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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549



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Form 10-Q



|    |  |                                                                                       
|--- |  | --------------------------------------------------------------------------------------
|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2000

OR



|     |  |                                                                                        
|---- |  | ---------------------------------------------------------------------------------------
|[  ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

|                |  |                                                                                                                              |  |                
|--------------- |  | ---------------------------------------------------------------------------------------------------------------------------- |  | ---------------
|                |  | Exact name of Registrant as specified in its                                                                                 |  | I.R.S. Employer
|Commission File |  | charter, state of incorporation, address of                                                                                  |  | Identification 
|No.             |  | principal executive offices, telephone                                                                                       |  | Number         
|                |  |                                                                                                                              |  |                
|1-8349          |  | FLORIDA PROGRESS CORPORATION
A Florida Corporation
One Progress Plaza
St. Petersburg, Florida 33701
Telephone (727) 824-6400 |  | 59-2147112     
|               
|               
|               
|               
|1-3274          |  | FLORIDA POWER CORPORATION
A Florida Corporation
One Progress Plaza
St. Petersburg, Florida 33701
Telephone (727) 820-5151    |  | 59-0247770     

Indicate by check mark whether each registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate the number of shares outstanding of each of the registrants
classes of common stock, as of the latest practicable date.

|                             |  |                                 |  |                                                             
|---------------------------- |  | ------------------------------- |  | ------------------------------------------------------------
|                             |  |                                 |  | Shares Outstanding                                          
|Registrant                   |  | Description of Class            |  | at March 31, 2000                                           
|                             |  |                                 |  |                                                             
|Florida Progress Corporation |  | Common Stock, without par value |  | 98,613,933                                                  
|                            
|                            
|                            
|                            
|Florida Power Corporation    |  | Common Stock, without par value |  | 100 (all of which were held by
Florida Progress Corporation)

This combined Form 10-Q represents separate filings by Florida Progress
Corporation and Florida Power Corporation. Florida Power makes no
representations as to the information relating to Florida Progress diversified
operations.



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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FLORIDA PROGRESS CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS

FLORIDA PROGRESS CORPORATION
Consolidated Statements of Income
(Dollars in millions, except per share amounts)

|                                           |                                                                                |                               |       |                    |       |      |       |       |       | 
|------------------------------------------ | ------------------------------------------------------------------------------ | ----------------------------- | ----- | ------------------ | ----- | ---- | ----- | ----- | ----- | 
|                                           |                                                                                |                               |       | Three Months Ended
|                                           |                                                                                |                               |       | March 31,         
|                                           |                                                                                |                               |       |                   
|                                           |                                                                                |                               |       | 2000               |       | 1999
|                                           |                                                                                |                               |       |                    |       |     
|                                           |                                                                                |                               |       | (Unaudited)       
|REVENUES:                                 
|                                          
|                                          
|                                          
|                                          
|                                           | Electric utility                                                               |                               | $     | 621.9              |       |      | $     | 570.7 |      
|                                          
|                                          
|                                          
|                                          
|                                           | Diversified                                                                    |                               |       | 328.2              |       |      |       | 249.7 |      
|                                           |                                                                                |                               |       |                    |       |      |       |      
|                                           |                                                                                |                               | 950.1 |                    |       |      | 820.4 |      
|                                           |                                                                                |                               |       |                    |       |      |       |      
|EXPENSES:                                 
|                                          
|                                          
|                                          
|                                          
|                                           | Electric utility:                                                             
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                | Fuel                          |       |                    | 134.0 |      |       |       | 113.7 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                | Purchased power               |       |                    | 103.1 |      |       |       | 90.3  | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                | Energy conservation costs     |       |                    | 14.1  |      |       |       | 17.1  | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                | Operation and maintenance     |       |                    | 100.0 |      |       |       | 97.1  | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                | Depreciation and amortization |       |                    | 85.7  |      |       |       | 80.8  | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                | Taxes other than income taxes |       |                    | 53.1  |      |       |       | 51.9  | 
|                                           |                                                                                |                               |       |                    |       |      |       |      
|                                           |                                                                                |                               | 490.0 |                    |       |      | 450.9 |      
|                                           |                                                                                |                               |       |                    |       |      |       |      
|                                           | Diversified:                                                                  
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                | Cost of sales                 |       |                    | 304.2 |      |       |       | 225.1 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                | Other                         |       |                    | 20.8  |      |       |       | 14.6  | 
|                                           |                                                                                |                               |       |                    |       |      |       |      
|                                           |                                                                                |                               | 325.0 |                    |       |      | 239.7 |      
|                                           |                                                                                |                               |       |                    |       |      |       |      
|INCOME FROM OPERATIONS                     |                                                                                |                               | 135.1 |                    |       |      | 129.8 |      
|                                           |                                                                                |                               |       |                    |       |      |       |      
|INTEREST EXPENSE AND OTHER:               
|                                          
|                                          
|                                          
|                                          
|                                           | Interest expense                                                               |                               |       | 45.2               |       |      |       | 45.0  |      
|                                          
|                                          
|                                          
|                                          
|                                           | Allowance for funds used during construction                                   |                               |       | (.9                | )     |      |       | (5.1  | )    
|                                          
|                                          
|                                          
|                                          
|                                           | Distributions on company obligated mandatorily redeemable preferred securities |                               |       | 5.3                |       |      |       |      |      
|                                          
|                                          
|                                          
|                                          
|                                           | Other expense / (income), net                                                  |                               |       | (.4                | )     |      |       | (4.3  | )    
|                                           |                                                                                |                               |       |                    |       |      |       |      
|                                           |                                                                                |                               | 49.2  |                    |       |      | 35.6  |      
|                                           |                                                                                |                               |       |                    |       |      |       |      
|INCOME FROM OPERATIONS BEFORE INCOME TAXES |                                                                                |                               | 85.9  |                    |       |      | 94.2  |      
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                | Income taxes                  |       |                    | 9.4   |      |       |       | 26.6  | 
|                                           |                                                                                |                               |       |                    |       |      |       |      
|NET INCOME                                 |                                                                                | $                             | 76.5  |                    |       | $    | 67.6  |      
|                                           |                                                                                |                               |       |                    |       |      |       |      
|AVERAGE SHARES OF COMMON STOCK OUTSTANDING |                                                                                |                               | 98.5  |                    |       |      | 97.5  |      
|                                           |                                                                                |                               |       |                    |       |      |       |      
|EARNINGS PER AVERAGE COMMON SHARE         
|                                          
|                                          
|                                          
|                                          
|                                           | (Basic and Diluted):                                                           |                               | $     | .78                |       |      | $     | .69   |      
|                                           |                                                                                |                               |       |                    |       |      |       |      
|DIVIDENDS PER COMMON SHARE                 |                                                                                | $                             | .555  |                    |       | $    | .545  |      
|                                           |                                                                                |                               |       |                    |       |      |       |      

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

2



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FLORIDA PROGRESS CORPORATION
Consolidated Balance Sheets
(Dollars in millions)

|                                   |                                                                                            |                                                     |                            |                                               |       |             |         |              |       |         |       | 
|---------------------------------- | ------------------------------------------------------------------------------------------ | --------------------------------------------------- | -------------------------- | --------------------------------------------- | ----- | ----------- | ------- | ------------ | ----- | ------- | ----- | 
|                                   |                                                                                            |                                                     |                            |                                               |       | March 31,   |         | December 31,
|                                   |                                                                                            |                                                     |                            |                                               |       | 2000        |         | 1999        
|                                   |                                                                                            |                                                     |                            |                                               |       |             |         |             
|                                   |                                                                                            |                                                     |                            |                                               |       | (Unaudited)
|ASSETS                            
|                                  
|                                  
|                                  
|                                  
|PROPERTY, PLANT AND EQUIPMENT:    
|                                  
|                                  
|                                  
|                                  
|                                   | Electric utility plant in service and held for future use                                  |                                                     | $                          | 6,795.9                                       |       |             | $       | 6,784.8      |      
|                                  
|                                  
|                                  
|                                  
|                                   | Less  Accumulated depreciation                                                            |                                                     |                            | 2,981.1                                       |       |             |         | 2,923.8      |      
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            |                                                     |                            | Accumulated decommissioning for nuclear plant |       |             | 292.5   |              |       |         | 285.0 | 
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            |                                                     |                            | Accumulated dismantlement for fossil plants   |       |             | 132.9   |              |       |         | 132.5 | 
|                                   |                                                                                            |                                                     |                            |                                               |       |             |         |             
|                                   |                                                                                            |                                                     | 3,389.4                    |                                               |       |             | 3,443.5 |             
|                                  
|                                  
|                                  
|                                  
|                                   | Construction work in progress                                                              |                                                     |                            | 165.8                                         |       |             |         | 139.7        |      
|                                  
|                                  
|                                  
|                                  
|                                   | Nuclear fuel, net of amortization of $406.7
in 2000 and $401.0 in 1999                     |                                                     |                            | 56.5                                          |       |             |         | 68.7         |      
|                                   |                                                                                            |                                                     |                            |                                               |       |             |         |             
|                                   |                                                                                            |                                                     | Net electric utility plant |                                               |       | 3,611.7     |         |              |       | 3,651.9 |      
|                                  
|                                  
|                                  
|                                  
|                                   | Other property, at cost, net of depreciation of $285.8
in 2000 and $275.0 in 1999          |                                                     |                            | 703.7                                         |       |             |         | 703.4        |      
|                                   |                                                                                            |                                                     |                            |                                               |       |             |         |             
|                                   |                                                                                            |                                                     | 4,315.4                    |                                               |       |             | 4,355.3 |             
|                                   |                                                                                            |                                                     |                            |                                               |       |             |         |             
|CURRENT ASSETS:                   
|                                  
|                                  
|                                  
|                                  
|                                   | Cash and equivalents                                                                       |                                                     |                            | 2.9                                           |       |             |         | 9.6          |      
|                                  
|                                  
|                                  
|                                  
|                                   | Accounts receivable, less allowance for doubtful accounts of
$5.6 in 2000 and $5.8 in 1999 |                                                     |                            | 409.0                                         |       |             |         | 420.6        |      
|                                  
|                                  
|                                  
|                                  
|                                   | Inventories, primarily at average cost:                                                   
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Fuel                                                |                            |                                               | 134.4 |             |         |              | 109.8 |        
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Utility materials and supplies                      |                            |                                               | 92.6  |             |         |              | 90.8  |        
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Diversified operations                              |                            |                                               | 198.2 |             |         |              | 175.9 |        
|                                  
|                                  
|                                  
|                                  
|                                   | Deferred income taxes                                                                      |                                                     |                            | 28.9                                          |       |             |         | 41.3         |      
|                                  
|                                  
|                                  
|                                  
|                                   | Prepayments and other                                                                      |                                                     |                            | 129.3                                         |       |             |         | 113.7        |      
|                                   |                                                                                            |                                                     |                            |                                               |       |             |         |             
|                                   |                                                                                            |                                                     | 995.3                      |                                               |       |             | 961.7   |             
|                                   |                                                                                            |                                                     |                            |                                               |       |             |         |             
|DEFERRED CHARGES AND OTHER ASSETS:
|                                  
|                                  
|                                  
|                                  
|                                   | Costs deferred pursuant to regulation:                                                    
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Deferred purchased power contract termination costs |                            |                                               | 295.0 |             |         |              | 297.8 |        
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Other                                               |                            |                                               | 87.3  |             |         |              | 94.0  |        
|                                  
|                                  
|                                  
|                                  
|                                   | Investments in nuclear plant decommissioning fund                                          |                                                     |                            | 370.1                                         |       |             |         | 377.2        |      
|                                  
|                                  
|                                  
|                                  
|                                   | Goodwill                                                                                   |                                                     |                            | 170.3                                         |       |             |         | 171.1        |      
|                                  
|                                  
|                                  
|                                  
|                                   | Joint ventures and partnerships                                                            |                                                     |                            | 58.4                                          |       |             |         | 66.2         |      
|                                  
|                                  
|                                  
|                                  
|                                   | Other                                                                                      |                                                     |                            | 224.7                                         |       |             |         | 204.9        |      
|                                   |                                                                                            |                                                     |                            |                                               |       |             |         |             
|                                   |                                                                                            |                                                     | 1,205.8                    |                                               |       |             | 1,211.2 |             
|                                   |                                                                                            |                                                     |                            |                                               |       |             |         |             
|                                   |                                                                                            | $                                                   | 6,516.5                    |                                               |       | $           | 6,528.2 |             
|                                   |                                                                                            |                                                     |                            |                                               |       |             |         |             

