<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)                                                      Fiscal Years Ended
                                                                      --------------------------------------------------------------
                                                                      January 28,              January 29,              January 30,
                                                                          2000                     1999                     1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                      <C>                      <C>
Net Sales ...............................................             $ 2,994,877              $ 2,536,265              $ 1,945,446
Cost of Sales ...........................................               2,320,604                1,977,266                1,519,323
------------------------------------------------------------------------------------------------------------------------------------
Gross Profit ............................................                 674,273                  558,999                  426,123
------------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
  Selling, general and administrative ...................                 508,644                  416,642                  318,923
  Depreciation and amortization .........................                  29,629                   23,269                   18,727
  Provision for doubtful accounts .......................                   3,608                    1,882                    1,229
------------------------------------------------------------------------------------------------------------------------------------
    Total operating expenses ............................                 541,881                  441,793                  338,879
------------------------------------------------------------------------------------------------------------------------------------
Operating Income ........................................                 132,392                  117,206                   87,244
------------------------------------------------------------------------------------------------------------------------------------
Non-Operating Income and (Expenses):
  Interest and other income .............................                   9,015                    6,886                    5,837
  Interest expense ......................................                 (31,805)                 (25,415)                 (19,257)
------------------------------------------------------------------------------------------------------------------------------------
                                                                          (22,790)                 (18,529)                 (13,420)
------------------------------------------------------------------------------------------------------------------------------------
Income Before Income Taxes ..............................                 109,602                   98,677                   73,824
Income Taxes ............................................                  43,731                   37,234                   26,254
------------------------------------------------------------------------------------------------------------------------------------
Net Income ..............................................             $    65,871              $    61,443              $    47,570
====================================================================================================================================
Earnings Per Share:
  Basic .................................................             $      2.82              $      2.57              $      2.37
====================================================================================================================================
  Diluted ...............................................             $      2.80              $      2.55              $      2.33
====================================================================================================================================
Average Shares Outstanding:
  Basic .................................................                  23,398                   23,889                   20,108
====================================================================================================================================
  Diluted ...............................................                  23,547                   24,138                   20,432
====================================================================================================================================
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                                       HUGHES SUPPLY, INC.  17

<PAGE>

CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                                                   January 28,           January 29,
                                                                                                      2000                  1999
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                <C>                  <C>
Assets
Current Assets:
  Cash and cash equivalents ..............................................................         $    10,000          $     6,010
  Accounts receivable, less allowance for losses of $2,777 and $2,809 ....................             398,244              341,109
  Inventories ............................................................................             495,491              409,734
  Deferred income taxes ..................................................................              15,993                8,520
  Other current assets ...................................................................              38,050               31,346
------------------------------------------------------------------------------------------------------------------------------------
    Total current assets .................................................................             957,778              796,719

Property and Equipment, Net ..............................................................             144,945              127,632
Excess of Cost over Net Assets Acquired ..................................................             243,367              181,622
Other Assets .............................................................................              22,924               17,540
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   $ 1,369,014          $ 1,123,513
====================================================================================================================================

Liabilities and Shareholders' Equity
Current Liabilities:
  Current portion of long-term debt ......................................................         $       803          $        39
  Accounts payable .......................................................................             239,810              176,234
  Accrued compensation and benefits ......................................................              29,590               25,029
  Other current liabilities ..............................................................              30,075               27,982
------------------------------------------------------------------------------------------------------------------------------------
    Total current liabilities ............................................................             300,278              229,284

Long-Term Debt ...........................................................................             535,000              402,203
Deferred Income Taxes ....................................................................               6,027                4,711
Other Noncurrent Liabilities .............................................................               5,265                3,359
------------------------------------------------------------------------------------------------------------------------------------
    Total liabilities ....................................................................             846,570              639,557
------------------------------------------------------------------------------------------------------------------------------------
Commitments and Contingencies (Note 7)

Shareholders' Equity:
  Preferred stock, no par value; 10,000,000 shares authorized; none issued;
    preferences, limitations and relative rights to be established
    by the Board of Directors ............................................................                  --                   --
  Common stock, par value $1 per share; 100,000,000 shares
    authorized; 24,249,281 and 24,183,834 shares issued ..................................              24,249               24,184
  Capital in excess of par value .........................................................             221,284              219,558
  Retained earnings ......................................................................             300,144              242,730
  Treasury stock, 668,950 and no shares, at cost .........................................             (15,434)                  --
  Unearned compensation related to outstanding restricted stock ..........................              (7,799)              (2,516)
------------------------------------------------------------------------------------------------------------------------------------
    Total shareholders' equity ...........................................................             522,444              483,956
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   $ 1,369,014          $ 1,123,513
====================================================================================================================================
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                                                            18

<PAGE>

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                                  Capital in
                                                          Number of    Common      Excess of     Retained    Treasury     Unearned
                                                            Shares      Stock      Par Value     Earnings     Stock     Compensation
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>       <C>          <C>          <C>          <C>          <C>
Balance, January 31, 1997 ............................      19,576    $  19,576    $ 110,328    $ 169,329    $      --    $      --

  Net income .........................................          --           --           --       47,570           --           --
  Cash dividends-$.31 per share ......................          --           --           --       (5,966)          --           --
    Pooled companies .................................          --           --           --       (2,794)          --           --
  Shares issued under stock option
    and bonus plans ..................................         172          172        1,494           --           --           --
  Purchase and retirement of common shares ...........         (19)         (19)        (234)        (325)          --           --
  Issuance of restricted stock .......................          50           50        1,250           --           --       (1,300)
  Amortization of unearned restricted stock ..........          --           --           --           --           --           58
  Capitalization of undistributed earnings of
    Subchapter S corporation .........................          --           --       12,999      (12,999)          --           --
  Other acquisitions .................................       3,658        3,658       76,373        2,549           --           --
------------------------------------------------------------------------------------------------------------------------------------
Balance, January 30, 1998 ............................      23,437       23,437      202,210      197,364           --       (1,242)

  Net income .........................................          --           --           --       61,443           --           --
  Cash dividends-$.33 per share ......................          --           --           --       (7,866)          --           --
    Pooled companies .................................          --           --           --       (1,222)          --           --
  Shares issued under stock option
    and bonus plans ..................................         108          108        1,282           --           --           --
  Purchase and retirement of common shares ...........         (19)         (19)        (193)        (389)          --           --
  Issuance of restricted stock .......................          52           52        1,615           --           --       (1,667)
  Amortization of unearned restricted stock ..........          --           --           --           --           --          393
  Capitalization of undistributed earnings of
    Subchapter S corporation .........................          --           --        7,697       (7,697)          --           --
  Other acquisitions .................................         606          606        6,947        1,097           --           --
------------------------------------------------------------------------------------------------------------------------------------
Balance, January 29, 1999 ............................      24,184       24,184      219,558      242,730           --       (2,516)

  Net income .........................................          --           --           --       65,871           --           --
  Cash dividends-$.34 per share ......................          --           --           --       (7,990)          --           --
  Purchase of treasury stock .........................        (921)          --           --           --      (21,229)          --
  Shares issued under stock option
    and bonus plans ..................................          65           29          472         (378)         811           --
  Purchase and retirement of common shares ...........          (7)          (7)         (57)         (89)          --           --
  Issuance of restricted stock,
    net of cancellations .............................         259           43        1,311           --        4,984       (6,338)
  Amortization of unearned restricted stock ..........          --           --           --           --           --        1,055
------------------------------------------------------------------------------------------------------------------------------------
Balance, January 28, 2000 ............................      23,580    $  24,249    $ 221,284    $ 300,144    $ (15,434)   $  (7,799)
====================================================================================================================================
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                                       HUGHES SUPPLY, INC.  19

<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
                                                                                                    Fiscal Years Ended
                                                                                        --------------------------------------------
                                                                                         January 28,     January 29,     January 30,
                                                                                             2000            1999            1998
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                       <C>             <C>             <C>
Cash Flows from Operating Activities:
  Net income .......................................................................      $  65,871       $  61,443       $  47,570
  Adjustments to reconcile net income to net cash provided by
  (used in) operating activities:
      Depreciation and amortization ................................................         29,629          23,269          18,727
      Provision for doubtful accounts ..............................................          3,608           1,882           1,229
      Other, net ...................................................................           (262)           (671)           (626)
  Changes in assets and liabilities, net of effects of business acquisitions:
      (Increase) in accounts receivable ............................................        (33,961)        (25,497)        (30,443)
      (Increase) in inventories ....................................................        (67,594)        (29,493)        (39,136)
      (Increase) in other current assets ...........................................         (4,464)         (7,718)         (3,865)
      (Increase) in other assets ...................................................         (4,006)         (5,692)         (9,061)
      Increase in accounts payable and accrued liabilities .........................         47,639           8,532           6,102
      Increase (decrease) in accrued interest and income taxes .....................          2,169          (2,948)          1,880
      Increase in other noncurrent liabilities .....................................            168             697             408
      (Increase) decrease in net deferred income taxes .............................         (5,348)          7,763           2,425
------------------------------------------------------------------------------------------------------------------------------------
        Net cash provided by (used in) operating activities ........................         33,449          31,567          (4,790)
------------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities:
  Capital expenditures .............................................................        (30,740)        (26,921)        (28,185)
  Proceeds from sale of property and equipment .....................................          4,892           6,630           1,184
  Investments in affiliated entities ...............................................         (3,750)             --              --
  Business acquisitions, net of cash ...............................................        (88,905)        (40,378)        (47,725)
------------------------------------------------------------------------------------------------------------------------------------
        Net cash (used in) investing activities ....................................       (118,503)        (60,669)        (74,726)
------------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities:
  Net borrowings under short-term debt arrangements ................................        132,797          10,232          36,921
  Principal payments on debt of acquired entities ..................................        (14,724)        (24,084)        (25,212)
  Proceeds from issuance of long-term debt .........................................             --          50,000          80,000
  Purchase of treasury shares ......................................................        (21,229)             --              --
  Dividends paid ...................................................................         (8,042)         (8,832)         (8,112)
  Other ............................................................................            242            (408)         (2,496)
------------------------------------------------------------------------------------------------------------------------------------
        Net cash provided by financing activities ..................................         89,044          26,908          81,101
------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents ...............................          3,990          (2,194)          1,585
Cash and Cash Equivalents, Beginning of Year .......................................          6,010           8,204           6,619
------------------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents, End of Year .............................................      $  10,000       $   6,010       $   8,204
====================================================================================================================================
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                                                            20
<PAGE>

NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
(dollars  in thousands, except per share data)

Note 1 -- DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Industry

Hughes  Supply,  Inc. and its  subsidiaries  (the  "Company") are engaged in the
wholesale  distribution  of a broad range of  materials,  equipment and supplies
primarily to the construction and industrial  markets.  The Company  distributes
nine different  product groups which it has classified  into three major product
categories:  (i) Fluid Control Products,  consisting of the Company's industrial
pipe, plate, valves and fittings,  plumbing,  water and sewer, and water systems
product groups; (ii) Electrical Products, consisting of the Company's electrical
and electric utilities product groups; and (iii) Specialty Products,  consisting
of the Company's air conditioning and heating,  building materials, and pool and
spa equipment and supplies product groups. The Company's principal customers are
electrical,  plumbing and mechanical  contractors,  electric utility  companies,
property  management   companies,   municipalities  and  industrial   companies.
Industrial companies include companies in the petrochemical,  food and beverage,
pulp and paper, mining, pharmaceutical and marine industries.

Principles of Consolidation

The consolidated  financial  statements include the Company and its wholly-owned
subsidiaries.  All significant intercompany  transactions and accounts have been
eliminated.  Results of  operations  of companies  acquired and accounted for as
purchases are included from their respective dates of acquisition.

Fiscal Year

The Company's fiscal year ends on the last Friday in January. Fiscal years 2000,
1999 and 1998 each contained 52 weeks.

Cash Equivalents

The Company  considers  all highly liquid  investments  with a maturity of three
months or less when purchased to be cash equivalents.

Inventories

Inventories  are  carried  at  the  lower  of  cost  or  market.   The  cost  of
substantially all inventories is determined by the average cost method.


Property and Equipment

Buildings  and  equipment  are  recorded  at cost  and  depreciated  using  both
straight-line  and  declining-balance  methods based on the following  estimated
useful lives:

Buildings and improvements ...............................           5-40 years
Transportation equipment .................................           2- 7 years
Furniture, fixtures and equipment ........................           2-12 years
Property under capital leases ............................          20-40 years

Maintenance  and repairs are charged to expense as incurred  and major  renewals
and  betterments  are  capitalized.  Gains or losses are  credited or charged to
earnings  upon  disposition.  Depreciation  of property  and  equipment  totaled
$18,309, $15,750 and $12,759 in fiscal 2000, 1999 and 1998, respectively.

Excess of Cost over Net Assets Acquired

The  excess of cost over the fair  value of net  assets of  purchased  companies
(goodwill) is being amortized by the  straight-line  method over 15 to 40 years.
At January  28,  2000 and  January  29,  1999,  goodwill  totaled  $243,367  and
$181,622,  respectively, net of accumulated amortization of $24,477 and $16,688,
respectively.  Amortization  of goodwill  totaled  $7,797,  $5,614 and $5,053 in
fiscal 2000, 1999 and 1998, respectively.

Other Assets

The Company  capitalizes  certain internal software  development costs which are
amortized by the  straight-line  method over the  estimated  useful lives of the
software,  not to exceed five years.  At January 28, 2000 and January 29,  1999,
unamortized software development costs totaled $11,465 and $9,474, respectively,
net of accumulated amortization of $5,186 and $1,873, respectively. Amortization
of capitalized  internal software  development costs totaled $3,385,  $1,680 and
$316 in fiscal 2000, 1999 and 1998, respectively.

Impairment of Long-Lived Assets

In the event that facts and circumstances  indicate that the carrying value of a
long-lived  asset,  including  associated  intangibles,   may  be  impaired,  an
evaluation of  recoverability  is performed by comparing  the  estimated  future
undiscounted cash flows associated with the asset to the asset's carrying amount
to  determine  if a  write-down  to  market  value or  discounted  cash  flow is
required.

                                                     HUGHES SUPPLY, INC. 21
<PAGE>

Deferred Employee Benefits

The present value of amounts estimated to be payable under unfunded supplemental
retirement  agreements with certain officers is being accrued over the remaining
years of active  employment of the officers and is included in other  noncurrent
liabilities.

Fair Value of Financial Instruments

The carrying values of cash and cash equivalents,  accounts receivable, accounts
payable and accrued  liabilities  approximate  their fair values  because of the
short maturity of these instruments.  The fair value of the Company's  long-term
debt is estimated  based on quoted market prices for the same or similar  issues
or on  current  rates  offered  to the  Company  for debt of the same  remaining
maturities.

Revenue Recognition

The Company  recognizes  revenue from  product  sales when goods are received by
customers.

Advertising

Advertising  costs are  charged  to expense as  incurred.  Advertising  expenses
totaled $6,471, $5,533 and $4,369 in fiscal 2000, 1999 and 1998, respectively.

Income Taxes

Income taxes are provided  for the tax effects of  transactions  reported in the
financial  statements  and consist of taxes  currently due plus  deferred  taxes
resulting from temporary  differences.  Such temporary  differences  result from
differences  in the  carrying  value  of  assets  and  liabilities  for  tax and
financial reporting purposes.  The deferred tax assets and liabilities represent
the future tax consequences of those  differences,  which will either be taxable
or deductible when the assets and liabilities are recovered or settled. Deferred
taxes are also  recognized  for  operating  losses that are  available to offset
future  taxable  income.  An assessment is made as to whether or not a valuation
allowance is required to offset deferred tax assets.

Stock-Based Compensation

The Company  measures  compensation  expense for  employee  and  director  stock
options as the aggregate  difference  between the market and exercise  prices of
the  options on the date that both the number of shares the  grantee is entitled
to receive and the purchase  price are known.  Compensation  expense  associated
with  restricted  stock grants is equal to the market value of the shares on the
date of grant and is recorded pro rata over the  required  holding  period.  Pro
forma  information  relating to the fair value of  stock-based  compensation  is
presented in Note 6 to the consolidated financial statements.

Earnings Per Common Share

Basic   earnings  per  share  is  calculated  by  dividing  net  income  by  the
weighted-average  number of shares  outstanding.  Diluted  earnings per share is
calculated  by  dividing  net  income by the  weighted-average  number of shares
outstanding, adjusted for dilutive potential common shares. The weighted-average
number of shares used in calculating  basic earnings per share were  23,398,000,
23,889,000  and  20,108,000  for fiscal 2000,  1999 and 1998,  respectively.  In
calculating  diluted earnings per share,  these amounts were adjusted to include
149,000,  249,000  and 324,000 of dilutive  potential  common  shares for fiscal
2000,  1999 and 1998,  respectively.  The Company's  dilutive  potential  common
shares consist of stock options and restricted stock.

Reclassifications

The  fiscal   1999  and  1998   statements   of  cash  flows   contain   certain
reclassifications  which were made to conform to the Company's current financial
statement format.

Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  necessarily  requires  management to make  estimates and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

NOTE 2--BUSINESS COMBINATIONS

On January 8, 1998,  the Company  acquired  all of the common  stock of Mountain
Country  Supply,  Inc.  ("Mountain  Country").  Mountain  Country is a wholesale
distributor of plumbing  supplies,  water and sewer equipment and supplies,  and
air  conditioning  and heating  equipment  and  supplies,  with 10  locations in
Arizona.  On January 13, 1998,  the Company  acquired all of the common stock of
International  Supply  Company,  Inc.  and  all  of  its  affiliated  operations
("International").  International is a wholesale  distributor of water and sewer
equipment  and  supplies,  plumbing  supplies and  industrial  pipe,  valves and
fittings with 38 locations in Texas.  The aggregate  consideration  paid for the
Mountain Country and International acquisitions was


                                       22
<PAGE>

$98,772,  consisting  of cash in the  amount  of  $39,642  and the  issuance  of
2,153,396  shares of common  stock.  These  transactions  were  accounted for as
purchases and the results of operations  of Mountain  Country and  International
from their  respective  dates of  acquisition  are included in the  consolidated
financial  statements.  The excess of cost over net assets acquired for Mountain
Country and  International is being amortized over 40 years by the straight-line
method.

