Corporate Responsibility Letter From CEO Executive Summary Company Overview	Customers Balanced Solution for Growing Energy Demand Reliable Power Customer Satisfaction	Communities Community Investments Economic Development Supplier Diversity Stakeholder Engagement	Environment Environmental Management Global Climate Change Renewable and Alternative Energy Advanced Vehicle Technologies Air Quality Water Resources Waste Management Remediation Natural Resources Research and Development	Employees Health and Safety Engaged Employees	Shareholders Corporate Governance Ethics Program Financial Highlights	Conclusion GRI Index Safe Harbor for Forward-Looking Statements Employee Recognition

Productivity and Efficiency
Progress Energy’s continuous business excellence (CBE) strategy is designed to address the new economic realities we face. Every business unit of the company is taking actions to increase productivity 3 to 5 percent every year. The goal is to introduce ongoing improvements that reduce cost and streamline processes for the long term.

CBE leaders across the company are collaborating on common methodologies, leveraging proven Lean and Six Sigma approaches, to gain process improvement efficiencies. Every group is focused on identifying and eliminating waste in our everyday business processes. Several efforts have already yielded positive results, and we are optimistic about our future with this ongoing effort. CBE represents a fundamental change in the way we manage our business.

The efficiencies gained are necessary for us to fund the investments that we must make in new plants, new transmission lines and continuing investments in our people. This strategy of continuous business excellence will allow Progress Energy to be more flexible, stronger and financially healthy, which will position the company for long-term success.

Financial Highlights

Progress Energy has a clear strategic focus on the regulated electric utility business with a flexible, balanced plan for delivering value to our customers and investors. A key element of the company’s strategic approach is to achieve our financial objectives year after year, while continuing to excel in the operational fundamentals of the business. The underlying foundation for this positive investment story is our strong corporate governance, talented workforce and collaborative, performance-oriented culture.

Despite the global financial crisis and economic slowdown, we successfully delivered on our 2008 financial goals and met our earnings guidance for the third consecutive year. We achieved these results by being aggressive about managing the business, controlling what we can control and making timely adjustments.  We also increased the dividend for the 21st consecutive year, and 50th of the last 55 years. Our senior management and board of directors recognize the importance of the dividend to our investors. Management is targeting a dividend payout ratio of approximately 80 percent in 2009 as part of efforts to reach our long-term goal of 70 to 75 percent. We have a solid track record of growing earnings and meeting projections, and fully intend to continue that trend in 2009.  Our long-term growth prospects are solid, and we expect to return to a long-term annual growth rate of 4 to 5 percent in 2010. Investors are pleased with this strategy and view Progress Energy as a stable, long-term investment.

Significant capital investment is needed in the coming years to add generation and transmission capacity, as well as other infrastructure, to meet anticipated energy demand in our service territories, maintain our existing systems and install required environmental controls. Our company’s capital expenditures exceeded $2 billion again in 2008, and we expect to maintain this high level of capital spending over the next decade. These capital investments will drive rate base growth in our two utilities. We are committed to making wise capital investments through prudent resource- and asset-management planning.

We know that 2009 will be a challenging year for our company and our customers. We are aggressively controlling costs to manage our business effectively and minimize the impact of rising costs and new energy policies on our customers while maintaining high levels of reliability. We’re being flexible and proactive in adapting to the new realities our nation and industry face.

Additional investor information is available in our annual report and on our Web site, www.progress-energy.com/investor.