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

3



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FLORIDA PROGRESS CORPORATION
Consolidated Balance Sheets
(Dollars in millions)

|                                        |                                                                                                                                                                                                       |   |             |         |              |   |         |         |  
|--------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------- | ------- | ------------ | - | ------- | ------- | -
|                                        |                                                                                                                                                                                                       |   | March 31,   |         | December 31,
|                                        |                                                                                                                                                                                                       |   | 2000        |         | 1999        
|                                        |                                                                                                                                                                                                       |   |             |         |             
|                                        |                                                                                                                                                                                                       |   | (Unaudited)
|CAPITAL AND LIABILITIES                
|                                       
|                                       
|                                       
|                                       
|COMMON STOCK EQUITY:                   
|                                       
|                                       
|                                       
|                                       
|                                        | Common stock                                                                                                                                                                                          |   | $           | 1,274.0 |              |   | $       | 1,267.3 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Retained earnings                                                                                                                                                                                     |   |             | 763.6   |              |   |         | 741.8   |  
|                                       
|                                       
|                                       
|                                       
|                                        | Accumulated other comprehensive income                                                                                                                                                                |   |             | (.6     | )            |   |         | (.4     | )
|                                        |                                                                                                                                                                                                       |   |             |         |              |   |         |        
|                                        |                                                                                                                                                                                                       |   | 2,037.0     |         |              |   | 2,008.7 |        
|                                       
|                                       
|                                       
|                                       
|PREFERRED SECURITIES:                  
|                                       
|                                       
|                                       
|                                       
|                                        | Cumulative preferred stock of Florida Power without sinking funds                                                                                                                                     |   |             | 33.5    |              |   |         | 33.5    |  
|                                       
|                                       
|                                       
|                                       
|                                        | Company-obligated mandatorily redeemable quarterly income preferred
securities (QUIPS) of a subsidiary trust holding solely Florida Progress
guaranteed junior subordinated deferrable interest notes |   |             | 300.0   |              |   |         | 300.0   |  
|                                       
|                                       
|                                       
|                                       
|LONG-TERM DEBT                          |                                                                                                                                                                                                       |   | 2,170.7     |         |              |   | 2,154.1 |        
|                                        |                                                                                                                                                                                                       |   |             |         |              |   |         |        
|TOTAL CAPITAL                           |                                                                                                                                                                                                       |   | 4,541.2     |         |              |   | 4,496.3 |        
|                                        |                                                                                                                                                                                                       |   |             |         |              |   |         |        
|CURRENT LIABILITIES:                   
|                                       
|                                       
|                                       
|                                       
|                                        | Accounts payable                                                                                                                                                                                      |   |             | 252.2   |              |   |         | 309.0   |  
|                                       
|                                       
|                                       
|                                       
|                                        | Customers deposits                                                                                                                                                                                   |   |             | 107.1   |              |   |         | 105.6   |  
|                                       
|                                       
|                                       
|                                       
|                                        | Taxes payable                                                                                                                                                                                         |   |             | 32.3    |              |   |         | 10.3    |  
|                                       
|                                       
|                                       
|                                       
|                                        | Accrued interest                                                                                                                                                                                      |   |             | 60.1    |              |   |         | 77.4    |  
|                                       
|                                       
|                                       
|                                       
|                                        | Overrecovered utility fuel costs                                                                                                                                                                      |   |             | 21.0    |              |   |         | 31.6    |  
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                                                                                                                                                                                 |   |             | 67.1    |              |   |         | 112.4   |  
|                                        |                                                                                                                                                                                                       |   |             |         |              |   |         |        
|                                        |                                                                                                                                                                                                       |   | 539.8       |         |              |   | 646.3   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Notes payable                                                                                                                                                                                         |   |             | 218.5   |              |   |         | 153.1   |  
|                                       
|                                       
|                                       
|                                       
|                                        | Current portion of long-term debt                                                                                                                                                                     |   |             | 163.0   |              |   |         | 163.2   |  
|                                        |                                                                                                                                                                                                       |   |             |         |              |   |         |        
|                                        |                                                                                                                                                                                                       |   | 921.3       |         |              |   | 962.6   |        
|                                        |                                                                                                                                                                                                       |   |             |         |              |   |         |        
|DEFERRED CREDITS AND OTHER LIABILITIES:
|                                       
|                                       
|                                       
|                                       
|                                        | Deferred income taxes                                                                                                                                                                                 |   |             | 558.9   |              |   |         | 565.3   |  
|                                       
|                                       
|                                       
|                                       
|                                        | Unamortized investment tax credits                                                                                                                                                                    |   |             | 68.1    |              |   |         | 70.0    |  
|                                       
|                                       
|                                       
|                                       
|                                        | Other postretirement benefit costs                                                                                                                                                                    |   |             | 124.4   |              |   |         | 123.1   |  
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                                                                                                                                                                                 |   |             | 302.6   |              |   |         | 310.9   |  
|                                        |                                                                                                                                                                                                       |   |             |         |              |   |         |        
|                                        |                                                                                                                                                                                                       |   | 1,054.0     |         |              |   | 1,069.3 |        
|                                        |                                                                                                                                                                                                       |   |             |         |              |   |         |        
|                                        |                                                                                                                                                                                                       | $ | 6,516.5     |         |              | $ | 6,528.2 |        
|                                        |                                                                                                                                                                                                       |   |             |         |              |   |         |        

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

4



---



FLORIDA PROGRESS CORPORATION
Consolidated Statements of Cash Flows
(Dollars in millions)

|                                                  |                                                                                      |                                                       |                                                 |       |                    |       |        |        |       |       |  
|------------------------------------------------- | ------------------------------------------------------------------------------------ | ----------------------------------------------------- | ----------------------------------------------- | ----- | ------------------ | ----- | ------ | ------ | ----- | ----- | -
|                                                  |                                                                                      |                                                       |                                                 |       | Three Months Ended
|                                                  |                                                                                      |                                                       |                                                 |       | March 31,         
|                                                  |                                                                                      |                                                       |                                                 |       |                   
|                                                  |                                                                                      |                                                       |                                                 |       | 2000               |       | 1999  
|                                                  |                                                                                      |                                                       |                                                 |       |                    |       |       
|                                                  |                                                                                      |                                                       |                                                 |       | (Unaudited)       
|OPERATING ACTIVITIES:                            
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Net income                                                                           |                                                       | $                                               | 76.5  |                    |       | $      | 67.6   |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Adjustments for noncash items:                                                      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      | Depreciation and amortization                         |                                                 |       | 110.1              |       |        |        | 100.5 |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      | Deferred income taxes and investment tax credits, net |                                                 |       | 6.3                |       |        |        | (6.4  | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Changes in working capital, net of effects from sale or acquisition of
businesses:  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      |                                                       | Accounts receivable                             |       |                    | 11.6  |        |        |       | 6.9   |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      |                                                       | Inventories                                     |       |                    | (39.9 | )      |        |       | (32.8 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      |                                                       | Overrecovered/underrecovered utility fuel costs |       |                    | (10.6 | )      |        |       | 13.3  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      |                                                       | Accounts payable                                |       |                    | (56.8 | )      |        |       | (94.7 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      |                                                       | Taxes payable                                   |       |                    | 22.1  |        |        |       | 51.5  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      |                                                       | Prepayments and other                           |       |                    | (77.5 | )      |        |       | (40.4 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other operating activities                                                           |                                                       |                                                 | .5    |                    |       |        | 9.2    |      
|                                                  |                                                                                      |                                                       |                                                 |       |                    |       |        |       
|                                                  |                                                                                      |                                                       | 42.3                                            |       |                    |       | 74.7   |       
|                                                  |                                                                                      |                                                       |                                                 |       |                    |       |        |       
|INVESTING ACTIVITIES:                            
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Property additions (including allowance for
borrowed funds used during construction) |                                                       |                                                 | (71.4 | )                  |       |        | (100.7 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Acquisition of businesses                                                            |                                                       |                                                 |      |                    |       |        | (10.1  | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other investing activities                                                           |                                                       |                                                 | (3.8  | )                  |       |        | (1.7   | )    
|                                                  |                                                                                      |                                                       |                                                 |       |                    |       |        |       
|                                                  |                                                                                      |                                                       | (75.2                                           | )     |                    |       | (112.5 | )     
|                                                  |                                                                                      |                                                       |                                                 |       |                    |       |        |       
|FINANCING ACTIVITIES:                            
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Issuance of long-term debt                                                           |                                                       |                                                 |      |                    |       |        | 50.0   |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Repayment of long-term debt                                                          |                                                       |                                                 | (.2   | )                  |       |        | (51.9  | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Increase in commercial paper with long-term support                                  |                                                       |                                                 | 16.4  |                    |       |        |       |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Sale of common stock                                                                 |                                                       |                                                 |      |                    |       |        | 18.1   |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Dividends paid on common stock                                                       |                                                       |                                                 | (54.7 | )                  |       |        | (53.3  | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Increase in short-term debt                                                          |                                                       |                                                 | 65.4  |                    |       |        | 74.6   |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other financing activities                                                           |                                                       |                                                 | (.7   | )                  |       |        | (.5    | )    
|                                                  |                                                                                      |                                                       |                                                 |       |                    |       |        |       
|                                                  |                                                                                      |                                                       | 26.2                                            |       |                    |       | 37.0   |       
|                                                  |                                                                                      |                                                       |                                                 |       |                    |       |        |       
|NET DECREASE IN CASH AND EQUIVALENTS              |                                                                                      |                                                       | (6.7                                            | )     |                    |       | (.8    | )     
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Beginning cash and equivalents                                                       |                                                       |                                                 | 9.6   |                    |       |        | 2.5    |      
|                                                  |                                                                                      |                                                       |                                                 |       |                    |       |        |       
|ENDING CASH AND EQUIVALENTS                       |                                                                                      | $                                                     | 2.9                                             |       |                    | $     | 1.7    |       
|                                                  |                                                                                      |                                                       |                                                 |       |                    |       |        |       
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Cash paid during the period for:                                                    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      | Interest (net of amount capitalized)                  |                                                 | $     | 61.4               |       |        | $      | 57.4  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      | Income taxes (net of refunds)                         |                                                 | $     | 17.4               |       |        | $      | 7.3   |      

