| 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 StreetRaleigh, North Carolina 27601-1748Telephone:   (919) 546-6111State of Incorporation: North Carolina                                                              | 56-2155481                            |
|                   |                                                                                                                                                                                                                            |                                  |
| 1-3382                 | Carolina Power & Light Companyd/b/a Progress Energy Carolinas, Inc.410 South Wilmington StreetRaleigh, North Carolina  27601-1748Telephone:   (919) 546-6111State of Incorporation: North Carolina | 56-0165465                            |
|                   |                                                                                                                                                                                                                            |                                  |
| 1-3274                 | Florida Power Corporationd/b/a Progress Energy Florida, Inc.299 First Avenue NorthSt. Petersburg, Florida  33701Telephone:   (727) 820-5151State 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 | x | No | o |

----

| Progress Energy | Yes | x | No | o |
|-----------------|-----|---|----|---|
| PEC             | Yes | x | No | o |
| PEF             | Yes | x | No | o |

| 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      |

| Progress Energy | Yes | o | No | x |
|-----------------|-----|---|----|---|
| PEC             | Yes | o | No | x |
| PEF             | Yes | o | No | x |

| Registrant      | Description                      | Shares                                                                 |
|-----------------|----------------------------------|------------------------------------------------------------------------|
| Progress Energy | Common Stock (Without Par Value) | 296,021,515                                                            |
|            |                             |                                                                   |
| 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 | 5 |
|                                       |
| PART I.  FINANCIAL INFORMATION   |
|                                       |
| ITEM 1.                                    | FINANCIAL STATEMENTS | 7 |
|                                       |   |   |
|                                       | Unaudited Condensed Interim Financial Statements: |   |
|                                       |   |   |
|                                       | Progress Energy, Inc. (Progress Energy) |   |
|                                       | Unaudited Condensed Consolidated Statements of Comprehensive Income | 7 |
|                                       | Unaudited Condensed Consolidated Balance Sheets | 8 |
|                                       | Unaudited Condensed Consolidated Statements of Cash Flows | 9 |
|                                       |   |   |
|                                       | Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. (PEC) |   |
|                                       | Unaudited Condensed Consolidated Statements of Comprehensive Income | 10 |
|                                       | Unaudited Condensed Consolidated Balance Sheets | 11 |
|                                       | Unaudited Condensed Consolidated Statements of Cash Flows | 12 |
|                                       |   |   |
|                                       | Florida Power Corporation d/b/a Progress Energy Florida, Inc. (PEF) |   |
|                                       | Unaudited Condensed Statements of Comprehensive Income | 13 |
|                                       | Unaudited Condensed Balance Sheets | 14 |
|                                       | Unaudited Condensed Statements of Cash Flows | 15 |
|                                       |   |   |
|                                       | 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. | 16 |
|                                       |   |   |
| ITEM 2.                                    | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 63 |
|                                       |   |   |
| ITEM 3.                                    | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 93 |
|                                       |   |   |
| ITEM 4.                                    | CONTROLS AND PROCEDURES | 96 |
|                                       |   |   |
| PART II.  OTHER INFORMATION      |
|                                       |
| ITEM 1.                                    | LEGAL PROCEEDINGS | 97 |
|                                       |   |   |
| ITEM 1A.                                   | RISK FACTORS | 97 |
|                                       |   |   |
| ITEM 2.                                    | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 97 |
|                                       |   |   |
| ITEM 6.                                    | EXHIBITS | 99 |
|                                       |   |   |
| SIGNATURES                                 | 101 |

----

GLOSSARY

| TERM                         | DEFINITION                                                                                                                                                                       |
|------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                         |                                                                                                                                                                             |
|                         |                                                                                                                                                                             |
| 2011 Form 10-K               | Progress Registrants’ annual report on Form 10-K for the fiscal year ended December 31, 2011                                                                          |
| 401(k)                       | Progress Energy 401(k) Savings & Stock Ownership Plan                                                                                                                        |
| AFUDC                        | Allowance for funds used during construction                                                                                                                                     |
| Anclote                      | PEF’s Anclote Units 1 and 2                                                                                                                                                |
| ARO                          | Asset retirement obligation                                                                                                                                                      |
| ASC                          | FASB Accounting Standards Codification                                                                                                                                           |
| 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                                                         |
| 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, fuel and other pass-through revenues and refunds, if any |
| Brunswick                    | PEC’s Brunswick Nuclear Plant                                                                                                                                              |
| Btu                          | British thermal unit                                                                                                                                                             |
| CAA                          | Clean Air Act                                                                                                                                                                    |
| CAIR                         | Clean Air Interstate 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                                                                                         |
| Clean Smokestacks Act        | North Carolina Clean Smokestacks Act                                                                                                                                             |
| 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 1 and 2 coal-fired steam turbines                                                                                                                |
| CR3                          | PEF’s Crystal River Nuclear Plant Unit 3                                                                                                                                   |
| CR4 and CR5                  | PEF’s Crystal River Units 4 and 5 coal-fired steam turbines                                                                                                                |
| CSAPR                        | Cross-State Air Pollution Rule                                                                                                                                                   |
| CVO                          | Contingent value obligation                                                                                                                                                      |
| D.C. Court of Appeals        | U.S. Court of Appeals for the District of Columbia Circuit                                                                                                                       |
| DOE                          | U.S. Department of Energy                                                                                                                                                        |
| DOJ                          | U.S. Department of Justice                                                                                                                                                       |
| DSM                          | Demand-side management                                                                                                                                                           |
| Duke Energy                  | Duke Energy Corporation                                                                                                                                                          |
| 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                        | U.S. Environmental Protection Agency                                                                                                                                                        |
| 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 al.                                                                                                                                            |
| Florida Progress           | Florida Progress Corporation                                                                                                                                                                |
| FPSC                       | Florida Public Service Commission                                                                                                                                                           |
| 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                                                                                                                                                                            |
| GWh                        | Gigawatt-hours                                                                                                                                                                              |
| Harris                     | PEC’s Shearon Harris Nuclear Plant                                                                                                                                                    |
| IPP                        | Progress Energy Investor Plus Plan                                                                                                                                                          |
| kV                         | Kilovolt                                                                                                                                                                                    |
| kVA                        | Kilovolt-ampere                                                                                                                                                                             |
| kWh                        | Kilowatt-hours                                                                                                                                                                              |
| Levy                       | PEF’s proposed Levy Units No. 1 and No. 2 Nuclear Power Plants                                                                                                                        |
| LIBOR                      | London Inter Bank Offered Rate                                                                                                                                                              |
| MACT                       | Maximum achievable control technology                                                                                                                                                       |
| MATS                       | Mercury and Air Toxics Standards                                                                                                                                                            |
| 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                                                                                                                       |
| the Merger Agreement       | Agreement and Plan of Merger, dated as of January 8, 2011, by and among Progress Energy and Duke Energy                                                                                     |
| 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                                                                                                                                             |
| NO2                        | Nitrogen dioxide                                                                                                                                                                            |
| North Carolina Global Case | Progress Synfuel Holdings, Inc. et al. v. U.S. Global, LLC                                                                                                                                  |
| NOx                        | Nitrogen oxides                                                                                                                                                                             |
| NRC                        | 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 |
| OPEB                       | Postretirement benefits other than pensions                                                                                                                                                 |

----

| ORS                            | South Carolina Office of Regulatory Staff                                                                                                   |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|
| 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                   |
| PRP                            | Potentially responsible party, as defined in CERCLA                                                                                         |
| PSSP                           | Performance Share Sub-Plan                                                                                                                  |
| QF                             | Qualifying facility                                                                                                                         |
| RCA                            | Revolving credit agreement                                                                                                                  |
| Reagents                       | Commodities such as ammonia and limestone used in emissions control technologies                                                            |
| REPS                           | Renewable energy portfolio standard                                                                                                         |
| the Registration Statement     | The registration statement filed on Form S-4 by Duke Energy related to the Merger                                                           |
| Robinson                       | PEC’s Robinson Nuclear Plant                                                                                                          |
| ROE                            | Return on equity                                                                                                                            |
| RSU                            | Restricted stock unit                                                                                                                       |
| 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 1 of this Form 10-Q |
| SERC                           | SERC Reliability Corporation                                                                                                                |
| S&P                        | Standard & Poor’s Rating Services                                                                                                 |
| SO2                            | Sulfur dioxide                                                                                                                              |
| SOx                            | Sulfur oxides                                                                                                                               |
| Subordinated Notes             | 7.10% Junior Subordinated Deferrable Interest Notes due 2039 issued by Funding Corp.                                                        |
| Tax Agreement                  | Intercompany Income Tax Allocation Agreement                                                                                                |
| the Trust                      | FPC Capital I                                                                                                                               |
| the Utilities                  | Collectively, PEC and PEF                                                                                                                   |
| VIE                            | Variable interest entity                                                                                                                    |
| VSP                            | Voluntary severance plan                                                                                                                    |
| 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                                                     |
|                           |                                                                                                                                        |

----

SAFE HARBOR

| ·   | our ability to obtain the approvals required to complete the merger and the impact of compliance with material restrictions or conditions potentially imposed by our regulators; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the risk that the merger is terminated prior to completion and results in significant transaction costs to us; |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | our ability to achieve the anticipated results and benefits of the merger; |
|--------------------|----------------------------------------------------------------------------|

| ·   | the impact of business uncertainties and contractual restrictions while the merger is pending; |
|--------------------|------------------------------------------------------------------------------------------------|

| ·   | the scope of necessary repairs of the delamination of PEF’s Crystal River Unit No. 3 Nuclear Plant (CR3) could prove more extensive than is currently identified, such repairs could prove not to be feasible, the cost of repair and/or replacement power could exceed our estimates and insurance coverage or may not be recoverable through the regulatory process; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the impact of fluid and complex laws and regulations, including those relating to the environment and energy policy; |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

| ·   | our ability to recover eligible costs and earn an adequate return on investment through the regulatory process; |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | our ability to successfully operate electric generating facilities and deliver electricity to customers; |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | the impact on our facilities and businesses from a terrorist attack, cyber security threats and other catastrophic events; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| ·   | our ability to meet the anticipated future need for additional baseload generation and associated transmission facilities in our regulated service territories and the accompanying regulatory and financial risks; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our ability to meet current and future renewable energy requirements; |
|--------------------|-----------------------------------------------------------------------|

| ·   | the inherent risks associated with the operation and potential construction of nuclear facilities, including environmental, health, safety, regulatory and financial risks; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the financial resources and capital needed to comply with environmental laws and regulations; |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | risks associated with climate change; |
|--------------------|---------------------------------------|

| ·   | weather and drought conditions that directly influence the production, delivery and demand for electricity; |
|--------------------|-------------------------------------------------------------------------------------------------------------|

| ·   | recurring seasonal fluctuations in demand for electricity; |
|--------------------|------------------------------------------------------------|

| ·   | our ability to recover in a timely manner, if at all, costs associated with future significant weather events through the regulatory process; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | fluctuations in the price of energy commodities and purchased power and our ability to recover such costs through the regulatory process; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | the Progress Registrants’ ability to control costs, including operations and maintenance expense (O&M) and large construction projects; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our subsidiaries’ ability to pay upstream dividends or distributions to Progress Energy, Inc. holding company (the Parent); |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------|

| ·   | current economic conditions; |
|--------------------|------------------------------|

| ·   | our ability to successfully access capital markets on favorable terms; |
|--------------------|------------------------------------------------------------------------|

| ·   | the stability of commercial credit markets and our access to short- and long-term credit; |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | the impact that increases in leverage or reductions in cash flow may have on each of the Progress Registrants; |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | the Progress Registrants’ ability to maintain their current credit ratings and the impacts in the event their credit ratings are downgraded; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the investment performance of our nuclear decommissioning trust (NDT) funds; |
|--------------------|------------------------------------------------------------------------------|

| ·   | the investment performance of the assets of our pension and benefit plans and resulting impact on future funding requirements; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| ·   | the impact of potential goodwill impairments; |
|--------------------|-----------------------------------------------|

| ·   | our ability to fully utilize tax credits generated from the previous production and sale of qualifying synthetic fuels under Internal Revenue Code Section 29/45K (Section 29/45K); and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the outcome of any ongoing or future litigation or similar disputes and the impact of any such outcome or related settlements. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                |   |   |   |   |   |   |
|-------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| PROGRESS ENERGY, INC.                                                               |
| UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS                       |
| March 31, 2012                                                                      |
|                                                                                |   |   |   |   |   |   |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of COMPREHENSIVE INCOME                 |   |
| (in millions except per share data)                                                 |   |   |   |   |   |   |
| Three months ended March 31                                                         |   | 2012   |   |   | 2011   |   |
| Operating revenues                                                                  |   | $      | 2,092  |   |   | $      | 2,167 |   |
| Operating expenses                                                                  |   |   |   |   |   |   |   |   |
| Fuel used in electric generation                                                    |   |   | 685    |   |   |   | 718 |   |
| Purchased power                                                                     |   |   | 210    |   |   |   | 220 |   |
| Operation and maintenance                                                           |   |   | 529    |   |   |   | 494 |   |
| Depreciation, amortization and accretion                                            |   |   | 166    |   |   |   | 154 |   |
| Taxes other than on income                                                          |   |   | 138    |   |   |   | 140 |   |
| Other                                                                               |   |   | -      |   |   |   | (10 | ) |
| Total operating expenses                                                            |   |   | 1,728  |   |   |   | 1,716 |   |
| Operating income                                                                    |   |   | 364    |   |   |   | 451 |   |
| Other income                                                                        |   |   |   |   |   |   |   |   |
| Interest income                                                                     |   |   | 1      |   |   |   | 1 |   |
| Allowance for equity funds used during construction                                 |   |   | 24     |   |   |   | 29 |   |
| Other, net                                                                          |   |   | 13     |   |   |   | 3 |   |
| Total other income, net                                                             |   |   | 38     |   |   |   | 33 |   |
| Interest charges                                                                    |   |   |   |   |   |   |   |   |
| Interest charges                                                                    |   |   | 194    |   |   |   | 199 |   |
| Allowance for borrowed funds used during construction                               |   |   | (9     | )      |   |   | (9 | ) |
| Total interest charges, net                                                         |   |   | 185    |   |   |   | 190 |   |
| Income from continuing operations before income tax                                 |   |   | 217    |   |   |   | 294 |   |
| Income tax expense                                                                  |   |   | 76     |   |   |   | 107 |   |
| Income from continuing operations                                                   |   |   | 141    |   |   |   | 187 |   |
| Discontinued operations, net of tax                                                 |   |   | 11     |   |   |   | (2 | ) |
| Net income                                                                          |   |   | 152    |   |   |   | 185 |   |
| Net income attributable to noncontrolling interests, net of tax                     |   |   | (2     | )      |   |   | (1 | ) |
| Net income attributable to controlling interests                                    |   | $      | 150    |   |   | $      | 184 |   |
| Average common shares outstanding – basic                                     |   |   | 297    |   |   |   | 295 |   |
| Basic and diluted earnings per common share                                         |   |   |   |   |   |   |   |   |
| Income from continuing operations attributable to controlling interests, net of tax |   | $      | 0.47   |   |   | $      | 0.63 |   |
| Discontinued operations attributable to controlling interests, net of tax           |   |   | 0.04   |   |   |   | (0.01 | ) |
| Net income attributable to controlling interests                                    |   | $      | 0.51   |   |   | $      | 0.62 |   |
| Dividends declared per common share                                                 |   | $      | 0.620  |   |   | $      | 0.620 |   |
| Net income amounts attributable to controlling interests                            |   |   |   |   |   |   |   |   |
| Income from continuing operations, net of tax                                       |   | $      | 139    |   |   | $      | 186 |   |
| Discontinued operations, net of tax                                                 |   |   | 11     |   |   |   | (2 | ) |
| Net income attributable to controlling interests                                    |   | $      | 150    |   |   | $      | 184 |   |
| Comprehensive income                                                                |   |   |   |   |   |   |   |   |
| Comprehensive income                                                                |   | $      | 157    |   |   | $      | 189 |   |
| Comprehensive income attributable to noncontrolling interests, net of tax           |   |   | (2     | )      |   |   | (1 | ) |
| Comprehensive income attributable to controlling interests                          |   | $      | 155    |   |   | $      | 188 |   |

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

----

| PROGRESS ENERGY, INC.                                                                                                                             |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS                                                                                                   |   |
| (in millions)                                                                                                                                     |   | March 31, 2012 |   |   | December 31, 2011 |   |
| ASSETS                                                                                                                                            |   |   |   |   |   |   |
| Utility plant                                                                                                                                     |   |   |   |   |   |   |
| Utility plant in service                                                                                                                          |   | $ | 31,284 |   |   | $ | 31,065 |   |
| Accumulated depreciation                                                                                                                          |   |   | (12,141 | ) |   |   | (12,001 | ) |
| Utility plant in service, net                                                                                                                     |   |   | 19,143 |   |   |   | 19,064 |   |
| Other utility plant, net                                                                                                                          |   |   | 217 |   |   |   | 217 |   |
| Construction work in progress                                                                                                                     |   |   | 2,698 |   |   |   | 2,449 |   |
| Nuclear fuel, net of amortization                                                                                                                 |   |   | 747 |   |   |   | 767 |   |
| Total utility plant, net                                                                                                                          |   |   | 22,805 |   |   |   | 22,497 |   |
| Current assets                                                                                                                                    |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                                                                                         |   |   | 565 |   |   |   | 230 |   |
| Receivables, net                                                                                                                                  |   |   | 758 |   |   |   | 889 |   |
| Inventory, net                                                                                                                                    |   |   | 1,447 |   |   |   | 1,438 |   |
| Regulatory assets                                                                                                                                 |   |   | 250 |   |   |   | 275 |   |
| Derivative collateral posted                                                                                                                      |   |   | 166 |   |   |   | 147 |   |
| Deferred tax assets                                                                                                                               |   |   | 518 |   |   |   | 371 |   |
| Prepayments and other current assets                                                                                                              |   |   | 131 |   |   |   | 133 |   |
| Total current assets                                                                                                                              |   |   | 3,835 |   |   |   | 3,483 |   |
| Deferred debits and other assets                                                                                                                  |   |   |   |   |   |   |   |   |
| Regulatory assets                                                                                                                                 |   |   | 3,123 |   |   |   | 3,025 |   |
| Nuclear decommissioning trust funds                                                                                                               |   |   | 1,762 |   |   |   | 1,647 |   |
| Miscellaneous other property and investments                                                                                                      |   |   | 413 |   |   |   | 407 |   |
| Goodwill                                                                                                                                          |   |   | 3,655 |   |   |   | 3,655 |   |
| Other assets and deferred debits                                                                                                                  |   |   | 382 |   |   |   | 345 |   |
| Total deferred debits and other assets                                                                                                            |   |   | 9,335 |   |   |   | 9,079 |   |
| Total assets                                                                                                                                      |   | $ | 35,975 |   |   | $ | 35,059 |   |
| CAPITALIZATION AND LIABILITIES                                                                                                                    |   |   |   |   |   |   |   |   |
| Common stock equity                                                                                                                               |   |   |   |   |   |   |   |   |
| Common stock without par value, 500 million shares authorized, 296  million and 295 million shares issued and outstanding, respectively |   | $ | 7,451 |   |   | $ | 7,434 |   |
| Accumulated other comprehensive loss                                                                                                              |   |   | (160 | ) |   |   | (165 | ) |
| Retained earnings                                                                                                                                 |   |   | 2,718 |   |   |   | 2,752 |   |
| Total common stock equity                                                                                                                         |   |   | 10,009 |   |   |   | 10,021 |   |
| Noncontrolling interests                                                                                                                          |   |   | 2 |   |   |   | 4 |   |
| Total equity                                                                                                                                      |   |   | 10,011 |   |   |   | 10,025 |   |
| Preferred stock of subsidiaries                                                                                                                   |   |   | 93 |   |   |   | 93 |   |
| Long-term debt, affiliate                                                                                                                         |   |   | 273 |   |   |   | 273 |   |
| Long-term debt, net                                                                                                                               |   |   | 11,742 |   |   |   | 11,718 |   |
| Total capitalization                                                                                                                              |   |   | 22,119 |   |   |   | 22,109 |   |
| Current liabilities                                                                                                                               |   |   |   |   |   |   |   |   |
| Current portion of long-term debt                                                                                                                 |   |   | 1,375 |   |   |   | 950 |   |
| Short-term debt                                                                                                                                   |   |   | 1,056 |   |   |   | 671 |   |
| Accounts payable                                                                                                                                  |   |   | 878 |   |   |   | 909 |   |
| Interest accrued                                                                                                                                  |   |   | 193 |   |   |   | 200 |   |
| Dividends declared                                                                                                                                |   |   | 2 |   |   |   | 78 |   |
| Customer deposits                                                                                                                                 |   |   | 343 |   |   |   | 340 |   |
| Derivative liabilities                                                                                                                            |   |   | 484 |   |   |   | 436 |   |
| Accrued compensation and other benefits                                                                                                           |   |   | 127 |   |   |   | 195 |   |
| Other current liabilities                                                                                                                         |   |   | 304 |   |   |   | 306 |   |
| Total current liabilities                                                                                                                         |   |   | 4,762 |   |   |   | 4,085 |   |
| Deferred credits and other liabilities                                                                                                            |   |   |   |   |   |   |   |   |
| Noncurrent income tax liabilities                                                                                                                 |   |   | 2,637 |   |   |   | 2,355 |   |
| Accumulated deferred investment tax credits                                                                                                       |   |   | 101 |   |   |   | 103 |   |
| Regulatory liabilities                                                                                                                            |   |   | 2,684 |   |   |   | 2,700 |   |
| Asset retirement obligations                                                                                                                      |   |   | 1,282 |   |   |   | 1,265 |   |
| Accrued pension and other benefits                                                                                                                |   |   | 1,611 |   |   |   | 1,625 |   |
| Derivative liabilities                                                                                                                            |   |   | 364 |   |   |   | 352 |   |
| Other liabilities and deferred credits                                                                                                            |   |   | 415 |   |   |   | 465 |   |
| Total deferred credits and other liabilities                                                                                                      |   |   | 9,094 |   |   |   | 8,865 |   |
| Commitments and contingencies (Notes 13 and 14)                                                                                                   |   |   |   |   |   |   |   |   |
| Total capitalization and liabilities                                                                                                              |   | $ | 35,975 |   |   | $ | 35,059 |   |

