Progress Energy 2008 Annual Report Download - page 129

Progress Energy Annual Report 2008
FIVE-YEAR TOTAL RETURN COMPARISON CHART
127
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN* AMONG PROGRESS ENERGY, INC.,
S&P 500 STOCK INDEX, S&P ELECTRIC INDEX AND COMPARABLE BUSINESS MODEL UTILITIES
2003 2004 2005 2006 2007 2008
$300
$275
$250
$225
$200
$175
$150
$125
$100
$75
$50
$25
$0
Measurement Period (Fiscal Year Covered) 2003 2004 2005 2006 2007 2008
Progress Energy, Inc. $100 $105 $108 $127 $132 $115
S&P 500 Index 100 111 116 135 142 90
Comparable Business Model Utilities 100 118 130 156 166 141
S&P Electric Index 100 127 149 183 226 168
*$100 invested on 12/31/2003 in Stock or Index. Including reinvestment of dividends. Fiscal year ending December 31.
$168
$115
$90
$141
Progress Energy
S&P Electric
S&P 500
Comparable Business
Model Utilities
Over the past decade, as deregulation has occurred
in several geographic areas of the United States, the
investor community has separated the utility industry
into a number of subsectors. The two main themes of
separation are 1) the aspect of the value chain in which
the company participates: generation, transmission and/
or delivery, and 2) the proportion of its business governed
by rate-of-return regulation as opposed to competitive
markets. Thus, the industry now has subsectors identified
frequently as competitive merchant, regulated delivery,
regulated integrated, and unregulated integrated
(typically state-regulated delivery and unregulated
generation). Each of these subsectors typically differs
in financial valuation characteristics and risk.
Progress Energy generally is identified as being in the
regulated integrated subsector. This means Progress
Energy and its peer companies are primarily rate-of-
return regulated, operate in the full range of the value
chain, and typically have requirements to serve all
customers under state utility regulations. The companies
similar to us from a business model perspective that are
generally categorized in our subsector are American
Electric Power, DPL, Duke Energy, Consolidated Edison,
Great Plains Energy, Alliant Energy, NV Energy, PG&E,
Pinnacle West, Portland General Electric, SCANA,
Southern Company, Wisconsin Energy, Westar Energy
and Xcel Energy.
It should be noted that, although the business models
of several of these companies may not have been
comparable to ours five years ago, their business models
and ours are now similar due to industry evolution. The
Company is providing this alternative market capitalization
weighted index to show an additional comparison of
Progress Energy’s total return performance.