##### Table of Contents









UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, DC 20549




---

FORM 10-Q



| |     |                                                                                         
| | --- | ----------------------------------------------------------------------------------------
| | [X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
|
| |     | For the Quarterly Period Ended September 30, 1999                                       

OR



| |      |                                                                                          
| | ---- | -----------------------------------------------------------------------------------------
| | [  ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
|
| |      | For the transition period from 
	to                                                      

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

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
issuers classes of common stock, as of the latest
practicable date.

|                             |  |                                 |  |                               
|---------------------------- |  | ------------------------------- |  | ------------------------------
|                             |  |                                 |  | Shares Outstanding            
|Registrant                   |  | Description of Class            |  | at September 30, 1999         
|                             |  |                                 |  |                               
|Florida Progress Corporation |  | Common Stock, without par value |  | 98,453,025                    
|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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---

TABLE OF CONTENTS



|                              |                                                                                               |  |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                              | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                              | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|PART II. OTHER INFORMATION   
|                              | Item 1. Legal Proceedings                                                                    
|                              | Item 5. Other                                                                                
|                              | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                   
|SIGNATURES                   
|EXHIBIT INDEX                



---






PART I. FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS

FLORIDA PROGRESS CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS


FLORIDA PROGRESS CORPORATION

Consolidated Statements of Income


(In millions, except per share amounts)