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

----

| PROGRESS ENERGY, INC.                                                                             |   |
|---------------------------------------------------------------------------------------------------|--------|
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of CASH FLOWS                                         |   |
| (in millions)                                                                                     |   |   |   |   |   |   |
| Three months ended March 31                                                                       |   | 2012 |   |   | 2011 |   |
| Operating activities                                                                              |   |   |   |   |   |   |
| Net income                                                                                        |   | $ | 152 |   |   | $ | 185 |   |
| Adjustments to reconcile net income to net cash provided by operating activities                  |   |   |   |   |   |   |   |   |
| Depreciation, amortization and accretion                                                          |   |   | 200 |   |   |   | 199 |   |
| Deferred income taxes and investment tax credits, net                                             |   |   | 107 |   |   |   | 101 |   |
| Deferred fuel (credit) cost                                                                       |   |   | (6 | ) |   |   | 70 |   |
| Allowance for equity funds used during construction                                               |   |   | (24 | ) |   |   | (29 | ) |
| Other adjustments to net income                                                                   |   |   | (7 | ) |   |   | 56 |   |
| Cash provided (used) by changes in operating assets and liabilities                               |   |   |   |   |   |   |   |   |
| Receivables                                                                                       |   |   | 78 |   |   |   | 163 |   |
| Inventory                                                                                         |   |   | (10 | ) |   |   | (49 | ) |
| Other assets                                                                                      |   |   | (48 | ) |   |   | 7 |   |
| Income taxes, net                                                                                 |   |   | (7 | ) |   |   | 57 |   |
| Accounts payable                                                                                  |   |   | 23 |   |   |   | (89 | ) |
| Accrued pension and other benefits                                                                |   |   | (33 | ) |   |   | (224 | ) |
| Other liabilities                                                                                 |   |   | (69 | ) |   |   | (1 | ) |
| Net cash provided by operating activities                                                         |   |   | 356 |   |   |   | 446 |   |
| Investing activities                                                                              |   |   |   |   |   |   |   |   |
| Gross property additions                                                                          |   |   | (562 | ) |   |   | (501 | ) |
| Nuclear fuel additions                                                                            |   |   | (51 | ) |   |   | (57 | ) |
| Purchases of available-for-sale securities and other investments                                  |   |   | (363 | ) |   |   | (1,817 | ) |
| Proceeds from available-for-sale securities and other investments                                 |   |   | 359 |   |   |   | 1,809 |   |
| Other investing activities                                                                        |   |   | 65 |   |   |   | 46 |   |
| Net cash used by investing activities                                                             |   |   | (552 | ) |   |   | (520 | ) |
| Financing activities                                                                              |   |   |   |   |   |   |   |   |
| Issuance of common stock, net                                                                     |   |   | 3 |   |   |   | 8 |   |
| Dividends paid on common stock                                                                    |   |   | (260 | ) |   |   | (183 | ) |
| Proceeds from issuance of short-term debt with original maturities greater than 90 days           |   |   | 65 |   |   |   | - |   |
| Net increase in short-term debt                                                                   |   |   | 320 |   |   |   | 79 |   |
| Proceeds from issuance of long-term debt, net                                                     |   |   | 444 |   |   |   | 494 |   |
| Retirement of long-term debt                                                                      |   |   | - |   |   |   | (700 | ) |
| Other financing activities                                                                        |   |   | (41 | ) |   |   | (63 | ) |
| Net cash provided (used) by financing activities                                                  |   |   | 531 |   |   |   | (365 | ) |
| Net increase (decrease) in cash and cash equivalents                                              |   |   | 335 |   |   |   | (439 | ) |
| Cash and cash equivalents at beginning of period                                                  |   |   | 230 |   |   |   | 611 |   |
| Cash and cash equivalents at end of period                                                        |   | $ | 565 |   |   | $ | 172 |   |
| Supplemental disclosures                                                                          |   |   |   |   |   |   |   |   |
| Significant noncash transactions                                                                  |   |   |   |   |   |   |   |   |
| Accrued property additions                                                                        |   | $ | 225 |   |   | $ | 178 |   |
|                                                                                              |   |
| 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                                               |
| March 31, 2012                                                                                              |
|                                                                                                        |   |   |   |   |   |   |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of COMPREHENSIVE INCOME                                         |   |
| (in millions)                                                                                               |   |   |   |   |   |   |
| Three months ended March 31                                                                                 |   | 2012 |   |   | 2011 |   |
| Operating revenues                                                                                          |   | $ | 1,085 |   |   | $ | 1,133 |   |
| Operating expenses                                                                                          |   |   |   |   |   |   |   |   |
| Fuel used in electric generation                                                                            |   |   | 349 |   |   |   | 363 |   |
| Purchased power                                                                                             |   |   | 65 |   |   |   | 67 |   |
| Operation and maintenance                                                                                   |   |   | 374 |   |   |   | 295 |   |
| Depreciation, amortization and accretion                                                                    |   |   | 134 |   |   |   | 124 |   |
| Taxes other than on income                                                                                  |   |   | 56 |   |   |   | 56 |   |
| Other                                                                                                       |   |   | (1 | ) |   |   | - |   |
| Total operating expenses                                                                                    |   |   | 977 |   |   |   | 905 |   |
| Operating income                                                                                            |   |   | 108 |   |   |   | 228 |   |
| Other income (expense)                                                                                      |   |   |   |   |   |   |   |   |
| Allowance for equity funds used during construction                                                         |   |   | 15 |   |   |   | 20 |   |
| Other, net                                                                                                  |   |   | 4 |   |   |   | (2 | ) |
| Total other income, net                                                                                     |   |   | 19 |   |   |   | 18 |   |
| Interest charges                                                                                            |   |   |   |   |   |   |   |   |
| Interest charges                                                                                            |   |   | 56 |   |   |   | 50 |   |
| Allowance for borrowed funds used during construction                                                       |   |   | (5 | ) |   |   | (5 | ) |
| Total interest charges, net                                                                                 |   |   | 51 |   |   |   | 45 |   |
| Income before income tax                                                                                    |   |   | 76 |   |   |   | 201 |   |
| Income tax expense                                                                                          |   |   | 24 |   |   |   | 70 |   |
| Net income                                                                                                  |   |   | 52 |   |   |   | 131 |   |
| Preferred stock dividend requirement                                                                        |   |   | (1 | ) |   |   | (1 | ) |
| Net income available to parent                                                                              |   | $ | 51 |   |   | $ | 130 |   |
| Comprehensive income                                                                                        |   | $ | 57 |   |   | $ | 133 |   |
|                                                                                                        |   |
| 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)                                                                                                       |   | March 31, 2012 |   |   | December 31, 2011 |   |
| ASSETS                                                                                                              |   |   |   |   |   |   |
| Utility plant                                                                                                       |   |   |   |   |   |   |
| Utility plant in service                                                                                            |   | $ | 17,613 |   |   | $ | 17,439 |   |
| Accumulated depreciation                                                                                            |   |   | (7,628 | ) |   |   | (7,567 | ) |
| Utility plant in service, net                                                                                       |   |   | 9,985 |   |   |   | 9,872 |   |
| Other utility plant, net                                                                                            |   |   | 181 |   |   |   | 181 |   |
| Construction work in progress                                                                                       |   |   | 1,439 |   |   |   | 1,294 |   |
| Nuclear fuel, net of amortization                                                                                   |   |   | 519 |   |   |   | 540 |   |
| Total utility plant, net                                                                                            |   |   | 12,124 |   |   |   | 11,887 |   |
| Current assets                                                                                                      |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                                                           |   |   | 21 |   |   |   | 20 |   |
| Receivables, net                                                                                                    |   |   | 400 |   |   |   | 492 |   |
| Receivables from affiliated companies                                                                               |   |   | 21 |   |   |   | 13 |   |
| Inventory, net                                                                                                      |   |   | 779 |   |   |   | 775 |   |
| Deferred fuel cost                                                                                                  |   |   | 25 |   |   |   | 31 |   |
| Deferred tax assets                                                                                                 |   |   | 166 |   |   |   | 142 |   |
| Prepayments and other current assets                                                                                |   |   | 99 |   |   |   | 76 |   |
| Total current assets                                                                                                |   |   | 1,511 |   |   |   | 1,549 |   |
| Deferred debits and other assets                                                                                    |   |   |   |   |   |   |   |   |
| Regulatory assets                                                                                                   |   |   | 1,352 |   |   |   | 1,310 |   |
| Nuclear decommissioning trust funds                                                                                 |   |   | 1,163 |   |   |   | 1,088 |   |
| Miscellaneous other property and investments                                                                        |   |   | 187 |   |   |   | 188 |   |
| Other assets and deferred debits                                                                                    |   |   | 87 |   |   |   | 80 |   |
| Total deferred debits and other assets                                                                              |   |   | 2,789 |   |   |   | 2,666 |   |
| Total assets                                                                                                        |   | $ | 16,424 |   |   | $ | 16,102 |   |
| CAPITALIZATION AND LIABILITIES                                                                                      |   |   |   |   |   |   |   |   |
| Common stock equity                                                                                                 |   |   |   |   |   |   |   |   |
| Common stock without par value, 200 million shares authorized, 160  million shares issued and outstanding |   | $ | 2,155 |   |   | $ | 2,148 |   |
| Accumulated other comprehensive loss                                                                                |   |   | (66 | ) |   |   | (71 | ) |
| Retained earnings                                                                                                   |   |   | 2,884 |   |   |   | 3,011 |   |
| Total common stock equity                                                                                           |   |   | 4,973 |   |   |   | 5,088 |   |
| Preferred stock                                                                                                     |   |   | 59 |   |   |   | 59 |   |
| Long-term debt, net                                                                                                 |   |   | 3,693 |   |   |   | 3,693 |   |
| Total capitalization                                                                                                |   |   | 8,725 |   |   |   | 8,840 |   |
| Current liabilities                                                                                                 |   |   |   |   |   |   |   |   |
| Current portion of long-term debt                                                                                   |   |   | 500 |   |   |   | 500 |   |
| Short-term debt                                                                                                     |   |   | 441 |   |   |   | 188 |   |
| Notes payable to affiliated companies                                                                               |   |   | 42 |   |   |   | 31 |   |
| Accounts payable                                                                                                    |   |   | 520 |   |   |   | 527 |   |
| Payables to affiliated companies                                                                                    |   |   | 64 |   |   |   | 41 |   |
| Interest accrued                                                                                                    |   |   | 64 |   |   |   | 77 |   |
| Customer deposits                                                                                                   |   |   | 120 |   |   |   | 116 |   |
| Derivative liabilities                                                                                              |   |   | 149 |   |   |   | 130 |   |
| Accrued compensation and other benefits                                                                             |   |   | 76 |   |   |   | 110 |   |
| Other current liabilities                                                                                           |   |   | 118 |   |   |   | 85 |   |
| Total current liabilities                                                                                           |   |   | 2,094 |   |   |   | 1,805 |   |
| Deferred credits and other liabilities                                                                              |   |   |   |   |   |   |   |   |
| Noncurrent income tax liabilities                                                                                   |   |   | 2,062 |   |   |   | 1,976 |   |
| Accumulated deferred investment tax credits                                                                         |   |   | 97 |   |   |   | 98 |   |
| Regulatory liabilities                                                                                              |   |   | 1,632 |   |   |   | 1,543 |   |
| Asset retirement obligations                                                                                        |   |   | 908 |   |   |   | 896 |   |
| Accrued pension and other benefits                                                                                  |   |   | 677 |   |   |   | 687 |   |
| Other liabilities and deferred credits                                                                              |   |   | 229 |   |   |   | 257 |   |
| Total deferred credits and other liabilities                                                                        |   |   | 5,605 |   |   |   | 5,457 |   |
| Commitments and contingencies (Notes 13 and 14)                                                                     |   |   |   |   |   |   |   |   |
| Total capitalization and liabilities                                                                                |   | $ | 16,424 |   |   | $ | 16,102 |   |
|                                                                                                                |   |   |
| 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)                                                                                               |   |   |   |   |   |   |
| Three months ended March 31                                                                                 |   | 2012 |   |   | 2011 |   |
| Operating activities                                                                                        |   |   |   |   |   |   |
| Net income                                                                                                  |   | $ | 52 |   |   | $ | 131 |   |
| Adjustments to reconcile net income to net cash provided by operating activities                            |   |   |   |   |   |   |   |   |
| Depreciation, amortization and accretion                                                                    |   |   | 162 |   |   |   | 161 |   |
| Deferred income taxes and investment tax credits, net                                                       |   |   | 46 |   |   |   | 69 |   |
| Deferred fuel cost                                                                                          |   |   | 7 |   |   |   | 29 |   |
| Allowance for equity funds used during construction                                                         |   |   | (15 | ) |   |   | (20 | ) |
| Other adjustments to net income                                                                             |   |   | 23 |   |   |   | 12 |   |
| Cash provided (used) by changes in operating assets and liabilities                                         |   |   |   |   |   |   |   |   |
| Receivables                                                                                                 |   |   | 50 |   |   |   | 102 |   |
| Receivables from affiliated companies                                                                       |   |   | (8 | ) |   |   | 11 |   |
| Inventory                                                                                                   |   |   | (5 | ) |   |   | (45 | ) |
| Other assets                                                                                                |   |   | (18 | ) |   |   | (8 | ) |
| Income taxes, net                                                                                           |   |   | (38 | ) |   |   | 81 |   |
| Accounts payable                                                                                            |   |   | 11 |   |   |   | (48 | ) |
| Payables to affiliated companies                                                                            |   |   | 23 |   |   |   | (24 | ) |
| Accrued pension and other benefits                                                                          |   |   | (17 | ) |   |   | (147 | ) |
| Other liabilities                                                                                           |   |   | (27 | ) |   |   | 13 |   |
| Net cash provided by operating activities                                                                   |   |   | 246 |   |   |   | 317 |   |
| Investing activities                                                                                        |   |   |   |   |   |   |   |   |
| Gross property additions                                                                                    |   |   | (356 | ) |   |   | (279 | ) |
| Nuclear fuel additions                                                                                      |   |   | (38 | ) |   |   | (50 | ) |
| Purchases of available-for-sale securities and other investments                                            |   |   | (138 | ) |   |   | (149 | ) |
| Proceeds from available-for-sale securities and other investments                                           |   |   | 133 |   |   |   | 141 |   |
| Changes in advances to affiliated companies                                                                 |   |   | - |   |   |   | (1 | ) |
| Other investing activities                                                                                  |   |   | 64 |   |   |   | 5 |   |
| Net cash used by investing activities                                                                       |   |   | (335 | ) |   |   | (333 | ) |
| Financing activities                                                                                        |   |   |   |   |   |   |   |   |
| Dividends paid on preferred stock                                                                           |   |   | (1 | ) |   |   | (1 | ) |
| Dividends paid to parent                                                                                    |   |   | (175 | ) |   |   | (100 | ) |
| Net increase in short-term debt                                                                             |   |   | 253 |   |   |   | - |   |
| Changes in advances from affiliated companies                                                               |   |   | 11 |   |   |   | - |   |
| Other financing activities                                                                                  |   |   | 2 |   |   |   | - |   |
| Net cash provided (used) by financing activities                                                            |   |   | 90 |   |   |   | (101 | ) |
| Net increase (decrease) in cash and cash equivalents                                                        |   |   | 1 |   |   |   | (117 | ) |
| Cash and cash equivalents at beginning of period                                                            |   |   | 20 |   |   |   | 230 |   |
| Cash and cash equivalents at end of period                                                                  |   | $ | 21 |   |   | $ | 113 |   |
| Supplemental disclosures                                                                                    |   |   |   |   |   |   |   |   |
| Significant noncash transactions                                                                            |   |   |   |   |   |   |   |   |
| Accrued property additions                                                                                  |   | $ | 162 |   |   | $ | 98 |   |
|                                                                                                        |   |
| 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                                             |   |
| March 31, 2012                                                                               |   |
|                                                                                         |   |   |   |   |   |   |
| UNAUDITED CONDENSED STATEMENTS of COMPREHENSIVE INCOME                                       |   |   |   |   |   |   |
| (in millions)                                                                                |   |   |   |   |   |   |
| Three months ended March 31                                                                  |   | 2012 |   |   | 2011 |   |
| Operating revenues                                                                           |   | $ | 1,005 |   |   | $ | 1,032 |   |
| Operating expenses                                                                           |   |   |   |   |   |   |   |   |
| Fuel used in electric generation                                                             |   |   | 336 |   |   |   | 355 |   |
| Purchased power                                                                              |   |   | 145 |   |   |   | 153 |   |
| Operation and maintenance                                                                    |   |   | 160 |   |   |   | 210 |   |
| Depreciation, amortization and accretion                                                     |   |   | 27 |   |   |   | 25 |   |
| Taxes other than on income                                                                   |   |   | 82 |   |   |   | 85 |   |
| Other                                                                                        |   |   | - |   |   |   | (12 | ) |
| Total operating expenses                                                                     |   |   | 750 |   |   |   | 816 |   |
| Operating income                                                                             |   |   | 255 |   |   |   | 216 |   |
| Other income                                                                                 |   |   |   |   |   |   |   |   |
| Allowance for equity funds used during construction                                          |   |   | 9 |   |   |   | 9 |   |
| Other, net                                                                                   |   |   | - |   |   |   | 3 |   |
| Total other income, net                                                                      |   |   | 9 |   |   |   | 12 |   |
| Interest charges                                                                             |   |   |   |   |   |   |   |   |
| Interest charges                                                                             |   |   | 67 |   |   |   | 69 |   |
| Allowance for borrowed funds used during construction                                        |   |   | (4 | ) |   |   | (4 | ) |
| Total interest charges, net                                                                  |   |   | 63 |   |   |   | 65 |   |
| Income before income tax                                                                     |   |   | 201 |   |   |   | 163 |   |
| Income tax expense                                                                           |   |   | 73 |   |   |   | 61 |   |
| Net income                                                                                   |   |   | 128 |   |   |   | 102 |   |
| Preferred stock dividend requirement                                                         |   |   | (1 | ) |   |   | (1 | ) |
| Net income available to parent                                                               |   | $ | 127 |   |   | $ | 101 |   |
| Comprehensive income                                                                         |   | $ | 129 |   |   | $ | 102 |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| 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)                                                                                              |   | March 31, 2012 |   |   | December 31, 2011 |   |
| ASSETS                                                                                                     |   |   |   |   |   |   |
| Utility plant                                                                                              |   |   |   |   |   |   |
| Utility plant in service                                                                                   |   | $ | 13,506 |   |   | $ | 13,461 |   |
| Accumulated depreciation                                                                                   |   |   | (4,433 | ) |   |   | (4,356 | ) |
| Utility plant in service, net                                                                              |   |   | 9,073 |   |   |   | 9,105 |   |
| Held for future use                                                                                        |   |   | 36 |   |   |   | 36 |   |
| Construction work in progress                                                                              |   |   | 1,259 |   |   |   | 1,155 |   |
| Nuclear fuel, net of amortization                                                                          |   |   | 228 |   |   |   | 227 |   |
| Total utility plant, net                                                                                   |   |   | 10,596 |   |   |   | 10,523 |   |
| Current assets                                                                                             |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                                                  |   |   | 18 |   |   |   | 16 |   |
| Receivables, net                                                                                           |   |   | 345 |   |   |   | 372 |   |
| Receivables from affiliated companies                                                                      |   |   | 32 |   |   |   | 19 |   |
| Notes receivable from affiliated companies                                                                 |   |   | 6 |   |   |   | - |   |
| Inventory, net                                                                                             |   |   | 669 |   |   |   | 663 |   |
| Regulatory assets                                                                                          |   |   | 225 |   |   |   | 244 |   |
| Derivative collateral posted                                                                               |   |   | 136 |   |   |   | 123 |   |
| Deferred tax assets                                                                                        |   |   | 223 |   |   |   | 138 |   |
| Prepayments and other current assets                                                                       |   |   | 25 |   |   |   | 39 |   |
| Total current assets                                                                                       |   |   | 1,679 |   |   |   | 1,614 |   |
| Deferred debits and other assets                                                                           |   |   |   |   |   |   |   |   |
| Regulatory assets                                                                                          |   |   | 1,659 |   |   |   | 1,602 |   |
| Nuclear decommissioning trust funds                                                                        |   |   | 599 |   |   |   | 559 |   |
| Other assets and deferred debits                                                                           |   |   | 199 |   |   |   | 186 |   |
| Total deferred debits and other assets                                                                     |   |   | 2,457 |   |   |   | 2,347 |   |
| Total assets                                                                                               |   | $ | 14,732 |   |   | $ | 14,484 |   |
| CAPITALIZATION AND LIABILITIES                                                                             |   |   |   |   |   |   |   |   |
| Common stock equity                                                                                        |   |   |   |   |   |   |   |   |
| Common stock without par value, 60 million shares authorized,  100 shares issued and outstanding |   | $ | 1,760 |   |   | $ | 1,757 |   |
| Accumulated other comprehensive loss                                                                       |   |   | (26 | ) |   |   | (27 | ) |
| Retained earnings                                                                                          |   |   | 2,966 |   |   |   | 2,945 |   |
| Total common stock equity                                                                                  |   |   | 4,700 |   |   |   | 4,675 |   |
| Preferred stock                                                                                            |   |   | 34 |   |   |   | 34 |   |
| Long-term debt, net                                                                                        |   |   | 4,057 |   |   |   | 4,482 |   |
| Total capitalization                                                                                       |   |   | 8,791 |   |   |   | 9,191 |   |
| Current liabilities                                                                                        |   |   |   |   |   |   |   |   |
| Current portion of long-term debt                                                                          |   |   | 425 |   |   |   | - |   |
| Short-term debt                                                                                            |   |   | 360 |   |   |   | 233 |   |
| Notes payable to affiliated companies                                                                      |   |   | - |   |   |   | 8 |   |
| Accounts payable                                                                                           |   |   | 336 |   |   |   | 358 |   |
| Payables to affiliated companies                                                                           |   |   | 38 |   |   |   | 25 |   |
| Interest accrued                                                                                           |   |   | 66 |   |   |   | 54 |   |
| Customer deposits                                                                                          |   |   | 223 |   |   |   | 224 |   |
| Derivative liabilities                                                                                     |   |   | 335 |   |   |   | 268 |   |
| Accrued compensation and other benefits                                                                    |   |   | 30 |   |   |   | 53 |   |
| Other current liabilities                                                                                  |   |   | 129 |   |   |   | 112 |   |
| Total current liabilities                                                                                  |   |   | 1,942 |   |   |   | 1,335 |   |
| Deferred credits and other liabilities                                                                     |   |   |   |   |   |   |   |   |
| Noncurrent income tax liabilities                                                                          |   |   | 1,553 |   |   |   | 1,405 |   |
| Regulatory liabilities                                                                                     |   |   | 967 |   |   |   | 1,071 |   |
| Asset retirement obligations                                                                               |   |   | 374 |   |   |   | 369 |   |
| Accrued pension and other benefits                                                                         |   |   | 591 |   |   |   | 598 |   |
| Capital lease obligations                                                                                  |   |   | 188 |   |   |   | 189 |   |
| Derivative liabilities                                                                                     |   |   | 234 |   |   |   | 231 |   |
| Other liabilities and deferred credits                                                                     |   |   | 92 |   |   |   | 95 |   |
| Total deferred credits and other liabilities                                                               |   |   | 3,999 |   |   |   | 3,958 |   |
| Commitments and contingencies (Notes 13 and 14)                                                            |   |   |   |   |   |   |   |   |
| Total capitalization and liabilities                                                                       |   | $ | 14,732 |   |   | $ | 14,484 |   |
|                                                                                                       |   |   |
| 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)                                                                                |   |   |   |   |   |   |
| Three months ended March 31                                                                  |   | 2012 |   |   | 2011 |   |
| Operating activities                                                                         |   |   |   |   |   |   |
| Net income                                                                                   |   | $ | 128 |   |   | $ | 102 |   |
| Adjustments to reconcile net income to net cash provided by operating activities             |   |   |   |   |   |   |   |   |
| Depreciation, amortization and accretion                                                     |   |   | 31 |   |   |   | 29 |   |
| Deferred income taxes and investment tax credits, net                                        |   |   | 53 |   |   |   | 60 |   |
| Deferred fuel (credit) cost                                                                  |   |   | (13 | ) |   |   | 41 |   |
| Allowance for equity funds used during construction                                          |   |   | (9 | ) |   |   | (9 | ) |
| Other adjustments to net income                                                              |   |   | (20 | ) |   |   | 35 |   |
| Cash provided (used) by changes in operating assets and liabilities                          |   |   |   |   |   |   |   |   |
| Receivables                                                                                  |   |   | 15 |   |   |   | 72 |   |
| Receivables from affiliated companies                                                        |   |   | (13 | ) |   |   | (7 | ) |
| Inventory                                                                                    |   |   | (6 | ) |   |   | (5 | ) |
| Other assets                                                                                 |   |   | (27 | ) |   |   | 19 |   |
| Income taxes, net                                                                            |   |   | 22 |   |   |   | 63 |   |
| Accounts payable                                                                             |   |   | 14 |   |   |   | (45 | ) |
| Payables to affiliated companies                                                             |   |   | 13 |   |   |   | (6 | ) |
| Accrued pension and other benefits                                                           |   |   | (14 | ) |   |   | (74 | ) |
| Other liabilities                                                                            |   |   | 15 |   |   |   | 26 |   |
| Net cash provided by operating activities                                                    |   |   | 189 |   |   |   | 301 |   |
| Investing activities                                                                         |   |   |   |   |   |   |   |   |
| Gross property additions                                                                     |   |   | (197 | ) |   |   | (218 | ) |
| Nuclear fuel additions                                                                       |   |   | (13 | ) |   |   | (7 | ) |
| Purchases of available-for-sale securities and other investments                             |   |   | (225 | ) |   |   | (1,659 | ) |
| Proceeds from available-for-sale securities and other investments                            |   |   | 225 |   |   |   | 1,659 |   |
| Changes in advances to affiliated companies                                                  |   |   | (6 | ) |   |   | - |   |
| Other investing activities                                                                   |   |   | 16 |   |   |   | 42 |   |
| Net cash used by investing activities                                                        |   |   | (200 | ) |   |   | (183 | ) |
| Financing activities                                                                         |   |   |   |   |   |   |   |   |
| Dividends paid on preferred stock                                                            |   |   | (1 | ) |   |   | (1 | ) |
| Dividends paid to parent                                                                     |   |   | (105 | ) |   |   | (325 | ) |
| Proceeds from issuance of short-term debt with original maturities greater than 90 days      |   |   | 65 |   |   |   | - |   |
| Net increase in short-term debt                                                              |   |   | 62 |   |   |   | - |   |
| Changes in advances from affiliated companies                                                |   |   | (8 | ) |   |   | (2 | ) |
| Net cash provided (used) by financing activities                                             |   |   | 13 |   |   |   | (328 | ) |
| Net increase (decrease) in cash and cash equivalents                                         |   |   | 2 |   |   |   | (210 | ) |
| Cash and cash equivalents at beginning of period                                             |   |   | 16 |   |   |   | 249 |   |
| Cash and cash equivalents at end of period                                                   |   | $ | 18 |   |   | $ | 39 |   |
| Supplemental disclosures                                                                     |   |   |   |   |   |   |   |   |
| Significant noncash transactions                                                             |   |   |   |   |   |   |   |   |
| Accrued property additions                                                                   |   | $ | 60 |   |   | $ | 78 |   |
|                                                                                         |   |
| See Notes to Progress Energy Florida, Inc. Unaudited Condensed Interim Financial Statements. |   |

