Progress Energy 2004 Annual Report Download - page 5

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3
(Letter continued inside)
Dear Fellow Shareholders:
Progress Energy kept a relentless focus on excellence and long-term value in 2004. We
increased the dividend for the 17th consecutive year and for the 29th time in the last 30 years. And
we entered 2005 with a clear vision of what we need to accomplish and a well-founded confidence
in our ability to do it.
Even though the unprecedented series of hurricanes last year created serious problems for
our customers and company in the short run, the fundamentals of our core business remain sound.
Moreover, our employees once again proved how well they rise to any challenge.
Executing a Clear Strategic Plan – In 2004, our management team conducted an extensive analysis
of our industry and our company. We developed a clear road map for the next three years and
beyond that will reinforce our position as a buy-and-hold stock providing good value at modest risk.
We reaffirmed the basic strategic focus on our three core energy businesses: Progress
Energy Carolinas and Progress Energy Florida – our electric utilities serving regulated markets –
and Progress Ventures (excluding synthetic fuels), which serves competitive energy markets in the
eastern United States.
Our strategic plan also includes selective asset sales to complete the restoration of our
balance sheet. We sold our North Texas natural gas properties in December 2004 and have used
the over $250 million in proceeds to retire debt. In February 2005, we reached a definitive agree-
ment to sell Progress Rail, a subsidiary acquired in the 2000 merger. The $405 million in proceeds
also will be used for debt reduction.
In addition, our plan calls for growing our core business earnings per share over the long term
by 3 percent to 5 percent a year, which will support continued dividend growth. We know that
consistent dividend growth is a major reason investors buy our stock.
Our strategy will help us maintain and enhance shareholder value as we make the transition
beyond the federal synthetic-fuel tax program that expires at the end of 2007. In 2004, we resolved
the federal tax audit issues with our Colona synthetic-fuel facilities, but, as of early 2005, we are
still working with the Internal Revenue Service to resolve issues with the Earthco synthetic-fuel
audit. While we feel good about our case, we can’t predict the outcome.