Progress Energy 2006 Annual Report Download - page 42

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S
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is scheduled to expire on March 28, 2010, and filed a
shelf registration statement with the SEC to provide
$1.0 billion of capacity, which was declared effective
on December 23, 2005. The shelf registration allows PEF
to issue various securities, including First Mortgage
Bonds, Debt Securities and Preferred Stock.
• Progress Energy issued approximately 4.8 million
shares of our common stock for approximately
$208 million in net proceeds from its Investor Plus Stock
Purchase Plan and its employee benefit and stock option
plans. Included in these amounts were approximately
4.6 million shares for proceeds of approximately
$199 million to meet the requirements of the 401(k) and
the Investor Plus Stock Purchase Plan. For 2005, the
dividends paid on common stock were approximately
$582 million.
2004
• Progress Energy paid at maturity $500 million in 6.55%
Senior Notes and entered into a new $1.1 billion five-
year line of credit, expiring August 5, 2009. This facility
replaced Progress Energy’s $250 million 364-day line
of credit and its three-year $450 million line of credit,
which were both scheduled to expire in November
2004. Proceeds from the sale of natural gas assets
were used to extinguish PVI’s $241 million bank facility,
and Progress Capital Holdings, Inc. paid at maturity
$25 million of 6.48% medium-term notes.
• PEC redeemed $35 million of Darlington County 6.6%
Series Pollution Control Bonds, $2 million of New
Hanover County 6.3% Series Pollution Control Bonds,
and $2 million of Chatham County 6.3% Series Pollution
Control Bonds. PEC paid at maturity $150 million of
5.875% First Mortgage Bonds and $150 million of 7.875%
First Mortgage Bonds. PEC extended to July 27, 2005, its
$165 million 364-day line of credit, which was scheduled
to expire on July 29, 2004.
• PEF paid at maturity $40 million in 6.69% Medium-Term
Notes, Series B.
• Progress Energy issued approximately 1.7 million shares
of our common stock for approximately $73 million in
net proceeds from our Investor Plus Stock Purchase
Plan and our employee benefit and stock option
plans. Included in these amounts were approximately
1.4 million shares for proceeds of approximately
$62 million to meet the requirements of the 401(k) and
the Investor Plus Stock Purchase Plan. For 2004, the
dividends paid on common stock were approximately
$558 million.
Future Liquidity and Capital Resources
Please review the “Safe Harbor for Forward-Looking
Statements” for a discussion of the factors that may impact
any such forward-looking statements made herein.
The Utilities produced substantially all of our consolidated
cash from operations for the years ended December 31,
2006 and 2005. It is expected that the Utilities will continue
to produce substantially all of the consolidated cash flows
from operations over the next several years. Our synthetic
fuels operations do not currently produce positive
operating cash flow due to the difference in timing of when
tax credits are recognized for financial reporting purposes
and when tax credits are realized for tax purposes (See
“Other Matters – Synthetic Fuels Tax Credits”).
Cash from operations plus availability under our credit
facilities and shelf registration statements is expected to
be sufficient to meet our requirements in the near term.
To the extent necessary, we may also use limited ongoing
equity sales from our Investor Plus Stock Purchase Plan
and employee benefit and stock option plans to meet our
liquidity requirements.
Over the long term, meeting the anticipated load
growth at the Utilities will require a balanced approach,
including energy conservation and efficiency programs,
development and deployment of new energy technologies,
and new generation, transmission and distribution
facilities, potentially including new baseload generation
facilities in both Florida and the Carolinas by the middle
of the next decade. This approach will require the Utilities
to make significant capital investments. See “Introduction
– Strategy – Regulated Utilities” for additional information.
These anticipated capital investments are expected to be
funded through a combination of long-term debt, preferred
stock and common equity, which is dependent on our ability
to successfully access capital markets. We may pursue
joint ventures or similar arrangements with third parties in
order to share some of the financing and operational risks
associated with new baseload generation.
The amount and timing of future sales of company
securities will depend on market conditions, operating
cash flow, asset sales and our specific needs. We may
from time to time sell securities beyond the amount
immediately needed to meet capital requirements in order
to allow for the early redemption of long-term debt, the
redemption of preferred stock, the reduction of short-term
debt or for other general corporate purposes.