----

| Registrant | Applicable Notes                     |
|------------|--------------------------------------|
|       |                                 |
| PEC        | 1 through 3, 5 through 11, 13 and 14 |
|       |                                 |
| PEF        | 1 through 3, 5 through 11, 13 and 14 |

----

| 1.     | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|--------|-------------------------------------------------------------|
|   |                                                        |
| A.     | ORGANIZATION                                                |

| B. | BASIS OF PRESENTATION |
|----|-----------------------|

----

|            |   | Three months ended March 31 |   |
|-----------------|--------|-----------------------------|--------|
| (in millions)   |   | 2012                        |   |   | 2011 |   |
| Progress Energy |   | $                           | 69     |   |   | $ | 73 |   |
| PEC             |   |                        | 26     |   |   |   | 28 |   |
| PEF             |   |                        | 43     |   |   |   | 45 |   |

| C.  | CONSOLIDATION OF VARIABLE INTEREST ENTITIES |
|----------|---------------------------------------------|

| (in millions)                                |   | March 31, 2012 |   |   | December 31, 2011 |   |
|----------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
| Miscellaneous other property and investments |   | $              | 12     |   |              | $      | 12 |   |
| Cash and cash equivalents                    |   |           | 1      |   |              |   | 1 |   |

----

| 2. | MERGER AGREEMENT |
|----|------------------|

| ·   | On August 23, 2011, the merger was approved by the shareholders of Progress Energy and Duke Energy. |
|--------------------|-----------------------------------------------------------------------------------------------------|

----

| ·   | Progress Energy and Duke Energy met their obligations under the Hart-Scott-Rodino Act with their March 28, 2011 filing with the U.S. Department of Justice (DOJ) for review under U.S. antitrust laws. Because the merger was not anticipated to close before the April 26, 2012 expiration of the original filing, Progress Energy and Duke Energy filed a new Hart-Scott-Rodino filing on March 22, 2012, in order to be able to close the merger and continue to meet their obligations under the Hart-Scott-Rodino Act. The 30-day waiting period required by the Hart-Scott-Rodino Act expired without Progress Energy or Duke Energy having received requests for additional information. Progress Energy and Duke Energy have met their obligations under the Hart-Scott-Rodino Act. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On January 5, 2012, the Federal Communications Commission extended its approval of the Assignment of Authorization filings to transfer control of certain licenses. The extended approval expires on July 12, 2012. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On September 30, 2011, the FERC, which assesses market power-related issues, conditionally approved the merger application filed by Progress Energy and Duke Energy. The approval is subject to the FERC’s acceptance of market power mitigation measures to address the FERC’s finding that the combined company could have an adverse effect on competition in the North Carolina and South Carolina wholesale power markets. Progress Energy and Duke Energy filed a market power mitigation plan with the FERC on October 17, 2011, that proposed a “virtual divestiture” under which power up to a certain amount would have been offered into the wholesale market rather than the sale or divestiture of physical assets. A virtual divestiture is one option the FERC indicated could be used to mitigate its market power concerns. On December 14, 2011, the FERC affirmed its conditional approval of the merger, but the FERC rejected the proposed market power mitigation plan. On March 26, 2012, Progress Energy and Duke Energy filed a second market power mitigation plan with the FERC. The revised mitigation plan consists of both interim and permanent components. The two- to three-year interim component consists of several power purchase agreements whereby the companies propose to sell capacity and firm energy during the summer (June – August) and winter (December – February) to new market participants. Together, the companies would sell 800 megawatts (MWs) during summer off-peak hours, 475 MWs during summer peak hours, 225 MWs during winter off-peak hours, and 25 MWs during winter peak hours. The agreements have been executed, contingent on the closing of the merger, and will be in effect upon the closing of the merger and remain in effect until the permanent component is operational. The permanent component consists of seven transmission projects to be constructed, estimated to cost approximately $110 million. The transmission projects significantly increase power import capabilities into the PEC and Duke Energy Carolinas service territories and enhance competitive power supply options for the region. Progress Energy and Duke Energy have requested that the FERC issue orders approving the revised mitigation plan within 60 days of the filing date, but no later than June 8, 2012. There is no statutory requirement that the FERC act within a specified timeframe. On April 10, 2012, Progress Energy and Duke Energy received a request from the FERC for additional information on the transmission-related models provided by Progress Energy and Duke Energy in the revised mitigation plan. On April 13, 2012, Progress Energy and Duke Energy responded to the FERC’s request. In the response, the companies reaffirmed their request that the FERC approve the revised mitigation plan within 60 days of the original filing date, but no later than June 8, 2012. Four participants to the proceedings filed comments before the April 25, 2012 filing deadline. On May 1, 2012, the companies filed a response to the comments with the FERC. The companies are working with the North Carolina Public Staff and the South Carolina Office of Regulatory Staff (ORS) on appropriate state ratemaking treatment associated with the measures in the revised market mitigation plan and other merger-related issues. The companies’ decision to close the merger will be subject to the companies obtaining acceptable resolution of various state ratemaking issues. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | On April 4, 2011, Progress Energy and Duke Energy made two additional filings with the FERC. The first filing is a joint dispatch agreement, pursuant to which PEC and Duke Energy Carolinas will agree to jointly dispatch their generation facilities in order to achieve certain of the operating efficiencies expected to result from the merger. The second filing is a joint open access transmission tariff (OATT) pursuant to which PEC and Duke Energy Carolinas will agree to provide transmission service over their transmission facilities under a single transmission rate. On December 14, 2011, in conjunction with the aforementioned decision on the proposed market power mitigation plan, the FERC dismissed the applications for approval of the joint dispatch agreement and the joint OATT without prejudice. As allowed under the FERC’s December 14, 2011 order, Progress Energy and Duke Energy refiled the joint dispatch agreement and OATT with the FERC on March 26, 2012. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On December 2, 2011, the NRC approved the filing requesting an indirect transfer of control of licenses for Progress Energy’s nuclear facilities to include Duke Energy as the ultimate parent corporation on these licenses. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On April 4, 2011, Progress Energy and Duke Energy filed a merger approval application and an application for approval of a joint dispatch agreement between PEC and Duke Energy Carolinas with the NCUC. On September 2, 2011, the North Carolina Public Staff filed a settlement agreement with the NCUC. On September 6, 2011, Progress Energy and Duke Energy signed a settlement with the ORS, a party to the North Carolina proceedings to resolve the ORS’s issues in the North Carolina proceeding. Under the settlement agreement with the North Carolina Public Staff, Progress Energy and Duke Energy will provide $650 million in system fuel cost savings for customers in North Carolina and South Carolina over the five years following the close of the merger, maintain their current level of community support in North Carolina for the next four years, and provide $15 million for low-income energy assistance and workforce development in North Carolina. The settlement agreement also provides that direct merger-related expenses will not be recovered from customers; however, PEC may request recovery of costs incurred to create operational savings. The NCUC held hearings regarding the application on September 20-22, 2011. On November 23, 2011, Progress Energy and Duke Energy filed proposed orders and briefs with the NCUC. The docket will remain open pending the FERC’s issuance of its final orders on the merger-related actions before the FERC. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On April 25, 2011, Progress Energy and Duke Energy filed an application for approval of the merger of PEC and Duke Energy Carolinas and an application for approval of a joint dispatch agreement between PEC and Duke Energy Carolinas with the SCPSC. On September 13, 2011, Progress Energy and Duke Energy withdrew the application of the merger of PEC and Duke Energy Carolinas, as the merger of these entities is not likely to occur for several years after the close of the merger. The SCPSC held hearings regarding the application for approval of the joint dispatch agreement on December 12, 2011. During the hearing, PEC, Duke Energy Carolinas and the ORS agreed to terminate the settlement agreement, which resolved the ORS’s issues in the NCUC merger proceeding, and replaced it with a commitment by PEC and Duke Energy Carolinas to provide PEC’s and Duke Energy Carolinas’ retail customers in South Carolina pro rata benefits equivalent to those approved by the NCUC in its order ruling upon PEC’s and Duke Energy Carolinas’ merger application. The docket will remain open pending the FERC’s issuance of its final orders on the merger-related actions before the FERC. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On October 28, 2011, the Kentucky Public Service Commission approved Progress Energy’s and Duke Energy’s merger-related settlement agreement with the Attorney General of the Commonwealth of Kentucky. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 3. | NEW ACCOUNTING STANDARDS |
|----|--------------------------|

----

| 4. | DIVESTITURES |
|----|--------------|

| 5. | REGULATORY MATTERS |
|----|--------------------|

| A. | PEC RETAIL RATE MATTERS |
|----|-------------------------|

| B. | PEF RETAIL RATE MATTERS |
|----|-------------------------|

----

----

|  (in millions)                               |   | ReplacementPower Costs |   |   | Repair Costs |   |
|---------------------------------------------------|--------|------------------------|--------|--------|--------------|--------|
|  Spent to date                               |   | $                      | 506    |   |         | $      | 279 |   |
|  NEIL proceeds received to date              |   |                   | (162   | )      |         |   | (143 | ) |
|  Insurance receivable at March 31, 2012, net |   |                   | (55    | )      |         |   | - |   |
| Balance for recovery(a)                           |   | $                      | 289    |   |         | $      | 136 |   |

| (a) |   | See "2012 Settlement Agreement" below for discussion of PEF's ability to recover prudently incurred fuel and purchased power costs and CR3 repair costs. |
|-----|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| 6.     | EQUITY                    |
|--------|---------------------------|
|   |                      |
| A.     | EARNINGS PER COMMON SHARE |

| B.  | RECONCILIATION OF TOTAL EQUITY |
|----------|--------------------------------|

----

|  (in millions)                                                                                     |   | Total CommonStock Equity |   |   | NoncontrollingInterests |   |   | Total Equity |   |
|---------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|--------|-------------------------|--------|--------|--------------|--------|
|  Balance,  December 31, 2011                                                             |   | $                        | 10,021 |   |                    | $      | 4      |         |   | $ | 10,025 |   |
|  Net income(a)                                                                                     |   |                     | 150    |   |                    |   | -      |         |   |   | 150 |   |
|  Other comprehensive income                                                                        |   |                     | 5      |   |                    |   | -      |         |   |   | 5 |   |
|  Issuance of shares through offerings and stock-  based compensation plans (See Note 6C) |   |                     | 17     |   |                    |   | -      |         |   |   | 17 |   |
|  Dividends declared                                                                                |   |                     | (184   | )      |                    |   | -      |         |   |   | (184 | ) |
|  Distributions to noncontrolling interests                                                         |   |                     | -      |   |                    |   | (2     | )            |   |   | (2 | ) |
|  Balance,  March 31, 2012                                                                |   | $                        | 10,009 |   |                    | $      | 2      |         |   | $ | 10,011 |   |
|                                                                                                    |   |                     |   |   |                    |   |   |         |   |   |   |   |
|  Balance,  December 31, 2010                                                             |   | $                        | 10,023 |   |                    | $      | 4      |         |   | $ | 10,027 |   |
|  Net income(a)                                                                                     |   |                     | 184    |   |                    |   | (1     | )            |   |   | 183 |   |
|  Other comprehensive income                                                                        |   |                     | 4      |   |                    |   | -      |         |   |   | 4 |   |
|  Issuance of shares through offerings and stock-  based compensation plans (See Note 6C) |   |                     | 19     |   |                    |   | -      |         |   |   | 19 |   |
|  Dividends declared                                                                                |   |                     | (183   | )      |                    |   | -      |         |   |   | (183 | ) |
|  Distributions to noncontrolling interests                                                         |   |                     | -      |   |                    |   | (2     | )            |   |   | (2 | ) |
|  Other                                                                                             |   |                     | -      |   |                    |   | 2      |         |   |   | 2 |   |
|  Balance,  March 31, 2011                                                                |   | $                        | 10,047 |   |                    | $      | 3      |         |   | $ | 10,050 |   |

| (a) | For the three months ended March 31, 2012, consolidated net income of $152 million includes $2 million attributable to preferred shareholders of subsidiaries. For the three months ended March 31, 2011, consolidated net income of $185 million includes $2 million attributable to preferred shareholders of subsidiaries. Income attributable to preferred shareholders of subsidiaries is not a component of total equity and is excluded from the table above. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| C. | COMMON STOCK |
|----|--------------|

|                        |   | Three months ended March 31 |   |
|-----------------------------|--------|-----------------------------|--------|
|                        |   | 2012                        |   |   | 2011 |   |
|  (in millions)         |   | Shares                      |   |   | Net Proceeds |   |   | Shares |   |   | Net Proceeds |   |
|  Total issuances       |   |                        | 0.8    |   |   | $ | 3 |   |   |   | 1.0 |   |   | $ | 8 |   |
|  Issuances through IPP |   |                        | -      |   |   |   | - |   |   |   | - |   |   |   | 1 |   |

----

| 7. | PREFERRED STOCK OF SUBSIDIARIES |
|----|---------------------------------|

| 8. | DEBT AND CREDIT FACILITIES |
|----|----------------------------|

| 9.     | FAIR VALUE DISCLOSURES |
|--------|------------------------|
|   |                   |
| A.     | DEBT AND INVESTMENTS   |