The  following  table  reflects  the  unaudited  pro forma  combined  results of
operations,  assuming the Mountain  Country and  International  acquisitions had
occurred at the beginning of the year presented:

                                                               Fiscal Year Ended
                                                               -----------------
                                                                      1998
--------------------------------------------------------------------------------
Net sales ...........................................            $   2,180,227
Net income ..........................................                   53,214
Earnings per share:
  Basic .............................................                     2.41
  Diluted ...........................................                     2.37

During fiscal 2000, 1999 and 1998, the Company  acquired several other wholesale
distributors of materials to the construction  and industrial  markets that were
accounted  for  as  purchases  or  immaterial   poolings.   These  acquisitions,
individually  or in the  aggregate,  did  not  have  a  material  effect  on the
consolidated financial statements. Results of operations of these companies from
their  respective  dates of acquisition  have been included in the  consolidated
financial statements.

NOTE 3--PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

                                                        2000             1999
--------------------------------------------------------------------------------
Land .........................................       $  28,771        $  25,590
Buildings and improvements ...................         110,308           93,341
Transportation equipment .....................          33,205           31,158
Furniture, fixtures and equipment ............          64,613           57,840
--------------------------------------------------------------------------------
                                                       236,897          207,929
Less accumulated depreciation
  and amortization ...........................         (91,952)         (80,297)
--------------------------------------------------------------------------------
                                                     $ 144,945        $ 127,632
================================================================================


NOTE 4--LONG-TERM DEBT

Long-term debt consists of the following:

                                                        2000             1999
--------------------------------------------------------------------------------
7.96% Senior notes, due 2011 .................       $  98,000        $  98,000
7.14% Senior notes, due 2012 .................          40,000           40,000
7.19% Senior notes, due 2012 .................          40,000           40,000
6.74% Senior notes, due 2013 .................          50,000           50,000
Unsecured bank notes under
  $275,000 revolving credit
  agreement, payable January 25,
  2004, fluctuating interest (6.0%
  to 6.9% at January 28, 2000) ...............         232,959          108,450
Short-term instruments classified
  as long-term debt ..........................          74,041           65,753
Other notes payable ..........................             803               39
--------------------------------------------------------------------------------
                                                       535,803          402,242
Less current portion .........................            (803)             (39)
--------------------------------------------------------------------------------
                                                     $ 535,000        $ 402,203
================================================================================

On August 28,  1997,  the Company  issued  $80,000 of senior notes due 2012 in a
private placement. The senior notes, of which $40,000 bear interest at 7.14% and
$40,000 bear interest at 7.19%,  will be payable in 21 and 13 equal  semi-annual
principal payments beginning in 2002 and 2006,  respectively.  Proceeds received
by  the  Company  from  the  sale  of the  senior  notes  were  used  to  reduce
indebtedness outstanding under the Company's revolving credit agreement and line
of credit agreement (the "credit agreement").

On August 27,  1997,  in  connection  with the issuance of the $80,000 of senior
notes,  the Company  entered  into an interest  rate swap  agreement  (the "swap
agreement").  The swap agreement  effectively  converts the Company's $40,000 of
7.19% senior notes due 2012 from fixed-rate debt to floating-rate  debt based on
six month London Interbank Offered Rates (LIBOR) less a predetermined  spread of
 .05% (5.99% as of January 28,  2000).  The  differential  is accrued as interest
rates change and is recorded as an adjustment to interest  expense.  As a result
of the swap  agreement,  interest  expense  decreased by $705,  $171 and $219 in
fiscal 2000, 1999 and 1998,  respectively.  The swap agreement  matures in 2012.
However,  the counterparty has the option to terminate the agreement at any time
from May 30, 2000 through  November 30, 2011.  The  estimated  fair value of the
swap  agreement,  based on a valuation  from an  investment  bank,  approximated
$1,504 and $1,251 at January 28, 2000 and January 29, 1999, respectively.

                                                     HUGHES SUPPLY, INC. 23

<PAGE>

On May 5, 1998, the Company issued $50,000 of senior notes due 2013 in a private
placement.  The senior  notes bear  interest  at 6.74% and will be payable in 21
equal semi-annual principal payments beginning in 2003. Proceeds received by the
Company  from the sale of the  senior  notes  were used to  reduce  indebtedness
outstanding under the Company's credit agreement.

On September 29, 1999, the credit agreement was amended.  The credit  agreement,
as  amended,  now  permits  the  Company to borrow up to  $350,000  (subject  to
borrowing limitations under the credit  agreement)--$275,000 under its revolving
credit  agreement as long-term  debt due January 25, 2004 and $75,000  under its
line of credit  agreement.  Under the credit  agreement,  interest is payable at
market rates plus applicable  margins.  Facility fees of .25% and .225% are paid
on the total of the revolving  credit  agreement  and line of credit  agreement,
respectively.

The credit  agreement  contains  financial  covenants  requiring  the Company to
maintain certain  financial  ratios and minimum net worth levels.  The covenants
also restrict the Company's activities regarding  investments,  liens, borrowing
and  leasing,  and payment of  dividends  other than stock.  Under the  dividend
covenant,  approximately  $115,257 was available at January 28, 2000 for payment
of dividends.

The  Company  has a  commercial  paper  program  backed  by its  line of  credit
agreement.  The weighted-average  interest rate on outstanding  commercial paper
borrowings  of $74,041  and  $65,753 as of January 28, 2000 and January 29, 1999
was 6.6% and 5.8%,  respectively.  The  Company  has the  ability  and intent to
refinance short-term  borrowings on a long-term basis.  Accordingly,  all of the
commercial  paper  borrowings at January 28, 2000 and January 29, 1999 have been
classified as long-term debt.

On March  1,  1999,  the  Company  entered  into two new  lines  of  credit  for
short-term  borrowing totaling $25,000.  There were no amounts outstanding under
these lines of credit at January 28, 2000.


On November 30, 1999, the Company  entered into a new $50,000  bridge  revolving
credit  agreement for short-term  borrowing.  There were no amounts  outstanding
under this line of credit at January 28, 2000.

Maturities  of long-term  debt for each of the five years  subsequent to January
28, 2000 and in the aggregate are as follows:

Fiscal Years Ending
--------------------------------------------------------------------------------
2001 ..................................................                 $    803
2002 ..................................................                    9,333
2003 ..................................................                   13,143
2004 ..................................................                  324,905
2005 ..................................................                   17,905
Later years ...........................................                  169,714
--------------------------------------------------------------------------------
                                                                        $535,803
================================================================================

The fair values of  long-term  debt  approximated  $524,002 and $407,836 and the
related  carrying  values  were  $535,803  and  $402,242 at January 28, 2000 and
January 29, 1999, respectively.

NOTE 5--INCOME TAXES

The  components of deferred tax assets and  liabilities  at January 28, 2000 and
January 29, 1999 are as follows:

                                                            2000           1999
--------------------------------------------------------------------------------
Deferred tax assets:
  Allowance for doubtful accounts ................        $ 1,064        $ 1,211
  Inventories ....................................          2,537            506
  Accrued vacation ...............................          2,646          3,001
  Deferred compensation ..........................          2,054          1,446
  Other accrued liabilities ......................          3,325          2,326
  Other ..........................................            662            270
--------------------------------------------------------------------------------
    Total deferred tax assets ....................         12,288          8,760
--------------------------------------------------------------------------------
Deferred tax liabilities:
  Capitalized software
    development costs ............................          3,401          2,664
  Intangible assets ..............................          3,590          2,287
  Property and equipment .........................          1,243             --
--------------------------------------------------------------------------------
    Total deferred tax liabilities ...............          8,234          4,951
Net deferred tax assets ..........................        $ 4,054        $ 3,809
================================================================================


No  valuation  allowance  has been  provided  for these  deferred  tax assets at
January 28, 2000 and January  29, 1999 as full  realization  of these  assets is
more likely than not.


                                                                            24
<PAGE>

The consolidated provision for income taxes consists of the following:

                                                   Fiscal Years Ended
                                         ---------------------------------------
                                           2000            1999            1998
--------------------------------------------------------------------------------
Currently payable:
  Federal ......................         $36,763         $25,119         $21,058
  State ........................           5,553           2,778           3,377
--------------------------------------------------------------------------------
                                          42,316          27,897          24,435
Deferred:
  Federal ......................           1,241           7,864           1,500
  State ........................             174           1,473             319
--------------------------------------------------------------------------------
                                           1,415           9,337           1,819
--------------------------------------------------------------------------------
                                         $43,731         $37,234         $26,254
================================================================================

The following is a reconciliation  of tax computed at the statutory Federal rate
to the income tax expense in the consolidated statements of income:

<TABLE>
<CAPTION>
                                                    Fiscal Years Ended
                         --------------------------------------------------------------------------
                                  2000                       1999                       1998
---------------------------------------------------------------------------------------------------
                          Amount           %        Amount           %         Amount            %
---------------------------------------------------------------------------------------------------
<S>                      <C>             <C>       <C>             <C>        <C>              <C>
Tax computed
  at statutory
  Federal rate ......    $ 38,361        35.0      $ 34,537        35.0       $ 25,838         35.0
Effect of:
  State and
    local income
    tax, net of
    Federal income
    tax benefit .....       3,722         3.4         2,763         2.8          2,459          3.3
  Subchapter
    S corporation
    earnings ........          --          --          (606)        (.6)        (2,315)        (3.1)
  Nondeductible
    purchase
    adjustments .....          --          --           880          .9            288           .4
  Nondeductible
    expenses ........       2,740         2.5         1,085         1.1            886          1.2
  Other, net ........      (1,092)       (1.0)       (1,425)       (1.5)          (902)        (1.2)
---------------------------------------------------------------------------------------------------
Income tax
  expense ...........    $ 43,731        39.9      $ 37,234        37.7       $ 26,254         35.6
===================================================================================================
</TABLE>


The Company merged with Chad Supply,  Inc. ("Chad") on January 30, 1998 and with
Winn-Lange Electric, Inc. ("Winn-Lange") on June 30, 1998. Prior to their merger
with the Company,  Chad and Winn-Lange were  Subchapter S corporations  and were
not subject to corporate income tax.

