(22	)		-
Continuing income attributable to noncontrolling interests, net of tax		4			2
Income from continuing operations before cumulative effect of change in accounting principle		737			708
Discontinued operations, net of tax		(2	)		(103	)
Net income attributable to noncontrolling interests, net of tax		(4	)		(2	)
Net income attributable to controlling interests	$	731		$	603


PROGRESS ENERGY
(in millions)	MGP and Other Sites			Remediation of Distribution and Substation Transformers			Total			MGP and Other Sites			Remediation of Distribution and Substation Transformers			Total
Balance, December 31, 2009	$	22		$	20		$	42		$	22		$	20		$	42
Amount accrued for environmental loss contingencies(a)		4			10			14			7			11			18
Expenditures for environmental loss contingencies(b)		(7	)		(9	)		(16	)		(8	)		(14	)		(22	)
Balance, June 30, 2010(c)	$	19		$	21		$	40
Balance, September 30, 2010(c)										$	21		$	17		$	38

Balance, December 31, 2008	$	31		$	22		$	53		$	31		$	22		$	53
Amount accrued for environmental loss contingencies(a)		4			2			6			3			11			14
Expenditures for environmental loss contingencies(b)		(6	)		(7	)		(13	)		(8	)		(11	)		(19	)
Balance, June 30, 2009(c)	$	29		$	17		$	46

Balance, September 30, 2009(c)										$	26		$	22		$	48

(a)	Amounts accrued are for the ~~six~~nine months ended ~~June~~September 30, 2010 and 2009. For the three months ended ~~June~~September 30, 2010, ~~we accrued $2~~our accruals were $3 million for the remediation of MGP and other sites and ~~$8 million~~were not material for the remediation of distribution and substation transformers. For the three months ended ~~June~~September 30, 2009, our accruals for the remediation of MGP and other sites were not material and were $9 million for the remediation of distribution and substation ~~transformers were not material.~~transformers.
(b)	Expenditures are for the ~~six~~nine months ended ~~June~~September 30, 2010 and 2009. For the three months ended ~~June~~September 30, 2010, ~~we spent $5 million~~our expenditures were not material for the remediation of MGP and other sites and were $5 million for the remediation of distribution and substation transformers. For the three months ended ~~June~~September 30, 2009, our expenditures were not material for the remediation of MGP and other sites and were $4 million for the remediation of distribution and substation ~~transformers were not material.~~transformers.
(c)	Expected to be paid out over one to 15 years.

(a)	Amounts accrued are for the ~~six~~nine months ended ~~June~~September 30, 2010 and 2009. For the three months ended ~~June~~September 30, 2010 and 2009, PEC's accruals for the remediation of MGP and other sites were not material.
(b)	Expenditures are for the ~~six~~nine months ended ~~June~~September 30, 2010 and 2009. For the three months ended ~~June~~September 30, 2010 and 2009, PEC's expenditures for the remediation of MGP and other sites were not material.
(c)	Expected to be paid out over one to five years.