|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |         |       | 
|------------------------------------------ | ---------------------------------------------------------------------------------- | ------------------------------------------------- | ------- | ----------------- | ----- | ---- | ------- | ----- | ----- | - | ------- | ------- | ----- | - | ------- | ------- | ----- | 
|                                           |                                                                                    |                                                   |         |                  
|                                           |                                                                                    | Three Months Ended                                |         | Nine Months Ended
|                                           |                                                                                    | September 30,                                     |         | September 30,    
|                                           |                                                                                    |                                                   |         |                  
|                                           |                                                                                    | 1999                                              |         | 1998              |       | 1999 |         | 1998 
|                                           |                                                                                    |                                                   |         |                   |       |      |         |      
|                                           |                                                                                    |                                                   |         |                  
|                                           |                                                                                    | (Unaudited)                                       |         | (Unaudited)      
|                                          
|                                          
|                                          
|                                          
|REVENUES:                                  |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | Electric utility                                                                   |                                                   | $       | 794.9             |       |      | $       | 795.6 |       |   | $       | 2,037.3 |       |   | $       | 2,024.6 |      
|                                          
|                                          
|                                          
|                                          
|                                           | Diversified                                                                        |                                                   |         | 312.4             |       |      |         | 235.9 |       |   |         | 866.7   |       |   |         | 697.5   |      
|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|                                           |                                                                                    |                                                   | 1,107.3 |                   |       |      | 1,031.5 |       |       |   | 2,904.0 |         |       |   | 2,722.1 |        
|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|EXPENSES:                                  |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | Electric utility:                                                                  |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |         |      
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Fuel                                              |         |                   | 191.5 |      |         |       | 188.9 |   |         |         | 448.7 |   |         |         | 434.0 | 
|                                           |                                                                                    | Purchased power                                   |         |                   | 106.7 |      |         |       | 122.3 |   |         |         | 305.4 |   |         |         | 332.1 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Energy conservation cost                          |         |                   | 25.4  |      |         |       | 24.5  |   |         |         | 61.9  |   |         |         | 60.1  | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Operation and maintenance                         |         |                   | 108.0 |      |         |       | 108.3 |   |         |         | 325.9 |   |         |         | 326.9 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Extended nuclear outage  replacement power costs |         |                   |      |      |         |       |      |   |         |         |      |   |         |         | 5.1   | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Depreciation and amortization                     |         |                   | 86.8  |      |         |       | 89.5  |   |         |         | 260.8 |   |         |         | 260.9 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Taxes other than income taxes                     |         |                   | 56.9  |      |         |       | 57.5  |   |         |         | 159.9 |   |         |         | 158.4 | 
|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|                                           |                                                                                    |                                                   | 575.3   |                   |       |      | 591.0   |       |       |   | 1,562.6 |         |       |   | 1,577.5 |        
|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|                                           | Diversified:                                                                       |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |         |      
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Cost of sales                                     |         |                   | 273.6 |      |         |       | 201.0 |   |         |         | 768.4 |   |         |         | 587.6 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Other                                             |         |                   | 30.3  |      |         |       | 11.4  |   |         |         | 60.7  |   |         |         | 43.0  | 
|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|                                           |                                                                                    |                                                   | 303.9   |                   |       |      | 212.4   |       |       |   | 829.1   |         |       |   | 630.6   |        
|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|INCOME FROM OPERATIONS                     |                                                                                    |                                                   | 228.1   |                   |       |      | 228.1   |       |       |   | 512.3   |         |       |   | 514.0   |        
|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|INTEREST EXPENSE AND OTHER:                |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | Interest expense                                                                   |                                                   |         | 42.3              |       |      |         | 46.2  |       |   |         | 131.2   |       |   |         | 141.2   |      
|                                          
|                                          
|                                          
|                                          
|                                           | Allowance for funds used during construction                                       |                                                   |         | (.4               | )     |      |         | (4.4  | )     |   |         | (6.7    | )     |   |         | (12.4   | )    
|                                          
|                                          
|                                          
|                                          
|                                           | Distributions on subsidiary-obligated mandatorily redeemable
	preferred securities |                                                   |         | 5.3               |       |      |         |      |       |   |         | 9.9     |       |   |         |        |      
|                                          
|                                          
|                                          
|                                          
|                                           | Other expense / (income), net                                                      |                                                   |         | (7.5              | )     |      |         | 1.9   |       |   |         | (10.8   | )     |   |         | 3.0     |      
|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|                                           |                                                                                    |                                                   | 39.7    |                   |       |      | 43.7    |       |       |   | 123.6   |         |       |   | 131.8   |        
|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|INCOME FROM OPERATIONS BEFORE INCOME TAXES |                                                                                    |                                                   | 188.4   |                   |       |      | 184.4   |       |       |   | 388.7   |         |       |   | 382.2   |        
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Income Taxes                                      |         |                   | 51.1  |      |         |       | 67.1  |   |         |         | 107.2 |   |         |         | 136.6 | 
|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|NET INCOME                                 |                                                                                    | $                                                 | 137.3   |                   |       | $    | 117.3   |       |       | $ | 281.5   |         |       | $ | 245.6   |        
|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|AVERAGE SHARES OF COMMON STOCK OUTSTANDING |                                                                                    |                                                   | 98.3    |                   |       |      | 97.0    |       |       |   | 97.9    |         |       |   | 97.0    |        
|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|EARNINGS PER AVERAGE COMMON SHARE          |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | (Basic and Diluted)                                                                |                                                   | $       | 1.40              |       |      | $       | 1.21  |       |   | $       | 2.87    |       |   | $       | 2.53    |      
|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        
|DIVIDENDS PER COMMON SHARE                 |                                                                                    | $                                                 | .545    |                   |       | $    | .535    |       |       | $ | 1.635   |         |       | $ | 1.605   |        
|                                           |                                                                                    |                                                   |         |                   |       |      |         |       |       |   |         |         |       |   |         |        

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

2



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##### Table of Contents



FLORIDA PROGRESS CORPORATION

Consolidated Balance Sheets


(In millions)