NOTE 6--EMPLOYEE BENEFIT PLANS

Profit Sharing and Employee Stock Ownership Plans

The  Company  has a 401(k)  profit  sharing  plan which  provides  benefits  for
substantially  all  employees  of the Company who meet minimum age and length of
service  requirements.  In fiscal 1999 and 1998,  employee  contributions of not
less than 2% to not more than 3% of each eligible  employee's  compensation were
matched  (in cash or stock) 50% by the  Company.  In fiscal  2000,  the  Company
adopted a plan to increase the maximum amount of employee contributions eligible
to be matched  50% by the  Company.  The  maximum  percentage  of each  eligible
employee's contribution to be matched by the Company was increased from 3% to 4%
on August 1, 1999 and from 4% to 5% as of February 1, 2000.  The plan also calls
for an additional  increase in the maximum matching  percentage from 5% to 6% on
February 1, 2001.  Additional annual contributions may be made at the discretion
of the Board of Directors.

The Company had an employee stock ownership plan (ESOP)  covering  substantially
all  employees  of the  Company  who met  minimum  age  and  length  of  service
requirements.  The plan was  terminated  by the Company on December 31, 1998. At
January 28, 2000 and January 29, 1999, the plan owned approximately  236,000 and
248,000 shares,  respectively,  of the Company's common stock, all of which were
allocated to  participants.  The Company is in the process of distributing  each
participant's final account balance in cash or stock.

Amounts charged to expense for these and other similar plans during fiscal 2000,
1999 and 1998 were $2,883, $1,946 and $1,581, respectively.

                                                                         25

<PAGE>

Bonus Plans

The Company has bonus plans,  based on  profitability  formulas,  which  provide
incentive  compensation  for key  officers  and  employees.  Amounts  charged to
expense for bonuses to executive  officers  were  $1,914,  $1,576 and $1,539 for
fiscal 2000, 1999 and 1998, respectively.

Stock Plans

The Company's two active stock plans include the 1997 Executive  Stock Plan (the
"1997 Stock  Plan") and the  Directors'  Stock  Option  Plan.  These stock plans
authorize the granting of both incentive and non-incentive  stock options for an
aggregate of 1,052,500 shares of common stock,  including  750,000 shares to key
employees and 302,500  shares to directors.  Under the stock plans,  options are
granted at prices not less than the market  value on the date of grant,  and the
maximum term of an option may not exceed ten years.  Prices for incentive  stock
options  granted to employees who own 10% or more of the Company's  stock are at
least 110% of market value at date of grant. Options may be granted from time to
time to  December  2006 with  respect to the 1997 Stock  Plan,  or May 2003 with
respect to the Directors'  Stock Option Plan. An option  becomes  exercisable at
such times and in such  installments as set forth by the Compensation  Committee
or by the Directors' Stock Option Plan.

Under the 1997 Stock Plan,  the  Company  can grant up to 375,000  shares of the
authorized  options as restricted  stock to certain key employees.  These shares
are subject to certain transfer restrictions,  and vesting may be dependent upon
continued  employment,  the  satisfaction  of performance  objectives,  or both.
During  fiscal  2000,  1999 and 1998,  the  Company  granted  certain  employees
261,921,  52,500 and 50,000  shares of restricted  stock,  with market values of
$6,415,  $1,667 and $1,300 at the date of grant,  respectively.  In fiscal 2000,
the Company also cancelled 2,400 of the restricted shares granted, with a market
value of $77 at the date of grant, according to the provisions of the grant. The
market  value of the  restricted  stock at the date of  grant  was  recorded  as
unearned compensation, a component of shareholders' equity, and is being charged
to expense over the respective  vesting periods.  In fiscal 2000, 1999 and 1998,
this expense amounted to $1,055, $393 and $58, respectively.

The 1997 Stock Plan also  permits  the  granting  of stock  appreciation  rights
("SARs") to holders of options.  Such rights permit the optionee to surrender an
exercisable  option, in whole or in part, on any date that the fair market value
of the Company's common stock exceeds the option price for the stock and receive
payment in common stock or, if the Board of Directors  approves,  in cash or any
combination of cash and common stock.  Such payment would be equal to the excess
of the fair market  value of the shares  under the  surrendered  option over the
option price for such shares.  The change in value of SARs would be reflected in
income  based upon the market  value of the stock.  No SARs have been granted or
issued through January 28, 2000.

A summary of option  transactions,  including  a  terminated  plan  under  which
options remain outstanding,  during each of the three fiscal years in the period
ended January 28, 2000 is shown below:

                                                                    Weighted-
                                                       Number of     Average
                                                         Shares    Option Price
--------------------------------------------------------------------------------
Under option, January 31, 1997
  (492,312 shares exercisable)  ..............           666,314       12.78
    Granted ..................................           271,991       33.23
    Exercised ................................          (112,908)      11.53
    Cancelled ................................            (6,000)      13.50
-----------------------------------------------------------------
Under option, January 30,1998
  (455,897 shares exercisable)  ..............           819,397       19.74
    Granted ..................................            48,000       34.19
    Exercised ................................           (98,587)      10.99
    Cancelled ................................           (12,800)      34.06
-----------------------------------------------------------------
Under option, January 29, 1999
  (435,810 shares exercisable)  ..............           756,010       21.55
    Granted ..................................            40,500       24.93
    Exercised ................................           (51,900)      11.89
    Cancelled ................................           (11,463)      28.24
-----------------------------------------------------------------
Under option, January 28, 2000
  (426,947 shares exercisable)  ..............           733,147       22.32
=================================================================

There were 211,751  shares  available for the granting of options at January 28,
2000.

                                                                            26

<PAGE>

The following  table  summarizes  the stock options  outstanding  at January 28,
2000:

                                              Weighted-
                                               Average
                              Options         Remaining        Weighted-
           Range of        Outstanding at    Contractual        Average
       Exercise Prices     Jan. 28, 2000         Life        Exercise Price
--------------------------------------------------------------------------------
         $       8.42         154,069          1 Year           $ 8.42
          12.83-18.67         234,276          6 Years           16.69
          21.63-28.75          74,102          8 Years           25.55
          33.00-35.63         270,700          8 Years           34.22

If the fair  value of  options  granted  had been  used to  record  compensation
expense,  pro forma net income would have been  $64,770,  $60,307 and $47,140 in
fiscal 2000, 1999 and 1998, respectively.  Diluted earnings per share would have
been $2.75,  $2.50 and $2.31 in fiscal 2000,  1999 and 1998,  respectively.  The
fair  value  of each  option  is  estimated  on the  date  of  grant  using  the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions:  dividend yields of 1.3% for fiscal 2000,  1999 and 1998;  expected
volatility  of 35%,  33% and 32% for fiscal 2000,  1999 and 1998,  respectively;
risk-free  interest  rates of 6.65%,  4.77% and 5.72% for fiscal 2000,  1999 and
1998,  respectively;  and expected  lives of 8 years for fiscal  2000,  1999 and
1998.  The  weighted-average  fair value of options  granted during the year was
$11.48, $13.81 and $13.92 for fiscal 2000, 1999 and 1998, respectively.  The pro
forma calculations do not include the effects of options granted prior to fiscal
1996.  As such,  the  impact is not  necessarily  indicative  of the  effects on
reported net income in future years.

Supplemental Executive Retirement Plan

The Company has entered  into  agreements  with certain key  executive  officers
providing for supplemental payments,  generally for periods up to 15 years, upon
retirement,  disability or death.  The obligations are not funded apart from the
Company's  general assets.  Amounts charged to expense under the agreements were
$543, $537 and $445 in fiscal 2000, 1999 and 1998, respectively.

NOTE 7--COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company leases certain  properties from a corporation owned by two directors
and one executive  officer of Hughes Supply,  Inc. The leases generally  provide
that all expenses  related to the  properties  are to be paid by the lessee.  On
April 1, 1998, certain amendments to these leases were executed,  which included
the  extension of their lease terms  through  March 31, 2003.  Rents paid to the
related  corporation  under these leases and other operating  leases amounted to
$1,341, $1,241 and $1,140 in fiscal 2000, 1999 and 1998, respectively.