Condensed Consolidating Statement of Income
Three months ended June 30, 2010
(in millions)	Parent			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Other			Progress Energy, Inc.
Operating revenues
Operating revenues	$	-		$	1,255		$	1,117		$	-		$	2,372
Affiliate revenues		-			-			52			(52	)		-
Total operating revenues		-			1,255			1,169			(52	)		2,372
Operating expenses
Fuel used in electric generation		-			368			375			-			743
Purchased power		-			239			76			-			315
Operation and maintenance		-			208			347			(50	)		505
Depreciation, amortization and accretion		-			110			123			-			233
Taxes other than on income		-			83			51			(1	)		133
Other		-			3			-			-			3
Total operating expenses		-			1,011			972			(51	)		1,932
Operating income (loss)		-			244			197			(1	)		440
Other income (expense)
Interest income		2			-			2			(3	)		1
Allowance for equity funds used during construction		-			10			15			-			25
Other, net		-			-			3			2			5
Total other income (expense), net		2			10			20			(1	)		31
Interest charges
Interest charges		72			75			54			(2	)		199
Allowance for borrowed funds used during construction		-			(2	)		(5	)		-			(7	)
Total interest charges, net		72			73			49			(2	)		192
(Loss) income from continuing operations before income tax and equity in earnings of consolidated subsidiaries		(70	)		181			168			-			279
Income tax (benefit) expense		(28	)		67			57			2			98
Equity in earnings of consolidated subsidiaries		222			-			-			(222	)		-
Income (loss) from continuing operations		180			114			111			(224	)		181
Discontinued operations, net of tax		-			-			(1	)		-			(1	)
Net income (loss)		180			114			110			(224	)		180
Net (income) loss attributable to noncontrolling interests, net of tax		-			(1	)		1			-			-
Net income (loss) attributable to controlling interests	$	180		$	113		$	111		$	(224	)	$	180

Condensed Consolidating Statement of Income
Three months ended June 30, 2009
(in millions)	Parent			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Other			Progress Energy, Inc.
Operating revenues
Operating revenues	$	-		$	1,236		$	1,076		$	-		$	2,312
Affiliate revenues		-			-			54			(54	)		-
Total operating revenues		-			1,236			1,130			(54	)		2,312
Operating expenses
Fuel used in electric generation		-			443			383			-			826
Purchased power		-			200			57			-			257
Operation and maintenance		2			204			331			(53	)		484
Depreciation, amortization and accretion		-			105			121			-			226
Taxes other than on income		-			80			51			(1	)		130
Other		-			8			2			-			10
Total operating expenses		2			1,040			945			(54	)		1,933
Operating (loss) income		(2	)		196			185			-			379
Other income (expense)
Interest income		3			1			1			(3	)		2
Allowance for equity funds used during construction		-			29			7			-			36
Other, net		1			6			5			1			13
Total other income (expense), net		4			36			13			(2	)		51
Interest charges
Interest charges		58			71			54			(2	)		181
Allowance for borrowed funds used during construction		-			(9	)		(3	)		-			(12	)
Total interest charges, net		58			62			51			(2	)		169
(Loss) income from continuing operations before income tax and equity in earnings of consolidated subsidiaries		(56	)		170			147			-			261
Income tax (benefit) expense		(26	)		55			53			4			86
Equity in earnings of consolidated subsidiaries		204			-			-			(204	)		-
Income (loss) from continuing operations		174			115			94			(208	)		175
Discontinued operations, net of tax		-			-			(1	)		-			(1	)
Net income (loss)		174			115			93			(208	)		174
Net (income) loss attributable to noncontrolling interests, net of tax		-			-			1			(1	)		-
Net income (loss) attributable to controlling interests	$	174		$	115		$	94		$	(209	)	$	174