|                                                  |                                                                                    |                                |                            |                                               |       |         |         |         |       |         |       | 
|------------------------------------------------- | ---------------------------------------------------------------------------------- | ------------------------------ | -------------------------- | --------------------------------------------- | ----- | ------- | ------- | ------- | ----- | ------- | ----- | 
|                                                  |                                                                                    | September 30,                  |                            | December 31,                                 
|                                                  |                                                                                    | 1999                           |                            | 1998                                         
|                                                  |                                                                                    |                                |                            |                                              
|                                                  |                                                                                    | (Unaudited)                    |                            |                                              
|                                                 
|                                                 
|                                                 
|                                                 
|ASSETS                                           
|                                                 
|                                                 
|                                                 
|                                                 
|PROPERTY, PLANT AND EQUIPMENT:                    |                                                                                    |                                |                            |                                               |       |         |         |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Electric utility plant in service and held for future use                          |                                | $                          | 6,687.5                                       |       |         | $       | 6,307.8 |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Less  Accumulated depreciation                                                    |                                |                            | 2,877.3                                       |       |         |         | 2,716.0 |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                    |                                |                            | Accumulated decommissioning for nuclear plant |       |         | 278.4   |         |       |         | 254.8 | 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                    |                                |                            | Accumulated dismantlement for fossil plants   |       |         | 132.4   |         |       |         | 130.7 | 
|                                                  |                                                                                    |                                |                            |                                               |       |         |         |        
|                                                  |                                                                                    |                                | 3,399.4                    |                                               |       |         | 3,206.3 |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Construction work in progress                                                      |                                |                            | 162.5                                         |       |         |         | 378.3   |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Nuclear fuel, net of amortization of $392.5 in 1999 and $377.2 in
	 1998           |                                |                            | 70.4                                          |       |         |         | 45.9    |      
|                                                  |                                                                                    |                                |                            |                                               |       |         |         |        
|                                                  |                                                                                    |                                | Net electric utility plant |                                               |       | 3,632.3 |         |         |       | 3,630.5 |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other property, at cost, net of depreciation of $265.5 in 1999
	and $234.6 in 1998 |                                |                            | 617.9                                         |       |         |         | 560.1   |      
|                                                  |                                                                                    |                                |                            |                                               |       |         |         |        
|                                                  |                                                                                    |                                | 4,250.2                    |                                               |       |         | 4,190.6 |        
|                                                  |                                                                                    |                                |                            |                                               |       |         |         |        
|CURRENT ASSETS:                                   |                                                                                    |                                |                            |                                               |       |         |         |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Cash and equivalents                                                               |                                |                            | 11.3                                          |       |         |         | 2.5     |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Accounts receivable, less reserves of $5.4 in 1999 and $5.0 in
	1998               |                                |                            | 480.4                                         |       |         |         | 413.4   |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Inventories, primarily at average cost:                                            |                                |                            |                                               |       |         |         |         |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                    | Fuel                           |                            |                                               | 104.1 |         |         |         | 69.8  |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                    | Utility materials and supplies |                            |                                               | 92.9  |         |         |         | 83.3  |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                    | Diversified operations         |                            |                                               | 172.9 |         |         |         | 137.0 |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Deferred income taxes                                                              |                                |                            | 61.4                                          |       |         |         | 55.9    |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Prepayments and other                                                              |                                |                            | 93.0                                          |       |         |         | 92.2    |      
|                                                  |                                                                                    |                                |                            |                                               |       |         |         |        
|                                                  |                                                                                    |                                | 1,016.0                    |                                               |       |         | 854.1   |        
|                                                  |                                                                                    |                                |                            |                                               |       |         |         |        
|DEFERRED CHARGES AND OTHER ASSETS:                |                                                                                    |                                |                            |                                               |       |         |         |        
|                                                 
|                                                 
|                                                 
|                                                 
|Costs deferred pursuant to regulation:            |                                                                                    |                                |                            |                                               |       |         |         |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Deferred purchased power contract termination costs                                |                                |                            | 302.3                                         |       |         |         | 321.0   |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other                                                                              |                                |                            | 96.6                                          |       |         |         | 113.6   |      
|                                                 
|                                                 
|                                                 
|                                                 
|Investments in nuclear plant decommissioning fund |                                                                                    |                                | 354.1                      |                                               |       |         | 332.1   |        
|                                                 
|                                                 
|                                                 
|                                                 
|Goodwill                                          |                                                                                    |                                | 147.3                      |                                               |       |         | 139.8   |        
|                                                 
|                                                 
|                                                 
|                                                 
|Joint ventures and partnerships                   |                                                                                    |                                | 59.6                       |                                               |       |         | 71.5    |        
|                                                 
|                                                 
|                                                 
|                                                 
|Other                                             |                                                                                    |                                | 186.9                      |                                               |       |         | 138.1   |        
|                                                  |                                                                                    |                                |                            |                                               |       |         |         |        
|                                                  |                                                                                    |                                | 1,146.8                    |                                               |       |         | 1,116.1 |        
|                                                  |                                                                                    |                                |                            |                                               |       |         |         |        
|                                                  |                                                                                    | $                              | 6,413.0                    |                                               |       | $       | 6,160.8 |        
|                                                  |                                                                                    |                                |                            |                                               |       |         |         |        