Future minimum payments, by year and in the aggregate,  under the aforementioned
leases and other noncancelable  operating leases with initial or remaining terms
in excess of one year as of January 28, 2000, are as follows:

Fiscal Years Ending
--------------------------------------------------------------------------------
2001 .....................................................              $ 35,698
2002 .....................................................                31,282
2003 .....................................................                24,704
2004 .....................................................                15,741
2005 .....................................................                10,392
Later years ..............................................                17,342
--------------------------------------------------------------------------------
Total minimum lease payments .............................              $135,159
================================================================================

Lease-related expenses were as follows:

                                                    Fiscal Years Ended
                                           -------------------------------------
                                             2000           1999           1998
--------------------------------------------------------------------------------
Capital lease
  amortization ....................        $    --        $    89        $   518
Capital lease
  interest expense ................             --             30            199
Operating lease
  rentals (excluding
  month-to-month rents) ...........         42,792         33,062         22,335

Legal Matters

The  Company is  involved  in various  legal  proceedings  arising in the normal
course of its business.  In the opinion of management,  none of the  proceedings
are material in relation to the Company's  consolidated  operations or financial
position.

                                                     HUGHES SUPPLY, INC.  27

<PAGE>

NOTE 8--CAPITAL STOCK

Common Stock

On May 20, 1997, the Company's Board of Directors declared a three-for-two stock
split to  shareholders  of record as of July 10, 1997.  The date of issuance for
the additional  shares was July 17, 1997.  Accordingly,  all share and per share
data have been restated for periods prior to the stock split.

On May 20, 1997, the shareholders approved an amendment to the Restated Articles
of  Incorporation of the Company  increasing the number of authorized  shares of
common stock from 20,000,000 to 100,000,000 shares.

Treasury Stock

On March 15, 1999,  the Company's  Board of Directors  authorized the Company to
repurchase up to 2,500,000  shares of its outstanding  shares of common stock to
be used for general corporate purposes.  In fiscal 2000, the Company repurchased
921,100  shares for a total  cost of  $21,229 at an average  price of $23.05 per
share.  During fiscal 2000,  the Company  issued 36,150 shares of treasury stock
for stock options  exercised and 216,000 shares of treasury stock for restricted
stock grants.

Preferred Stock

The  Company's  Board of  Directors  established  Series A Junior  Participating
Preferred  Stock ("Series A Stock")  consisting of 75,000 shares.  Each share of
Series A Stock will be entitled to 1,000  votes on all  matters  submitted  to a
vote of  shareholders.  Series A Stock is not redeemable or convertible into any
other  security.  Each share of Series A Stock  shall have a minimum  cumulative
preferential  quarterly dividend rate equal to the greater of $1.00 per share or
1000 times the  aggregate  per share amount of the  dividend  declared on common
stock in the related  quarter.  In the event of liquidation,  shares of Series A
Stock will be  entitled  to the  greater of $1000 per share plus any accrued and
unpaid  dividend or 1000 times the payment to be made per share of common stock.
No  shares  of  Series A Stock are  presently  outstanding,  and no  shares  are
expected to be issued  except in  connection  with the  shareholder  rights plan
referred to below.


The  Company  has a  shareholder  rights  plan.  Under  the  plan,  the  Company
distributed  to  shareholders a dividend of one right per share of the Company's
common stock.  When  exercisable,  each right will permit the holder to purchase
from the Company one one-thousandth of a share (a "unit") of Series A Stock at a
purchase price of $200 per unit. The rights  generally  become  exercisable if a
person or group acquires 15% or more of the Company's  common stock or commences
a tender  offer that could  result in such person or group owning 15% or more of
the Company's common stock. If certain  subsequent events occur after the rights
first become exercisable,  the rights may become exercisable for the purchase of
shares of common stock of the  Company,  or of an  acquiring  company,  having a
value equal to two times the exercise price of the right. In general, the rights
may be  redeemed by the Company at $.0l per right at any time prior to the later
of (i) ten days after 20% or more of the Company's stock is acquired by a person
or group and (ii) the first date of a public announcement that a person or group
has acquired 15% or more of the  Company's  stock.  The rights expire on June 2,
2008 unless terminated earlier in accordance with the rights plan.

NOTE 9--SUPPLEMENTAL CASH FLOWS INFORMATION

Cash paid for interest  during fiscal 2000,  1999 and 1998 was $29,636,  $23,972
and $18,107,  respectively.  Cash paid for income taxes during fiscal 2000, 1999
and 1998 was $49,079, $33,862 and $23,099, respectively.

Noncash Investing and Financing Activities

The net assets  acquired and  consideration  for  acquisitions  accounted for as
purchases are summarized below:

                                                Fiscal Years Ended
                                    --------------------------------------------
                                       2000             1999             1998
--------------------------------------------------------------------------------
Fair value of:
  Assets acquired ...........       $ 125,536        $  77,707        $ 172,546
  Liabilities assumed .......         (37,510)         (32,048)         (45,816)
--------------------------------------------------------------------------------
Purchase price ..............       $  88,026        $  45,659        $ 126,730
================================================================================

Consideration  in fiscal 1999 and 1998 included  207,829 and 2,850,526 shares of
common stock, with fair values of $5,438 and $78,768, respectively.

                                                                            28

<PAGE>

NOTE 10--PRODUCT, GEOGRAPHIC AND CUSTOMER INFORMATION

The  Company's  products are  classified  into three major  product  categories,
including Fluid Control Products,  Electrical  Products and Specialty  Products.
Net sales for each of these product categories were as follows:

                                                 Fiscal Years Ended
--------------------------------------------------------------------------------
                                       2000             1999             1998
--------------------------------------------------------------------------------
Fluid Control
  Products ..................       $1,803,742       $1,512,828       $1,048,688
Electrical Products .........          625,068          572,048          536,490
Specialty Products ..........          566,067          451,389          360,268
--------------------------------------------------------------------------------
                                    $2,994,877       $2,536,265       $1,945,446
================================================================================

The Company sells its products in the major areas of construction and industrial
markets in certain  states  primarily in the  Southeast,  Southwest  and Midwest
United  States.  Revenues and assets of  operations  located  outside the United
States are not material.

Approximately  90% of the  Company's  sales  are  credit  sales  which  are made
primarily  to  customers  whose  ability to pay is  dependent  upon the economic
strength  of  the  construction   industry  in  the  areas  where  it  operates.
Concentration  of credit  risk with  respect  to trade  accounts  receivable  is
limited,  however, due to the large number of customers comprising the Company's
customer base and the fact that no one customer comprises more than 1% of annual
sales. The Company  performs ongoing credit  evaluations of its customers and in
certain situations obtains collateral sufficient to protect its credit position.
The Company maintains reserves for potential credit losses, and such losses have
been within management's expectations.

NOTE 11--QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                    Quarter
                                                            --------------------------------------------------------
                                                             First           Second          Third           Fourth
--------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>             <C>             <C>             <C>
Fiscal 2000
Net sales ..........................................        $711,296        $774,888        $786,379        $722,314
Gross profit .......................................        $156,358        $176,173        $178,648        $163,094
Net income .........................................        $ 13,355        $ 20,905        $ 20,243        $ 11,368
Earnings per share:
  Basic ............................................        $    .56        $    .90        $    .87        $    .49
  Diluted ..........................................        $    .55        $    .88        $    .87        $    .49
Average shares outstanding (in thousands):
  Basic ............................................          23,863          23,300          23,214          23,215
  Diluted ..........................................          24,240          23,686          23,349          23,338
Market price per share:
  High .............................................        $  26.25        $  29.94        $  28.50        $  24.13
  Low ..............................................        $  17.94        $  22.94        $  20.75        $  18.06
Dividends per share ................................        $   .085        $   .085        $   .085        $   .085
--------------------------------------------------------------------------------------------------------------------
Fiscal 1999
Net sales ..........................................        $602,031        $674,550        $659,045        $600,639
Gross profit .......................................        $129,277        $148,841        $146,639        $134,242
Net income .........................................        $ 11,603        $ 19,773        $ 19,150        $ 10,917
Earning per share:
  Basic ............................................        $    .49        $    .83        $    .80        $    .45
  Diluted ..........................................        $    .49        $    .82        $    .79        $    .45
Average shares outstanding (in thousands):
  Basic ............................................          23,601          23,925          23,989          24,038
  Diluted ..........................................          23,874          24,180          24,204          24,294
Market price per share:
  High .............................................        $  39.81        $  39.19        $  32.50        $  29.50
  Low ..............................................        $  32.56        $  29.13        $  25.13        $  25.13
Dividends per share ................................        $   .080        $   .080        $   .085        $   .085
</TABLE>

                                                     HUGHES SUPPLY, INC. 29

<PAGE>

REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS


To the Shareholders and Board of Directors
of Hughes Supply, Inc.

In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated  statements  of  income,  shareholders'  equity  and of cash  flows
present  fairly,  in all material  respects,  the  financial  position of Hughes
Supply,  Inc. and its subsidiaries at January 28, 2000 and January 29, 1999, and
the results of their operations and their cash flows for each of the three years
in the period ended January 28, 2000 in conformity  with  accounting  principles
generally  accepted in the United  States.  These  financial  statements are the
responsibility of the Company's management;  our responsibility is to express an
opinion on these  financial  statements  based on our audits.  We conducted  our
audits of these  statements in  accordance  with  auditing  standards  generally
accepted in the United States,  which require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.