----

| (in millions)                    |   | Fair Value |   |   | UnrealizedLosses |   |   | UnrealizedGains |   |
|----------------------------------|--------|------------|--------|--------|------------------|--------|--------|-----------------|--------|
| March 31, 2012                   |   |       |   |   |             |   |   |            |   |
| Common stock equity              |   | $          | 1,160  |   |             | $      | 16     |            |   | $ | 508 |   |
| Preferred stock and other equity |   |       | 43     |   |             |   | -      |            |   |   | 14 |   |
| Corporate debt                   |   |       | 90     |   |             |   | -      |            |   |   | 7 |   |
| U.S. state and municipal debt    |   |       | 124    |   |             |   | 2      |            |   |   | 7 |   |
| U.S. and foreign government debt |   |       | 293    |   |             |   | -      |            |   |   | 14 |   |
| Money market funds and other     |   |       | 55     |   |             |   | 1      |            |   |   | 1 |   |
| Total                            |   | $          | 1,765  |   |             | $      | 19     |            |   | $ | 551 |   |
|                             |   |       |   |   |             |   |   |            |   |   |   |   |
| December 31, 2011                |   |       |   |   |             |   |   |            |   |   |   |   |
| Common stock equity              |   | $          | 1,033  |   |             | $      | 29     |            |   | $ | 401 |   |
| Preferred stock and other equity |   |       | 29     |   |             |   | -      |            |   |   | 11 |   |
| Corporate debt                   |   |       | 86     |   |             |   | -      |            |   |   | 6 |   |
| U.S. state and municipal debt    |   |       | 128    |   |             |   | 2      |            |   |   | 7 |   |
| U.S. and foreign government debt |   |       | 284    |   |             |   | -      |            |   |   | 18 |   |
| Money market funds and other     |   |       | 70     |   |             |   | -      |            |   |   | 1 |   |
| Total                            |   | $          | 1,630  |   |             | $      | 31     |            |   | $ | 444 |   |
|                             |   |       |   |   |             |   |   |            |   |   |   |   |

| (in millions)                    |   |   |   |
|----------------------------------|--------|--------|--------|
| Due in one year or less          |   | $      | 34     |   |
| Due after one through five years |   |   | 217    |   |
| Due after five through 10 years  |   |   | 175    |   |
| Due after 10 years               |   |   | 94     |   |
| Total                            |   | $      | 520    |   |
|                             |   |   |   |   |

| (in millions)   |   | 2012   |   |   | 2011   |   |
|-----------------|--------|--------|--------|--------|--------|--------|
| Proceeds        |   | $      | 304    |   |   | $      | 1,744 |   |
| Realized gains  |   |   | 7      |   |   |   | 9 |   |
| Realized losses |   |   | 3      |   |   |   | 4 |   |
|            |   |   |   |   |   |   |   |   |

----

| (in millions)                    |   | Fair Value |   |   | UnrealizedLosses |   |   | UnrealizedGains |   |
|----------------------------------|--------|------------|--------|--------|------------------|--------|--------|-----------------|--------|
| March 31, 2012                   |   |       |   |   |             |   |   |            |   |
| Common stock equity              |   | $          | 755    |   |             | $      | 11     |            |   | $ | 322 |   |
| Preferred stock and other equity |   |       | 20     |   |             |   | -      |            |   |   | 9 |   |
| Corporate debt                   |   |       | 75     |   |             |   | -      |            |   |   | 6 |   |
| U.S. state and municipal debt    |   |       | 53     |   |             |   | -      |            |   |   | 3 |   |
| U.S. and foreign government debt |   |       | 229    |   |             |   | -      |            |   |   | 13 |   |
| Money market funds and other     |   |       | 34     |   |             |   | 1      |            |   |   | 1 |   |
| Total                            |   | $          | 1,166  |   |             | $      | 12     |            |   | $ | 354 |   |
|                             |   |       |   |   |             |   |   |            |   |   |   |   |
| December 31, 2011                |   |       |   |   |             |   |   |            |   |   |   |   |
| Common stock equity              |   | $          | 673    |   |             | $      | 20     |            |   | $ | 255 |   |
| Preferred stock and other equity |   |       | 17     |   |             |   | -      |            |   |   | 7 |   |
| Corporate debt                   |   |       | 69     |   |             |   | -      |            |   |   | 5 |   |
| U.S. state and municipal debt    |   |       | 56     |   |             |   | -      |            |   |   | 3 |   |
| U.S. and foreign government debt |   |       | 226    |   |             |   | -      |            |   |   | 16 |   |
| Money market funds and other     |   |       | 60     |   |             |   | -      |            |   |   | 1 |   |
| Total                            |   | $          | 1,101  |   |             | $      | 20     |            |   | $ | 287 |   |
|                             |   |       |   |   |             |   |   |            |   |   |   |   |

| (in millions)                    |   |   |   |
|----------------------------------|--------|--------|--------|
| Due in one year or less          |   | $      | 11     |   |
| Due after one through five years |   |   | 191    |   |
| Due after five through 10 years  |   |   | 100    |   |
| Due after 10 years               |   |   | 65     |   |
| Total                            |   | $      | 367    |   |
|                             |   |   |   |   |

----

| (in millions)   |   | 2012   |   |   | 2011   |   |
|-----------------|--------|--------|--------|--------|--------|--------|
| Proceeds        |   | $      | 130    |   |   | $      | 131 |   |
| Realized gains  |   |   | 5      |   |   |   | 3 |   |
| Realized losses |   |   | 2      |   |   |   | 1 |   |
|            |   |   |   |   |   |   |   |   |

| (in millions)                    |   | Fair Value |   |   | UnrealizedLosses |   |   | UnrealizedGains |   |
|----------------------------------|--------|------------|--------|--------|------------------|--------|--------|-----------------|--------|
| March 31, 2012                   |   |       |   |   |             |   |   |            |   |
| Common stock equity              |   | $          | 405    |   |             | $      | 5      |            |   | $ | 186 |   |
| Preferred stock and other equity |   |       | 23     |   |             |   | -      |            |   |   | 5 |   |
| Corporate debt                   |   |       | 15     |   |             |   | -      |            |   |   | 1 |   |
| U.S. state and municipal debt    |   |       | 71     |   |             |   | 2      |            |   |   | 4 |   |
| U.S. and foreign government debt |   |       | 64     |   |             |   | -      |            |   |   | 1 |   |
| Money market funds and other     |   |       | 21     |   |             |   | -      |            |   |   | - |   |
| Total                            |   | $          | 599    |   |             | $      | 7      |            |   | $ | 197 |   |
|                             |   |       |   |   |             |   |   |            |   |   |   |   |
| December 31, 2011                |   |       |   |   |             |   |   |            |   |   |   |   |
| Common stock equity              |   | $          | 360    |   |             | $      | 9      |            |   | $ | 146 |   |
| Preferred stock and other equity |   |       | 12     |   |             |   | -      |            |   |   | 4 |   |
| Corporate debt                   |   |       | 17     |   |             |   | -      |            |   |   | 1 |   |
| U.S. state and municipal debt    |   |       | 72     |   |             |   | 2      |            |   |   | 4 |   |
| U.S. and foreign government debt |   |       | 58     |   |             |   | -      |            |   |   | 2 |   |
| Money market funds and other     |   |       | 10     |   |             |   | -      |            |   |   | - |   |
| Total                            |   | $          | 529    |   |             | $      | 11     |            |   | $ | 157 |   |
|                             |   |       |   |   |             |   |   |            |   |   |   |   |

----

| (in millions)                    |   |   |   |
|----------------------------------|--------|--------|--------|
| Due in one year or less          |   | $      | 23     |   |
| Due after one through five years |   |   | 26     |   |
| Due after five through 10 years  |   |   | 75     |   |
| Due after 10 years               |   |   | 29     |   |
| Total                            |   | $      | 153    |   |
|                             |   |   |   |   |

| (in millions)   |   | 2012   |   |   | 2011   |   |
|-----------------|--------|--------|--------|--------|--------|--------|
| Proceeds        |   | $      | 174    |   |   | $      | 1,606 |   |
| Realized gains  |   |   | 2      |   |   |   | 6 |   |
| Realized losses |   |   | 1      |   |   |   | 3 |   |

| B. | FAIR VALUE MEASUREMENTS |
|----|-------------------------|

----

| PROGRESS ENERGY                           |   |    |   |   |    |   |   |    |   |   |   |   |
|-------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
| (in millions)                             |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total  |   |
| March 31, 2012                            |   |    |   |   |    |   |   |    |   |   |   |   |
| Assets                                    |   |    |   |   |    |   |   |    |   |   |   |   |
| Nuclear decommissioning trust funds       |   |    |   |   |    |   |   |    |   |   |   |   |
| Common stock equity                       |   | $       | 1,160  |   |    | $      | -      |    |   | $      | -      |   |   | $ | 1,160 |   |
| Preferred stock and other equity          |   |    | 33     |   |    |   | 10     |    |   |   | -      |   |   |   | 43 |   |
| Corporate debt                            |   |    | -      |   |    |   | 90     |    |   |   | -      |   |   |   | 90 |   |
| U.S. state and municipal debt             |   |    | -      |   |    |   | 124    |    |   |   | -      |   |   |   | 124 |   |
| U.S. and foreign government debt          |   |    | 129    |   |    |   | 164    |    |   |   | -      |   |   |   | 293 |   |
| Money market funds and other              |   |    | 1      |   |    |   | 51     |    |   |   | -      |   |   |   | 52 |   |
| Total nuclear decommissioning trust funds |   |    | 1,323  |   |    |   | 439    |    |   |   | -      |   |   |   | 1,762 |   |
| Derivatives                               |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Commodity forward contracts               |   |    | -      |   |    |   | 8      |    |   |   | -      |   |   |   | 8 |   |
| Other marketable securities               |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Money market and other                    |   |    | 18     |   |    |   | -      |    |   |   | -      |   |   |   | 18 |   |
| Total assets                              |   | $       | 1,341  |   |    | $      | 447    |    |   | $      | -      |   |   | $ | 1,788 |   |
|                                      |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Liabilities                               |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Derivatives                               |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Commodity forward contracts               |   | $       | -      |   |    | $      | 769    |    |   | $      | 27     |   |   | $ | 796 |   |
| Interest rate contracts                   |   |    | -      |   |    |   | 49     |    |   |   | -      |   |   |   | 49 |   |
| Contingent value obligations derivatives  |   |    | -      |   |    |   | 3      |    |   |   | -      |   |   |   | 3 |   |
| Total liabilities                         |   | $       | -      |   |    | $      | 821    |    |   | $      | 27     |   |   | $ | 848 |   |
|                                      |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |

----

|                                      |   |    |   |   |    |   |   |    |   |   |   |   |
|-------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
| (in millions)                             |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total  |   |
| December 31, 2011                         |   |    |   |   |    |   |   |    |   |   |   |   |
| Assets                                    |   |    |   |   |    |   |   |    |   |   |   |   |
| Nuclear decommissioning trust funds       |   |    |   |   |    |   |   |    |   |   |   |   |
| Common stock equity                       |   | $       | 1,033  |   |    | $      | -      |    |   | $      | -      |   |   | $ | 1,033 |   |
| Preferred stock and other equity          |   |    | 28     |   |    |   | 1      |    |   |   | -      |   |   |   | 29 |   |
| Corporate debt                            |   |    | -      |   |    |   | 86     |    |   |   | -      |   |   |   | 86 |   |
| U.S. state and municipal debt             |   |    | -      |   |    |   | 128    |    |   |   | -      |   |   |   | 128 |   |
| U.S. and foreign government debt          |   |    | 87     |   |    |   | 197    |    |   |   | -      |   |   |   | 284 |   |
| Money market funds and other              |   |    | -      |   |    |   | 87     |    |   |   | -      |   |   |   | 87 |   |
| Total nuclear decommissioning trust funds |   |    | 1,148  |   |    |   | 499    |    |   |   | -      |   |   |   | 1,647 |   |
| Derivatives                               |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Commodity forward contracts               |   |    | -      |   |    |   | 5      |    |   |   | -      |   |   |   | 5 |   |
| Other marketable securities               |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Money market and other                    |   |    | 20     |   |    |   | -      |    |   |   | -      |   |   |   | 20 |   |
| Total assets                              |   | $       | 1,168  |   |    | $      | 504    |    |   | $      | -      |   |   | $ | 1,672 |   |
|                                      |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Liabilities                               |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Derivatives                               |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Commodity forward contracts               |   | $       | -      |   |    | $      | 668    |    |   | $      | 24     |   |   | $ | 692 |   |
| Interest rate contracts                   |   |    | -      |   |    |   | 93     |    |   |   | -      |   |   |   | 93 |   |
| Contingent value obligations derivatives  |   |    | -      |   |    |   | 14     |    |   |   | -      |   |   |   | 14 |   |
| Total liabilities                         |   | $       | -      |   |    | $      | 775    |    |   | $      | 24     |   |   | $ | 799 |   |

| PEC                                       |   |    |   |   |    |   |   |    |   |   |   |   |
|-------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
| (in millions)                             |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total  |   |
| March 31, 2012                            |   |    |   |   |    |   |   |    |   |   |   |   |
| Assets                                    |   |    |   |   |    |   |   |    |   |   |   |   |
| Nuclear decommissioning trust funds       |   |    |   |   |    |   |   |    |   |   |   |   |
| Common stock equity                       |   | $       | 755    |   |    | $      | -      |    |   | $      | -      |   |   | $ | 755 |   |
| Preferred stock and other equity          |   |    | 20     |   |    |   | -      |    |   |   | -      |   |   |   | 20 |   |
| Corporate debt                            |   |    | -      |   |    |   | 75     |    |   |   | -      |   |   |   | 75 |   |
| U.S. state and municipal debt             |   |    | -      |   |    |   | 53     |    |   |   | -      |   |   |   | 53 |   |
| U.S. and foreign government debt          |   |    | 105    |   |    |   | 124    |    |   |   | -      |   |   |   | 229 |   |
| Money market funds and other              |   |    | 1      |   |    |   | 30     |    |   |   | -      |   |   |   | 31 |   |
| Total nuclear decommissioning trust funds |   |    | 881    |   |    |   | 282    |    |   |   | -      |   |   |   | 1,163 |   |
| Derivatives                               |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Commodity forward contracts               |   |    | -      |   |    |   | 1      |    |   |   | -      |   |   |   | 1 |   |
| Other marketable securities               |   |    | 4      |   |    |   | -      |    |   |   | -      |   |   |   | 4 |   |
| Total assets                              |   | $       | 885    |   |    | $      | 283    |    |   | $      | -      |   |   | $ | 1,168 |   |
|                                      |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Liabilities                               |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Derivatives                               |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Commodity forward contracts               |   | $       | -      |   |    | $      | 208    |    |   | $      | 27     |   |   | $ | 235 |   |
| Interest rate contracts                   |   |    | -      |   |    |   | 41     |    |   |   | -      |   |   |   | 41 |   |
| Total liabilities                         |   | $       | -      |   |    | $      | 249    |    |   | $      | 27     |   |   | $ | 276 |   |
|                                      |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |

----

|                                                                     |   |    |   |   |    |   |   |    |   |   |   |   |
|--------------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
| (in millions)                                                            |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total  |   |
| December 31, 2011                                                        |   |    |   |   |    |   |   |    |   |   |   |   |
| Assets                                                                   |   |    |   |   |    |   |   |    |   |   |   |   |
| Nuclear decommissioning trust funds                                      |   |    |   |   |    |   |   |    |   |   |   |   |
| Common stock equity                                                      |   | $       | 673    |   |    | $      | -      |    |   | $      | -      |   |   | $ | 673 |   |
| Preferred stock and other equity                                         |   |    | 17     |   |    |   | -      |    |   |   | -      |   |   |   | 17 |   |
| Corporate debt                                                           |   |    | -      |   |    |   | 69     |    |   |   | -      |   |   |   | 69 |   |
|         U.S. state and municipal debt |   |    | -      |   |    |   | 56     |    |   |   | -      |   |   |   | 56 |   |
| U.S. and foreign government debt                                         |   |    | 81     |   |    |   | 145    |    |   |   | -      |   |   |   | 226 |   |
|         Money market funds and other  |   |    | -      |   |    |   | 47     |    |   |   | -      |   |   |   | 47 |   |
| Total nuclear decommissioning trust funds                                |   |    | 771    |   |    |   | 317    |    |   |   | -      |   |   |   | 1,088 |   |
| Other marketable securities                                              |   |    | 6      |   |    |   | -      |    |   |   | -      |   |   |   | 6 |   |
| Total assets                                                             |   | $       | 777    |   |    | $      | 317    |    |   | $      | -      |   |   | $ | 1,094 |   |
|                                                                     |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Liabilities                                                              |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Derivatives                                                              |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Commodity forward contracts                                              |   | $       | -      |   |    | $      | 177    |    |   | $      | 24     |   |   | $ | 201 |   |
| Interest rate contracts                                                  |   |    | -      |   |    |   | 47     |    |   |   | -      |   |   |   | 47 |   |
| Total liabilities                                                        |   | $       | -      |   |    | $      | 224    |    |   | $      | 24     |   |   | $ | 248 |   |

| PEF                                                                         |   |    |   |   |    |   |   |    |   |   |   |   |
|-----------------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
| (in millions)                                                               |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total  |   |
| March 31, 2012                                                              |   |    |   |   |    |   |   |    |   |   |   |   |
| Assets                                                                      |   |    |   |   |    |   |   |    |   |   |   |   |
| Nuclear decommissioning trust funds                                         |   |    |   |   |    |   |   |    |   |   |   |   |
| Common stock equity                                                         |   | $       | 405    |   |    | $      | -      |    |   | $      | -      |   |   | $ | 405 |   |
|         Preferred stock and other equity |   |    | 13     |   |    |   | 10     |    |   |   | -      |   |   |   | 23 |   |
| Corporate debt                                                              |   |    | -      |   |    |   | 15     |    |   |   | -      |   |   |   | 15 |   |
| U.S. state and municipal debt                                               |   |    | -      |   |    |   | 71     |    |   |   | -      |   |   |   | 71 |   |
| U.S. and foreign government debt                                            |   |    | 24     |   |    |   | 40     |    |   |   | -      |   |   |   | 64 |   |
| Money market funds and other                                                |   |    | -      |   |    |   | 21     |    |   |   | -      |   |   |   | 21 |   |
| Total nuclear decommissioning trust funds                                   |   |    | 442    |   |    |   | 157    |    |   |   | -      |   |   |   | 599 |   |
| Derivatives                                                                 |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Commodity forward contracts                                                 |   |    | -      |   |    |   | 7      |    |   |   | -      |   |   |   | 7 |   |
| Other marketable securities                                                 |   |    | 1      |   |    |   | -      |    |   |   | -      |   |   |   | 1 |   |
| Total assets                                                                |   | $       | 443    |   |    | $      | 164    |    |   | $      | -      |   |   | $ | 607 |   |
|                                                                        |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Liabilities                                                                 |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Derivatives                                                                 |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Commodity forward contracts                                                 |   | $       | -      |   |    | $      | 561    |    |   | $      | -      |   |   | $ | 561 |   |
| Interest rate contracts                                                     |   |    | -      |   |    |   | 8      |    |   |   | -      |   |   |   | 8 |   |
| Total liabilities                                                           |   | $       | -      |   |    | $      | 569    |    |   | $      | -      |   |   | $ | 569 |   |
|                                                                        |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |

----

|                                      |   |    |   |   |    |   |   |    |   |   |   |   |
|-------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
| (in millions)                             |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total  |   |
| December 31, 2011                         |   |    |   |   |    |   |   |    |   |   |   |   |
| Assets                                    |   |    |   |   |    |   |   |    |   |   |   |   |
| Nuclear decommissioning trust funds       |   |    |   |   |    |   |   |    |   |   |   |   |
| Common stock equity                       |   | $       | 360    |   |    | $      | -      |    |   | $      | -      |   |   | $ | 360 |   |
| Preferred stock and other equity          |   |    | 11     |   |    |   | 1      |    |   |   | -      |   |   |   | 12 |   |
| Corporate debt                            |   |    | -      |   |    |   | 17     |    |   |   | -      |   |   |   | 17 |   |
| U.S. state and municipal debt             |   |    | -      |   |    |   | 72     |    |   |   | -      |   |   |   | 72 |   |
| U.S. and foreign government debt          |   |    | 6      |   |    |   | 52     |    |   |   | -      |   |   |   | 58 |   |
| Money market funds and other              |   |    | -      |   |    |   | 40     |    |   |   | -      |   |   |   | 40 |   |
| Total nuclear decommissioning trust funds |   |    | 377    |   |    |   | 182    |    |   |   | -      |   |   |   | 559 |   |
| Derivatives                               |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Commodity forward contracts               |   |    | -      |   |    |   | 5      |    |   |   | -      |   |   |   | 5 |   |
| Other marketable securities               |   |    | 1      |   |    |   | -      |    |   |   | -      |   |   |   | 1 |   |
| Total assets                              |   | $       | 378    |   |    | $      | 187    |    |   | $      | -      |   |   | $ | 565 |   |
|                                      |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Liabilities                               |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Derivatives                               |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |
| Commodity forward contracts               |   | $       | -      |   |    | $      | 491    |    |   | $      | -      |   |   | $ | 491 |   |
| Interest rate contracts                   |   |    | -      |   |    |   | 8      |    |   |   | -      |   |   |   | 8 |   |
| Total liabilities                         |   | $       | -      |   |    | $      | 499    |    |   | $      | -      |   |   | $ | 499 |   |

