Progress Energy 2006 Annual Report Download - page 46

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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currently in compliance with these covenants and were
in compliance with these covenants at December 31,
2006. See Note 12 for a discussion of the credit facilities’
financial covenants. At December 31, 2006, the calculated
ratios, pursuant to the terms of the agreements, are as
disclosed in Note 12.
Progress Energy, as a well-known seasoned issuer, has
on file with the SEC a shelf registration statement under
which Progress Energy may issue an indeterminate
number or amount of various securities, including Senior
Debt Securities, Junior Subordinated Debentures,
Common Stock, Preferred Stock, Stock Purchase
Contracts, Stock Purchase Units, and Trust Preferred
Securities and Guarantees. The board of directors has
authorized the issuance and sale of up to $1.0 billion
aggregate principal amount of various securities off
the new shelf registration statement, in addition to
$679 million of various securities, which were not sold
from our prior shelf registration statement. Accordingly,
at December 31, 2006, Progress Energy has the authority
to issue and sell up to $1.679 billion aggregate principal
amount of various securities.
Both PEC and PEF currently have on file with the SEC a
shelf registration statement under which each can issue
up to $1.0 billion of various long-term debt securities and
preferred stock.
Both PEC and PEF can issue First Mortgage Bonds
under their respective First Mortgage Bond indentures.
At December 31, 2006, PEC and PEF could issue up to
$3.333 billion and $4.330 billion, respectively, based on
property additions and $1.627 billion and $175 million,
respectively, based upon retirements.
CAPITALIZATION RATIOS
The following table shows our total debt to total
capitalization ratios at December 31:
CREDIT RATING MATTERS
The major credit rating agencies have currently rated our
securities as follows:
These ratings reflect the current views of these rating
agencies, and no assurances can be given that these
ratings will continue for any given period of time. However,
we monitor our financial condition as well as market
conditions that could ultimately affect our credit ratings.
On November 3, 2006, Fitch upgraded the senior unsecured
credit ratings of Progress Energy to BBB from BBB-, PEC
to A- from BBB+ and PEF to A- from BBB+. The outlook
at each entity was changed to stable. The short-term
ratings of PEC and PEF were upgraded to F-1 from F-2. The
ratings upgrades were based on our reduced business
risk due to non-utility asset sales, the $1.3 billion holding
company debt reduction and the successful resolution of
the Internal Revenue Service (IRS) audit of the Earthco
synthetic fuels facilities (Earthco).
2006 2005
Common stock equity 47.2% 41.6%
Preferred stock and minority interest 0.6% 0.7%
Total debt 52.2% 57.7%
Moody’s
Investors Service
Standard
& Poor’s
Fitch
Ratings
Progress Energy, Inc.
Outlook Stable Positive Stable
Corporate credit rating n/a BBB n/a
Senior unsecured debt Baa2 BBB- BBB
Commercial paper P-2 A-2 F-2
PEC
Outlook Positive Positive Stable
Corporate credit rating Baa1 BBB n/a
Commercial paper P-2 A-2 F-1
Senior secured debt A3 BBB A
Senior unsecured debt Baa1 BBB- A-
Subordinate debt Baa2 n/a n/a
Preferred stock Baa3 BB+ BBB+
PEF
Outlook Stable Positive Stable
Corporate credit rating A3 BBB n/a
Commercial paper P-2 A-2 F-1
Senior secured debt A2 BBB A
Senior unsecured debt A3 BBB- A-
Preferred stock Baa2 BB+ BBB+
FPC Capital I
Preferred stock(a) Baa2 BB+ n/a
Progress Capital Holdings, Inc.
Senior unsecured debt(b) Baa1 BBB- n/a
(a) Guaranteed by Progress Energy, Inc. and Florida Progress.
(b) Guaranteed by Florida Progress.