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

3



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##### Table of Contents



FLORIDA PROGRESS CORPORATION

Consolidated Balance Sheets


(In millions)


|                                        |                                                                  |               |         |              |  |   |         |         | 
|--------------------------------------- | ---------------------------------------------------------------- | ------------- | ------- | ------------ |  | - | ------- | ------- | 
|                                        |                                                                  | September 30, |         | December 31,
|                                        |                                                                  | 1999          |         | 1998        
|                                        |                                                                  |               |         |             
|                                        |                                                                  | (Unaudited)   |         |             
|                                       
|                                       
|                                       
|                                       
|CAPITAL AND LIABILITIES                
|                                       
|                                       
|                                       
|                                       
|COMMON STOCK EQUITY:                    |                                                                  |               |         |              |  |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Common stock                                                     |               | $       | 1,267.3      |  |   | $       | 1,221.1 | 
|                                       
|                                       
|                                       
|                                       
|                                        | Retained earnings                                                |               |         | 762.0        |  |   |         | 640.9   | 
|                                        |                                                                  |               |         |              |  |   |         |        
|                                        |                                                                  |               | 2,029.3 |              |  |   | 1,862.0 |        
|                                       
|                                       
|                                       
|                                       
|PREFERRED SECURITIES:                   |                                                                  |               |         |              |  |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Cumulative preferred stock of Florida Power                      |               |         | 33.5         |  |   |         | 33.5    | 
|                                       
|                                       
|                                       
|                                       
|                                        | Subsidiary-obligated mandatorily redeemable preferred securities |               |         | 300.0        |  |   |         |        | 
|                                       
|                                       
|                                       
|                                       
|LONG-TERM DEBT                          |                                                                  |               | 2,177.5 |              |  |   | 2,250.4 |        
|                                        |                                                                  |               |         |              |  |   |         |        
|TOTAL CAPITAL                           |                                                                  |               | 4,540.3 |              |  |   | 4,145.9 |        
|                                        |                                                                  |               |         |              |  |   |         |        
|CURRENT LIABILITIES:                    |                                                                  |               |         |              |  |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Accounts payable                                                 |               |         | 273.7        |  |   |         | 279.1   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Customers deposits                                              |               |         | 105.8        |  |   |         | 104.1   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Taxes payable                                                    |               |         | 135.5        |  |   |         | 10.1    | 
|                                       
|                                       
|                                       
|                                       
|                                        | Accrued interest                                                 |               |         | 57.4         |  |   |         | 70.4    | 
|                                       
|                                       
|                                       
|                                       
|                                        | Overrecovered utility fuel costs                                 |               |         | 37.7         |  |   |         | 22.2    | 
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                                            |               |         | 76.5         |  |   |         | 104.6   | 
|                                        |                                                                  |               |         |              |  |   |         |        
|                                        |                                                                  |               | 686.6   |              |  |   | 590.5   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Notes payable                                                    |               |         |             |  |   |         | 236.2   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Current portion of long-term debt                                |               |         | 152.8        |  |   |         | 145.9   | 
|                                        |                                                                  |               |         |              |  |   |         |        
|                                        |                                                                  |               | 839.4   |              |  |   | 972.6   |        
|                                        |                                                                  |               |         |              |  |   |         |        
|DEFERRED CREDITS AND OTHER LIABILITIES: |                                                                  |               |         |              |  |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Deferred income taxes                                            |               |         | 580.9        |  |   |         | 595.4   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Unamortized investment tax credits                               |               |         | 71.9         |  |   |         | 77.8    | 
|                                       
|                                       
|                                       
|                                       
|                                        | Other postretirement benefit costs                               |               |         | 121.8        |  |   |         | 116.1   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                                            |               |         | 258.7        |  |   |         | 253.0   | 
|                                        |                                                                  |               |         |              |  |   |         |        
|                                        |                                                                  |               | 1,033.3 |              |  |   | 1,042.3 |        
|                                        |                                                                  |               |         |              |  |   |         |        
|                                        |                                                                  | $             | 6,413.0 |              |  | $ | 6,160.8 |        
|                                        |                                                                  |               |         |              |  |   |         |        