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

5



---



FLORIDA PROGRESS CORPORATION
Consolidated Statements of Common Equity and Comprehensive Income (Unaudited)
For the periods ended March 31, 2000 and 1999
(Dollars in millions)

|                                        |                      |   |         |      |       |   |          |   |          |   |               |      |  |   |             |     |  
|--------------------------------------- | -------------------- | - | ------- | ---- | ----- | - | -------- | - | -------- | - | ------------- | ---- |  | - | ----------- | --- | -
|                                        |                      |   |         |      |       |   |          |   |          |   |               |      |  |   | Accumulated
|                                        |                      |   |         |      |       |   |          |   |          |   |               |      |  |   | Other      
|                                        |                      |   |         |      |       |   | Common   |   | Retained |   | Comprehensive
|                                        |                      |   | Total   |      | Stock |   | Earnings |   | Income  
|                                        |                      |   |         |      |       |   |          |   |         
|Balance, December 31, 1998              |                      | $ | 1,862.0 |      |       | $ | 1,221.1  |   |          | $ | 640.9         |      |  | $ |            |    
|                                       
|                                       
|                                       
|                                       
|Net income                              |                      |   | 67.6    |      |       |   |          |   |          |   | 67.6          |     
|                                       
|                                       
|                                       
|                                       
|Common stock issued                     |                      |   | 21.0    |      |       |   | 21.0     |  
|                                       
|                                       
|                                       
|                                       
|Cash dividends on common stock          |                      |   | (53.3   | )    |       |   |          |   |          |   | (53.3         | )   
|                                        |                      |   |         |      |       |   |          |   |          |   |               |      |  |   |             |    
|Balance, March 31, 1999                 |                      |   | 1,897.3 |      |       |   | 1,242.1  |   |          |   | 655.2         |      |  |   |            |    
|                                        |                      |   |         |      |       |   |          |   |          |   |               |      |  |   |             |    
|                                        |                      |   |         |      |       |   |          |   |          |   |               |      |  |   |             |    
|Balance, December 31, 1999              |                      |   | 2,008.7 |      |       |   | 1,267.3  |   |          |   | 741.8         |      |  |   | (.4         | )  
|                                       
|                                       
|                                       
|                                       
|Net income                              |                      |   | 76.5    |      |       |   |          |   |          |   | 76.5          |     
|                                       
|                                       
|                                       
|                                       
|Foreign currency translation adjustment |                      |   | (.2     | )    |       |   |          |   |          |   |               |      |  |   | (.2         | )  
|                                        |                      |   |         |      |       |   |          |   |          |   |               |      |  |   |             |    
|                                        | Comprehensive income |   |         | 76.3 |       |   |          |  |          |   |               | 76.5 |  |   |             | (.2 | )
|                                       
|                                       
|                                       
|                                       
|Common stock issued                     |                      |   | 6.7     |      |       |   | 6.7      |  
|                                       
|                                       
|                                       
|                                       
|Cash dividends on common stock          |                      |   | (54.7   | )    |       |   |          |   |          |   | (54.7         | )   
|                                        |                      |   |         |      |       |   |          |   |          |   |               |      |  |   |             |    
|Balance, March 31, 2000                 |                      | $ | 2,037.0 |      |       | $ | 1,274.0  |   |          | $ | 763.6         |      |  | $ | (.6         | )  
|                                        |                      |   |         |      |       |   |          |   |          |   |               |      |  |   |             |    

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

6



---



FLORIDA POWER CORPORATION
Statements of Income
(Dollars in millions)

|                                              |                                                       |                               |       |                    |       |      |       |       |       |  
|--------------------------------------------- | ----------------------------------------------------- | ----------------------------- | ----- | ------------------ | ----- | ---- | ----- | ----- | ----- | -
|                                              |                                                       |                               |       | Three Months Ended
|                                              |                                                       |                               |       | March 31,         
|                                              |                                                       |                               |       | 2000               |       | 1999
|                                              |                                                       |                               |       |                    |       |     
|                                              |                                                       |                               |       | (Unaudited)       
|OPERATING REVENUES:                          
|                                             
|                                             
|                                             
|                                             
|                                              | Residential                                           |                               | $     | 319.2              |       |      | $     | 298.7 |      
|                                             
|                                             
|                                             
|                                             
|                                              | Commercial                                            |                               |       | 135.9              |       |      |       | 131.4 |      
|                                             
|                                             
|                                             
|                                             
|                                              | Industrial                                            |                               |       | 51.0               |       |      |       | 49.3  |      
|                                             
|                                             
|                                             
|                                             
|                                              | Sales for resale                                      |                               |       | 59.9               |       |      |       | 48.8  |      
|                                             
|                                             
|                                             
|                                             
|                                              | Other                                                 |                               |       | 55.9               |       |      |       | 42.5  |      
|                                              |                                                       |                               |       |                    |       |      |       |      
|                                              |                                                       |                               | 621.9 |                    |       |      | 570.7 |      
|                                              |                                                       |                               |       |                    |       |      |       |      
|OPERATING EXPENSES:                          
|                                             
|                                             
|                                             
|                                             
|                                              | Operation:                                           
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Fuel                          |       |                    | 134.0 |      |       |       | 113.7 |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Purchased power               |       |                    | 103.1 |      |       |       | 90.3  |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Energy conservation costs     |       |                    | 14.1  |      |       |       | 17.1  |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Operation and maintenance     |       |                    | 100.0 |      |       |       | 97.1  |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Depreciation and amortization |       |                    | 85.7  |      |       |       | 80.8  |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Taxes other than income taxes |       |                    | 53.1  |      |       |       | 51.9  |  
|                                              |                                                       |                               |       |                    |       |      |       |      
|                                              |                                                       |                               | 490.0 |                    |       |      | 450.9 |      
|                                              |                                                       |                               |       |                    |       |      |       |      
|                                              | Income taxes:                                        
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Currently payable             |       |                    | 38.2  |      |       |       | 40.7  |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Deferred, net                 |       |                    | .3    |      |       |       | (6.0  | )
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Investment tax credits, net   |       |                    | (1.9  | )    |       |       | (2.0  | )
|                                              |                                                       |                               |       |                    |       |      |       |      
|                                              |                                                       |                               | 36.6  |                    |       |      | 32.7  |      
|                                              |                                                       |                               |       |                    |       |      |       |      
|                                              |                                                       |                               | 526.6 |                    |       |      | 483.6 |      
|                                              |                                                       |                               |       |                    |       |      |       |      
|INCOME FROM OPERATIONS                        |                                                       |                               | 95.3  |                    |       |      | 87.1  |      
|                                              |                                                       |                               |       |                    |       |      |       |      
|OTHER INCOME AND DEDUCTIONS:                 
|                                             
|                                             
|                                             
|                                             
|                                              | Allowance for equity funds used during construction   |                               |       | .5                 |       |      |       | 2.3   |      
|                                             
|                                             
|                                             
|                                             
|                                              | Other income (expense), net                           |                               |       | (.2                | )     |      |       | 2.0   |      
|                                              |                                                       |                               |       |                    |       |      |       |      
|                                              |                                                       |                               | .3    |                    |       |      | 4.3   |      
|                                              |                                                       |                               |       |                    |       |      |       |      
|INTEREST CHARGES                             
|                                             
|                                             
|                                             
|                                             
|                                              | Interest on long-term debt                            |                               |       | 25.9               |       |      |       | 26.9  |      
|                                             
|                                             
|                                             
|                                             
|                                              | Other interest expense                                |                               |       | 6.3                |       |      |       | 4.5   |      
|                                              |                                                       |                               |       |                    |       |      |       |      
|                                              |                                                       |                               | 32.2  |                    |       |      | 31.4  |      
|                                             
|                                             
|                                             
|                                             
|                                              | Allowance for borrowed funds used during construction |                               |       | (.4                | )     |      |       | (2.8  | )    
|                                              |                                                       |                               |       |                    |       |      |       |      
|                                              |                                                       |                               | 31.8  |                    |       |      | 28.6  |      
|                                              |                                                       |                               |       |                    |       |      |       |      
|NET INCOME                                    |                                                       |                               | 63.8  |                    |       |      | 62.8  |      
|                                             
|                                             
|                                             
|                                             
|DIVIDENDS ON PREFERRED STOCK                  |                                                       |                               | .4    |                    |       |      | .4    |      
|                                              |                                                       |                               |       |                    |       |      |       |      
|NET INCOME AFTER DIVIDENDS ON PREFERRED STOCK |                                                       | $                             | 63.4  |                    |       | $    | 62.4  |      
|                                              |                                                       |                               |       |                    |       |      |       |      