----

| PROGRESS ENERGY                                                                    |   |
|------------------------------------------------------------------------------------|--------|
| (in millions)                                                                      | 2012   |   | 2011 |   |
| Derivatives, net at January 1                                                      |   | $ | 24 |   |   | $ | 36 |   |
| Total unrealized losses (gains) deferred as regulatory assets and liabilities, net |   |   | 3 |   |   |   | (4 | ) |
| Derivatives, net at March 31                                                       |   | $ | 27 |   |   | $ | 32 |   |

| PEC                                                                                |   |
|------------------------------------------------------------------------------------|--------|
| (in millions)                                                                      | 2012   |   | 2011 |   |
| Derivatives, net at January 1                                                      |   | $ | 24 |   |   | $ | 36 |   |
| Total unrealized losses (gains) deferred as regulatory assets and liabilities, net |   |   | 3 |   |   |   | (4 | ) |
| Derivatives, net at March 31                                                       |   | $ | 27 |   |   | $ | 32 |   |

| PROGRESS ENERGY              |      |
|------------------------------|-----------|
| (in millions)                | FairValue |   | ValuationTechnique |   | UnobservableInput |   | Range (priceper MMBtu) |   |
| March 31, 2012               |      |   |   |   |   |   |   |   |   |   |
| Commodity natural gas hedges |      | $ | 27 |   | Discounted cash flow |   | Forward natural gas curves |   | $ | 4.111 - 4.528 |   |

| PEC                          |      |
|------------------------------|-----------|
| (in millions)                | FairValue |   | ValuationTechnique |   | UnobservableInput |   | Range (priceper MMBtu) |   |
| March 31, 2012               |      |   |   |   |   |   |   |   |   |
| Commodity natural gas hedges |      | $ | 27 |   | Discounted cash flow |   | Forward natural gas curves |   | $ | 4.111 - 4.528 |   |

----

| 10. | BENEFIT PLANS |
|-----|---------------|

|  PROGRESS ENERGY                   |   |             |   |   |   |   |
|-----------------------------------------|--------|------------------|--------|--------|--------|--------|
|                                    |   | Pension Benefits |   |   | OPEB   |   |
|  (in millions)                     |   | 2012             |   |   | 2011   |   |   | 2012 |   |   | 2011 |   |
|  Service cost                      |   | $                | 16     |   |   | $      | 13 |   |   | $ | 3 |   |   | $ | 3 |   |
|  Interest cost                     |   |             | 33     |   |   |   | 35 |   |   |   | 10 |   |   |   | 10 |   |
|  Expected return on plan assets    |   |             | (46    | )      |   |   | (45 | ) |   |   | - |   |   |   | - |   |
|  Amortization of actuarial loss(a) |   |             | 23     |   |   |   | 14 |   |   |   | 6 |   |   |   | 3 |   |
|  Other amortization, net(a)        |   |             | 2      |   |   |   | 2 |   |   |   | 1 |   |   |   | 1 |   |
| Net periodic cost                       |   | $                | 28     |   |   | $      | 19 |   |   | $ | 20 |   |   | $ | 17 |   |

| (a) | Adjusted to reflect PEF’s rate treatment. See Note 17B in the 2011 Form 10-K. |
|-----|-------------------------------------------------------------------------------------|

|  PEC                            |   |             |   |   |   |   |
|--------------------------------------|--------|------------------|--------|--------|--------|--------|
|                                 |   | Pension Benefits |   |   | OPEB   |   |
|  (in millions)                  |   | 2012             |   |   | 2011   |   |   | 2012 |   |   | 2011 |   |
|  Service cost                   |   | $                | 6      |   |   | $      | 5 |   |   | $ | 1 |   |   | $ | 2 |   |
|  Interest cost                  |   |             | 15     |   |   |   | 16 |   |   |   | 5 |   |   |   | 5 |   |
|  Expected return on plan assets |   |             | (24    | )      |   |   | (23 | ) |   |   | - |   |   |   | - |   |
|  Amortization of actuarial loss |   |             | 9      |   |   |   | 6 |   |   |   | 3 |   |   |   | 1 |   |
|  Other amortization, net        |   |             | 2      |   |   |   | 1 |   |   |   | - |   |   |   | - |   |
| Net periodic cost                    |   | $                | 8      |   |   | $      | 5 |   |   | $ | 9 |   |   | $ | 8 |   |

|  PEF                            |   |             |   |   |   |   |
|--------------------------------------|--------|------------------|--------|--------|--------|--------|
|                                 |   | Pension Benefits |   |   | OPEB   |   |
|  (in millions)                  |   | 2012             |   |   | 2011   |   |   | 2012 |   |   | 2011 |   |
|  Service cost                   |   | $                | 7      |   |   | $      | 6 |   |   | $ | 1 |   |   | $ | 1 |   |
|  Interest cost                  |   |             | 14     |   |   |   | 15 |   |   |   | 4 |   |   |   | 4 |   |
|  Expected return on plan assets |   |             | (20    | )      |   |   | (20 | ) |   |   | - |   |   |   | - |   |
|  Amortization of actuarial loss |   |             | 11     |   |   |   | 8 |   |   |   | 3 |   |   |   | 2 |   |
|  Other amortization, net        |   |             | -      |   |   |   | - |   |   |   | 1 |   |   |   | 1 |   |
| Net periodic cost                    |   | $                | 12     |   |   | $      | 9 |   |   | $ | 9 |   |   | $ | 8 |   |

| 11. | RISK MANAGEMENT ACTIVITIES AND DERIVATIVE TRANSACTIONS |
|-----|--------------------------------------------------------|

----

| A. | COMMODITY DERIVATIVES |
|----|-----------------------|

| B. |  INTEREST RATE DERIVATIVES |
|----|---------------------------------|

----

| C. | CONTINGENT FEATURES |
|----|---------------------|

----

| D. | DERIVATIVE INSTRUMENT AND HEDGING ACTIVITY INFORMATION |
|----|--------------------------------------------------------|

| The following table presents the fair value of derivative instruments at March 31, 2012 and December 31, 2011: |   |
|----------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|  Instrument / Balance sheet location                                                                      |   | March 31, 2012 |   |   | December 31, 2011 |   |
|  (in millions)                                                                                            | Asset  |   | Liability |   | Asset |   | Liability |   |
| Derivatives designated as hedging instruments                                                                  |   |
| Commodity cash flow derivatives                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liabilities, current                                                                                |   |   |   |   | $ | 2 |   |   |   |   |   | $ | 2 |   |
| Derivative liabilities, long-term                                                                              |   |   |   |   |   | 1 |   |   |   |   |   |   | 1 |   |
| Interest rate derivatives                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liabilities, current                                                                                |   |   |   |   |   | 42 |   |   |   |   |   |   | 76 |   |
| Derivative liabilities, long-term                                                                              |   |   |   |   |   | 7 |   |   |   |   |   |   | 17 |   |
| Total derivatives designated as hedging instruments                                                            |   |   |   |   |   | 52 |   |   |   |   |   |   | 96 |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives not designated as hedging instruments                                                              |   |
| Commodity derivatives(a)                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Prepayments and other current assets                                                                           |   | $ | 7 |   |   |   |   |   |   | $ | 5 |   |   |   |   |   |
| Other assets and deferred debits                                                                               |   |   | 1 |   |   |   |   |   |   |   | - |   |   |   |   |   |
| Derivative liabilities, current                                                                                |   |   |   |   |   |   | 439 |   |   |   |   |   |   |   | 357 |   |
| Derivative liabilities, long-term                                                                              |   |   |   |   |   |   | 354 |   |   |   |   |   |   |   | 332 |   |
| CVOs(b)                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other current liabilities                                                                                      |   |   |   |   |   |   | - |   |   |   |   |   |   |   | 14 |   |
| Other liabilities and deferred credits                                                                         |   |   |   |   |   |   | 3 |   |   |   |   |   |   |   | - |   |
| Fair value of derivatives not designated as hedging instruments                                                |   |   | 8 |   |   |   | 796 |   |   |   | 5 |   |   |   | 703 |   |
| Fair value loss transition adjustment                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liabilities, current                                                                                |   |   |   |   |   |   | 1 |   |   |   |   |   |   |   | 1 |   |
| Derivative liabilities, long-term                                                                              |   |   |   |   |   |   | 2 |   |   |   |   |   |   |   | 2 |   |
| Total derivatives not designated as hedging instruments                                                        |   |   | 8 |   |   |   | 799 |   |   |   | 5 |   |   |   | 706 |   |
| Total derivatives                                                                                              |   | $ | 8 |   |   | $ | 851 |   |   | $ | 5 |   |   | $ | 802 |   |

| (a) | Substantially all of these contracts receive regulatory treatment.                                                                                                                                                                                                                                                          |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | As discussed in Note 16 in the 2011 Form 10-K, the Parent issued 98.6 million CVOs in connection with the acquisition of Florida Progress during 2000. Through a negotiated settlement agreement and subsequent tender offer between October 2011 and February 2012, we repurchased and continue to hold 83.4 million CVOs. |

----

|                                          |                                                                  |   |                                                                              |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------|-----------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Derivatives Designated as Hedging Instruments |                                                                  |
|  Instrument                              | Amount of Gain or(Loss) Recognized inOCI, Net of Tax onDerivatives(a) |   | Amount of Gain or(Loss), Net of TaxReclassified fromAccumulated OCI intoIncome(a) |   | Amount of Pre-tax Gainor (Loss) Recognized inIncome onDerivatives(b) |   |
|  (in millions)                           |                                                                  | 2012   |                                                                              |   | 2011                                                                 |   |   | 2012   |   |   | 2011   |   |   | 2012   |   |   | 2011   |   |
|  Interest rate derivatives(c) (d)        |                                                                  | $      | 2                                                                                 |   |                                                                 | $      | 2      |   |   | $      | (3     | )      |   | $      | (1     | )      |   | $      | - |   |   | $ | (1 | ) |

| (a) | Effective portion.                                                                                                                                                                                                                     |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Related to ineffective portion and amount excluded from effectiveness testing.                                                                                                                                                         |
| (c) | Amounts in accumulated OCI related to terminated hedges are reclassified to earnings as the interest expense is recorded. The effective portion of the hedges will be amortized to interest expense over the term of the related debt. |
| (d) | Amounts recorded on the Consolidated Statements of Comprehensive Income are classified in interest charges.                                                                                                                            |

| Derivatives Not Designated as Hedging Instruments |                       |
|---------------------------------------------------|----------------------------|
|  Instrument                                  | Realized Gain or (Loss)(a) |   | Unrealized Gain or (Loss)(b) |   |
|  (in millions)                               |                       | 2012 |   |   | 2011 |   |   | 2012 |   |   | 2011 |   |
|  Commodity derivatives                       |                       | $ | (105 | ) |   | $ | (52 | ) |   | $ | (206 | ) |   | $ | 23 |   |

| (a) | After settlement of the derivatives and the fuel is consumed, gains or losses are passed through the fuel cost-recovery clause.            |   |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------|--------|
| (b) | Amounts are recorded in regulatory liabilities and assets, respectively, on the Consolidated Balance Sheets until derivatives are settled. |   |

|  Instrument    |   | Amount of Gain or (Loss)Recognized in Income onDerivatives |   |
|---------------------|--------|------------------------------------------------------------|--------|
|  (in millions) |   | 2012                                                       |   |   | 2011 |   |
|  CVOs(a)       |   | $                                                          | 8      |   |   | $ | - |   |

| (a) | Amounts recorded in the Consolidated Statements of Comprehensive Income are classified in other, net. |   |
|-----|-------------------------------------------------------------------------------------------------------|--------|

----

| PEC                                                                                                            |   |
|----------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| The following table presents the fair value of derivative instruments at March 31, 2012 and December 31, 2011: |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|  Instrument / Balance sheet location                                                                      |   | March 31, 2012 |   | December 31, 2011 |   |
|  (in millions)                                                                                            | Asset  |   | Liability |   | Asset |   | Liability |   |
| Derivatives designated as hedging instruments                                                                  |   |
|  Interest rate derivatives                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liabilities, current                                                                                |   |   |   |   | $ | 34 |   |   |   |   |   | $ | 38 |   |
| Other liabilities and deferred credits                                                                         |   |   |   |   |   | 7 |   |   |   |   |   |   | 9 |   |
| Total derivatives designated as hedging instruments                                                            |   |   |   |   |   | 41 |   |   |   |   |   |   | 47 |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives not designated as hedging instruments                                                              |   |
|  Commodity derivatives(a)                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other assets and deferred debits                                                                               |   | $ | 1 |   |   |   |   |   |   | $ | - |   |   |   |   |   |
| Derivative liabilities, current                                                                                |   |   |   |   |   |   | 114 |   |   |   |   |   |   |   | 91 |   |
| Other liabilities and deferred credits                                                                         |   |   |   |   |   |   | 121 |   |   |   |   |   |   |   | 110 |   |
| Fair value of derivatives not designated as hedging instruments                                                |   |   | 1 |   |   |   | 235 |   |   |   | - |   |   |   | 201 |   |
|  Fair value loss transition adjustment                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liabilities, current                                                                                |   |   |   |   |   |   | 1 |   |   |   |   |   |   |   | 1 |   |
| Other liabilities and deferred credits                                                                         |   |   |   |   |   |   | 2 |   |   |   |   |   |   |   | 2 |   |
| Total derivatives not designated as hedging instruments                                                        |   |   | 1 |   |   |   | 238 |   |   |   | - |   |   |   | 204 |   |
| Total derivatives                                                                                              |   | $ | 1 |   |   | $ | 279 |   |   | $ | - |   |   | $ | 251 |   |

| (a) | Substantially all of these contracts receive regulatory treatment. |
|-----|--------------------------------------------------------------------|

|                                          |                                                                  |
|-----------------------------------------------|-----------------------------------------------------------------------|
| Derivatives Designated as Hedging Instruments |                                                                  |
|  Instrument                              | Amount of Gain or(Loss) Recognized inOCI, Net of Tax onDerivatives(a) |   | Amount of Gain or(Loss), Net of TaxReclassified fromAccumulated OCI intoIncome(a) |   | Amount of Pre-tax Gainor (Loss) Recognized inIncome onDerivatives(b) |   |
|  (in millions)                           |                                                                  | 2012 |   |   | 2011 |   |   | 2012 |   |   | 2011 |   |   | 2012 |   |   | 2011 |   |
|  Interest rate derivatives(c) (d)        |                                                                  | $ | 3 |   |   | $ | 1 |   |   | $ | (2 | ) |   | $ | (1 | ) |   | $ | - |   |   | $ | - |   |

| (a) | Effective portion.                                                                                                                                                                                                                     |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Related to ineffective portion and amount excluded from effectiveness testing.                                                                                                                                                         |
| (c) | Amounts in accumulated OCI related to terminated hedges are reclassified to earnings as the interest expense is recorded. The effective portion of the hedges will be amortized to interest expense over the term of the related debt. |
| (d) | Amounts recorded on the Consolidated Statements of Comprehensive Income are classified in interest charges.                                                                                                                            |

----

| Derivatives Not Designated as Hedging Instruments |                       |
|---------------------------------------------------|----------------------------|
|  Instrument                                  | Realized Gain or (Loss)(a) |   | Unrealized Gain or (Loss)(b) |   |
|  (in millions)                               |                       | 2012 |   |   | 2011 |   |   | 2012 |   |   | 2011 |   |
|  Commodity derivatives                       |                       | $ | (26 | ) |   | $ | (11 | ) |   | $ | (59 | ) |   | $ | 7 |   |

| (a) | After settlement of the derivatives and the fuel is consumed, gains or losses are passed through the fuel cost-recovery clause.            |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Amounts are recorded in regulatory liabilities and assets, respectively, on the Consolidated Balance Sheets until derivatives are settled. |

|  PEF                                                                                                      |   |           |      |   |              |   |      |   |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------|--------|----------------|-----------|--------|-------------------|--------|-----------|--------|--------|--------|--------|--------|
|                                                                                                           |   |           |      |   |              |   |      |   |   |   |   |   |
| The following table presents the fair value of derivative instruments at March 31, 2012 and December 31, 2011: |   |
|                                                                                                           |   |           |      |   |              |   |      |   |   |   |   |   |
|  Instrument / Balance sheet location                                                                      |   | March 31, 2012 |      |   | December 31, 2011 |   |
|  (in millions)                                                                                            | Asset  |           | Liability |   | Asset             |   | Liability |   |
| Derivatives designated as hedging instruments                                                                  |   |
| Commodity cash flow derivatives                                                                                |   |           |      |   |              |   |      |   |   |   |   |   |
| Derivative liabilities, current                                                                                |   |           |      |   | $                 | 2      |      |   |   |   |   | $      | 2 |   |
| Derivative liabilities, long-term                                                                              |   |           |      |   |              | 1      |      |   |   |   |   |   | 1 |   |
| Interest rate derivatives                                                                                      |   |           |      |   |              |   |      |   |   |   |   |   |   |   |
| Derivative liabilities, current                                                                                |   |           |      |   |              | 8      |      |   |   |   |   |   | - |   |
| Derivative liabilities, long-term                                                                              |   |           |      |   |              | -      |      |   |   |   |   |   | 8 |   |
| Total derivatives designated as hedging instruments                                                            |   |           |      |   |              | 11     |      |   |   |   |   |   | 11 |   |
|                                                                                                           |   |           |      |   |              |   |      |   |   |   |   |   |   |   |
| Derivatives not designated as hedging instruments                                                              |   |
| Commodity derivatives(a)                                                                                       |   |           |      |   |              |   |      |   |   |   |   |   |   |   |
| Prepayments and other current assets                                                                           |   | $              | 7         |   |              |   |      |   |   | $      | 5      |   |   |   |   |   |
| Derivative liabilities, current                                                                                |   |           |      |   |              |   | 325       |   |   |   |   |   |   |   | 266 |   |
| Derivative liabilities, long-term                                                                              |   |           |      |   |              |   | 233       |   |   |   |   |   |   |   | 222 |   |
| Total derivatives not designated as hedging instruments                                                        |   |           | 7         |   |              |   | 558       |   |   |   | 5      |   |   |   | 488 |   |
| Total derivatives                                                                                              |   | $              | 7         |   |              | $      | 569       |   |   | $      | 5      |   |   | $ | 499 |   |

| (a) | Substantially all of these contracts receive regulatory treatment. |
|-----|--------------------------------------------------------------------|

----

|                                          |                                                                  |
|-----------------------------------------------|-----------------------------------------------------------------------|
| Derivatives Designated as Hedging Instruments |                                                                  |
|  Instrument                              | Amount of Gain or(Loss) Recognized inOCI, Net of Tax onDerivatives(a) |   | Amount of Gain or(Loss), Net of TaxReclassified fromAccumulated OCI intoIncome(a) |   | Amount of Pre-tax Gainor (Loss) Recognized inIncome onDerivatives(b) |   |
|  (in millions)                           |                                                                  | 2012 |   |   | 2011 |   |   | 2012 |   |   | 2011 |   |   | 2012 |   |   | 2011 |   |
|  Interest rate derivatives(c) (d)        |                                                                  | $ | - |   |   | $ | - |   |   | $ | (1 | ) |   | $ | - |   |   | $ | - |   |   | $ | - |   |

| (a) | Effective portion.                                                                                                                                                                                                                     |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Related to ineffective portion and amount excluded from effectiveness testing.                                                                                                                                                         |
| (c) | Amounts in accumulated OCI related to terminated hedges are reclassified to earnings as the interest expense is recorded. The effective portion of the hedges will be amortized to interest expense over the term of the related debt. |
| (d) | Amounts recorded on the Statements of Comprehensive Income are classified in interest charges.                                                                                                                                         |

| Derivatives Not Designated as Hedging Instruments |                       |
|---------------------------------------------------|----------------------------|
|  Instrument                                  | Realized Gain or (Loss)(a) |   | Unrealized Gain or (Loss)(b) |   |
|  (in millions)                               |                       | 2012 |   |   | 2011 |   |   | 2012 |   |   | 2011 |   |
|  Commodity derivatives                       |                       | $ | (79 | ) |   | $ | (41 | ) |   | $ | (147 | ) |   | $ | 17 |   |

| (a) | After settlement of the derivatives and the fuel is consumed, gains or losses are passed through the fuel cost-recovery clause. |
|-----|---------------------------------------------------------------------------------------------------------------------------------|
| (b) | Amounts are recorded in regulatory liabilities and assets, respectively, on the Balance Sheets until derivatives are settled.   |

| 12. | FINANCIAL INFORMATION BY BUSINESS SEGMENT |
|-----|-------------------------------------------|

----

|  (in millions)                              | PEC    |   | PEF    |   | Corporateand Other |   | Eliminations |   | Totals |   |
|--------------------------------------------------|--------|--------|--------|--------|--------------------|--------|--------------|--------|--------|--------|
| At and for the three months ended March 31, 2012 |   |
|  Revenues                                   |   |   |   |   |               |   |         |   |   |   |   |   |   |   |   |
| Unaffiliated                                     |   | $      | 1,085  |   |               | $      | 1,005        |   |   | $      | 2 |   |   | $ | - |   |   | $ | 2,092 |   |
| Intersegment                                     |   |   | -      |   |               |   | -            |   |   |   | 59 |   |   |   | (59 | ) |   |   | - |   |
| Total revenues                                   |   |   | 1,085  |   |               |   | 1,005        |   |   |   | 61 |   |   |   | (59 | ) |   |   | 2,092 |   |
|  Ongoing Earnings                           |   |   | 60     |   |               |   | 130          |   |   |   | (47 | ) |   |   | - |   |   |   | 143 |   |
|  Total assets                               |   |   | 16,424 |   |               |   | 14,732       |   |   |   | 21,248 |   |   |   | (16,429 | ) |   |   | 35,975 |   |
|                                             |   |   |   |   |               |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| For the three months ended March 31, 2011        |   |
|  Revenues                                   |   |   |   |   |               |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unaffiliated                                     |   | $      | 1,133  |   |               | $      | 1,032        |   |   | $      | 2 |   |   | $ | - |   |   | $ | 2,167 |   |
| Intersegment                                     |   |   | -      |   |               |   | -            |   |   |   | 74 |   |   |   | (74 | ) |   |   | - |   |
| Total revenues                                   |   |   | 1,133  |   |               |   | 1,032        |   |   |   | 76 |   |   |   | (74 | ) |   |   | 2,167 |   |
|  Ongoing Earnings                           |   |   | 139    |   |               |   | 111          |   |   |   | (48 | ) |   |   | - |   |   |   | 202 |   |