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

4



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##### Table of Contents



FLORIDA PROGRESS CORPORATION

Consolidated Statements of Cash Flows


(In millions)


|                                                  |                                                                                       |                                                       |        |        |       |   |        |        |       |  
|------------------------------------------------- | ------------------------------------------------------------------------------------- | ----------------------------------------------------- | ------ | ------ | ----- | - | ------ | ------ | ----- | -
|                                                  |                                                                                       |                                                      
|                                                  |                                                                                       | Nine Months Ended                                    
|                                                  |                                                                                       | September 30,                                        
|                                                  |                                                                                       |                                                      
|                                                  |                                                                                       | 1999                                                  |        | 1998  
|                                                  |                                                                                       |                                                       |        |       
|                                                  |                                                                                       |                                                      
|                                                  |                                                                                       | (Unaudited)                                          
|                                                 
|                                                 
|                                                 
|                                                 
|OPERATING ACTIVITIES:                             |                                                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Net income                                                                            |                                                       | $      | 281.5  |       |   | $      | 245.6  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Adjustments for noncash items:                                                        |                                                       |        |        |       |   |        |        |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Depreciation and amortization                         |        |        | 326.9 |   |        |        | 318.0 |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Deferred income taxes and investment tax credits, net |        |        | (35.2 | ) |        |        | 76.8  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Changes in working capital, net of effects from acquisition or
	sale of businesses:   |                                                       |        |        |       |   |        |        |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Accounts receivable                                   |        |        | (70.9 | ) |        |        | (38.4 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Inventories                                           |        |        | (82.6 | ) |        |        | 32.0  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Overrecovered/Underrecovered utility fuel cost        |        |        | 15.5  |   |        |        | 15.0  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Accounts payable                                      |        |        | (27.8 | ) |        |        | (59.6 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Taxes payable                                         |        |        | 148.7 |   |        |        | 97.6  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Other                                                 |        |        | (44.9 | ) |        |        | (26.0 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other operating activities                                                            |                                                       |        | 8.6    |       |   |        | 5.9    |      
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|                                                  |                                                                                       |                                                       | 519.8  |        |       |   | 666.9  |       
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|INVESTING ACTIVITIES:                             |                                                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Property additions (including allowance for borrowed funds used
	during construction) |                                                       |        | (417.2 | )     |   |        | (355.9 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Proceeds from sale of properties and businesses                                       |                                                       |        | 27.2   |       |   |        | 16.5   |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Proceeds from sale and leaseback                                                      |                                                       |        | 47.0   |       |   |        | 110.0  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Acquisition of businesses                                                             |                                                       |        | (8.2   | )     |   |        | (144.5 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other investing activities                                                            |                                                       |        | (39.3  | )     |   |        | (93.4  | )    
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|                                                  |                                                                                       |                                                       | (390.5 | )      |       |   | (467.3 | )     
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|FINANCING ACTIVITIES:                             |                                                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Issuance of long-term debt                                                            |                                                       |        | 50.0   |       |   |        | 189.1  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Repayment of long-term debt                                                           |                                                       |        | (68.6  | )     |   |        | (172.5 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Decrease in commercial paper with long-term support                                   |                                                       |        | (46.5  | )     |   |        | (8.4   | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Issuance of subsidiary-obligated mandatorily redeemable preferred
	 securities        |                                                       |        | 300.0  |       |   |        |       |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Sale of common stock                                                                  |                                                       |        | 43.2   |       |   |        |       |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Dividends paid on common stock                                                        |                                                       |        | (160.4 | )     |   |        | (155.9 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Decrease in short-term debt                                                           |                                                       |        | (236.2 | )     |   |        | (31.6  | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other financing activities                                                            |                                                       |        | (2.0   | )     |   |        | (2.3   | )    
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|                                                  |                                                                                       |                                                       | (120.5 | )      |       |   | (181.6 | )     
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|NET INCREASE IN CASH AND EQUIVALENTS              |                                                                                       |                                                       | 8.8    |        |       |   | 18.0   |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Beginning cash and equivalents                                                        |                                                       |        | 2.5    |       |   |        | 3.1    |      
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|ENDING CASH AND EQUIVALENTS                       |                                                                                       | $                                                     | 11.3   |        |       | $ | 21.1   |       
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |                                                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Cash paid during the period for:                                                      |                                                       |        |        |       |   |        |        |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Interest (net of amount capitalized)                  |        | $      | 137.9 |   |        | $      | 142.4 |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Income taxes (net of refunds)                         |        | $      | 86.4  |   |        | $      | 21.9  |  