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

7



---



FLORIDA POWER CORPORATION
Balance Sheets
(Dollars in millions)

|                                   |                                                                                            |                                                     |                                               |         |             |       |              |         |       |       | 
|---------------------------------- | ------------------------------------------------------------------------------------------ | --------------------------------------------------- | --------------------------------------------- | ------- | ----------- | ----- | ------------ | ------- | ----- | ----- | 
|                                   |                                                                                            |                                                     |                                               |         | March 31,   |       | December 31,
|                                   |                                                                                            |                                                     |                                               |         | 2000        |       | 1999        
|                                   |                                                                                            |                                                     |                                               |         |             |       |             
|                                   |                                                                                            |                                                     |                                               |         | (Unaudited)
|ASSETS                            
|                                  
|                                  
|                                  
|                                  
|PROPERTY, PLANT AND EQUIPMENT:    
|                                  
|                                  
|                                  
|                                  
|                                   | Electric utility plant in service and held for future use                                  |                                                     | $                                             | 6,795.9 |             |       | $            | 6,784.8 |      
|                                  
|                                  
|                                  
|                                  
|                                   | Less  Accumulated depreciation                                                            |                                                     |                                               | 2,981.1 |             |       |              | 2,923.8 |      
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            |                                                     | Accumulated decommissioning for nuclear plant |         |             | 292.5 |              |         |       | 285.0 | 
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            |                                                     | Accumulated dismantlement for fossil plants   |         |             | 132.9 |              |         |       | 132.5 | 
|                                   |                                                                                            |                                                     |                                               |         |             |       |              |        
|                                   |                                                                                            |                                                     | 3,389.4                                       |         |             |       | 3,443.5      |        
|                                  
|                                  
|                                  
|                                  
|                                   | Construction work in progress                                                              |                                                     |                                               | 165.8   |             |       |              | 139.7   |      
|                                  
|                                  
|                                  
|                                  
|                                   | Nuclear fuel, net of amortization of $406.7
in 2000 and $401.0 in 1999                     |                                                     |                                               | 56.5    |             |       |              | 68.7    |      
|                                   |                                                                                            |                                                     |                                               |         |             |       |              |        
|                                   |                                                                                            |                                                     | 3,611.7                                       |         |             |       | 3,651.9      |        
|                                  
|                                  
|                                  
|                                  
|                                   | Other property, net                                                                        |                                                     |                                               | 9.8     |             |       |              | 10.0    |      
|                                   |                                                                                            |                                                     |                                               |         |             |       |              |        
|                                   |                                                                                            |                                                     | 3,621.5                                       |         |             |       | 3,661.9      |        
|                                   |                                                                                            |                                                     |                                               |         |             |       |              |        
|CURRENT ASSETS:                   
|                                  
|                                  
|                                  
|                                  
|                                   | Accounts receivable, less allowance for doubtful accounts of $4.0
in 2000 and $4.0 in 1999 |                                                     |                                               | 190.4   |             |       |              | 210.8   |      
|                                  
|                                  
|                                  
|                                  
|                                   | Inventories, primarily at average cost:                                                   
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Fuel                                                |                                               |         | 79.8        |       |              |         | 76.4  |      
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Materials and supplies                              |                                               |         | 92.6        |       |              |         | 90.8  |      
|                                  
|                                  
|                                  
|                                  
|                                   | Deferred income taxes                                                                      |                                                     |                                               | 28.9    |             |       |              | 41.4    |      
|                                  
|                                  
|                                  
|                                  
|                                   | Prepayments and other                                                                      |                                                     |                                               | 99.0    |             |       |              | 101.3   |      
|                                   |                                                                                            |                                                     |                                               |         |             |       |              |        
|                                   |                                                                                            |                                                     | 490.7                                         |         |             |       | 520.7        |        
|                                   |                                                                                            |                                                     |                                               |         |             |       |              |        
|DEFERRED CHARGES AND OTHER ASSETS:
|                                  
|                                  
|                                  
|                                  
|                                   | Costs deferred pursuant to regulation:                                                    
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Deferred purchased power contract termination costs |                                               |         | 295.0       |       |              |         | 297.8 |      
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Other                                               |                                               |         | 87.3        |       |              |         | 94.0  |      
|                                  
|                                  
|                                  
|                                  
|                                   | Investments in nuclear plant decommissioning fund                                          |                                                     |                                               | 370.1   |             |       |              | 377.2   |      
|                                  
|                                  
|                                  
|                                  
|                                   | Other                                                                                      |                                                     |                                               | 59.0    |             |       |              | 50.9    |      
|                                   |                                                                                            |                                                     |                                               |         |             |       |              |        
|                                   |                                                                                            |                                                     | 811.4                                         |         |             |       | 819.9        |        
|                                   |                                                                                            |                                                     |                                               |         |             |       |              |        
|                                   |                                                                                            | $                                                   | 4,923.6                                       |         |             | $     | 5,002.5      |        
|                                   |                                                                                            |                                                     |                                               |         |             |       |              |        

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

8



---



FLORIDA POWER CORPORATION
Balance Sheets
(Dollars in millions)

|                                        |                                          |   |             |         |              |   |         |         | 
|--------------------------------------- | ---------------------------------------- | - | ----------- | ------- | ------------ | - | ------- | ------- | 
|                                        |                                          |   | March 31,   |         | December 31,
|                                        |                                          |   | 2000        |         | 1999        
|                                        |                                          |   |             |         |             
|                                        |                                          |   | (Unaudited)
|CAPITALIZATION AND LIABILITIES         
|                                       
|                                       
|                                       
|                                       
|CAPITALIZATION:                        
|                                       
|                                       
|                                       
|                                       
|                                        | Common stock                             |   | $           | 1,004.4 |              |   | $       | 1,004.4 | 
|                                       
|                                       
|                                       
|                                       
|                                        | Retained earnings                        |   |             | 892.8   |              |   |         | 880.6   | 
|                                        |                                          |   |             |         |              |   |         |        
|                                        |                                          |   | 1,897.2     |         |              |   | 1,885.0 |        
|                                       
|                                       
|                                       
|                                       
|CUMULATIVE PREFERRED STOCK:            
|                                       
|                                       
|                                       
|                                       
|                                        | Without sinking funds                    |   |             | 33.5    |              |   |         | 33.5    | 
|                                       
|                                       
|                                       
|                                       
|LONG-TERM DEBT                          |                                          |   | 1,478.9     |         |              |   | 1,478.8 |        
|                                        |                                          |   |             |         |              |   |         |        
|TOTAL CAPITAL                           |                                          |   | 3,409.6     |         |              |   | 3,397.3 |        
|                                        |                                          |   |             |         |              |   |         |        
|CURRENT LIABILITIES:                   
|                                       
|                                       
|                                       
|                                       
|                                        | Accounts payable                         |   |             | 128.6   |              |   |         | 152.9   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Accounts payable to associated companies |   |             | 25.1    |              |   |         | 23.1    | 
|                                       
|                                       
|                                       
|                                       
|                                        | Customers deposits                      |   |             | 107.1   |              |   |         | 105.6   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Income taxes payable                     |   |             | 24.8    |              |   |         |        | 
|                                       
|                                       
|                                       
|                                       
|                                        | Accrued other taxes                      |   |             | 27.4    |              |   |         | 5.8     | 
|                                       
|                                       
|                                       
|                                       
|                                        | Accrued interest                         |   |             | 49.5    |              |   |         | 59.6    | 
|                                       
|                                       
|                                       
|                                       
|                                        | Overrecovered utility fuel costs         |   |             | 21.0    |              |   |         | 31.6    | 
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                    |   |             | 38.7    |              |   |         | 79.3    | 
|                                        |                                          |   |             |         |              |   |         |        
|                                        |                                          |   | 422.2       |         |              |   | 457.9   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Notes payable                            |   |             | 116.9   |              |   |         | 153.1   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Current portion of long-term debt        |   |             | 76.8    |              |   |         | 76.8    | 
|                                        |                                          |   |             |         |              |   |         |        
|                                        |                                          |   | 615.9       |         |              |   | 687.8   |        
|                                        |                                          |   |             |         |              |   |         |        
|DEFERRED CREDITS AND OTHER LIABILITIES:
|                                       
|                                       
|                                       
|                                       
|                                        | Deferred income taxes                    |   |             | 496.2   |              |   |         | 509.9   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Unamortized investment tax credits       |   |             | 67.5    |              |   |         | 69.5    | 
|                                       
|                                       
|                                       
|                                       
|                                        | Other postretirement benefit costs       |   |             | 120.6   |              |   |         | 119.4   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                    |   |             | 213.8   |              |   |         | 218.6   | 
|                                        |                                          |   |             |         |              |   |         |        
|                                        |                                          |   | 898.1       |         |              |   | 917.4   |        
|                                        |                                          |   |             |         |              |   |         |        
|                                        |                                          | $ | 4,923.6     |         |              | $ | 5,002.5 |        
|                                        |                                          |   |             |         |              |   |         |        