| (in millions)                                                          |   | 2012   |   |   | 2011   |   |
|------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Ongoing Earnings                                                       |   | $      | 143    |   |   | $      | 202 |   |
| Tax levelization                                                       |   |   | (7     | )      |   |   | (2 | ) |
| CVO mark-to-market                                                     |   |   | 8      |   |   |   | - |   |
| Merger and integration costs, net of tax benefit of $2 and $- (Note 2) |   |   | (5     | )      |   |   | (14 | ) |
| Continuing income attributable to noncontrolling interests, net of tax |   |   | 2      |   |   |   | 1 |   |
| Income from continuing operations                                      |   |   | 141    |   |   |   | 187 |   |
| Discontinued operations, net of tax                                    |   |   | 11     |   |   |   | (2 | ) |
| Net income attributable to noncontrolling interests, net of tax        |   |   | (2     | )      |   |   | (1 | ) |
| Net income attributable to controlling interests                       |   | $      | 150    |   |   | $      | 184 |   |

| 13. | ENVIRONMENTAL MATTERS |
|-----|-----------------------|

----

| A. | HAZARDOUS AND SOLID WASTE |
|----|---------------------------|

----

|  PROGRESS ENERGY                                     |   |               |   |   |                                                  |   |   |   |   |
|-----------------------------------------------------------|--------|--------------------|--------|--------|-------------------------------------------------------|--------|--------|--------|--------|
|  (in millions)                                       |   | MGP andOther Sites |   |   | Remediationof Distributionand Substation Transformers |   |   | Total  |   |
|  Balance, December 31, 2011                          |   | $                  | 17     |   |                                                  | $      | 6      |   |   | $ | 23 |   |
|  Amount accrued for environmental loss contingencies |   |               | 3      |   |                                                  |   | 2      |   |   |   | 5 |   |
|  Expenditures for environmental loss contingencies   |   |               | (2     | )      |                                                  |   | (2     | )      |   |   | (4 | ) |
|  Balance, March 31, 2012(a)                          |   | $                  | 18     |   |                                                  | $      | 6      |   |   | $ | 24 |   |
|                                                      |   |               |   |   |                                                  |   |   |   |   |   |   |   |
|  Balance, December 31, 2010                          |   | $                  | 20     |   |                                                  | $      | 15     |   |   | $ | 35 |   |
|  Amount accrued for environmental loss contingencies |   |               | -      |   |                                                  |   | -      |   |   |   | - |   |
|  Expenditures for environmental loss contingencies   |   |               | (1     | )      |                                                  |   | (5     | )      |   |   | (6 | ) |
|  Balance, March 31, 2011(a)                          |   | $                  | 19     |   |                                                  | $      | 10     |   |   | $ | 29 |   |

| (a) | Expected to be paid out over one to 12 years. |   |   |   |   |   |   |   |   |
|-----|-----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|

|  PEC                                                     |   |               |   |
|---------------------------------------------------------------|--------|--------------------|--------|
|  (in millions)                                           |   | MGP andOther Sites |   |
|  Balance, December 31, 2011                              |   | $                  | 11     |   |
|  Change in estimate for environmental loss contingencies |   |               | (1     | ) |
|  Expenditures for environmental loss contingencies       |   |               | (1     | ) |
|  Balance, March 31, 2012(a)                              |   | $                  | 9      |   |
|                                                          |   |               |   |   |
|  Balance, December 31, 2010                              |   | $                  | 12     |   |
|  Amount accrued for environmental loss contingencies     |   |               | -      |   |
|  Expenditures for environmental loss contingencies       |   |               | -      |   |
|  Balance, March 31, 2011(a)                              |   | $                  | 12     |   |

| (a) | Expected to be paid out over one to ten years. |   |   |   |   |   |   |   |   |
|-----|------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|

|  PEF                                                 |   |               |   |   |                                                  |   |   |   |   |
|-----------------------------------------------------------|--------|--------------------|--------|--------|-------------------------------------------------------|--------|--------|--------|--------|
|  (in millions)                                       |   | MGP andOther Sites |   |   | Remediationof Distributionand Substation Transformers |   |   | Total  |   |
|  Balance, December 31, 2011                          |   | $                  | 6      |   |                                                  | $      | 6      |   |   | $ | 12 |   |
|  Amount accrued for environmental loss contingencies |   |               | 4      |   |                                                  |   | 2      |   |   |   | 6 |   |
|  Expenditures for environmental loss contingencies   |   |               | (1     | )      |                                                  |   | (2     | )      |   |   | (3 | ) |
|  Balance, March 31, 2012(a)                          |   | $                  | 9      |   |                                                  | $      | 6      |   |   | $ | 15 |   |
|                                                      |   |               |   |   |                                                  |   |   |   |   |   |   |   |
|  Balance, December 31, 2010                          |   | $                  | 8      |   |                                                  | $      | 15     |   |   | $ | 23 |   |
|  Amount accrued for environmental loss contingencies |   |               | -      |   |                                                  |   | -      |   |   |   | - |   |
|  Expenditures for environmental loss contingencies   |   |               | (1     | )      |                                                  |   | (5     | )      |   |   | (6 | ) |
|  Balance, March 31, 2011(a)                          |   | $                  | 7      |   |                                                  | $      | 10     |   |   | $ | 17 |   |

| (a) | Expected to be paid out over one to 12 years. |   |   |   |   |   |   |   |   |
|-----|-----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|

----

----

| B. | AIR AND WATER QUALITY |
|----|-----------------------|

----

| 14. | COMMITMENTS AND CONTINGENCIES |
|-----|-------------------------------|

| A. | PURCHASE OBLIGATIONS |
|----|----------------------|

| B. | GUARANTEES |
|----|------------|

----

| C. | OTHER COMMITMENTS AND CONTINGENCIES |
|----|-------------------------------------|

----

----

| 15. | CONDENSED CONSOLIDATING STATEMENTS |
|-----|------------------------------------|

----

| Condensed Consolidating Statement of Comprehensive Income                                                                            |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|
| Three months ended March 31, 2012                                                                                                    |   |
| (in millions)                                                                                                                        |   | Parent |   |   | SubsidiaryGuarantor |   |   | Non-GuarantorSubsidiaries |   |   | Other |   |   | ProgressEnergy,Inc. |   |
| Operating revenues                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating revenues                                                                                                                   |   | $ | - |   |   | $ | 1,007 |   |   | $ | 1,085 |   |   | $ | - |   |   | $ | 2,092 |   |
| Affiliate revenues                                                                                                                   |   |   | - |   |   |   | - |   |   |   | 59 |   |   |   | (59 | ) |   |   | - |   |
| Total operating revenues                                                                                                             |   |   | - |   |   |   | 1,007 |   |   |   | 1,144 |   |   |   | (59 | ) |   |   | 2,092 |   |
| Operating expenses                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel used in electric generation                                                                                                     |   |   | - |   |   |   | 336 |   |   |   | 349 |   |   |   | - |   |   |   | 685 |   |
| Purchased power                                                                                                                      |   |   | - |   |   |   | 145 |   |   |   | 65 |   |   |   | - |   |   |   | 210 |   |
| Operation and maintenance                                                                                                            |   |   | 1 |   |   |   | 160 |   |   |   | 422 |   |   |   | (54 | ) |   |   | 529 |   |
| Depreciation, amortization and accretion                                                                                             |   |   | - |   |   |   | 27 |   |   |   | 139 |   |   |   | - |   |   |   | 166 |   |
| Taxes other than on income                                                                                                           |   |   | - |   |   |   | 82 |   |   |   | 58 |   |   |   | (2 | ) |   |   | 138 |   |
| Total operating expenses                                                                                                             |   |   | 1 |   |   |   | 750 |   |   |   | 1,033 |   |   |   | (56 | ) |   |   | 1,728 |   |
| Operating (loss) income                                                                                                              |   |   | (1 | ) |   |   | 257 |   |   |   | 111 |   |   |   | (3 | ) |   |   | 364 |   |
| Other income (expense)                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                                                                                                      |   |   | 1 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1 |   |
| Allowance for equity funds used during construction                                                                                  |   |   | - |   |   |   | 9 |   |   |   | 15 |   |   |   | - |   |   |   | 24 |   |
| Other, net                                                                                                                           |   |   | 8 |   |   |   | 1 |   |   |   | 2 |   |   |   | 2 |   |   |   | 13 |   |
| Total other income, net                                                                                                              |   |   | 9 |   |   |   | 10 |   |   |   | 17 |   |   |   | 2 |   |   |   | 38 |   |
| Interest charges                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest charges                                                                                                                     |   |   | 66 |   |   |   | 73 |   |   |   | 55 |   |   |   | - |   |   |   | 194 |   |
| Allowance for borrowed funds used during  construction                                                                     |   |   | - |   |   |   | (4 | ) |   |   | (5 | ) |   |   | - |   |   |   | (9 | ) |
| Total interest charges, net                                                                                                          |   |   | 66 |   |   |   | 69 |   |   |   | 50 |   |   |   | - |   |   |   | 185 |   |
| (Loss) income from continuing operations before  income tax and equity in earnings of consolidated  subsidiaries |   |   | (58 | ) |   |   | 198 |   |   |   | 78 |   |   |   | (1 | ) |   |   | 217 |   |
| Income tax (benefit) expense                                                                                                         |   |   | (22 | ) |   |   | 73 |   |   |   | 27 |   |   |   | (2 | ) |   |   | 76 |   |
| Equity in earnings of consolidated subsidiaries                                                                                      |   |   | 186 |   |   |   | - |   |   |   | - |   |   |   | (186 | ) |   |   | - |   |
| Income from continuing operations                                                                                                    |   |   | 150 |   |   |   | 125 |   |   |   | 51 |   |   |   | (185 | ) |   |   | 141 |   |
| Discontinued operations, net of tax                                                                                                  |   |   | - |   |   |   | 11 |   |   |   | - |   |   |   | - |   |   |   | 11 |   |
| Net income                                                                                                                           |   |   | 150 |   |   |   | 136 |   |   |   | 51 |   |   |   | (185 | ) |   |   | 152 |   |
| Net income attributable to noncontrolling interests,  net of tax                                                           |   |   | - |   |   |   | (1 | ) |   |   | - |   |   |   | (1 | ) |   |   | (2 | ) |
| Net income attributable to controlling interests                                                                                     |   | $ | 150 |   |   | $ | 135 |   |   | $ | 51 |   |   | $ | (186 | ) |   | $ | 150 |   |
| Comprehensive income                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income                                                                                                                 |   | $ | 155 |   |   | $ | 137 |   |   | $ | 55 |   |   | $ | (190 | ) |   | $ | 157 |   |
| Comprehensive income attributable to noncontrolling  interests, net of tax                                                 |   |   | - |   |   |   | (1 | ) |   |   | - |   |   |   | (1 | ) |   |   | (2 | ) |
| Comprehensive income attributable to controlling  interests                                                                |   | $ | 155 |   |   | $ | 136 |   |   | $ | 55 |   |   | $ | (191 | ) |   | $ | 155 |   |

----

| Condensed Consolidating Statement of Comprehensive Income                                                                            |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|
| Three months ended March 31, 2011                                                                                                    |   |
| (in millions)                                                                                                                        |   | Parent |   |   | SubsidiaryGuarantor |   |   | Non-GuarantorSubsidiaries |   |   | Other |   |   | ProgressEnergy,Inc. |   |
| Operating revenues                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating revenues                                                                                                                   |   | $ | - |   |   | $ | 1,034 |   |   | $ | 1,133 |   |   | $ | - |   |   | $ | 2,167 |   |
| Affiliate revenues                                                                                                                   |   |   | - |   |   |   | - |   |   |   | 74 |   |   |   | (74 | ) |   |   | - |   |
| Total operating revenues                                                                                                             |   |   | - |   |   |   | 1,034 |   |   |   | 1,207 |   |   |   | (74 | ) |   |   | 2,167 |   |
| Operating expenses                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fuel used in electric generation                                                                                                     |   |   | - |   |   |   | 355 |   |   |   | 363 |   |   |   | - |   |   |   | 718 |   |
| Purchased power                                                                                                                      |   |   | - |   |   |   | 153 |   |   |   | 67 |   |   |   | - |   |   |   | 220 |   |
| Operation and maintenance                                                                                                            |   |   | 3 |   |   |   | 211 |   |   |   | 351 |   |   |   | (71 | ) |   |   | 494 |   |
| Depreciation, amortization and accretion                                                                                             |   |   | - |   |   |   | 25 |   |   |   | 129 |   |   |   | - |   |   |   | 154 |   |
| Taxes other than on income                                                                                                           |   |   | - |   |   |   | 85 |   |   |   | 59 |   |   |   | (4 | ) |   |   | 140 |   |
| Other                                                                                                                                |   |   | - |   |   |   | (10 | ) |   |   | - |   |   |   | - |   |   |   | (10 | ) |
| Total operating expenses                                                                                                             |   |   | 3 |   |   |   | 819 |   |   |   | 969 |   |   |   | (75 | ) |   |   | 1,716 |   |
| Operating (loss) income                                                                                                              |   |   | (3 | ) |   |   | 215 |   |   |   | 238 |   |   |   | 1 |   |   |   | 451 |   |
| Other income (expense)                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                                                                                                      |   |   | - |   |   |   | 1 |   |   |   | - |   |   |   | - |   |   |   | 1 |   |
| Allowance for equity funds used during construction                                                                                  |   |   | - |   |   |   | 9 |   |   |   | 20 |   |   |   | - |   |   |   | 29 |   |
| Other, net                                                                                                                           |   |   | - |   |   |   | 5 |   |   |   | (2 | ) |   |   | - |   |   |   | 3 |   |
| Total other income, net                                                                                                              |   |   | - |   |   |   | 15 |   |   |   | 18 |   |   |   | - |   |   |   | 33 |   |
| Interest charges                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest charges                                                                                                                     |   |   | 73 |   |   |   | 75 |   |   |   | 51 |   |   |   | - |   |   |   | 199 |   |
| Allowance for borrowed funds used during  construction                                                                     |   |   | - |   |   |   | (4 | ) |   |   | (5 | ) |   |   | - |   |   |   | (9 | ) |
| Total interest charges, net                                                                                                          |   |   | 73 |   |   |   | 71 |   |   |   | 46 |   |   |   | - |   |   |   | 190 |   |
| (Loss) income from continuing operations before  income tax and equity in earnings of consolidated  subsidiaries |   |   | (76 | ) |   |   | 159 |   |   |   | 210 |   |   |   | 1 |   |   |   | 294 |   |
| Income tax (benefit) expense                                                                                                         |   |   | (31 | ) |   |   | 60 |   |   |   | 80 |   |   |   | (2 | ) |   |   | 107 |   |
| Equity in earnings of consolidated subsidiaries                                                                                      |   |   | 229 |   |   |   | - |   |   |   | - |   |   |   | (229 | ) |   |   | - |   |
| Income from continuing operations before  cumulative effect of change in accounting principle                              |   |   | 184 |   |   |   | 99 |   |   |   | 130 |   |   |   | (226 | ) |   |   | 187 |   |
| Discontinued operations, net of tax                                                                                                  |   |   | - |   |   |   | (1 | ) |   |   | (1 | ) |   |   | - |   |   |   | (2 | ) |
| Net income                                                                                                                           |   |   | 184 |   |   |   | 98 |   |   |   | 129 |   |   |   | (226 | ) |   |   | 185 |   |
| Net (income) loss attributable to noncontrolling  interests, net of tax                                                    |   |   | - |   |   |   | (1 | ) |   |   | - |   |   |   | - |   |   |   | (1 | ) |
| Net income attributable to controlling interests                                                                                     |   | $ | 184 |   |   | $ | 97 |   |   | $ | 129 |   |   | $ | (226 | ) |   | $ | 184 |   |
| Comprehensive income                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income                                                                                                                 |   | $ | 188 |   |   | $ | 99 |   |   | $ | 132 |   |   | $ | (230 | ) |   | $ | 189 |   |
| Comprehensive income attributable to noncontrolling  interests                                                             |   |   | - |   |   |   | (1 | ) |   |   | - |   |   |   | - |   |   |   | (1 | ) |
| Comprehensive income attributable to controlling  interests                                                                |   | $ | 188 |   |   | $ | 98 |   |   | $ | 132 |   |   | $ | (230 | ) |   | $ | 188 |   |

----

| Condensed Consolidating Balance Sheet        |   |
|----------------------------------------------|--------|
| March 31, 2012                               |   |
| (in millions)                                |   | Parent |   |   | SubsidiaryGuarantor |   |   | Non-GuarantorSubsidiaries |   |   | Other |   |   | ProgressEnergy,Inc. |   |
| ASSETS                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Utility plant, net                           |   | $ | - |   |   | $ | 10,596 |   |   | $ | 12,124 |   |   | $ | 85 |   |   | $ | 22,805 |   |
| Current assets                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                    |   |   | 511 |   |   |   | 33 |   |   |   | 21 |   |   |   | - |   |   |   | 565 |   |
| Receivables, net                             |   |   | - |   |   |   | 346 |   |   |   | 412 |   |   |   | - |   |   |   | 758 |   |
| Notes receivable from affiliated companies   |   |   | 63 |   |   |   | 7 |   |   |   | 172 |   |   |   | (242 | ) |   |   | - |   |
| Regulatory assets                            |   |   | - |   |   |   | 225 |   |   |   | 25 |   |   |   | - |   |   |   | 250 |   |
| Derivative collateral posted                 |   |   | - |   |   |   | 136 |   |   |   | 30 |   |   |   | - |   |   |   | 166 |   |
| Prepayments and other current assets         |   |   | 135 |   |   |   | 960 |   |   |   | 1,134 |   |   |   | (133 | ) |   |   | 2,096 |   |
| Total current assets                         |   |   | 709 |   |   |   | 1,707 |   |   |   | 1,794 |   |   |   | (375 | ) |   |   | 3,835 |   |
| Deferred debits and other assets             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment in consolidated subsidiaries      |   |   | 13,968 |   |   |   | - |   |   |   | - |   |   |   | (13,968 | ) |   |   | - |   |
| Regulatory assets                            |   |   | - |   |   |   | 1,659 |   |   |   | 1,464 |   |   |   | - |   |   |   | 3,123 |   |
| Goodwill                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,655 |   |   |   | 3,655 |   |
| Nuclear decommissioning trust funds          |   |   | - |   |   |   | 599 |   |   |   | 1,163 |   |   |   | - |   |   |   | 1,762 |   |
| Other assets and deferred debits             |   |   | 116 |   |   |   | 255 |   |   |   | 869 |   |   |   | (445 | ) |   |   | 795 |   |
| Total deferred debits and other assets       |   |   | 14,084 |   |   |   | 2,513 |   |   |   | 3,496 |   |   |   | (10,758 | ) |   |   | 9,335 |   |
| Total assets                                 |   | $ | 14,793 |   |   | $ | 14,816 |   |   | $ | 17,414 |   |   | $ | (11,048 | ) |   | $ | 35,975 |   |
| CAPITALIZATION AND LIABILITIES               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock equity                          |   | $ | 10,009 |   |   | $ | 4,759 |   |   | $ | 5,536 |   |   | $ | (10,295 | ) |   | $ | 10,009 |   |
| Noncontrolling interests                     |   |   | - |   |   |   | 2 |   |   |   | - |   |   |   | - |   |   |   | 2 |   |
| Total equity                                 |   |   | 10,009 |   |   |   | 4,761 |   |   |   | 5,536 |   |   |   | (10,295 | ) |   |   | 10,011 |   |
| Preferred stock of subsidiaries              |   |   | - |   |   |   | 34 |   |   |   | 59 |   |   |   | - |   |   |   | 93 |   |
| Long-term debt, affiliate                    |   |   | - |   |   |   | 309 |   |   |   | - |   |   |   | (36 | ) |   |   | 273 |   |
| Long-term debt, net                          |   |   | 3,992 |   |   |   | 4,057 |   |   |   | 3,693 |   |   |   | - |   |   |   | 11,742 |   |
| Total capitalization                         |   |   | 14,001 |   |   |   | 9,161 |   |   |   | 9,288 |   |   |   | (10,331 | ) |   |   | 22,119 |   |
| Current liabilities                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current portion of long-term debt            |   |   | 450 |   |   |   | 425 |   |   |   | 500 |   |   |   | - |   |   |   | 1,375 |   |
| Short-term debt                              |   |   | 255 |   |   |   | 360 |   |   |   | 441 |   |   |   | - |   |   |   | 1,056 |   |
| Notes payable to affiliated companies        |   |   | - |   |   |   | 198 |   |   |   | 44 |   |   |   | (242 | ) |   |   | - |   |
| Derivative liabilities                       |   |   | - |   |   |   | 335 |   |   |   | 149 |   |   |   | - |   |   |   | 484 |   |
| Other current liabilities                    |   |   | 65 |   |   |   | 836 |   |   |   | 1,084 |   |   |   | (138 | ) |   |   | 1,847 |   |
| Total current liabilities                    |   |   | 770 |   |   |   | 2,154 |   |   |   | 2,218 |   |   |   | (380 | ) |   |   | 4,762 |   |
| Deferred credits and other liabilities       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noncurrent income tax liabilities            |   |   | - |   |   |   | 990 |   |   |   | 2,062 |   |   |   | (415 | ) |   |   | 2,637 |   |
| Regulatory liabilities                       |   |   | - |   |   |   | 967 |   |   |   | 1,632 |   |   |   | 85 |   |   |   | 2,684 |   |
| Other liabilities and deferred credits       |   |   | 22 |   |   |   | 1,544 |   |   |   | 2,214 |   |   |   | (7 | ) |   |   | 3,773 |   |
| Total deferred credits and other liabilities |   |   | 22 |   |   |   | 3,501 |   |   |   | 5,908 |   |   |   | (337 | ) |   |   | 9,094 |   |
| Total capitalization and liabilities         |   | $ | 14,793 |   |   | $ | 14,816 |   |   | $ | 17,414 |   |   | $ | (11,048 | ) |   | $ | 35,975 |   |