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

5



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##### Table of Contents



FLORIDA PROGRESS CORPORATION

Statements of Common Equity and Comprehensive Income


For the periods ended September 30, 1999 and 1998


(Dollars in millions)


|                               |  |       |         |        |  |          |         |   |  |   |        |  
|------------------------------ |  | ----- | ------- | ------ |  | -------- | ------- | - |  | - | ------ | -
|                               |  |       |         | Common |  | Retained
|                               |  | Total |         | Stock  |  | Earnings
|                               |  |       |         |        |  |         
|Balance, December 31, 1997     |  | $     | 1,776.0 |        |  | $        | 1,209.0 |   |  | $ | 567.0  |  
|                              
|                              
|                              
|                              
|Net income                     |  |       | 245.6   |        |  |          |        |   |  |   | 245.6  |  
|                              
|                              
|                              
|                              
|Common stock redeemed          |  |       | (.6     | )      |  |          | (.6     | ) |  |   |       |  
|                              
|                              
|                              
|                              
|Cash dividends on common stock |  |       | (155.9  | )      |  |          |        |   |  |   | (155.9 | )
|                               |  |       |         |        |  |          |         |   |  |   |        |  
|Balance, September 30, 1998    |  | $     | 1,865.1 |        |  | $        | 1,208.4 |   |  | $ | 656.7  |  
|                               |  |       |         |        |  |          |         |   |  |   |        |  
|Balance, December 31, 1998     |  | $     | 1,862.0 |        |  | $        | 1,221.1 |   |  | $ | 640.9  |  
|                              
|                              
|                              
|                              
|Net income                     |  |       | 281.5   |        |  |          |        |   |  |   | 281.5  |  
|                              
|                              
|                              
|                              
|Common stock issued            |  |       | 46.2    |        |  |          | 46.2    |   |  |   |       |  
|                              
|                              
|                              
|                              
|Cash dividends on common stock |  |       | (160.4  | )      |  |          |        |   |  |   | (160.4 | )
|                               |  |       |         |        |  |          |         |   |  |   |        |  
|Balance, September 30, 1999    |  | $     | 2,029.3 |        |  | $        | 1,267.3 |   |  | $ | 762.0  |  
|                               |  |       |         |        |  |          |         |   |  |   |        |  

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

6



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##### Table of Contents



FLORIDA POWER CORPORATION

FINANCIAL STATEMENTS


FLORIDA POWER CORPORATION

Statements Of Income


(In millions)