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

9



---



FLORIDA POWER CORPORATION
Statements of Cash Flows
(Dollars in millions)

|                                                  |                                                       |                                                       |       |                    |       |      |       |       |       |  
|------------------------------------------------- | ----------------------------------------------------- | ----------------------------------------------------- | ----- | ------------------ | ----- | ---- | ----- | ----- | ----- | -
|                                                  |                                                       |                                                       |       | Three Months Ended
|                                                  |                                                       |                                                       |       | March 31,         
|                                                  |                                                       |                                                       |       |                   
|                                                  |                                                       |                                                       |       | 2000               |       | 1999
|                                                  |                                                       |                                                       |       |                    |       |     
|                                                  |                                                       |                                                       |       | (Unaudited)       
|OPERATING ACTIVITIES:                            
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Net income after dividends on preferred stock         |                                                       | $     | 63.4               |       |      | $     | 62.4  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Adjustments for noncash items:                       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Depreciation and amortization                         |       |                    | 94.3  |      |       |       | 86.6  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Deferred income taxes and investment tax credits, net |       |                    | (1.7  | )    |       |       | (8.3  | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Changes in working capital:                          
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Accounts receivable                                   |       |                    | 20.4  |      |       |       | 13.6  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Inventories                                           |       |                    | (5.2  | )    |       |       | (20.3 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Overrecovered/underrecovered utility fuel costs       |       |                    | (10.6 | )    |       |       | 13.3  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Accounts payable                                      |       |                    | (22.3 | )    |       |       | (51.3 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Taxes payable                                         |       |                    | 56.6  |      |       |       | 60.2  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Prepayments and other                                 |       |                    | (57.1 | )    |       |       | (24.7 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other operating activities                            |                                                       |       | .2                 |       |      |       | 12.2  |      
|                                                  |                                                       |                                                       |       |                    |       |      |       |      
|                                                  |                                                       |                                                       | 138.0 |                    |       |      | 143.7 |      
|                                                  |                                                       |                                                       |       |                    |       |      |       |      
|INVESTING ACTIVITIES:                            
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Construction expenditures                             |                                                       |       | (46.4              | )     |      |       | (57.6 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Allowance for borrowed funds used during construction |                                                       |       | (.4                | )     |      |       | (2.8  | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other investing activities                            |                                                       |       | (3.8               | )     |      |       | (3.8  | )    
|                                                  |                                                       |                                                       |       |                    |       |      |       |      
|                                                  |                                                       |                                                       | (50.6 | )                  |       |      | (64.2 | )    
|                                                  |                                                       |                                                       |       |                    |       |      |       |      
|FINANCING ACTIVITIES:                            
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Dividends paid on common stock                        |                                                       |       | (51.2              | )     |      |       | (49.9 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Decrease in short-term debt                           |                                                       |       | (36.2              | )     |      |       | (29.6 | )    
|                                                  |                                                       |                                                       |       |                    |       |      |       |      
|                                                  |                                                       |                                                       | (87.4 | )                  |       |      | (79.5 | )    
|                                                  |                                                       |                                                       |       |                    |       |      |       |      
|NET INCREASE IN CASH AND EQUIVALENTS              |                                                       |                                                       |      |                    |       |      |      |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Beginning cash and equivalents                        |                                                       |       |                   |       |      |       |      |      
|                                                  |                                                       |                                                       |       |                    |       |      |       |      
|ENDING CASH AND EQUIVALENTS                       |                                                       | $                                                     |      |                    |       | $    |      |      
|                                                  |                                                       |                                                       |       |                    |       |      |       |      
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Cash paid during the period for:                     
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Interest (net of amount capitalized)                  |       | $                  | 41.2  |      |       | $     | 35.9  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Income taxes (net of refunds)                         |       | $                  | 3.4   |      |       | $     | 5.9   |  

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

10



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FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION

NOTES TO FINANCIAL STATEMENTS



|1) |  | Florida Progress Corporations (Florida Progress or the Company)
principal business segment is its Utility segment. Florida Power
Corporation (Florida Power), the largest subsidiary of Florida
Progress, engages in the generation, purchase, transmission,
distribution and sale of electricity. Florida Progress other
reportable business segments are Electric Fuels Corporations
(Electric Fuels) Energy and Related Services, Rail Services and
Inland Marine Transportation units. Financial data for business
segments for the periods covered in this Form 10-Q are presented in the
table below:
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                   |                           |         |   |          |  |          |            |                |      |       |        |              |        |              |   |       |  |  |   |       |   |  |   |        |   |  |   |         | 
|---------------------------------- | ------------------------- | ------- | - | -------- |  | -------- | ---------- | -------------- | ---- | ----- | ------ | ------------ | ------ | ------------ | - | ----- |  |  | - | ----- | - |  | - | ------ | - |  | - | ------- | 
|                                   |                           |         |   |          |  |          | Energy and |                |      |       |        |              | Inland
|                                   |                           |         |   |          |  |          | Related    |                | Rail |       | Marine
|(In millions)                      |                           | Utility |   | Services |  | Services |            | Transportation |      | Other |        | Eliminations |        | Consolidated
|                                  
|Three months ended
March 31, 2000:
|                                  
|                                  
|                                  
|                                  
|                                   | Revenues                  |         | $ | 621.9    |  |          | $          | 48.7           |      |       | $      | 240.6        |        |              | $ | 37.9  |  |  | $ | (.2   | ) |  | $ | 1.2    |   |  | $ | 950.1   | 
|                                  
|                                  
|                                  
|                                  
|                                   | Intersegment revenues     |         |   |         |  |          |            | 64.6           |      |       |        |             |        |              |   | 4.3   |  |  |   | (1.9  | ) |  |   | (67.0  | ) |  |   |        | 
|                                  
|                                  
|                                  
|                                  
|                                   | Segment net income (loss) |         |   | 63.4     |  |          |            | 20.2           |      |       |        | 1.0          |        |              |   | 1.3   |  |  |   | (9.2  | ) |  |   | (.2    | ) |  |   | 76.5    | 
|                                  
|                                  
|                                  
|                                  
|                                   | Total assets              |         |   | 4,923.6  |  |          |            | 447.5          |      |       |        | 837.1        |        |              |   | 109.7 |  |  |   | 567.5 |   |  |   | (368.9 | ) |  |   | 6,516.5 | 
|                                  
|                                  
|                                  
|                                  
|Three months ended
March 31, 1999:
|                                  
|                                  
|                                  
|                                  
|                                   | Revenues                  |         | $ | 570.7    |  |          | $          | 42.8           |      |       | $      | 174.0        |        |              | $ | 30.2  |  |  | $ | 1.5   |   |  | $ | 1.2    |   |  | $ | 820.4   | 
|                                  
|                                  
|                                  
|                                  
|                                   | Intersegment revenues     |         |   |         |  |          |            | 65.8           |      |       |        | .4           |        |              |   | 4.0   |  |  |   | (4.6  | ) |  |   | (65.6  | ) |  |   |        | 
|                                  
|                                  
|                                  
|                                  
|                                   | Segment net income (loss) |         |   | 62.4     |  |          |            | 8.1            |      |       |        | .5           |        |              |   | .7    |  |  |   | (4.1  | ) |  |   |       |   |  |   | 67.6    | 
|                                  
|                                  
|                                  
|                                  
|                                   | Total assets              |         |   | 4,889.7  |  |          |            | 332.3          |      |       |        | 712.9        |        |              |   | 109.2 |  |  |   | 175.3 |   |  |   | (43.9  | ) |  |   | 6,175.5 | 



|2) |  | FLORIDA PROGRESS OBLIGATED MANDATORILY REDEEMABLE CUMULATIVE QUARTERLY
INCOME PREFERRED SECURITIES (QUIPS) OF A SUBSIDIARY TRUST HOLDING
SOLELY FLORIDA PROGRESS GUARANTEED SUBORDINATED DEFERRABLE INTEREST
NOTES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | In April 1999, FPC Capital I (the Trust), an indirect wholly owned
subsidiary of Florida Progress, issued 12 million shares of $25 par
cumulative Company-obligated mandatorily redeemable preferred
securities (Preferred Securities) due 2039, with an aggregate
liquidation value of $300 million and a quarterly distribution rate of
7.10%. Currently, all 12 million shares of the Preferred Securities
that were issued are outstanding. Concurrent with the issuance of the
Preferred Securities, the Trust issued to Florida Progress Funding
Corporation (Funding Corp.) all of the common securities of the Trust
(371,135 shares), for $9.3 million. Funding Corp. is a direct wholly
owned subsidiary of the Company.                                                                 
|  
|   |  | The existence of the Trust is for the sole purpose of issuing the
Preferred Securities and the common securities and using the proceeds
thereof to purchase from Funding Corp. its 7.10% Junior Subordinated
Deferrable Interest Notes (subordinated notes) due 2039, for a
principal amount of $309.3 million. The subordinated notes and the
Notes Guarantee (as discussed below) are the sole assets of the Trust.
Funding Corp.s proceeds from the sale of the subordinated notes were
advanced to Progress Capital Holdings, Inc. (PCH), a subsidiary of
Florida Progress that provides financing for Florida Progress
diversified operations, and used for general corporate purposes
including the repayment of a portion of certain outstanding short-term
bank loans and commercial paper.
|  
|   |  | The Company has fully and unconditionally guaranteed the obligations of
Funding Corp. under the subordinated notes (the Notes Guarantee). In
addition, the Company has guaranteed the payment of all distributions
required to be made by the Trust, but only to the extent that the Trust
has funds available for such distributions (Preferred Securities
Guarantee). The Preferred Securities Guarantee, considered together with the Notes Guarantee, constitutes a full and unconditional
guarantee by the Company of the Trusts obligations under the Preferred
Securities.                                                                                                                                                                                                                   

11



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12



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| |  | Investigation, Baseline Risk Assessment and Feasibility Study
(RI/FS). Florida Power is liable for approximately 40% of the costs
for the RI/FS as agreed to in the Participation Agreement. In July
1999, the initial draft of the RI/FS was submitted to the EPA. In March 2000,
the EPA selected from the FS a preferred remedy for the cleanup
of the contaminated soils at the site. The EPA held a public meeting to discuss the
preferred remedy in April 2000, and is expected to publish the preferred remedy
as its final decision for cleanup in a Record of Decision in late May 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The PRP group is expected to negotiate a second participation agreement
that will define and allocate Remedial Design and Remedial Action costs
among the participants for Phase I of cleanup. Cleanup will be
addressed in phases for project management purposes. Florida Powers
future cost share allocation is expected to be identified by the second
quarter 2000. The discussions and resolution of liability for cleanup
costs could cause Florida Power to increase the estimate of its
liability for those costs. Although estimates of any additional costs
are not currently available, the outcome is not expected to have a
material effect on Florida Progress or Florida Powers financial
position, results of operations or liquidity.                                                                                                                                                                                                                                                                                                                
|
| |  | In December 1998, the EPA conducted an Expanded Site Inspection (ESI)
at a former Florida Power plant site near Inglis, Florida. Soil and
groundwater samples were obtained from the Florida Power property, as
well as sediment samples from the adjacent Withlacoochee River. A final
copy of the report, along with a Request for Information under the
Comprehensive Environmental Response Compensation and Liability Act
(CERCLA or Superfund) was received in December 1999. Upon review of
Florida Powers reply, the EPAs conclusions may change the current
hazard ranking and ultimately result in the Inglis site being placed on
the National Priorities List (NPL). If this property were placed on
the NPL, then the EPA might conduct remediation actions at the site and
seek repayment of those costs as well as investigative costs from any
PRPs. Past costs currently exceed $3.5 million with Florida Power
identified as the only major viable business associated with this site.                                                        
|
| |  | In addition to these designated sites, there are other sites where
Florida Progress may be responsible for additional environmental
cleanup. Florida Progress estimates that its share of liability for
cleaning up all designated sites ranges from $9.0 million to $13.0
million. It has accrued $9.0 million against these potential costs.
There can be no assurance that the Companys estimates will not change
in the future.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Age Discrimination Suit Florida Power and Florida Progress have been
named defendants in an age discrimination lawsuit. The number of
plaintiffs remains at 116, but four of those plaintiffs have had their
federal claims dismissed and 74 others have had their state age claims
dismissed. While no dollar amount was requested, each plaintiff seeks
back pay, reinstatement or front pay through their projected dates of
normal retirement, costs and attorneys fees. In October 1996, the
federal Court approved an agreement between the parties to
provisionally certify this case as a class action suit under the Age
Discrimination in Employment Act. Florida Power filed a motion to
decertify the class and in August 1999, the Court granted Florida
Powers motion. In October 1999, the judge certified the question of
whether the case should be tried as a class action to the Eleventh
Circuit Court of Appeals for immediate appellate review. In December
1999, the Court of Appeals agreed to review the judges order
decertifying the class.
|
| |  | In December 1998, during mediation in this age discrimination suit,
plaintiffs alleged damages of $100 million. Company management, while
not believing plaintiffs claim to have merit, offered $5 million in an
attempt to settle all claims. Plaintiffs rejected that offer. Florida
Power and the plaintiffs engaged in informal settlement discussions,
which terminated on December 22, 1998. As a result of the plaintiffs
claims, management has identified a probable range of $5 million to
$100 million with no amount within that range a better estimate of
probable loss than any other amount; accordingly, Florida Power has
accrued $5 million. In December 1999, Florida Power also recorded an
accrual of $4.8 million for legal fees associated with defending its
position in these proceedings. There can be no assurance that this
litigation will be settled, or if settled, that the settlement will not
exceed $5 million. Additionally, the ultimate outcome, if litigated,
cannot presently be determined.                                   
|
| |  | Advanced Separation Technologies (AST) In 1996, Florida Progress
sold its 80% interest in AST to Calgon Carbon Corporation (Calgon)
for net proceeds of $56 million in cash. In January 1998, Calgon                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