Condensed Consolidating Statement of Income
Six months ended June 30, 2010
(in millions)	Parent			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Other			Progress Energy, Inc.
(in millions)	Parent			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Other			Progress Energy, Inc.
Operating revenues
Operating revenues	$	-		$	2,527		$	2,380		$	-		$	4,907
Affiliate revenues		-			-			113			(113	)		-
Total operating revenues		-			2,527			2,493			(113	)		4,907
Operating expenses
Fuel used in electric generation		-			781			858			-			1,639
Purchased power		-			452			126			-			578
Operation and maintenance		3			413			676			(107	)		985
Depreciation, amortization and accretion		-			234			245			-			479
Taxes other than on income		-			176			115			(4	)		287
Other		-			5			-			-			5
Total operating expenses		3			2,061			2,020			(111	)		3,973
Operating (loss) income		(3	)		466			473			(2	)		934
Other income (expense)
Interest income		4			-			3			(4	)		3
Allowance for equity funds used during construction		-			18			28			-			46
Other, net		(1	)		3			(4	)		2			-
Total other income (expense), net		3			21			27			(2	)		49
Interest charges
Interest charges		143			145			106			(4	)		390
Allowance for borrowed funds used during construction		-			(7	)		(9	)		-			(16	)
Total interest charges, net		143			138			97			(4	)		374
(Loss) income from continuing operations before income tax and equity in earnings of consolidated subsidiaries		(143	)		349			403			-			609
Income tax (benefit) expense		(58	)		136			154			5			237
Equity in earnings of consolidated subsidiaries		455			-			-			(455	)		-
Income (loss) from continuing operations before cumulative effect of change in accounting principle		370			213			249			(460	)		372
Discontinued operations, net of tax		-			1			(1	)		-			-
Cumulative effect of change in accounting principle, net of tax		-			-			(2	)		-			(2	)
Net income (loss)		370			214			246			(460	)		370
Net (income) loss attributable to noncontrolling interests, net of tax		-			(2	)		3			(1	)		-
Net income (loss) attributable to controlling interests	$	370		$	212		$	249		$	(461	)	$	370

Condensed Consolidating Statement of Income
Six months ended June 30, 2009
(in millions)	Parent			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Other			Progress Energy, Inc.
Operating revenues
Operating revenues	$	-		$	2,500		$	2,254		$	-		$	4,754
Affiliate revenues		-			-			119			(119	)		-
Total operating revenues		-			2,500			2,373			(119	)		4,754
Operating expenses
Fuel used in electric generation		-			955			825			-			1,780
Purchased power		-			360			114			-			474
Operation and maintenance		3			406			642			(114	)		937
Depreciation, amortization and accretion		-			265			241			-			506
Taxes other than on income		-			168			109			(4	)		273
Other		-			10			2			-			12
Total operating expenses		3			2,164			1,933			(118	)		3,982
Operating (loss) income		(3	)		336			440			(1	)		772
Other income (expense)
Interest income		6			2			4			(6	)		6
Allowance for equity funds used during construction		-			59			16			-			75
Other, net		8			6			(2	)		-			12
Total other income (expense), net		14			67			18			(6	)		93
Interest charges
Interest charges		110			143			113			(6	)		360
Allowance for borrowed funds used during construction		-			(18	)		(6	)		-			(24	)
Total interest charges, net		110			125			107			(6	)		336
(Loss) income from continuing operations before income tax and equity in earnings of consolidated subsidiaries		(99	)		278			351			(1	)		529
Income tax (benefit) expense		(39	)		76			129			5			171
Equity in earnings of consolidated subsidiaries		415			-			-			(415	)		-
Income (loss) from continuing operations		355			202			222			(421	)		358
Discontinued operations, net of tax		1			(1	)		(1	)		-			(1	)
Net income (loss)		356			201			221			(421	)		357
Net (income) loss attributable to noncontrolling interests, net of tax		-			(1	)		1			(1	)		(1	)
Net income (loss) attributable to controlling interests	$	356		$	200		$	222		$	(422	)	$	356