|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |         |       |  
|--------------------------------------------- | ------------------------------------------------------ | ------------------------------------------------- | ----- | ----------------- | ----- | ---- | ----- | ----- | ----- | - | ------- | ------- | ----- | - | ------- | ------- | ----- | -
|                                              |                                                        |                                                   |       |                  
|                                              |                                                        | Three Months Ended                                |       | Nine Months Ended
|                                              |                                                        | September 30,                                     |       | September 30,    
|                                              |                                                        |                                                   |       |                  
|                                              |                                                        | 1999                                              |       | 1998              |       | 1999 |       | 1998 
|                                              |                                                        |                                                   |       |                   |       |      |       |      
|                                              |                                                        |                                                   |       |                  
|                                              |                                                        | (Unaudited)                                       |       | (Unaudited)      
|                                             
|                                             
|                                             
|                                             
|OPERATING REVENUES:                           |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|                                             
|                                             
|                                             
|                                             
|                                              | Residential                                            |                                                   | $     | 446.9             |       |      | $     | 445.0 |       |   | $       | 1,072.5 |       |   | $       | 1,089.2 |      
|                                             
|                                             
|                                             
|                                             
|                                              | Commercial                                             |                                                   |       | 180.0             |       |      |       | 174.4 |       |   |         | 464.7   |       |   |         | 451.8   |      
|                                             
|                                             
|                                             
|                                             
|                                              | Industrial                                             |                                                   |       | 54.8              |       |      |       | 55.5  |       |   |         | 155.8   |       |   |         | 158.5   |      
|                                             
|                                             
|                                             
|                                             
|                                              | Sales for resale                                       |                                                   |       | 72.1              |       |      |       | 74.3  |       |   |         | 164.7   |       |   |         | 155.0   |      
|                                             
|                                             
|                                             
|                                             
|                                              | Other                                                  |                                                   |       | 41.1              |       |      |       | 46.4  |       |   |         | 179.6   |       |   |         | 170.1   |      
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|                                              |                                                        |                                                   | 794.9 |                   |       |      | 795.6 |       |       |   | 2,037.3 |         |       |   | 2,024.6 |        
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|OPERATING EXPENSES:                           |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|                                             
|                                             
|                                             
|                                             
|                                              | Operation:                                             |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |         |      
|                                             
|                                             
|                                             
|                                             
|                                              |                                                        | Fuel                                              |       |                   | 191.5 |      |       |       | 188.9 |   |         |         | 448.7 |   |         |         | 434.0 |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                        | Purchased power                                   |       |                   | 106.7 |      |       |       | 122.3 |   |         |         | 305.4 |   |         |         | 332.1 |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                        | Energy conservation cost                          |       |                   | 25.4  |      |       |       | 24.5  |   |         |         | 61.9  |   |         |         | 60.1  |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                        | Operation and maintenance                         |       |                   | 108.0 |      |       |       | 108.3 |   |         |         | 325.9 |   |         |         | 326.9 |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                        | Extended nuclear outage  replacement power costs |       |                   |      |      |       |       |      |   |         |         |      |   |         |         | 5.1   |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                        | Depreciation and amortization                     |       |                   | 86.8  |      |       |       | 89.5  |   |         |         | 260.8 |   |         |         | 260.9 |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                        | Taxes other than income taxes                     |       |                   | 56.9  |      |       |       | 57.5  |   |         |         | 159.9 |   |         |         | 158.4 |  
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|                                              |                                                        |                                                   | 575.3 |                   |       |      | 591.0 |       |       |   | 1,562.6 |         |       |   | 1,577.5 |        
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|                                              | Income taxes:                                          |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |         |      
|                                             
|                                             
|                                             
|                                             
|                                              |                                                        | Currently payable                                 |       |                   | 87.2  |      |       |       | (38.1 | ) |         |         | 182.7 |   |         |         | 55.8  |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                        | Deferred, net                                     |       |                   | (14.4 | )    |       |       | 105.0 |   |         |         | (35.1 | ) |         |         | 79.6  |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                        | Investment tax credits, net                       |       |                   | (2.0  | )    |       |       | (2.0  | ) |         |         | (5.9  | ) |         |         | (5.9  | )
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|                                              |                                                        |                                                   | 70.8  |                   |       |      | 64.9  |       |       |   | 141.7   |         |       |   | 129.5   |        
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|                                              |                                                        |                                                   | 646.1 |                   |       |      | 655.9 |       |       |   | 1,704.3 |         |       |   | 1,707.0 |        
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|INCOME FROM OPERATIONS                        |                                                        |                                                   | 148.8 |                   |       |      | 139.7 |       |       |   | 333.0   |         |       |   | 317.6   |        
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|OTHER INCOME AND DEDUCTIONS:                  |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|                                             
|                                             
|                                             
|                                             
|                                              | Allowance for equity funds used during construction    |                                                   |       | .2                |       |      |       | 2.4   |       |   |         | 3.0     |       |   |         | 6.9     |      
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|                                              | Misc. other income/(expense), net                      |                                                   |       | 3.1               |       |      |       | (1.8  | )     |   |         | 3.8     |       |   |         | (2.4    | )    
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|                                              |                                                        |                                                   | 3.3   |                   |       |      | .6    |       |       |   | 6.8     |         |       |   | 4.5     |        
|INTEREST CHARGES                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|                                             
|                                             
|                                             
|                                             
|                                              | Interest on long-term debt                             |                                                   |       | 26.5              |       |      |       | 28.1  |       |   |         | 80.1    |       |   |         | 87.8    |      
|                                             
|                                             
|                                             
|                                             
|                                              | Other interest expense                                 |                                                   |       | 4.5               |       |      |       | 5.0   |       |   |         | 13.4    |       |   |         | 16.4    |      
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|                                              |                                                        |                                                   | 31.0  |                   |       |      | 33.1  |       |       |   | 93.5    |         |       |   | 104.2   |        
|                                             
|                                             
|                                             
|                                             
|                                              | Allowances for borrowed funds used during construction |                                                   |       | (.02              | )     |      |       | (1.9  | )     |   |         | (3.7    | )     |   |         | (5.5    | )    
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|                                              |                                                        |                                                   | 30.8  |                   |       |      | 31.2  |       |       |   | 89.8    |         |       |   | 98.7    |        
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|NET INCOME                                    |                                                        |                                                   | 121.3 |                   |       |      | 109.1 |       |       |   | 250.0   |         |       |   | 223.4   |        
|                                             
|                                             
|                                             
|                                             
|DIVIDENDS ON PREFERRED STOCK                  |                                                        |                                                   | .3    |                   |       |      | .3    |       |       |   | 1.1     |         |       |   | 1.1     |        
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        
|NET INCOME AFTER DIVIDENDS ON PREFERRED STOCK |                                                        | $                                                 | 121.0 |                   |       | $    | 108.8 |       |       | $ | 248.9   |         |       | $ | 222.3   |        
|                                              |                                                        |                                                   |       |                   |       |      |       |       |       |   |         |         |       |   |         |        