13



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| |  | filed a lawsuit against Florida Progress and the other selling
shareholder and amended it in April 1998, alleging misstatement of
ASTs 1996 revenues, assets and liabilities, seeking damages and
granting Calgon the right to rescind the sale. The lawsuit also accused
the sellers of failing to disclose flaws in ASTs manufacturing process
and a lack of quality control. Florida Progress believes that the
aggregate total of all legitimate warranty claims by customers of AST
for which it is probable that Florida Progress will be responsible for
under the Stock Purchase Agreement with Calgon is approximately $3.2
million, and accordingly, accrued $3.2 million in the third quarter of
1999 as an estimate of probable loss.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Qualifying Facilities Contracts Florida Powers purchased power
contracts with qualifying facilities employ separate pricing
methodologies for capacity payments and energy payments. Florida Power
has interpreted the pricing provision in these contracts to allow it to
pay an as-available energy price rather than a higher firm energy price
when the avoided unit upon which the applicable contract is based would
not have been operated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | The owners of four qualifying facilities filed suits against Florida
Power in state court over the contract payment terms, and one owner
also filed suit in federal court. Two of the state court suits have
been settled, and the federal case was dismissed, although the
plaintiff has appealed. Of the two remaining state court suits, the
trial regarding NCP Lake Power (Lake) concluded in December 1998. In
April 1999, the judge entered an order granting Lakes breach of
contract claim and ruled that Lake is entitled to receive firm energy
payments during on-peak hours, but for all other hours, Lake is
entitled to the as-available rate. The Court also ruled that for
purposes of calculating damages, the breach of contract occurred at the
inception of the contract. In August 1999, a Final Judgment was entered
for Lake for approximately $4.5 million and Lake filed a Notice of
Appeal. In September 1999, Florida Power filed a notice of cross
appeal. Also in this case, in April 1998, Florida Power filed a
petition with the Florida Public Service Commission (FPSC) for a
Declaratory Statement that the contract between the parties limits
energy payments thereunder to the avoided costs based upon an analysis
of a hypothetical unit having the characteristics specified in the
contract. In October 1998, the FPSC denied the petition, but Florida
Power appealed to the Florida Supreme Court.
|
| |  | In the other remaining suit regarding Dade County, in May 1999, the
parties reached an agreement in principle to settle their dispute in
its entirety, including all of the ongoing litigation, except the
Florida Supreme Court appeal of an FPSC ruling that is similar to the
appeal of the FPSC decision in the Lake case. The settlement agreement
was approved by the Dade County Commission in December 1999, but is
subject to approval by the FPSC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | Management does not expect that the results of these legal actions will
have a material impact on Florida Powers financial position, results
of operations or liquidity. Florida Power anticipates that all fuel and
capacity expenses, including any settlement amounts incurred as a
result of the matters discussed above, will be recovered from its
customers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Mid-Continent Life Insurance Company (Mid-Continent) As discussed
below, a series of events in 1997 significantly jeopardized the ability
of Mid-Continent to implement a plan to eliminate a projected reserve
deficiency, resulting in the impairment of Florida Progress investment
in Mid-Continent. Therefore, Florida Progress recorded a provision for
loss on investment of $86.9 million in 1997. Florida Progress also
recorded an accrual at December 31, 1997, for legal fees associated
with defending its position in current Mid-Continent legal proceedings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | In the spring of 1997, the Oklahoma State Insurance Commissioner
(Commissioner) received court approval to seize control as receiver
of the operations of Mid-Continent. The Commissioner had alleged that
Mid-Continents reserves were understated by more than $125 million,
thus causing Mid-Continent to be statutorily impaired. The Commissioner
further alleged that Mid-Continent had violated Oklahoma law relating
to deceptive trade practices in connection with the sale of its Extra
Life insurance policies and was not entitled to raise premiums, a key
element of Mid-Continents plan to address the projected reserve
deficiency. While sustaining the receivership, the court also ruled
that premiums could be raised.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

14



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| |  | Although both sides appealed the decision to the Oklahoma Supreme
Court, those appeals were withdrawn in early 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | In December 1997, the receiver filed a lawsuit against Florida
Progress, certain of its directors and officers, and certain former
Mid-Continent officers, making a number of allegations and seeking
access to Florida Progress assets to satisfy policyholder and creditor
claims. In April 1998, the court granted motions to dismiss the
individual defendants, leaving Florida Progress as the sole remaining
defendant in the lawsuit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | A new Commissioner was elected in November 1998 and has stated his
intention to work with Florida Progress and others to develop a plan to
rehabilitate Mid-Continent rather than pursue litigation against
Florida Progress. Based on data through December 31, 1998, Florida
Progress actuarial estimate of the additional assets necessary to fund
the reserve, after applying Mid-Continents statutory surplus is in the
range of $100 million. The amount put forth by the actuary hired by the
former Commissioner was in the range of $350 million. Florida Progress
believes that any estimate of the projected reserve deficiency would
affect only the assets of Mid-Continent, because Florida Progress has
legal defenses to any claims asserted against it. Florida Progress is
working with the new Commissioner to develop a viable plan to
rehabilitate Mid-Continent, which would include the sale of that
company or assumption of its policies. Proposals for a plan of
rehabilitation were received and opened in June 1999.                                                                                                                                                                                                                                                              
|
| |  | In October 1999, the new Commissioner signed a Letter of Intent,
subject to approval by the Oklahoma District Court, with Iowa-based
Life Investors Insurance Company of America, a wholly owned subsidiary
of AEGON USA, Inc., concerning the assumption of all policies of
Mid-Continent. In a letter of intent in connection with the proposed
plan of rehabilitation, Florida Progress agreed to assign all of
Mid-Continents stock to the receiver, and contribute $10 million to
help offset future premium rate increases or coverage reductions,
provided that, among other things, Florida Progress receives a full
release from liability, and the receivers action against Florida
Progress is dismissed, with prejudice. The $10 million was proposed to
be held in escrow by the Commissioner for a period of 10 years and
invested for the benefit of the policyholders. Any proposed premium
increases would have been offset by this fund until it was exhausted.
The Mid-Continent plan was originally scheduled to be considered by the
Oklahoma County District Court in December 1999, but the Court
postponed its consideration. The Court has now ordered the filing of
new proposals by May 22, 2000 and a confirmation hearing on August 21,
2000 as well as other interim milestones.
|
| |  | Florida Progress now believes that as part of any plan of
rehabilitation, the Company will be required to contribute the
aforementioned $10 million regardless of which party ultimately assumes
the policies of Mid-Continent. Accordingly, Florida Progress accrued an
additional provision for loss of $10 million in December 1999. The loss
was more than offset by the recognition of tax benefits of
approximately $11 million, related to the excess of the tax basis over
the current book value of the investment in Mid-Continent, and thus,
did not have a material impact on Florida Progress consolidated
financial position, results of operations, or liquidity. This benefit
had not been recorded earlier due to uncertainties associated with the
timing of the tax deduction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | In January 1999, five Mid-Continent policyholders filed a purported
class action against Mid-Continent and the same defendants named in the
case filed by the former Commissioner. The complaint contains
substantially the same factual allegations as those made by the former
Commissioner. The suit asserts Extra Life policyholders have been
injured as a result of representations made in connection with the sale
of that policy. The suit seeks actual and punitive damages. As allowed
by the Court, plaintiffs filed a second amended petition after prior
filings were dismissed as a result of defendants motions. Defendants
motions to dismiss the latest petition were denied.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | On April 17, 2000, Florida Progress filed an answer to the second
amended petition. That answer denied all material allegations of the
petition. On April 27, 2000, Florida Progress filed an amended answer
and third party petition, which asserted claims for indemnity and
contribution against John P. Crawford in his capacity as a prior
actuary to Mid-Continent and Lewis & Ellis, Inc., the actuarial firm
that designed the Mid-Continent Extra Life policy. On May 2, 2000, Florida Progress and
other defendants filed an application for writ of prohibition in the
Oklahoma Supreme Court, requesting that the Oklahoma Supreme Court
resolve the issue of whether the policyholder plaintiffs have standing
to pursue their lawsuit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