/s/ PricewaterhouseCoopers LLP


PricewaterhouseCoopers LLP


Orlando, Florida
March 17, 2000


MANAGEMENT'S RESPONSIBILITY
FOR FINANCIAL STATEMENTS


Management's Responsibility
for Financial Statements

The consolidated  financial  statements and related information included in this
annual report were prepared in conformity  with  generally  accepted  accounting
principles.  Management  is  responsible  for  the  integrity  of the  financial
statements  and for the  related  information.  Management  has  included in the
Company's  financial   statements  amounts  that  are  based  on  estimates  and
judgements which it believes are reasonable under the circumstances.

The  responsibility  of the Company's  independent  accountants is to express an
opinion on the fairness of the financial  statements.  Their opinion is based on
an audit conducted in accordance with generally  accepted auditing  standards as
further described in their report.

The  Audit   Committee   of  the  Board  of   Directors  is  composed  of  three
non-management  directors.  The  Committee  meets  periodically  with  financial
management,  internal  auditors,  and  the  independent  accountants  to  review
internal accounting control, auditing, and financial reporting matters.


                                                                         30

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Certain  statements  set  forth  in  Management's  Discussion  and  Analysis  of
Financial  Condition  and  Results  of  Operations  constitute  "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and
are  subject  to the safe  harbor  created by such  sections.  When used in this
report, the words "believe," "anticipate,"  "estimate," "expect," "may," "will,"
"should," "plan," "intend," "potential,"  "estimate," "predict," "forecast," and
similar  expressions  are  intended  to  identify  forward-looking   statements.
Although  the  Company  believes  that  the   expectations   reflected  in  such
forward-looking  statements are  reasonable,  it can give no assurance that such
expectations  will prove to be correct.  The Company's actual results may differ
significantly  from the results  discussed in such  forward-looking  statements.
When appropriate,  certain factors that could cause results to differ materially
from those  projected in the  forward-looking  statements are  enumerated.  This
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  should  be read  in  conjunction  with  the  Company's  consolidated
financial  statements and the notes thereto.

RESULTS OF OPERATIONS

Net Sales

In  fiscal  2000,  the  Company  generated  net sales of $2.99  billion,  an 18%
increase over fiscal 1999 net sales of $2.54  billion.  Fiscal 1999 net sales of
$2.54  billion  increased 30% over fiscal 1998 net sales of $1.95  billion.  The
increases in net sales were primarily due to acquired and newly-opened wholesale
branches resulting from the Company's  acquisition and internal growth programs.
Same-store sales growth also contributed to the increases. On a basis comparable
to the prior year, same-store sales increased 7% in fiscal 2000 and 6% in fiscal
1999.

The increase of 7% in same-store  sales for fiscal 2000 was  attributable to (i)
continued  overall strength of the construction  market,  (ii) increases in pool
and spa product sales due to increased  market  penetration  and (iii) growth in
electric  utility  product sales  resulting from  increased  spending by utility
companies  due  to the  anticipated  deregulation  within  their  industry.  The
same-store sales increase of 6% in fiscal 1999 was primarily attributable to (i)
continued  growth in construction  markets and (ii) the favorable impact of warm
and  dry  weather  conditions  experienced  in  certain  regions  served  by the
Company's  air  conditioning  and pool supply  products.  These  increases  were
partially  offset by  declines in  industrial  product  demand and  deflationary
pricing  within  certain of the  Company's  commodity-based  products as further
discussed below.

Gross Margin

Over the past three years, gross margins have been improving. Gross margins were
22.5%,  22.0% and 21.9%  for  fiscal  2000,  1999 and  1998,  respectively.  The
improvement  in gross  margins  resulted  from several  factors,  including  the
Company's  overall  expansion of  higher-margin  products  due  primarily to its
acquisition program,  efficiencies created with central distribution centers and
enhanced  purchasing  power.  Enhanced  purchasing  power  was  attributable  to
increased  volume and  concentration  of supply sources as part of the Company's
preferred  vendor program.  In the early part of fiscal 2000, all of fiscal 1999
and the last part of fiscal  1998,  total gross profit  dollars were  negatively
impacted by  deflationary  pressures on the pricing of certain of the  Company's
products  whose  manufacture  is  reliant  on  certain  commodities,   including
stainless  steel,  nickel  alloys,  copper,  aluminum and  plastic.  Despite the
commodity pricing pressures,  the Company was able to maintain the gross margins
on much of the business  associated  with these  products  and increase  overall
gross  margin for each of these years.  In the latter part of fiscal  2000,  the
deflationary  pressures on certain commodity items eased, which further improved
gross margins.

Operating Expenses

Operating  expenses in fiscal 2000 were $542 million (or 18.1% of net sales),  a
23% increase  over fiscal 1999  operating  expenses of $442 million (or 17.4% of
net sales).  The  increase in  operating  expenses as a percent of net sales for
fiscal 2000 was  primarily  due to (i) higher  personnel  costs  resulting  from
increased headcount due to higher volume levels of activity,  wage increases and
the Company's  employee  retention  activities  and (ii)  increased  information
technology  ("IT")  spending and conversion  costs as the Company  continued its
program of upgrading IT systems.  The Company  believes its  investment in these
initiatives  will provide a platform for future  growth and enable it to realize
more administrative synergies from past and future acquisitions.

Similarly,  the increase of $103 million in fiscal 1999 compared to fiscal 1998,
which had  operating  expenses  of $339  million  (or 17.4% of net  sales),  was
primarily attributable to branches acquired and opened after February 1,


                                                     HUGHES SUPPLY, INC. 31

<PAGE>

1997.  The remainder of the increase was  primarily due to (i) higher  personnel
and transportation  costs associated with same-store sales growth, (ii) expenses
related to the  Company's  IT  initiatives  and (iii) the impact of deflation on
sales volumes.

Non-Operating Income and Expenses

Interest  and other  income was $9.0  million in fiscal  2000  compared  to $6.9
million in fiscal 1999 and $5.8  million in fiscal 1998.  The  increases of $2.1
million and $1.1 million in fiscal 2000 and 1999,  respectively,  were primarily
the result of higher levels of accounts receivable and the related collection of
service charge income on delinquent accounts receivable.

Interest expense for fiscal 2000, 1999 and 1998 was $31.8 million, $25.4 million
and $19.3 million,  respectively.  The $6.4 million  increase in fiscal 2000 and
the $6.1  million  increase in fiscal 1999 were  primarily  the result of higher
borrowing  levels.  The  higher  borrowing  levels  were  primarily  due  to the
Company's expansion through business acquisitions, which was partially funded by
debt  financing.  The  increase in fiscal  2000's debt level was also due to the
Company's share repurchase program.

Income Taxes

The  effective  tax rates for fiscal 2000,  1999 and 1998 were 39.9%,  37.7% and
35.6%,  respectively.  Prior to the mergers with Chad Supply,  Inc.  ("Chad") on
January 30, 1998 and with Winn-Lange Electric,  Inc.  ("Winn-Lange") on June 30,
1998, both of these entities were Subchapter S corporations and, therefore,  not
subject to corporate income tax. Each entity's  Subchapter S corporation  status
terminated  upon the  merger  with  the  Company.  As a  result,  the  Company's
effective  tax rate is higher for fiscal  2000  compared  to fiscal  1999 and is
higher for fiscal 1999 compared to fiscal 1998. The Company's effective tax rate
for  fiscal  1999 and 1998  would  have  been  approximately  38.3%  and  38.7%,
respectively, assuming Chad and Winn-Lange were tax paying entities.

Net Income

Net income in fiscal 2000  increased 7% to $65.9  million from $61.4  million in
fiscal 1999.  Diluted  earnings per share  increased 10% to $2.80 in fiscal 2000
compared to $2.55 in fiscal 1999.  These results  followed fiscal 1999 increases
of 29% and 9% in net income and diluted  earnings per share,  respectively.  Net
income and  diluted  earnings  per share in fiscal  1998 were $47.6  million and
$2.33, respectively.

Liquidity and Capital Resources

Net cash  provided by  operations  was $33.4  million in fiscal 2000 compared to
$31.6  million in fiscal 1999 and net cash used in operations of $4.8 million in
fiscal 1998.  In fiscal 2000,  net cash  provided by operations of $33.4 million
was  primarily  the  result of an  increase  in  accounts  payable  and  accrued
liabilities resulting from the Company's working capital management efforts. Net
cash  provided by  operations  of $31.6 million in fiscal 1999 was primarily the
result of the Company's improved profit levels, partially offset by increases in
accounts receivable and inventories, resulting from higher sales volumes.

The  Company's  expenditures  for property and  equipment  were $30.7 million in
fiscal 2000  compared to $26.9  million in fiscal 1999.  Of these  expenditures,
approximately $14 million and $10 million, respectively,  were for new warehouse
facilities to support the Company's  growth and  approximately $5 million and $7
million,  respectively,  were related to information technology outlays. Capital
expenditures  for property and  equipment,  not  including  amounts for business
acquisitions, are expected to be approximately $30 million in fiscal 2001.