Condensed Consolidating Balance Sheet
June 30, 2010
	Parent		Subsidiary Guarantor		Non- Guarantor Subsidiaries		Other			Progress Energy, Inc.
(in millions)	Parent		Subsidiary Guarantor		Non- Guarantor Subsidiaries		Other			Progress Energy, Inc.
ASSETS
Utility plant, net	$	-	$	9,977	$	10,424	$	111		$	20,512
Current assets
Cash and cash equivalents		366		116		208		-			690
Notes receivable from affiliated companies		133		51		9		(193	)		-
Regulatory assets		-		223		101		-			324
Derivative collateral posted		-		174		20		-			194
Income taxes receivable		15		6		33		(33	)		21
Prepayments and other current assets		19		1,248		1,334		(170	)		2,431
Total current assets		533		1,818		1,705		(396	)		3,660
Deferred debits and other assets
Investment in consolidated subsidiaries		13,669		-		-		(13,669	)		-
Regulatory assets		-		1,317		894		-			2,211
Goodwill		-		-		-		3,655			3,655
Nuclear decommissioning trust funds		-		482		859		-			1,341
Other assets and deferred debits		165		225		918		(550	)		758
Total deferred debits and other assets		13,834		2,024		2,671		(10,564	)		7,965
Total assets	$	14,367	$	13,819	$	14,800	$	(10,849	)	$	32,137
CAPITALIZATION AND LIABILITIES
Equity
Common stock equity	$	9,857	$	4,727	$	5,270	$	(9,997	)	$	9,857
Noncontrolling interests		-		2		-		-			2
Total equity		9,857		4,729		5,270		(9,997	)		9,859
Preferred stock of subsidiaries		-		34		59		-			93
Long-term debt, affiliate		-		309		115		(152	)		272
Long-term debt, net		3,494		4,481		3,688		1			11,664
Total capitalization		13,351		9,553		9,132		(10,148	)		21,888
Current liabilities
Current portion of long-term debt		700		-		6		(1	)		705
Notes payable to affiliated companies		-		166		27		(193	)		-
Derivative liabilities		23		179		48		-			250
Other current liabilities		259		1,147		943		(201	)		2,148
Total current liabilities		982		1,492		1,024		(395	)		3,103
Deferred credits and other liabilities
Noncurrent income tax liabilities		-		371		1,327		(410	)		1,288
Regulatory liabilities		-		1,060		1,307		112			2,479
Other liabilities and deferred credits		34		1,343		2,010		(8	)		3,379
Total deferred credits and other liabilities		34		2,774		4,644		(306	)		7,146
Total capitalization and liabilities	$	14,367	$	13,819	$	14,800	$	(10,849	)	$	32,137

Condensed Consolidating Statement of Income
Three months ended September 30, 2010
(in millions)	Parent			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Other			Progress Energy, Inc.
Operating revenues
Operating revenues	$	-		$	1,548		$	1,414		$	-		$	2,962
Affiliate revenues		-			-			66			(66	)		-
Total operating revenues		-			1,548			1,480			(66	)		2,962
Operating expenses
Fuel used in electric generation		-			471			464			-			935
Purchased power		-			309			109			-			418
Operation and maintenance		2			234			301			(63	)		474
Depreciation, amortization and accretion		-			77			124			-			201
Taxes other than on income		-			102			60			(1	)		161
Other		-			10			10			-			20
Total operating expenses		2			1,203			1,068			(64	)		2,209
Operating (loss) income		(2	)		345			412			(2	)		753
Other income (expense)
Interest income		2			1			2			(2	)		3
Allowance for equity funds used during construction		-			5			17			-			22
Other, net		-			(3	)		(3	)		1			(5	)
Total other income (expense), net		2			3			16			(1	)		20
Interest charges
Interest charges		71			74			53			(1	)		197
Allowance for borrowed funds used during construction		-			(3	)		(5	)		-			(8	)
Total interest charges, net		71			71			48			(1	)		189
(Loss) income from continuing operations before income tax and equity in earnings of consolidated subsidiaries		(71	)		277			380			(2	)		584
Income tax (benefit) expense		(25	)		99			147			(2	)		219
Equity in earnings of consolidated subsidiaries		406			-			-			(406	)		-
Income (loss) from continuing operations before cumulative effect of change in accounting principle		360			178			233			(406	)		365
Discontinued operations, net of tax		1			(1	)		(2	)		-			(2	)
Cumulative effect of change in accounting principle, net of tax		-			-			2			-			2
Net income (loss)		361			177			233			(406	)		365
Net (income) loss attributable to noncontrolling interests, net of tax		-			(1	)		(2	)		(1	)		(4	)
Net income (loss) attributable to controlling interests	$	361		$	176		$	231		$	(407	)	$	361