----

| Condensed Consolidating Balance Sheet        |   |
|----------------------------------------------|--------|
| December 31, 2011                            |   |
| (in millions)                                |   | Parent |   |   | SubsidiaryGuarantor |   |   | Non-GuarantorSubsidiaries |   |   | Other |   |   | ProgressEnergy,Inc. |   |
| ASSETS                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Utility plant, net                           |   | $ | - |   |   | $ | 10,523 |   |   | $ | 11,887 |   |   | $ | 87 |   |   | $ | 22,497 |   |
| Current assets                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                    |   |   | 117 |   |   |   | 92 |   |   |   | 21 |   |   |   | - |   |   |   | 230 |   |
| Receivables, net                             |   |   | - |   |   |   | 372 |   |   |   | 517 |   |   |   | - |   |   |   | 889 |   |
| Notes receivable from affiliated companies   |   |   | 53 |   |   |   | - |   |   |   | 219 |   |   |   | (272 | ) |   |   | - |   |
| Regulatory assets                            |   |   | - |   |   |   | 244 |   |   |   | 31 |   |   |   | - |   |   |   | 275 |   |
| Derivative collateral posted                 |   |   | - |   |   |   | 123 |   |   |   | 24 |   |   |   | - |   |   |   | 147 |   |
| Prepayments and other current assets         |   |   | 128 |   |   |   | 852 |   |   |   | 1,049 |   |   |   | (87 | ) |   |   | 1,942 |   |
| Total current assets                         |   |   | 298 |   |   |   | 1,683 |   |   |   | 1,861 |   |   |   | (359 | ) |   |   | 3,483 |   |
| Deferred debits and other assets             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment in consolidated subsidiaries      |   |   | 14,043 |   |   |   | - |   |   |   | - |   |   |   | (14,043 | ) |   |   | - |   |
| Regulatory assets                            |   |   | - |   |   |   | 1,602 |   |   |   | 1,423 |   |   |   | - |   |   |   | 3,025 |   |
| Goodwill                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,655 |   |   |   | 3,655 |   |
| Nuclear decommissioning trust funds          |   |   | - |   |   |   | 559 |   |   |   | 1,088 |   |   |   | - |   |   |   | 1,647 |   |
| Other assets and deferred debits             |   |   | 140 |   |   |   | 242 |   |   |   | 856 |   |   |   | (486 | ) |   |   | 752 |   |
| Total deferred debits and other assets       |   |   | 14,183 |   |   |   | 2,403 |   |   |   | 3,367 |   |   |   | (10,874 | ) |   |   | 9,079 |   |
| Total assets                                 |   | $ | 14,481 |   |   | $ | 14,609 |   |   | $ | 17,115 |   |   | $ | (11,146 | ) |   | $ | 35,059 |   |
| CAPITALIZATION AND LIABILITIES               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock equity                          |   | $ | 10,021 |   |   | $ | 4,728 |   |   | $ | 5,646 |   |   | $ | (10,374 | ) |   | $ | 10,021 |   |
| Noncontrolling interests                     |   |   | - |   |   |   | 4 |   |   |   | - |   |   |   | - |   |   |   | 4 |   |
| Total equity                                 |   |   | 10,021 |   |   |   | 4,732 |   |   |   | 5,646 |   |   |   | (10,374 | ) |   |   | 10,025 |   |
| Preferred stock of subsidiaries              |   |   | - |   |   |   | 34 |   |   |   | 59 |   |   |   | - |   |   |   | 93 |   |
| Long-term debt, affiliate                    |   |   | - |   |   |   | 309 |   |   |   | - |   |   |   | (36 | ) |   |   | 273 |   |
| Long-term debt, net                          |   |   | 3,543 |   |   |   | 4,482 |   |   |   | 3,693 |   |   |   | - |   |   |   | 11,718 |   |
| Total capitalization                         |   |   | 13,564 |   |   |   | 9,557 |   |   |   | 9,398 |   |   |   | (10,410 | ) |   |   | 22,109 |   |
| Current liabilities                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current portion of long-term debt            |   |   | 450 |   |   |   | - |   |   |   | 500 |   |   |   | - |   |   |   | 950 |   |
| Short-term debt                              |   |   | 250 |   |   |   | 233 |   |   |   | 188 |   |   |   | - |   |   |   | 671 |   |
| Notes payable to affiliated companies        |   |   | - |   |   |   | 238 |   |   |   | 34 |   |   |   | (272 | ) |   |   | - |   |
| Derivative liabilities                       |   |   | 38 |   |   |   | 268 |   |   |   | 130 |   |   |   | - |   |   |   | 436 |   |
| Other current liabilities                    |   |   | 161 |   |   |   | 839 |   |   |   | 1,112 |   |   |   | (84 | ) |   |   | 2,028 |   |
| Total current liabilities                    |   |   | 899 |   |   |   | 1,578 |   |   |   | 1,964 |   |   |   | (356 | ) |   |   | 4,085 |   |
| Deferred credits and other liabilities       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noncurrent income tax liabilities            |   |   | - |   |   |   | 837 |   |   |   | 1,976 |   |   |   | (458 | ) |   |   | 2,355 |   |
| Regulatory liabilities                       |   |   | - |   |   |   | 1,071 |   |   |   | 1,543 |   |   |   | 86 |   |   |   | 2,700 |   |
| Other liabilities and deferred credits       |   |   | 18 |   |   |   | 1,566 |   |   |   | 2,234 |   |   |   | (8 | ) |   |   | 3,810 |   |
| Total deferred credits and other liabilities |   |   | 18 |   |   |   | 3,474 |   |   |   | 5,753 |   |   |   | (380 | ) |   |   | 8,865 |   |
| Total capitalization and liabilities         |   | $ | 14,481 |   |   | $ | 14,609 |   |   | $ | 17,115 |   |   | $ | (11,146 | ) |   | $ | 35,059 |   |

----

| Condensed Consolidating Statement of Cash Flows                                                        |   |
|--------------------------------------------------------------------------------------------------------|--------|
| Three months ended March 31, 2012                                                                      |   |
| (in millions)                                                                                          |   | Parent |   |   | SubsidiaryGuarantor |   |   | Non-GuarantorSubsidiaries |   |   | Other |   |   | ProgressEnergy,Inc. |   |
| Net cash provided by operating activities                                                              |   | $ | 227 |   |   | $ | 166 |   |   | $ | 245 |   |   | $ | (282 | ) |   | $ | 356 |   |
| Investing activities                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross property additions                                                                               |   |   | - |   |   |   | (197 | ) |   |   | (365 | ) |   |   | - |   |   |   | (562 | ) |
| Nuclear fuel additions                                                                                 |   |   | - |   |   |   | (13 | ) |   |   | (38 | ) |   |   | - |   |   |   | (51 | ) |
| Purchases of available-for-sale securities and other   investments                      |   |   | - |   |   |   | (225 | ) |   |   | (138 | ) |   |   | - |   |   |   | (363 | ) |
| Proceeds from available-for-sale securities and other  investments                           |   |   | - |   |   |   | 226 |   |   |   | 133 |   |   |   | - |   |   |   | 359 |   |
| Changes in advances to affiliated companies                                                            |   |   | (10 | ) |   |   | (7 | ) |   |   | 47 |   |   |   | (30 | ) |   |   | - |   |
| Other investing activities                                                                             |   |   | (14 | ) |   |   | 15 |   |   |   | 64 |   |   |   | - |   |   |   | 65 |   |
| Net cash used by investing activities                                                                  |   |   | (24 | ) |   |   | (201 | ) |   |   | (297 | ) |   |   | (30 | ) |   |   | (552 | ) |
| Financing activities                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of common stock, net                                                                          |   |   | 3 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3 |   |
| Dividends paid on common stock                                                                         |   |   | (260 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (260 | ) |
| Dividends paid to parent                                                                               |   |   | - |   |   |   | (108 | ) |   |   | (175 | ) |   |   | 283 |   |   |   | - |   |
| Proceeds from the issuance of short-term debt with  original maturities greater than 90 days |   |   | - |   |   |   | 65 |   |   |   | - |   |   |   | - |   |   |   | 65 |   |
| Net increase in short-term debt                                                                        |   |   | 5 |   |   |   | 62 |   |   |   | 253 |   |   |   | - |   |   |   | 320 |   |
| Proceeds from issuance of long-term debt, net                                                          |   |   | 444 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 444 |   |
| Changes in advances from affiliated companies                                                          |   |   | - |   |   |   | (40 | ) |   |   | 11 |   |   |   | 29 |   |   |   | - |   |
| Other financing activities                                                                             |   |   | (1 | ) |   |   | (3 | ) |   |   | (37 | ) |   |   | - |   |   |   | (41 | ) |
| Net cash provided (used) by financing activities                                                       |   |   | 191 |   |   |   | (24 | ) |   |   | 52 |   |   |   | 312 |   |   |   | 531 |   |
| Net increase (decrease) in cash and cash equivalents                                                   |   |   | 394 |   |   |   | (59 | ) |   |   | - |   |   |   | - |   |   |   | 335 |   |
| Cash and cash equivalents at beginning of period                                                       |   |   | 117 |   |   |   | 92 |   |   |   | 21 |   |   |   | - |   |   |   | 230 |   |
| Cash and cash equivalents at end of period                                                             |   | $ | 511 |   |   | $ | 33 |   |   | $ | 21 |   |   | $ | - |   |   | $ | 565 |   |

----

| Condensed Consolidating Statement of Cash Flows                              |   |
|------------------------------------------------------------------------------|--------|
| Three months ended March 31, 2011                                            |   |
| (in millions)                                                                |   | Parent |   |   | SubsidiaryGuarantor |   |   | Non-GuarantorSubsidiaries |   |   | Other |   |   | ProgressEnergy,Inc. |   |
| Net cash provided by operating activities                                    |   | $ | 280 |   |   | $ | 257 |   |   | $ | 337 |   |   | $ | (428 | ) |   | $ | 446 |   |
| Investing activities                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross property additions                                                     |   |   | - |   |   |   | (218 | ) |   |   | (283 | ) |   |   | - |   |   |   | (501 | ) |
| Nuclear fuel additions                                                       |   |   | - |   |   |   | (7 | ) |   |   | (50 | ) |   |   | - |   |   |   | (57 | ) |
| Purchases of available-for-sale securities and other  investments  |   |   | - |   |   |   | (1,661 | ) |   |   | (156 | ) |   |   | - |   |   |   | (1,817 | ) |
| Proceeds from available-for-sale securities and other  investments |   |   | - |   |   |   | 1,661 |   |   |   | 148 |   |   |   | - |   |   |   | 1,809 |   |
| Changes in advances to affiliated companies                                  |   |   | (75 | ) |   |   | 21 |   |   |   | 42 |   |   |   | 12 |   |   |   | - |   |
| Contributions to consolidated subsidiaries                                   |   |   | (10 | ) |   |   | - |   |   |   | - |   |   |   | 10 |   |   |   | - |   |
| Other investing activities                                                   |   |   | - |   |   |   | 43 |   |   |   | 5 |   |   |   | (2 | ) |   |   | 46 |   |
| Net cash used by investing activities                                        |   |   | (85 | ) |   |   | (161 | ) |   |   | (294 | ) |   |   | 20 |   |   |   | (520 | ) |
| Financing activities                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of common stock, net                                                |   |   | 8 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 8 |   |
| Dividends paid on common stock                                               |   |   | (183 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (183 | ) |
| Dividends paid to parent                                                     |   |   | - |   |   |   | (328 | ) |   |   | (100 | ) |   |   | 428 |   |   |   | - |   |
| Net increase in short-term debt                                              |   |   | 79 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 79 |   |
| Proceeds from issuance of long-term debt, net                                |   |   | 494 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 494 |   |
| Retirement of long-term debt                                                 |   |   | (700 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (700 | ) |
| Changes in advances from affiliated companies                                |   |   | - |   |   |   | 11 |   |   |   | - |   |   |   | (11 | ) |   |   | - |   |
| Contributions from parent                                                    |   |   | - |   |   |   | 10 |   |   |   | - |   |   |   | (10 | ) |   |   | - |   |
| Other financing activities                                                   |   |   | - |   |   |   | (4 | ) |   |   | (60 | ) |   |   | 1 |   |   |   | (63 | ) |
| Net cash used by financing activities                                        |   |   | (302 | ) |   |   | (311 | ) |   |   | (160 | ) |   |   | 408 |   |   |   | (365 | ) |
| Net decrease in cash and cash equivalents                                    |   |   | (107 | ) |   |   | (215 | ) |   |   | (117 | ) |   |   | - |   |   |   | (439 | ) |
| Cash and cash equivalents at beginning of period                             |   |   | 110 |   |   |   | 270 |   |   |   | 231 |   |   |   | - |   |   |   | 611 |   |
| Cash and cash equivalents at end of period                                   |   | $ | 3 |   |   | $ | 55 |   |   | $ | 114 |   |   | $ | - |   |   | $ | 172 |   |

----

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

----

|  (in millions except per share data)                                                  |   | PEC    |   |   | PEF    |   |   | Corporateand Other |   |   | Total  |   |   | Per Share |   |
|--------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------------------|--------|--------|--------|--------|--------|-----------|--------|
|  Three months ended March 31, 2012                                                    |   |   |   |   |   |   |   |               |   |   |   |   |   |      |   |
|  Ongoing Earnings                                                                     |   | $      | 60     |   |   | $      | 130    |               |   | $      | (47    | )      |   | $         | 143    |   |   | $ | 0.48 |   |
|  Tax levelization                                                                     |   |   | (6     | )      |   |   | (1     | )                  |   |   | -      |   |   |      | (7     | ) |   |   | (0.02 | ) |
|  CVO mark-to-market(a)                                                                |   |   | -      |   |   |   | -      |               |   |   | 8      |   |   |      | 8      |   |   |   | 0.03 |   |
|  Merger and integration costs, net of tax(a)                                          |   |   | (3     | )      |   |   | (2     | )                  |   |   | -      |   |   |      | (5     | ) |   |   | (0.02 | ) |
|  Discontinued operations attributable  to controlling interests, net of tax |   |   | -      |   |   |   | -      |               |   |   | 11     |   |   |      | 11     |   |   |   | 0.04 |   |
|  Net income (loss) attributable to  controlling interests(b)                |   | $      | 51     |   |   | $      | 127    |               |   | $      | (28    | )      |   | $         | 150    |   |   | $ | 0.51 |   |
|                                                                                       |   |   |   |   |   |   |   |               |   |   |   |   |   |      |   |   |   |   |   |   |
|  Three months ended March 31, 2011                                                    |   |   |   |   |   |   |   |               |   |   |   |   |   |      |   |   |   |   |   |   |
|  Ongoing Earnings                                                                     |   | $      | 139    |   |   | $      | 111    |               |   | $      | (48    | )      |   | $         | 202    |   |   | $ | 0.69 |   |
|  Tax levelization                                                                     |   |   | (2     | )      |   |   | (3     | )                  |   |   | 3      |   |   |      | (2     | ) |   |   | (0.01 | ) |
|  Merger and integration costs, net of tax(a)                                          |   |   | (7     | )      |   |   | (7     | )                  |   |   | -      |   |   |      | (14    | ) |   |   | (0.05 | ) |
|  Discontinued operations attributable  to controlling interests, net of tax |   |   | -      |   |   |   | -      |               |   |   | (2     | )      |   |      | (2     | ) |   |   | (0.01 | ) |
|  Net income (loss) attributable to  controlling interests(b)                |   | $      | 130    |   |   | $      | 101    |               |   | $      | (47    | )      |   | $         | 184    |   |   | $ | 0.62 |   |

| (a) | Calculated using an assumed tax rate of 40 percent to the extent items are tax deductible.                                                 |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Net income attributable to controlling interests is shown net of preferred stock dividend requirement of $(1) million at both PEC and PEF. |

----

| ·   | higher O&M expense at PEC primarily due to an additional nuclear refueling outage and |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | unfavorable impact of weather at PEC. |
|--------------------|---------------------------------------|

| ·   | lower O&M expense at PEF primarily due to the reversal of certain regulatory liabilities in accordance with the 2012 settlement agreement and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher income from discontinued operations (Ongoing Earnings adjustment). |
|--------------------|---------------------------------------------------------------------------|

----

| (in millions)                          |   |   |   |
|----------------------------------------|--------|--------|--------|
| Customer Class                         |   | 2012   |   |   | Change |   |   | % Change |   |   | 2011 |   |
| Residential                            |   | $      | 277    |   |   | $ | (55 | ) |   |   | (16.6 | ) |   | $ | 332 |   |
| Commercial                             |   |   | 162    |   |   |   | (5 | ) |   |   | (3.0 | ) |   |   | 167 |   |
| Industrial                             |   |   | 79     |   |   |   | (4 | ) |   |   | (4.8 | ) |   |   | 83 |   |
| Governmental                           |   |   | 14     |   |   |   | (1 | ) |   |   | (6.7 | ) |   |   | 15 |   |
| Unbilled                               |   |   | (7     | ) |   |   | 28 |   |   | NM |   |   |   | (35 | ) |
| Total retail base revenues             |   |   | 525    |   |   |   | (37 | ) |   |   | (6.6 | ) |   |   | 562 |   |
| Wholesale base revenues                |   |   | 69     |   |   |   | (4 | ) |   |   | (5.5 | ) |   |   | 73 |   |
| Total Base Revenues                    |   |   | 594    |   |   |   | (41 | ) |   |   | (6.5 | ) |   |   | 635 |   |
| Clause-recoverable regulatory revenues |   |   | 11     |   |   |   | 4 |   |   |   | 57.1 |   |   |   | 7 |   |
| Miscellaneous                          |   |   | 34     |   |   |   | 3 |   |   |   | 9.7 |   |   |   | 31 |   |
| Fuel and other pass-through revenues   |   |   | 446    |   |   |   | (14 | ) |   | NM |   |   |   | 460 |   |
| Total operating revenues               |   | $      | 1,085  |   |   | $ | (48 | ) |   |   | (4.2 | ) |   | $ | 1,133 |   |
| NM - not meaningful                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (in millions of kWh)   |   |   |   |   |   |   |   |     |   |   |   |   |
|------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|--------|--------|--------|
| Customer Class         |   | 2012   |   |   | Change |   |   | % Change |   |   | 2011   |   |
| Residential            |   |   | 4,435  |   |   |   | (1,004 | )        |   |   | (18.5  | )      |   |   | 5,439 |   |
| Commercial             |   |   | 3,116  |   |   |   | (171   | )        |   |   | (5.2   | )      |   |   | 3,287 |   |
| Industrial             |   |   | 2,429  |   |   |   | (59    | )        |   |   | (2.4   | )      |   |   | 2,488 |   |
| Governmental           |   |   | 363    |   |   |   | (23    | )        |   |   | (6.0   | )      |   |   | 386 |   |
| Unbilled               |   |   | (133   | )      |   |   | 536    |     |   | NM     |   |   |   | (669 | ) |
| Total retail kWh sales |   |   | 10,210 |   |   |   | (721   | )        |   |   | (6.6   | )      |   |   | 10,931 |   |
| Wholesale              |   |   | 2,958  |   |   |   | (251   | )        |   |   | (7.8   | )      |   |   | 3,209 |   |
| Total kWh sales        |   |   | 13,168 |   |   |   | (972   | )        |   |   | (6.9   | )      |   |   | 14,140 |   |
|                   |   |   |   |   |   |   |   |     |   |   |   |   |   |   |   |   |

