Bob McGehee Quotations

We believe we have a responsibility to protect the environment while fulfilling our obligation to provide affordable, reliable electric service.

We had a very successful year in 2005, with ongoing earnings of $3.33 per share, significantly exceeding our 2005 guidance of $2.90 to $3.20 per share. These positive results reflected the benefit of positive weather as well as actions our management took to manage costs.

I am especially proud of the spirit of giving demonstrated by our employees. In addition to the funds our employees donate, our employees give their time as volunteers at schools, community organizations and special events that help improve the quality of life in the communities we serve.

Selecting a site for possible nuclear generation expansion, first in North Carolina and later in Florida, is part of our planning process to ensure we have the energy our customers need in the future.

Progress Energy has long been recognized as a leader in the areas of corporate governance, transparency, board independence and accountability. We believe these proposals are consistent with those same high standards.

Successfully resolving the placed-in-service issue has been a top priority for the company, so we are very pleased by the outcome. This positive ruling removes a major uncertainty for the company and will allow our management team to focus on strategic uses of the cash benefits provided by the synthetic fuel tax credits.

The Nuclear Regulatory Commission performed the on-site portion of its evaluation of security at the Harris Plant this week. While the NRC has not completed its assessment and provided us with its conclusions, the inspectors did not identify any concerns requiring our immediate attention while on-site. Once complete, we will act immediately on any insights the agency may provide.

Even with more conservation and energy-efficiency programs, energy use will continue to grow as more people move to this region. To meet that growing demand for electricity, we'll need to add significant new power generation.

Everyone at Progress Energy is focused on meeting the needs of our customers to provide them with reliable power today and in the future. Our corporate giving reflects the same dedication and pursuit of excellence.

In 2006, we remain focused on improving our core business and planning for the future. Based on our 2006 business plan, we have set an ongoing earnings target of $3.15 to $3.35 per share. Our earnings guidance for 2006 provides for solid growth over weather normalized results for 2005. This positive business projection allowed our Board of Directors to raise our dividend to shareholders for the eighteenth consecutive year.