15



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| |  | Although Florida Progress hopes to complete the negotiated resolution
of these matters involving Mid-Continent, it will continue to
vigorously defend itself against the two lawsuits, if that is required.
Although there can be no assurance as to the outcome of the two
lawsuits, Florida Progress believes they are without merit and that
their outcomes would not have a material adverse effect on Florida
Progress consolidated financial position, results of operations or
liquidity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Share Exchange Litigation In August 1999, Florida Progress announced
that it entered into an Agreement and Plan of Exchange with Carolina
Power & Light Company (CP&L), and CP&L Energy, Inc., a wholly owned
subsidiary of CP&L. A lawsuit was filed in September 1999, against
Florida Progress and its directors seeking class action status, an
unspecified amount of damages and injunctive relief, including a
declaration that the agreement and plan of exchange was entered into in
breach of the fiduciary duties of the Florida Progress board of
directors, and enjoining Florida Progress from proceeding with the
share exchange. The complaint also seeks an award of costs and
attorneys fees. Florida Progress believes this suit is without merit
and intends to vigorously defend itself against this action.
Accordingly, no provision for loss has been recorded pertaining to this
matter.                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Easement Litigation In December 1998, Florida Power was served with
a class action lawsuit seeking damages, declaratory and injunctive
relief for the alleged improper use of electric transmission easements.
The plaintiffs contend that the licensing of fiber optic
telecommunications lines to third parties or telecommunications
companies for other than Florida Powers internal use along the
electric transmission line right-of-way exceeds the authority granted
in the easements. In June 1999, plaintiffs amended their complaint to
add Progress Telecommunications Corporation, an indirect wholly owned
subsidiary of Florida Progress, as a defendant and to add counts for
unjust enrichment and constructive trust. In January 2000, the court
conditionally certified the class statewide. In a mediation held in
March 2000, the parties reached a tentative settlement of this claim,
which is subject to the resolution of procedural issues relating to
class matters as well as court approval. Management does not expect
that the results of these legal actions will have a material impact on
Florida Progress financial position, results of operations or
liquidity. Accordingly, no provision for loss has been recorded
pertaining to this matter.
|
| |  | Other Legal Matters Florida Progress and Florida Power are involved
in various other claims and legal actions arising in the ordinary
course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect
upon either companys consolidated financial position, results of
operations or liquidity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

ITEM 2. MANAGEMENTS DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OPERATING RESULTS

Florida Progress consolidated earnings for the three month period ended March
31, 2000 were $76.5 million, or $.78 per share, compared to earnings of $67.6
million, or $.69 per share, for the same period in 1999.

16



---



A reconciliation of Florida Progress 2000 first quarter earnings per share is
as follows:

|                                        |                   |  |                                       |  |  |      |     |      |   |  | 
|--------------------------------------- | ----------------- |  | ------------------------------------- |  |  | ---- | --- | ---- | - |  | 
|1999 Florida Progress First Quarter EPS |                   |  |                                       |  |  |      | $   | .69  |  
|                                       
|                                       
|                                       
|                                       
|                                        | Florida Power    
|                                       
|                                       
|                                       
|                                       
|                                        |                   |  | Sales of electricity & other revenues |  |  | .12  |    
|                                       
|                                       
|                                       
|                                       
|                                        |                   |  | Operations & maintenance              |  |  | (.02 | )  
|                                       
|                                       
|                                       
|                                       
|                                        |                   |  | Depreciation & amortization           |  |  | (.03 | )  
|                                       
|                                       
|                                       
|                                       
|                                        |                   |  | Interest expense and AFUDC            |  |  | (.04 | )  
|                                       
|                                       
|                                       
|                                       
|                                        |                   |  | 1999 gain on sale of property         |  |  | (.03 | )  
|                                        |                   |  |                                       | 
|                                        |                   |  |                                       |  |  |      |    |     
|                                        | Electric Fuels    |  |                                       |  |  |      |     | .12  |  
|                                       
|                                       
|                                       
|                                       
|                                        | Corporate & Other |  |                                       |  |  |      |     | (.03 | )
|                                        |                   |  |                                       |  |  |      |     |     
|2000 Florida Progress First Quarter EPS |                   |  |                                       |  |  | $    | .78 |     
|                                        |                   |  |                                       |  |  |      |     |     

FLORIDA POWER CORPORATION

Florida Power, the largest subsidiary of Florida Progress, reported earnings of
$.64 per share, for the first quarter of 2000 equaling last years first quarter
results. Excluding a $.03 per share one-time gain on sale of property in the
first quarter of 1999, Florida Powers earnings per share were up nearly 5
percent.

Florida Powers total kilowatt-hour sales increased 9 percent during the first
quarter of 2000, compared with 1999. The improvement was primarily due to strong
customer growth, a return to more normal temperatures and higher wholesale
sales.

Retail sales were up 6 percent as Florida Power provided electric service to
approximately 30,000 new customers during the first quarter of 2000 compared
with last year. Weather, a key factor influencing usage among residential
customers favorably influenced retail sales for the quarter. Usage among
residential customers was nearly 9 percent higher during the quarter when
compared with last year.

Wholesale sales increased nearly 30 percent over 1999. Most of the increase is
attributable to higher sales to Seminole Electric Cooperative, Florida Powers
largest wholesale customer.

Operations and maintenance expense was up $2.9 million during the quarter. The
increase is due primarily to higher costs associated with the utilitys
generation fleet including scheduled maintenance on certain peaking units and
costs associated with the utilitys new 530-megawatt generation plant, which was
placed into service in April 1999.

The new plant also resulted in higher plant-in-service balances, which increased
depreciation expense during the first quarter of 2000 compared with 1999.

Allowance for funds used during construction was $4.2 million less than last
year as a result of lower construction work-in-progress (CWIP) balances in
2000. The lower CWIP balances were due to the new 530-megawatt generation plant
placed into service as discussed above.

DIVERSIFIED OPERATIONS

Revenues and cost of sales for diversified operations increased $78.5 million
and $79.1 million, respectively, for the three months ended March 31, 2000
compared to the same period in the prior year. The increases were due primarily
to prior year acquisitions in Electric Fuels Rail Services group and increased
synfuel operations.

17



---



ELECTRIC FUELS CORPORATION

Electric Fuels earned $.21 per share, in the first quarter, compared with $.09
per share, for the same period last year. All three Electric Fuels business
units experienced improved operating results, however most of the $.12 per share
improvement was due to improved operating results for the Energy & Related
Services group.

Earnings at the Energy and Related Services group were up $12.1 million, of
which $8 million was due to the timing of the recognition of alternative fuel
tax credits. The remaining amount of the increase was due primarily to higher
synfuel sales during the quarter compared with last year when Electric Fuels was
in the early phases of producing and marketing the new product.

In April, an affiliate of CP&L Energy
purchased a 90% interest in an affiliate of Electric Fuels that owns
a synthetic fuels plant located at the Powell Mountain mine site in
Virginia for approximately $44.5 million including cash of $1.8
million, assumption of debt of $6.7 million, a note receivable of
$34 million (bearing interest at 7% per annum), plus $2 million in
cash payable upon receipt of a private letter ruling from the IRS.
The purchase agreement contains a provision that requires the CP&L
Energy affiliate to sell, and the Electric Fuels affiliate to
repurchase, the 90% interest should the share exchange between
Florida Progress, CP&L Energy and CP&L not occur. The repurchase
price would approximate the original consideration given for the
interest, adjusted by an amount to compensate for the economic
benefit obtained by the CP&L Energy affiliate during the period it
owned the interest. Because of the repurchase provision, Electric
Fuels deferred recognizing any gain from the sale. Negotiations
for the purchase of an interest in a different Electric Fuels
affiliate owning another synthetic fuels plant are ongoing.

Earnings from the Inland Marine Transportation group were up
$.6 million when compared to last year. Improved operating conditions
during 2000 when compared with the first quarter of 1999 were partially
offset by higher diesel fuel costs.

Results in the Rail Services group improved $.5 million when compared to 1999.
The improvement reflects higher demand for rail and track work but was partially
offset by reduced orders for railcar repair work. The companys recycling
division showed some improvement over last years results as scrap steel prices
continued to improve when compared with last years prices.

CORPORATE & OTHER

Corporate and other expenses were higher during the first quarter of 2000
compared with 1999 due primarily to the write-down of a minority interest in a
cogeneration facility, which reduced earnings by $.02 a share.

LIQUIDITY AND CAPITAL RESOURCES

Florida Progress capital expenditures are expected to be funded primarily from
internally generated funds and debt. During the first three months of 2000,
$46.4 million was spent on the Florida Power construction program and $24.6
million was spent in diversified operations.

The share exchange agreement with CP&L limits Florida Progress total capital
expenditures, absent CP&L approval. (See prior discussion of this matter in the
1999 Form 10-K, Item 7 MD&A  Future Cash Requirements.)

Florida Powers ratio of earnings to fixed charges was 4.38 for the twelve
months ended March 31, 2000. (See Exhibit 12 filed herewith).

In April 1999, FPC Capital I, an affiliated business trust, completed the sale
of $300 million of Cumulative Quarterly Income Preferred Securities, which were
initially offered to the public at $25 per share. The securities are, in effect,
fully and unconditionally guaranteed by Florida Progress. Quarterly
distributions are payable at an annual rate of 7.10%. Florida Progress used the
net proceeds to repay a portion of certain outstanding short-term bank loans and
commercial paper and for other general corporate purposes. (See Note 2 to the
Financial Statements.)

In March 2000, Florida Power established an uncommitted bank bid facility
allowing it to borrow and re-borrow and have outstanding at any time, up to $100
million. The facility was established to temporarily supplement commercial paper
borrowings, as needed. The bank bid facility was not drawn on as of March 31,
2000.

18



---



Progress Capital Holdings, Inc. has uncommitted bank bid facilities
authorizing it to borrow and re-borrow, and have outstanding at any time, up to
$300 million. As of March 31, 2000, $35 million was outstanding under these bid
facilities. The funds were used to temporarily supplement commercial paper
borrowings, as needed.

In April 2000, PCH updated its private medium-term note (MTN) program and now
has $400 million of MTNs available for issuance.

Florida Progress and Florida Power believe their available sources of liquidity
will be sufficient to fund their long-term and short-term capital requirements.
However, due to the pending share exchange with CP&L, Standard & Poors Ratings
Services, Moodys Investors Service and Duff & Phelps Credit Rating Co. have
announced they are reviewing the rated securities of Florida Power, PCH and FPC
Capital I for a possible ratings downgrade.

FORWARD-LOOKING STATEMENTS

This report contains certain forward-looking statements, including the liability
for cleaning up certain environmental sites; the savings associated with the
restructuring of certain cogeneration contracts; and the effect of interest rate
fluctuations on pretax earnings over the next fiscal year.