----

----

| (in millions)                         |   |   |   |
|---------------------------------------|--------|--------|--------|
| Customer Class                        |   | 2012   |   |   | Change |   |   | % Change |   |   | 2011 |   |
| Residential                           |   | $      | 192    |   |   | $ | (28 | ) |   |   | (12.7 | ) |   | $ | 220 |   |
| Commercial                            |   |   | 78     |   |   |   | - |   |   |   | - |   |   |   | 78 |   |
| Industrial                            |   |   | 17     |   |   |   | (1 | ) |   |   | (5.6 | ) |   |   | 18 |   |
| Governmental                          |   |   | 21     |   |   |   | 1 |   |   |   | 5.0 |   |   |   | 20 |   |
| Unbilled                              |   |   | 12     |   |   |   | 27 |   |   | NM |   |   |   | (15 | ) |
| Total retail base revenues            |   |   | 320    |   |   |   | (1 | ) |   |   | (0.3 | ) |   |   | 321 |   |
| Wholesale base revenues               |   |   | 34     |   |   |   | 9 |   |   |   | 36.0 |   |   |   | 25 |   |
| Total Base Revenues                   |   |   | 354    |   |   |   | 8 |   |   |   | 2.3 |   |   |   | 346 |   |
| Clause-recoverable regulatory returns |   |   | 48     |   |   |   | 3 |   |   |   | 6.7 |   |   |   | 45 |   |
| Miscellaneous                         |   |   | 53     |   |   |   | 2 |   |   |   | 3.9 |   |   |   | 51 |   |
| Fuel and other pass-through revenues  |   |   | 550    |   |   |   | (40 | ) |   | NM |   |   |   | 590 |   |
| Total operating revenues              |   | $      | 1,005  |   |   | $ | (27 | ) |   |   | (2.6 | ) |   | $ | 1,032 |   |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (in millions of kWh)   |   |   |   |   |   |   |   |     |   |   |   |   |
|------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|--------|--------|--------|
| Customer Class         |   | 2012   |   |   | Change |   |   | % Change |   |   | 2011   |   |
| Residential            |   |   | 3,705  |   |   |   | (576   | )        |   |   | (13.5  | )      |   |   | 4,281 |   |
| Commercial             |   |   | 2,565  |   |   |   | 18     |     |   |   | 0.7    |   |   |   | 2,547 |   |
| Industrial             |   |   | 757    |   |   |   | (15    | )        |   |   | (1.9   | )      |   |   | 772 |   |
| Governmental           |   |   | 752    |   |   |   | 25     |     |   |   | 3.4    |   |   |   | 727 |   |
| Unbilled               |   |   | 334    |   |   |   | 690    |     |   | NM     |   |   |   | (356 | ) |
| Total retail kWh sales |   |   | 8,113  |   |   |   | 142    |     |   |   | 1.8    |   |   |   | 7,971 |   |
| Wholesale              |   |   | 299    |   |   |   | (179   | )        |   |   | (37.4  | )      |   |   | 478 |   |
| Total kWh sales        |   |   | 8,412  |   |   |   | (37    | )        |   |   | (0.4   | )      |   |   | 8,449 |   |

----

----

|                                                                      |   | Three months ended March 31 |   |
|---------------------------------------------------------------------------|--------|-----------------------------|--------|
| (in millions)                                                             |   | 2012                        |   |   | 2011 |   |
| Other interest expense                                                    |   | $                           | (71    | ) |   | $ | (79 | ) |
| Other income tax benefit                                                  |   |                        | 25     |   |   |   | 32 |   |
| Other expense                                                             |   |                        | (1     | ) |   |   | (1 | ) |
| Ongoing Earnings                                                          |   |                        | (47    | ) |   |   | (48 | ) |
| Tax levelization                                                          |   |                        | -      |   |   |   | 3 |   |
| CVO mark-to-market                                                        |   |                        | 8      |   |   |   | - |   |
| Discontinued operations attributable to controlling interests, net of tax |   |                        | 11     |   |   |   | (2 | ) |
| Net loss attributable to controlling interests                            |   | $                           | (28    | ) |   | $ | (47 | ) |

----

----

----

----

----

----

|  (in millions)                               |   | ReplacementPower Costs |   |   | Repair Costs |   |
|---------------------------------------------------|--------|------------------------|--------|--------|--------------|--------|
|  Spent to date                               |   | $                      | 506    |   |         | $      | 279 |   |
|  NEIL proceeds received                      |   |                   | (162   | )      |         |   | (143 | ) |
|  Insurance receivable at March 31, 2012, net |   |                   | (55    | )      |         |   | - |   |
| Balance for recovery(a)                           |   | $                      | 289    |   |         | $      | 136 |   |

| (a)    |   | See "2012 Settlement Agreement" below for discussion of PEF's ability to recover prudently incurred fuel and purchased power costs and CR3 repair costs. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                     |   |   |   |   |

----

| Regulation and Status            | Primarily Regulates                                                        | Compliance Strategy                                                                                                         |
|----------------------------------|----------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------|
|                             | Impacting Solid Waste                                                      |                                                                                                                        |
| Coal Combustion Residuals        |                                                                       |                                                                                                                        |
| Final rule expected in late 2012 | Storage, use and disposal of coal ashand flue gas desulfurizationmaterials | Proposed rule included twosignificantly different options.Compliance method cannot bedetermined until the rule is finalized |
|                             |                                                                       |                                                                                                                        |

----

|                                                                                                     | Impacting Air Quality                                                                                                  |                                                                                                                                                                     |
|----------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| CAIR/CSAPR                                                                                               |                                                                                                                   |                                                                                                                                                                     |
| CAIR in effect pending resolutionof appeal of CSAPR                                                      | NOx, SO2                                                                                                               | Previously installed air pollutioncontrols and fleet modernizationprojects, and use of emissionallowances                                                                |
|                                                                                                     |                                                                                                                   |                                                                                                                                                                     |
| MATS                                                                                                     |                                                                                                                   |                                                                                                                                                                     |
| Compliance due April 2015 withprovisions for one-year extensionfrom state agencies on case-by-case basis | Mercury and other hazardous metals,acid gases, hydrogen fluoride,dioxin/furan from coal- and oil-firedgenerating units | Previously installed air pollutioncontrols and fleet modernizationprojects largely address for PEC; forPEF, additional controls and/or fleetmodernization required       |
|                                                                                                     |                                                                                                                   |                                                                                                                                                                     |
| NC Mercury                                                                                               |                                                                                                                   |                                                                                                                                                                     |
| NC-specific requirements in effect                                                                       | Mercury                                                                                                                | Federal MATS compliance                                                                                                                                                  |
|                                                                                                     |                                                                                                                   |                                                                                                                                                                     |
| CAVR – BART provisions                                                                             |                                                                                                                   |                                                                                                                                                                     |
| Effective 2013                                                                                           | NOx, SO2 and particulate matter                                                                                        | Assess BART impact; EPA mayallow CSAPR compliance to fulfillBART requirements for SO2 andNOx                                                                             |
|                                                                                                     |                                                                                                                   |                                                                                                                                                                     |
| NC Clean Smokestacks                                                                                     |                                                                                                                   |                                                                                                                                                                     |
| In effect                                                                                                | NOx, SO2                                                                                                               | Evaluating strategy for compliancesubsequent to 2013                                                                                                                     |
|                                                                                                     |                                                                                                                   |                                                                                                                                                                     |
| NAAQS                                                                                                    |                                                                                                                   |                                                                                                                                                                     |
| In effect                                                                                                | Ozone, NO2, SO2 and particulatematter                                                                                  | Currently in compliance. Additionalcontrols may be necessary ifnonattainment is determined                                                                               |
|                                                                                                     |                                                                                                                   |                                                                                                                                                                     |
| GHG New Source Performance Standards                                                                     |                                                                                                                   |
| Proposed rule issued March 27,2012                                                                       | GHGs                                                                                                                   | Case-by-case determination for newunits                                                                                                                                  |
|                                                                                                     |                                                                                                                   |                                                                                                                                                                     |
|                                                                                                     | Impacting Water Quality                                                                                                |                                                                                                                                                                     |
| Effluent Guideline Revisions                                                                             |                                                                                                                   |                                                                                                                                                                     |
| Proposed regulation anticipated byNovember 20, 2012                                                      | Wastewater discharges from steam-electric power plant                                                                  | Cannot be determined until final ruleis issued                                                                                                                           |
|                                                                                                     |                                                                                                                   |                                                                                                                                                                     |
| 316(b)                                                                                                   |                                                                                                                   |                                                                                                                                                                     |
| Final rules are expected in lateJuly 2012                                                                | Cooling water intake structures forsteam-electric power plants                                                         | Modification of traveling screens;assessment of environmentalimpacts and alternative technologiesfor reducing those impacts; andpossible installation of newtechnologies |

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| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|---------|------------------------------------------------------------|

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| Cash Flow Hedges (dollars in millions) |   | NotionalAmount |   |   | MandatorySettlement |   |   | Pay    |   | Receive (a) |   | FairValue |          |   | Exposure (b) |   |
|----------------------------------------|--------|----------------|--------|--------|---------------------|--------|--------|--------|--------|-------------|--------|-----------|---------------|--------|--------------|--------|
| Parent                                 |   |           |   |   |                |   |   |   |   |        |   |      |          |   |         |   |
| Risk hedged at March 31, 2012          |   |           |   |   | None                |   |   |   |   |        |   |      |          |   |         |   |
|                                   |   |           |   |   |                |   |   |   |   |        |   |      |          |   |         |   |
| Risk hedged at December 31, 2011       |   |           |   |   |                |   |   |   |   |        |   |      |          |   |         |   |
| Anticipated 10-year debt issue         |   | $              | 200    |   |                |   | 2012   |   |   |        | 4.20   | %         | 3-month LIBOR |   | $            | (38    | ) |   | $ | (5 | ) |
|                                   |   |           |   |   |                |   |   |   |   |        |   |      |          |   |         |   |   |   |   |   |   |
| PEC                                    |   |           |   |   |                |   |   |   |   |        |   |      |          |   |         |   |   |   |   |   |   |
| Risk hedged at March 31, 2012          |   |           |   |   |                |   |   |   |   |        |   |      |          |   |         |   |   |   |   |   |   |
| Anticipated 10-year debt issue         |   | $              | 200    |   |                |   | 2012   |   |   |        | 4.27   | %         | 3-month LIBOR |   | $            | (34    | ) |   | $ | (5 | ) |
| Anticipated 10-year debt issue         |   | $              | 50     |   |                |   | 2013   |   |   |        | 4.43   | %         | 3-month LIBOR |   | $            | (7     | ) |   | $ | (1 | ) |
|                                   |   |           |   |   |                |   |   |   |   |        |   |      |          |   |         |   |   |   |   |   |   |
| Risk hedged at December 31, 2011       |   |           |   |   |                |   |   |   |   |        |   |      |          |   |         |   |   |   |   |   |   |
| Anticipated 10-year debt issue         |   | $              | 200    |   |                |   | 2012   |   |   |        | 4.27   | %         | 3-month LIBOR |   | $            | (38    | ) |   | $ | (5 | ) |
| Anticipated 10-year debt issue         |   | $              | 50     |   |                |   | 2013   |   |   |        | 4.43   | %         | 3-month LIBOR |   | $            | (9     | ) |   | $ | (1 | ) |
|                                   |   |           |   |   |                |   |   |   |   |        |   |      |          |   |         |   |   |   |   |   |   |
| PEF                                    |   |           |   |   |                |   |   |   |   |        |   |      |          |   |         |   |   |   |   |   |   |
| Risk hedged at March 31, 2012          |   |           |   |   |                |   |   |   |   |        |   |      |          |   |         |   |   |   |   |   |   |
| Anticipated 10-year debt issue         |   | $              | 50     |   |                |   | 2013   |   |   |        | 4.30   | %         | 3-month LIBOR |   | $            | (8     | ) |   | $ | (1 | ) |
|                                   |   |           |   |   |                |   |   |   |   |        |   |      |          |   |         |   |   |   |   |   |   |
| Risk hedged at December 31, 2011       |   |           |   |   |                |   |   |   |   |        |   |      |          |   |         |   |   |   |   |   |   |
| Anticipated 10-year debt issue         |   | $              | 50     |   |                |   | 2013   |   |   |        | 4.30   | %         | 3-month LIBOR |   | $            | (9     | ) |   | $ | (1 | ) |
|                                   |   |           |   |   |                |   |   |   |   |        |   |      |          |   |         |   |   |   |   |   |   |

| (a) | 3-month London Inter Bank Offered Rate (LIBOR) rate was 0.47% at March 31, 2012 and 0.58% at December 31, 2011. |
|-----|-----------------------------------------------------------------------------------------------------------------|

| (b) | Exposure indicates change in value due to 25 basis point unfavorable shift in interest rates. |
|-----|-----------------------------------------------------------------------------------------------|

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| ITEM 4. | CONTROLS AND PROCEDURES |
|---------|-------------------------|

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| ITEM 1. | LEGAL PROCEEDINGS |
|---------|-------------------|

| ITEM 1A. | RISK FACTORS |
|----------|--------------|

| ITEM 2. | UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS |
|---------|------------------------------------------------------------|

| (a)   | Securities Delivered. On March 16, 2012, March 19, 2012 and March 20, 2012, 318,902, 194,736 and 24,630 shares, respectively, of our common stock were delivered to certain current and former employees pursuant to the terms of the Progress Energy 2002 and 2007 Equity Incentive Plans (individually and collectively EIP), which have been approved by Progress Energy’s shareholders. The shares of common stock delivered pursuant to the EIP were newly issued shares of Progress Energy. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Underwriters and Other Purchasers. No underwriters were used in connection with the delivery of our common stock described above. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Consideration. The restricted stock unit awards were granted to provide an incentive to the former and current employees to exert their utmost efforts on Progress Energy’s behalf and thus enhance our performance while aligning the employees’ interests with those of our shareholders. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Exemption from Registration Claimed. The common shares described in this Item were delivered pursuant to a broad-based involuntary, non-contributory employee benefit plan, and thus did not involve an offer to sell or sale of securities within the meaning of Section 2(3) of the Securities Act of 1933. Receipt of the shares of our common stock required no investment decision on the part of the recipient. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | Securities Delivered. On February 25, 2012 and March 21, 2012, 167,142 and 1,927 shares, respectively, of our common stock were delivered to certain current and former employees pursuant to the terms of the EIP. The shares of common stock delivered pursuant to the EIP were newly issued shares of Progress Energy. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Underwriters and Other Purchasers. No underwriters were used in connection with the delivery of our common stock described above. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Consideration. The performance share awards were granted to provide an incentive to the current and former employees to exert their utmost efforts on our behalf and thus enhance our performance while aligning the employees’ interests with those of our shareholders. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Exemption from Registration Claimed. The common shares described in this Item were delivered pursuant to a broad-based involuntary, non-contributory employee benefit plan, and thus did not involve an offer to sell or sale of securities within the meaning of Section 2(3) of the Securities Act of 1933. Receipt of the shares of our common stock required no investment decision on the part of the recipient. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Period                         |   | (a)Total Numberof Shares(or Units)Purchased(1)(2)(3)(4) |      |   | (b)AveragePricePaid PerShare(or Unit) |   |    | (c)Total Number ofShares (or Units)Purchased asPart of PubliclyAnnouncedPlans orPrograms(1) |   |   | (d)Maximum Number(or ApproximateDollar Value) ofShares (or Units)that May Yet BePurchased Under thePlans or Programs(1) |   |
|--------------------------------|--------|---------------------------------------------------------|-----------|--------|---------------------------------------|--------|---------|---------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------|--------|
| January 1 – January 31   |   |                                                    | 103,786   |   |                                  | $      | 54.5054 |                                                                                        |   |   | N/A                                                                                                                     |   |   |   | N/A |   |
| February 1 – February 29 |   |                                                    | 465,354   |   |                                  |   | 53.9238 |                                                                                        |   |   | N/A                                                                                                                     |   |   |   | N/A |   |
| March 1 – March 31       |   |                                                    | 559,227   |   |                                  |   | 53.2437 |                                                                                        |   |   | N/A                                                                                                                     |   |   |   | N/A |   |
| Total                          |   |                                                    | 1,128,367 |   |                                  | $      | 53.6402 |                                                                                        |   |   | N/A                                                                                                                     |   |   |   | N/A |   |

| (1) | At March 31, 2012, Progress Energy does not have any publicly announced plans or programs to purchase shares of its common stock. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (2) | The plan administrator purchased 621,500 shares of our common stock in open-market transactions to meet share delivery obligations under the Progress Energy 401(k) Savings & Stock Ownership Plan. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The plan administrator purchased 261,018 shares of our common stock in open-market transactions to meet share delivery obligations under the Savings Plan for Employees of Florida Progress Corporation. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Progress Energy withheld 245,849 shares of our common stock during the first quarter of 2012 to pay taxes due upon the payout of certain Restricted Stock awards, Restricted Stock Unit awards and Performance Share Sub-Plan awards pursuant to the terms of the 2002 and 2007 Equity Incentive Plans. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ITEM 6. | EXHIBITS |
|---------|----------|

| (a)   | Exhibits |
|-----------------|----------|

| Exhibit Number            | Description                                                                                                                                                                                | ProgressEnergy | PEC    | PEF    |
|---------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|--------|--------|
|                      |                                                                                                                                                                                       |           |   |   |
| *10(a)                    | Progress Energy, Inc. Amended and Restated Credit Agreement dated as of February 15, 2012 (filed as Exhibit 10.1 to Current Report on Form 8-K dated February 15, 2012, File No. 1-15929). | X              |   |   |
|                      |                                                                                                                                                                                       |           |   |   |
| 10(b)                     | Amendment, adopted on March 14, 2012, to the Supplemental Senior Executive Retirement Plan of Progress Energy, Inc.                                                                        | X              | X      | X      |
|                      |                                                                                                                                                                                       |           |   |   |
| 31(a)                     | 302 Certifications of Chief Executive Officer                                                                                                                                              | X              |   |   |
|                      |                                                                                                                                                                                       |           |   |   |
| 31(b)                     | 302 Certifications of Chief Financial Officer                                                                                                                                              | X              |   |   |
|                      |                                                                                                                                                                                       |           |   |   |
| 31(c)                     | 302 Certifications of Chief Executive Officer                                                                                                                                              |           | X      |   |
|                      |                                                                                                                                                                                       |           |   |   |
| 31(d)                     | 302 Certifications of Chief Financial Officer                                                                                                                                              |           | X      |   |
|                      |                                                                                                                                                                                       |           |   |   |
| 31(e)                     | 302 Certifications of Chief Executive Officer                                                                                                                                              |           |   | X      |
|                      |                                                                                                                                                                                       |           |   |   |
| 31(f)                     | 302 Certifications of Chief Financial Officer                                                                                                                                              |           |   | X      |
|                      |                                                                                                                                                                                       |           |   |   |
| 32(a)                     | 906 Certifications of Chief Executive Officer                                                                                                                                              | X              |   |   |
|                      |                                                                                                                                                                                       |           |   |   |
| 32(b)                     | 906 Certifications of Chief Financial Officer                                                                                                                                              | X              |   |   |
|                      |                                                                                                                                                                                       |           |   |   |
| 32(c)                     | 906 Certifications of Chief Executive Officer                                                                                                                                              |           | X      |   |
|                      |                                                                                                                                                                                       |           |   |   |
| 32(d)                     | 906 Certifications of Chief Financial Officer                                                                                                                                              |           | X      |   |
|                      |                                                                                                                                                                                       |           |   |   |
| 32(e)                     | 906 Certifications of Chief Executive Officer                                                                                                                                              |           |   | X      |
|                      |                                                                                                                                                                                       |           |   |   |
| 32(f)                     | 906 Certifications of Chief Financial Officer                                                                                                                                              |           |   | X      |
|                      |                                                                                                                                                                                       |           |   |   |
| 101.INS                   | XBRL Instance Document**                                                                                                                                                                   | X              | X      | X      |
|                      |                                                                                                                                                                                       |           |   |   |
| 101.SCH                   | XBRL Taxonomy Extension Schema Document                                                                                                                                                    | X              | X      | X      |
|                      |                                                                                                                                                                                       |           |   |   |
| 101.CAL                   | XBRL Taxonomy Calculation Linkbase Document                                                                                                                                                | X              | X      | X      |
|                      |                                                                                                                                                                                       |           |   |   |
| 101.LAB                   | XBRL Taxonomy Label Linkbase Document                                                                                                                                                      | X              | X      | X      |
|                      |                                                                                                                                                                                       |           |   |   |
| 101.PRE                   | XBRL Taxonomy Presentation Linkbase Document                                                                                                                                               | X              | X      | X      |
|                      |                                                                                                                                                                                       |           |   |   |
| 101.DEF    | XBRL Taxonomy Definition Linkbase Document                                                                                                                                            | X              | X      | X      |

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|              | PROGRESS ENERGY, INC.                                                    |
|-------------------|--------------------------------------------------------------------------|
|              | CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY CAROLINAS, INC. |
|              | FLORIDA POWER CORPORATION d/b/a PROGRESS ENERGY FLORIDA, INC.            |
| Date: May 8, 2012 | (Registrants)                                                            |
|              |                                                                     |
|              | By: /s/ Mark F. Mulhern                                                  |
|              | Mark F. Mulhern                                                          |
|              | Senior Vice President and Chief Financial Officer                        |
|              |                                                                     |
|              | By: /s/ Jeffrey M. Stone                                                 |
|              | Jeffrey M. Stone                                                         |
|              | Chief Accounting Officer and Controller                                  |
|              | Progress Energy, Inc.                                                    |
|              | Chief Accounting Officer                                                 |
|              | Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. |
|              | Florida Power Corporation d/b/a Progress Energy Florida, Inc.            |

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