Progress Energy 2010 Annual Report Download - page 34

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MANAGEMENT’S DISCUSSION AND ANALYSIS
credit agreements (RCAs) and an $877 million net
decrease in short-term indebtedness, primarily driven
by commercial paper repayments; partially offset by a
$491 million increase in proceeds from the issuance of
common stock, primarily related to the Parent’s January
2009 common stock offering; a $481 million increase
in net proceeds from long-term debt issuances due
to the Parent’s combined $1.700 billion issuances and
PEC’s $600 million issuance in 2009 compared to PEF’s
$1.500 billion issuance and PEC’s $325 million issuance in
2008; and a $477 million decrease in payments at maturity
of long-term debt.
Our financing activities are described below.
2011
•฀ On฀January฀21,฀2011,฀the฀Parent฀issued฀$500฀million฀of฀
4.40% Senior Notes due 2021. We expect to use the net
proceeds, along with available cash on hand, to retire
at maturity the $700 million outstanding aggregate
principal balance of our 7.10% Senior Notes due
March 1, 2011.
2010
•฀ On฀ January฀ 15,฀ 2010,฀ the฀ Parent฀ paid฀ at฀ maturity฀
$100 million of its Series A Floating Rate Notes with a
portion of the proceeds from the $950 million of Senior
Notes issued in November 2009.
•฀ On฀ March฀ 25,฀ 2010,฀ PEF฀ issued฀ $250฀ million฀ of฀ 4.55%฀
First Mortgage Bonds due 2020 and $350 million of
5.65% First Mortgage Bonds due 2040. Proceeds were
used to repay the outstanding balance of PEF’s notes
payable to affiliated companies, to repay the maturity
of PEF’s $300 million 4.50% First Mortgage Bonds due
June 1, 2010, and for general corporate purposes.
•฀ On฀October฀15,฀2010,฀PEC฀and฀PEF฀ each฀ entered฀ into฀
new $750 million, three-year RCAs with a syndication
of 22 financial institutions. The RCAs are used to
provide liquidity support for PEC’s and PEF’s issuances
of commercial paper and other short-term obligations,
and for general corporate purposes. The RCAs will
expire on October 15, 2013. The new $750 million RCAs
replaced PEC’s and PEF’s $450 million RCAs, which
were set to expire June 28, 2011 and March 28, 2011,
respectively. Both $450 million RCAs were terminated
effective October 15, 2010 (See “Credit Facilities and
Registration Statements”).
•฀ On฀ October฀ 15,฀ 2010,฀ the฀ Parent฀ ratably฀ reduced฀ the฀
size฀ of฀ its฀ $1.130฀ billion฀ credit฀ facility฀ to฀ $500฀ million฀
with the existing group of 15 financial institutions (See
“Credit Facilities and Registration Statements”).
•฀ Progress฀ Energy฀ issued฀ approximately฀ 12.2฀ million฀
shares of common stock resulting in approximately
$434 million in proceeds from the Progress Energy
Investor Plus Plan (IPP) and its employee benefit and
equity incentive plans. Included in these amounts
were approximately 11.2 million shares for proceeds
of approximately $431 million issued for the IPP. For
2010, the dividends paid on common stock were
approximately $718 million.
2009
•฀ On฀ January฀ 12,฀ 2009,฀ the฀ Parent฀ issued฀ 14.4฀ million฀
shares of common stock at a public offering price of
$37.50 per share. Net proceeds from this offering were
approximately $523 million. On February 3, 2009, the
Parent used $100 million of the proceeds to reduce its
$600 million RCA balance outstanding at December 31,
2008, and the remainder was used for general corporate
purposes.
•฀ On฀January฀15,฀ 2009,฀PEC฀issued฀$600฀ million฀of฀First฀
Mortgage Bonds, 5.30% Series due 2019. A portion of
the proceeds was used to repay the maturity of PEC’s
$400 million 5.95% Senior Notes, due March 1, 2009.
The remaining proceeds were used to repay PEC’s
outstanding short-term debt and for general corporate
purposes.
•฀ On฀ March฀ 19,฀ 2009,฀ the฀ Parent฀ issued฀ an฀ aggregate฀
$750 million of Senior Notes consisting of $300 million of
6.05% Senior Notes due 2014 and $450 million of 7.05%
Senior Notes due 2019. A portion of the proceeds was
used to fund PEF’s capital expenditures through an
equity contribution with the remaining proceeds used
for general corporate purposes.
•฀ On฀June฀18,฀2009,฀PEC฀entered฀into฀a฀Seventy-seventh฀
Supplemental Indenture to its Mortgage and Deed
of Trust, dated May 1, 1940, as supplemented, in
connection with certain amendments to the mortgage.
The amendments are set forth in the Seventy-seventh
Supplemental Indenture and include an amendment to
extend the maturity date of the mortgage by 100 years.
The maturity date of the mortgage is now May 1, 2140.
•฀ On฀November฀19,฀2009,฀the฀Parent฀issued฀an฀aggregate฀
$950 million of Senior Notes consisting of $350 million
of 4.875% Senior Notes due 2019 and $600 million of
6.00% Senior Notes due 2039. The proceeds were used
to retire at maturity the $100 million outstanding Series
A Floating Rate Notes due January 15, 2010, to repay
outstanding commercial paper balances, to pre-fund a
portion of the $700 million aggregate principal amount
due upon maturity of our 7.10% Senior Notes due
March 1, 2011, and for general corporate purposes.