Proceeds  from the sale of property and  equipment  were $4.9 million for fiscal
2000  compared  to $6.6  million  and $1.2  million  for  fiscal  1999 and 1998,
respectively.  The  increases  in fiscal  2000 and fiscal  1999,  as compared to
fiscal 1998, were primarily due to the sale and subsequent lease-back of certain
computer  hardware  which  generated  proceeds of $2.5 million and $5.4 million,
respectively.

Principal  reductions on debt of acquired entities were $14.7 million for fiscal
2000  compared  to $24.1  million  and $25.2  million  for fiscal 1999 and 1998,
respectively.  Dividend  payments  totaled $8.0  million,  $8.8 million and $8.1
million  during fiscal 2000,  1999 and 1998.  This  included  cash  dividends of
pooled companies totaling $1.2 million and $2.8 million in fiscal 1999 and 1998,
respectively.

As discussed in Note 4 of the Notes to  Consolidated  Financial  Statements,  in
September 1999 the Company amended its credit  agreement.  The credit  agreement
permits the Company to borrow up to $350 million ($300 million previously). With
the  increase  in this  facility  and the  additional  $50,000  bridge  facility
discussed in Note 4, the Company believes it has the resources necessary,

                                                                            32
<PAGE>

with  approximately  $103 million available under its existing credit facilities
(subject to borrowing  limitations under long-term debt covenants) as of January
28,  2000,  to fund  ongoing  operating  requirements  and  anticipated  capital
expenditures.  The Company also believes it has sufficient borrowing capacity to
take  advantage of growth and  business  acquisition  opportunities  and to fund
share  repurchases in the near term. The Company  expects to continue to finance
future expansion on a  project-by-project  basis through additional borrowing or
through the issuance of common stock.

Business Acquisitions

Cash payments for business acquisitions accounted for as purchases totaled $88.9
million for fiscal 2000  compared to $40.4  million and $47.7  million in fiscal
years 1999 and 1998, respectively.  These outlays represent seven, eight and ten
wholesale  distributors  acquired and accounted for as purchases in fiscal 2000,
1999 and 1998,  respectively.  The  increase  in cash paid for  acquisitions  in
fiscal  2000 was the result of all of the  Company's  fiscal  2000  acquisitions
being financed completely with cash consideration.  In fiscal 1999 and 1998, the
Company  used  $18  million  and $96  million  of its  stock,  respectively,  as
additional consideration for acquisitions (excluding poolings of interests).

Investment in Affiliated Entities

In  fiscal  2000,  the  Company   invested  $3.8  million  into  two  e-commerce
initiatives. Under the terms of these agreements, the Company may be required to
fund an additional $6.3 million in fiscal 2001 if certain  operating  thresholds
are met.

Share Repurchases

On March 15, 1999,  the Board of Directors  authorized the Company to repurchase
up to 2.5 million of its outstanding shares. Through March 31, 2000, the Company
repurchased  921,100  shares  for a total  cost of $21.2  million  at an average
purchase price of $23.05 per share.

Inflation and Changing Prices

The  Company  is  aware  of the  potentially  unfavorable  effects  inflationary
pressures  may  create  through  higher  asset  replacement  costs  and  related
depreciation,  higher interest rates and higher material costs. In addition, the
Company's  operating  performance is affected by price fluctuations in stainless
steel,  nickel alloys,  copper,  aluminum,  plastic and other  commodities.  The
Company seeks to minimize the effects of inflation and changing  prices  through
economies of purchasing and inventory  management  resulting in cost  reductions
and productivity  improvements as well as price increases to maintain reasonable
profit margins.

At January 28, 2000, the Company had approximately $307.0 million of outstanding
variable-rate  debt.  Based upon an assumed 10% increase or decrease in interest
rates from their January 28, 2000 levels,  the Company's  interest expense would
increase or decrease by  approximately  $2.0  million.  The Company  manages its
interest rate risk by maintaining a combination of fixed-rate and  variable-rate
debt.

Management  believes that  inflation  (which has been moderate over the past few
years) did not significantly  affect the Company's  operating results or markets
in fiscal 2000, 1999 or 1998. As discussed above, however, the Company's results
of operations for fiscal 1999 and parts of fiscal 2000 and 1998 were  negatively
impacted by declines in the pricing of certain  commodity-based  products.  Such
commodity price  fluctuations have from time to time created  cyclicality in the
financial performance of the Company and could continue to do so in the future.

Recent Accounting Pronouncements

Statement of Financial  Accounting  Standards No. 133, Accounting for Derivative
Instruments and Hedging  Activities  ("SFAS 133"), is effective for fiscal years
beginning  after June 15, 2000.  SFAS 133  establishes  accounting and reporting
standards for derivative  instruments,  including certain derivative instruments
embedded in other contracts,  and for hedging  activities.  The adoption of this
standard is not expected to have a material  impact on the  Company's  financial
reporting.

Year 2000 Issues

The Company studied the "Year 2000" issues affecting its information  technology
systems, its non-information technology systems, and its issues with third-party
companies and other  significant  suppliers,  and  implemented a plan to address
them.  Year 2000 issues have not had a material  adverse effect on the Company's
operations.  The cost of addressings its Year 2000 issues was approximately $1.2
million.  These costs have not had a material effect on the Company's  financial
position  or  results  of  operations  in any one  period in part  because  they
represent the re-deployment of existing information  technology  resources,  and
because they would have been  incurred as part of normal  software  upgrades and
replacements.


                                                     HUGHES SUPPLY, INC. 33

<PAGE>

SELECTED FINANCIAL DATA
(in thousands, except per share data and ratios)

<TABLE>
<CAPTION>
                                                      Fiscal Years Ended(1)(2)
                                       -----------------------------------------------------
                                          2000          1999          1998          1997
--------------------------------------------------------------------------------------------
<S>                                    <C>           <C>           <C>           <C>
STATEMENTS OF INCOME:
Net sales ..........................   $2,994,877    $2,536,265    $1,945,446    $1,619,362
Cost of sales ......................   $2,320,604    $1,977,266    $1,519,323    $1,276,481
Gross margin .......................         22.5%         22.0%         21.9%         21.2%
--------------------------------------------------------------------------------------------
Selling, general and
  administrative expenses ..........     $508,644      $416,642      $318,923      $261,355
   As a percentage of net sales ....         17.0%         16.4%         16.4%         16.1%
Depreciation and amortization ......      $29,629       $23,269       $18,727       $15,566
Provision for doubtful accounts ....       $3,608        $1,882        $1,229        $1,023
Operating income ...................     $132,392      $117,206       $87,244       $64,937
Operating margin ...................          4.4%          4.6%          4.5%          4.0%
--------------------------------------------------------------------------------------------
Interest and other income ..........       $9,015        $6,886        $5,837        $6,241
Interest expense ...................      $31,805       $25,415       $19,257       $14,842
--------------------------------------------------------------------------------------------
Income before income taxes .........     $109,602       $98,677       $73,824       $56,336
   As a percentage of net sales ....          3.7%          3.9%          3.8%          3.5%
Income taxes (benefits) ............      $43,731       $37,234       $26,254       $19,282
Net income .........................      $65,871       $61,443       $47,570       $37,054
   As a percentage of net sales ....          2.2%          2.4%          2.4%          2.3%
--------------------------------------------------------------------------------------------
Earnings per share:
   Basic ...........................        $2.82         $2.57         $2.37         $2.13
   Diluted .........................        $2.80         $2.55         $2.33         $2.09
--------------------------------------------------------------------------------------------
Average shares outstanding:
   Basic ...........................       23,398        23,889        20,108        17,384
   Diluted .........................       23,547        24,138        20,432        17,719

BALANCE SHEET:
Working capital ....................     $657,500      $567,435      $486,106      $350,975
Total assets .......................   $1,369,014    $1,123,513      $965,742      $684,056
Long-term debt, less current portion     $535,000      $402,203      $343,197      $228,351
Shareholders' equity ...............     $522,444      $483,956      $421,769      $299,233
--------------------------------------------------------------------------------------------
Current ratio ......................     3.2 to 1      3.5 to 1      3.5 to 1      3.3 to 1
Ratio of long-term debt to
  total capital employed ...........     .51 to 1      .45 to 1      .45 to 1      .43 to 1
Leverage (total assets/
  shareholders' equity) ............         2.62          2.32          2.29          2.29

OTHER:
Cash dividends per share ...........         $.34          $.33          $.31          $.25
Shareholders' equity per share .....       $22.16        $20.01        $18.00        $15.29
Return on average assets ...........          5.3%          5.9%          5.8%          6.4%
Return on average
  shareholders' equity .............         13.1%         13.6%         13.2%         15.2%
Capital expenditures(3) ............      $30,740       $26,921       $28,185       $16,898
--------------------------------------------------------------------------------------------
</TABLE>

--------
(1)  The Company's fiscal year ends on the last Friday in January.

(2)  All data  adjusted for poolings of interests  and the  three-for-two  stock
     split declared in fiscal 1998.

(3)  Excludes capital leases.