These statements, and any other statements contained in this report that are not
historical facts, are forward-looking statements that are based on a series of
projections and estimates regarding the economy, the electric utility business
and Florida Progress other businesses in general, and on factors which impact
Florida Progress directly. The estimates relate to the pricing of services, the
actions of regulatory bodies, and the effects of competition. The words
should, estimates, believes, expects, anticipates, plans and
intends, and variations of such words, and similar expressions, are intended
to identify forward-looking statements that involve risks and uncertainties.

Key factors that have a direct impact on the ability to attain these estimates
include continued annual growth in customers; successful cost containment
efforts; actions of various other regulatory authorities and the efficient
operation of Florida Powers existing and future generating units.

Also, in developing its forward-looking statements, Florida Progress and Florida
Power have made certain assumptions relating to productivity improvements and
the favorable outcome of various commercial, legal and regulatory proceedings
and the lack of disruption to its markets.

If Florida Progress and Florida Powers estimates regarding the economy, the
electric utility business and other factors differ materially from what actually
occurs, or if various legal or regulatory proceedings have unfavorable outcomes,
then actual results could vary significantly from the performance projected in
the forward-looking statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

Florida Progress is exposed to changes in interest rates primarily as a result
of its borrowing activities.

A hypothetical 60 basis point increase in interest rates (10% of Florida
Progress weighted average interest rate at March 31, 2000) affecting Florida
Progress variable rate debt ($722.5 million at March 31, 2000) would have an
immaterial affect on Florida Progress pre-tax earnings over the next fiscal
year. A hypothetical 10% decrease in interest rates would also have an
immaterial effect on the estimated fair value of Florida Progress long-term
debt at March 31, 2000.

19



---



COMMODITY PRICE RISK

Currently at Florida Power, commodity price risk due to changes in market
conditions for fuel and purchased power are recovered through the fuel
adjustment clause, with no effect on earnings.

Electric Fuels is exposed to commodity price risk through coal sales, the scrap
steel market and fuel for its marine transportation business. A 10-percent
change in the market price of those commodities would have an immaterial effect
on the earnings of Florida Progress.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS



|1. |  | Wanda L. Adams, et al. v. Florida Power Corporation and Florida
Progress Corporation, U.S. District Court, Middle District of Florida,
Ocala Division, Case No. 95-123-C.V.-OC-10.                                                                                                                                                                                                                                                                                               
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | See prior discussion of this matter in the 1999 Form 10-K, Item 3,
paragraph 3. In March 2000, the plaintiffs filed a motion with the
District Court to reopen the case of Akin, et al. vs. Florida
Power,
and to dismiss the Adams case. The Akin case was originally filed in an
effort to preserve the litigation rights of the 61 plaintiffs who opted
into the Adams case. The Court stayed the Akin case pending a ruling on
Florida Powers motion to decertify the class.
|  
|2. |  | In Re: Joint Petition for Determination of Need for an Electrical Power
Plant in Volusia County by the Utilities Commission, City of New Smyrna
Beach, and Duke Energy New Smyrna Beach Power Company Ltd., L.L.P.
Public Service Commission, Docket No. 981042-EM.                                                                                                                                                                                                              
|  
|   |  | See prior discussion of this matter in the 1999 Form 10-K, Item 3,
paragraph 7. On April 20, 2000, the Florida Supreme Court ruled in
favor of Florida Powers appeal of the FPSCs decision and reversed the
FPSCs order on the basis that the granting of the determination of
need exceeds the FPSCs authority under Florida law. All appelees and a
non-party, Enron North America, have filed motions for a rehearing.                                                    
|  
|3. |  | Sanford Gasification Plant Site, Sanford, Florida (Sanford Site).                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   |  | See prior discussion of this matter in the 1999 Form 10-K, Item 3,
paragraph 11. In March 2000, the EPA selected from the FS a
preferred remedy for the cleanup of the contaminated soils at the
site. The EPA held a public meeting to discuss the preferred remedy in
April 2000, and is expected to publish the preferred remedy as its final
decision for cleanup in a Record of Decision in late May 2000.                                                                
|  
|4. |  | Peak Oil Company, Missouri Electric, 62nd Street Superfund Sites.                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   |  | See prior discussion of these matters in the 1999 Form 10-K, Item 3,
paragraph 10. In the Missouri Electric case, Florida Power and other
group members purchased insurance to limit their liability. The cost of
the insurance was immaterial to Florida Power, and Florida Power does
not expect to incur any further expenses in connection with this case
at this time. This will conclude the Missouri Electric case for
reporting purposes.                                

20



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|5. |  | State of Oklahoma, ex rel. John P. Crawford, Insurance Commissioner v.
Mid-Continent Life Insurance Company, District Court of Oklahoma
County, State of Oklahoma, Case No. CJ-97-2518-62                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | State of Oklahoma, ex rel, John P. Crawford, Insurance Commissioner as
Receiver for Mid-Continent Life Insurance Company v. Florida Progress
Corporation, a Florida corporation, Jack Barron Critchfield, George Ruppel, Thomas Steven Krzesinski, Richard
Korpan, Richard Donald Keller, James Lacy Harlan, Gerald William McRae,
Thomas Richard Dlouhy, Andrew Joseph Beal and Robert Terry Stuart, Jr.,
District Court of Oklahoma County, State of Oklahoma, Case No.
CJ-97-2518-62 (part of the same case noted above).                                                                                                                                                                                                                          
|  
|   |  | Michael Farrimond, Pamela S. Farrimond, Angela Fry, Jowhna Hill, and
Barbara Hodges, for themselves and all others similarly situated v.
Florida Progress Corporation, a Florida corporation, Jack Barron
Critchfield, George Ruppel, Thomas Steven Krzesinski, Richard Korpan,
Richard Donald Keller, James Lacy Harlan, Gerald William McRae, Thomas
Richard Dlouhy, Andrew Joseph Beal and Robert Terry Stuart, Jr.,
District Court of Oklahoma County, State of Oklahoma, Case No.
CJ-99-130-65                                                                                                                                                                                                                                                   
|  
|   |  | See prior discussion of this matter in the 1999 Form 10-K, Item 3,
paragraph 5. In the rehabilitation proceedings, the Court has ordered
the following schedule: new proposals to be submitted by the four
proposers by May 22; Life Investors to submit its proposal by June 1;
Commissioner Fisher to submit his recommendation by June 15; and, a
confirmation hearing on the new recommendation by Commissioner Fisher
beginning on August 21.                                                                                                                                                                                                                                                                                                    
|  
|   |  | On April 17, 2000, Florida Progress filed an answer to the second
amended petition. That answer denied all material allegations of the
petition. On April 27, 2000, Florida Progress filed an amended answer
and third party petition, which asserted claims for indemnity and
contribution against John P. Crawford in his capacity as a prior
actuary to Mid-Continent and Lewis & Ellis, Inc., the actuarial firm
that designed the Mid-Continent Extra Life policy. On May 2, 2000,
Florida Progress and other defendants filed an application for writ of
prohibition in the Oklahoma Supreme Court, requesting that the Oklahoma
Supreme Court resolve the issue of whether the policyholder plaintiffs
have standing to pursue their lawsuit.

21



---



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



|              | 
|------------- | 
|(a) Exhibits:

|       |  |                                                                                         |  |          |   |         |  |  
|------ |  | --------------------------------------------------------------------------------------- |  | -------- | - | ------- |  | -
|       |  |                                                                                         |  | Florida  |   | Florida
|Number |  | Exhibit                                                                                 |  | Progress |   | Power  
|       |  |                                                                                         |  |          |   |        
|12     |  | Statement Regarding Computation of
Ratio of Earnings to Fixed Charges for
Florida Power |  |          |   |         |  | X
|      
|      
|      
|      
|27.(a) |  | Florida Progress Financial Data Schedule                                                |  |          | X |        
|      
|      
|      
|      
|27.(b) |  | Florida Power Financial Data Schedule                                                   |  |          |   |         |  | X
|      
|      
|      
|      
|X =    |  | Exhibit is filed for that respective
company                                           



|                         | 
|------------------------ | 
|(b) Reports on form 8-K:



| |                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------
| | During the first quarter of 2000, Florida Progress and Florida Power
filed the following combined reports on Form 8-K:



| |                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------
| | Form 8-K dated January 27, 2000, reporting under Item 5 Other
Events Florida Progress and Florida Powers 1999 year-end
earnings.
|
| | Form 8-K dated February 24, 2000, reporting under Item 5 Other
Events an increase in Florida Progress annual dividend.           



| |                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------
| | In addition, Florida Progress and Florida Power filed the following
combined reports on Form 8-K subsequent to the first quarter 2000:



| |                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------
| | Form 8-K dated April 27, 2000, reporting under Item 5 Other
Events Florida Progress and Florida Powers first quarter 2000
earnings.

22



---



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                   |  |                                                                                                    
|------------------ |  | ---------------------------------------------------------------------------------------------------
|                   |  | FLORIDA PROGRESS CORPORATION                                                                       
|                  
|Date: May 15, 2000 |  | By: /s/ John Scardino, Jr.
John Scardino, Jr.
Vice President and Controller                        
|                  
|Date: May 15, 2000 |  | By: /s/ Edward W. Moneypenny
Edward W. Moneypenny
Senior Vice President and
Chief Financial Officer

23



---



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                   |  |                                                                                                   
|------------------ |  | --------------------------------------------------------------------------------------------------
|                   |  | FLORIDA POWER CORPORATION                                                                         
|                  
|Date: May 15, 2000 |  | By:  /s/ John
Scardino, Jr.
John Scardino, Jr.
Vice President and Controller                      
|                  
|Date: May 15, 2000 |  | By:  /s/ Jeffrey R. Heinicka
Jeffrey R. Heinicka
Senior Vice President and
Chief Financial Officer

24



---



Exhibit Index

|       |  |                                                                                          |  |          |   |         |  |  
|------ |  | ---------------------------------------------------------------------------------------- |  | -------- | - | ------- |  | -
|       |  |                                                                                          |  | Florida  |   | Florida
|Number |  | Exhibit                                                                                  |  | Progress |   | Power  
|       |  |                                                                                          |  |          |   |        
|12     |  | Statement Regarding computation of Ratio
of Earnings to Fixed Charges for Florida
Power. |  |          |   |         |  | X
|      
|      
|      
|      
|27.(a) |  | Florida Progress Financial Data Schedule (For SEC use only)                              |  |          | X |        
|      
|      
|      
|      
|27.(b) |  | Florida Power Financial Data Schedule (For SEC use only)                                 |  |          |   |         |  | X
|      
|      
|      
|      
|X =    |  | Exhibit is filed for that respective company.                                           

25