                                  34

<PAGE>

<TABLE>
<CAPTION>
                                                           Fiscal Years Ended(1)(2)
                                       ------------------------------------------------------------------
                                          1996              1995              1994              1993
                                       ------------------------------------------------------------------
<S>                                    <C>               <C>               <C>               <C>
STATEMENTS OF INCOME:
Net sales ..........................   $1,326,978        $1,065,549        $  880,977        $  724,466
Cost of sales ......................   $1,052,120        $  848,698        $  704,907        $  583,513
Gross margin .......................         20.7%             20.4%             20.0%             19.5%
---------------------------------------------------------------------------------------------------------
  administrative expenses ..........   $  218,093        $  172,828        $  145,913        $  119,732
   As a percentage of net sales ....        16.4%             16.2%             16.6%             16.5%
Depreciation and amortization ......   $   11,859        $   10,131        $    8,657        $    7,382
Provision for doubtful accounts ....   $    2,203        $    1,501        $    2,448        $    2,028
Operating income ...................   $   42,703        $   32,391        $   19,052        $   11,811
Operating margin ...................          3.2%              3.0%              2.2%              1.6%
---------------------------------------------------------------------------------------------------------
Interest and other income ..........   $    5,111        $    3,206        $    3,677        $    4,072
Interest expense ...................   $   10,440        $    6,813        $    6,456        $    6,087
---------------------------------------------------------------------------------------------------------
Income before income taxes .........   $   37,374        $   28,784        $   16,273        $    9,796
   As a percentage of net sales ....          2.8%              2.7%              1.8%              1.4%
Income taxes (benefits) ............   $   11,728        $    7,984        $    4,710        $    1,734
Net income .........................   $   25,646        $   20,800        $   11,563        $    8,062
   As a percentage of net sales ....          1.9%              2.0%              1.3%              1.1%
---------------------------------------------------------------------------------------------------------
Earnings per share:
   Basic ...........................   $     1.78        $     1.54        $      .97        $      .68
   Diluted .........................   $     1.75        $     1.50        $      .92        $      .68
---------------------------------------------------------------------------------------------------------
Average shares outstanding:
   Basic ...........................       14,418            13,504            11,900            11,899
   Diluted .........................       14,647            13,992            13,675            11,917

BALANCE SHEET:
Working capital ....................   $  235,113        $  212,573        $  171,702        $  148,919
Total assets .......................   $  474,574        $  418,717        $  330,526        $  294,510
Long-term debt, less current portion   $  139,165        $  127,166        $  121,292        $  103,870
Shareholders' equity ...............   $  188,926        $  165,427        $  116,918        $  106,597
---------------------------------------------------------------------------------------------------------
Current ratio ......................     2.6 to 1          2.7 to 1          2.9 to 1          2.8 to 1
Ratio of long-term debt to
  total capital employed ...........     .42 to 1          .43 to 1          .51 to 1          .49 to 1
Leverage (total assets/
  shareholders' equity) ............         2.51              2.53              2.83              2.76

OTHER:
Cash dividends per share ...........   $      .20        $      .15        $      .11        $      .08
Shareholders' equity per share .....   $    12.64        $    11.40        $     9.43        $     8.71
Return on average assets ...........          5.7%              5.6%              3.7%              2.8%
Return on average
  shareholders' equity .............         14.5%             14.7%             10.3%              7.8%
Capital expenditures(3) ............   $   14,713        $   15,824        $    9,997        $   10,335
---------------------------------------------------------------------------------------------------------

<CAPTION>
                                                   Fiscal Years Ended(1)(2)
                                       ------------------------------------------------
                                          1992               1991              1990
                                       ------------------------------------------------
<S>                                    <C>                <C>               <C>
STATEMENTS OF INCOME:
Net sales ..........................   $  690,311         $  752,951        $  706,860
Cost of sales ......................   $  557,380         $  608,322        $  565,386
Gross margin .......................         19.3%              19.2%             20.0%
--------------------------------------------------------------------------------------
  administrative expenses ..........   $  116,317         $  117,649        $  107,882
   As a percentage of net sales ....        16.8%              15.6%             15.3%
Depreciation and amortization ......   $    7,987         $    9,929        $    9,743
Provision for doubtful accounts ....   $    3,247         $    3,119        $    2,962
Operating income ...................   $    5,380         $   13,932        $   20,887
Operating margin ...................           .8%               1.9%              3.0%
--------------------------------------------------------------------------------------
Interest and other income ..........   $    2,696         $    4,732        $    3,348
Interest expense ...................   $    7,702         $    9,850        $    8,911
--------------------------------------------------------------------------------------
Income before income taxes .........   $      374         $    8,814        $   15,324
   As a percentage of net sales ....           .1%               1.2%              2.2%
Income taxes (benefits) ............   $   (1,359)        $    2,058        $    4,937
Net income .........................   $    1,733         $    6,756        $   10,387
   As a percentage of net sales ....           .3%                .9%              1.5%
--------------------------------------------------------------------------------------
Earnings per share:
   Basic ...........................   $      .15         $      .58        $      .84
   Diluted .........................   $      .15         $      .58        $      .81
--------------------------------------------------------------------------------------
Average shares outstanding:
   Basic ...........................       11,899             11,746            12,374
   Diluted .........................       11,899             11,746            14,062

BALANCE SHEET:
Working capital ....................   $  134,961         $  143,011        $  140,226
Total assets .......................   $  276,439         $  273,216        $  285,434
Long-term debt, less current portion   $   89,921         $   99,261        $   94,409
Shareholders' equity ...............   $   99,649         $  102,094        $  107,113
--------------------------------------------------------------------------------------
Current ratio ......................     2.6 to 1           3.0 to 1          2.7 to 1
Ratio of long-term debt to
  total capital employed ...........     .47 to 1           .49 to 1          .47 to 1
Leverage (total assets/
  shareholders' equity) ............         2.77               2.68              2.66

OTHER:
Cash dividends per share ...........   $      .16         $      .24        $      .23
Shareholders' equity per share .....   $     8.14         $     8.64        $     8.54
Return on average assets ...........           .6%               2.4%              3.8%
Return on average
  shareholders' equity .............          1.7%               6.5%              9.9%
Capital expenditures(3) ............   $    6,073         $    8,877        $   11,844
--------------------------------------------------------------------------------------
</TABLE>


                                               HUGHES SUPPLY, INC. 35

<PAGE>

CORPORATE AND SHAREHOLDER INFORMATION

<TABLE>
<S>                                          <C>                                        <C>
DIRECTORS                                    EXECUTIVE OFFICERS                         Thomas M. Ward II
David H. Hughes                              AND MANAGEMENT                             Vice President and Chief Technology Officer
Chairman of the Board
                                             David H. Hughes                            Gradie E. Winstead, Jr.
John D. Baker II                             Chairman of the Board and                  Group President
President and Chief Executive Officer        Chief Executive Officer
Florida Rock Industries, Inc.
                                             A. Stewart Hall, Jr.                       J. Stephen Zepf
Robert N. Blackford                          President and Chief Operating Officer      Treasurer and Chief Financial Officer
Attorney, Holland & Knight LLP
                                             Benjamin P. Butterfield
H. Corbin Day                                Secretary and General Counsel              TRANSFER AGENT
Chairman, Jemison Investment Co., Inc.                                                  AND REGISTRAR
                                             Jack R. Clark
A. Stewart Hall, Jr.                         Vice President of Credit                   American Stock Transfer
                                                                                        & Trust Company
Vincent S. Hughes                            Jacquel K. Clark                           40 Wall Street
                                             Assistant Secretary and                    New York, New York 10005
William P. Kennedy                           Assistant Treasurer
Chief Executive Officer                                                                 ANNUAL MEETING
Nephron Pharmaceuticals Corporation          Jasper L. Holland, Jr.
                                             Group President                            Tuesday, May 16, 2000,
                                                                                        at 10:00 a.m., local time
                                             Clyde E. Hughes III                        Hughes Supply, Inc.
                                             Group President                            20 North Orange Avenue
                                                                                        Suite 200
                                             Vincent S. Hughes                          Orlando, Florida 32801
                                             Vice President
                                                                                        INDEPENDENT ACCOUNTANTS
                                             Robert A. Machaby
                                             Group President                            PricewaterhouseCoopers LLP
                                                                                        Orlando, Florida
                                             James C. Plyler, Jr.
                                             Vice President and Regional Manager        CORPORATE HEADQUARTERS

                                             Kenneth H. Stephens                        Hughes Supply, Inc.
                                             Vice President and Regional Manager        20 North Orange Avenue
                                                                                        Orlando, Florida 32801
                                             Michael L. Stanwood                        Telephone: 407-841-4755
                                             Group President

                                             Sidney J. Strickland, Jr.
                                             Vice President of Administration
</TABLE>




The shares of Hughes Supply,  Inc. common stock are traded on the New York Stock
Exchange  under the symbol  "HUG." The  approximate  number of  shareholders  of
record as of March 24, 2000 was 1,188. A COPY OF THE HUGHES SUPPLY,  INC. ANNUAL
REPORT ON FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE
MADE AVAILABLE WITHOUT CHARGE, UPON WRITTEN REQUEST. REQUESTS SHOULD BE DIRECTED
TO:

J. Stephen Zepf
Treasurer and Chief Financial Officer
Hughes Supply, Inc.
Post Office Box 2273
Orlando, Florida 32802