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

7



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##### Table of Contents



FLORIDA POWER CORPORATION

Balance Sheets


(In millions)


|                               |                                                                          |                                                     |                                               |              |       |       |         |         |       |       | 
|------------------------------ | ------------------------------------------------------------------------ | --------------------------------------------------- | --------------------------------------------- | ------------ | ----- | ----- | ------- | ------- | ----- | ----- | 
|                               |                                                                          | September 30,                                       |                                               | December 31,
|                               |                                                                          | 1999                                                |                                               | 1998        
|                               |                                                                          |                                                     |                                               |             
|                               |                                                                          | (Unaudited)                                         |                                               |             
|                              
|                              
|                              
|                              
|ASSETS                        
|                              
|                              
|                              
|                              
|PROPERTY, PLANT AND EQUIPMENT: |                                                                          |                                                     |                                               |              |       |       |         |        
|                              
|                              
|                              
|                              
|                               | Electric utility plant in service and held for future use                |                                                     | $                                             | 6,687.5      |       |       | $       | 6,307.8 |      
|                              
|                              
|                              
|                              
|                               | Less -Accumulated depreciation                                           |                                                     |                                               | 2,877.3      |       |       |         | 2,716.0 |      
|                              
|                              
|                              
|                              
|                               |                                                                          |                                                     | Accumulated decommissioning for nuclear plant |              |       | 278.4 |         |         |       | 254.8 | 
|                              
|                              
|                              
|                              
|                               |                                                                          |                                                     | Accumulated dismantlement for fossil plants   |              |       | 132.4 |         |         |       | 130.7 | 
|                               |                                                                          |                                                     |                                               |              |       |       |         |        
|                               |                                                                          |                                                     | 3,399.4                                       |              |       |       | 3,206.3 |        
|                              
|                              
|                              
|                              
|                               | Construction work in progress                                            |                                                     |                                               | 162.5        |       |       |         | 378.3   |      
|                              
|                              
|                              
|                              
|                               | Nuclear fuel, net of amortization of $392.5 in 1999 and $377.2 in
	 1998 |                                                     |                                               | 70.4         |       |       |         | 45.9    |      
|                               |                                                                          |                                                     |                                               |              |       |       |         |        
|                               |                                                                          |                                                     | 3,632.3                                       |              |       |       | 3,630.5 |        
|                              
|                              
|                              
|                              
|Other property, net            |                                                                          |                                                     | 10.4                                          |              |       |       | 11.5    |        
|                               |                                                                          |                                                     |                                               |              |       |       |         |        
|                               |                                                                          |                                                     | 3,642.7                                       |              |       |       | 3,642.0 |        
|                               |                                                                          |                                                     |                                               |              |       |       |         |        
|CURRENT ASSETS:                |                                                                          |                                                     |                                               |              |       |       |         |        
|                              
|                              
|                              
|                              
|                               | Cash and equivalents                                                     |                                                     |                                               | 4.5          |       |       |         |        |      
|                              
|                              
|                              
|                              
|                               | Accounts receivable, less reserve of $4.0 in 1999 and $3.8 in
	1998      |                                                     |                                               | 291.2        |       |       |         | 206.0   |      
|                              
|                              
|                              
|                              
|                               | Inventories at average cost:                                             |                                                     |                                               |              |       |       |         |         |      
|                              
|                              
|                              
|                              
|                               |                                                                          | Fuel                                                |                                               |              | 77.8  |       |         |         | 48.4  |      
|                              
|                              
|                              
|                              
|                               |                                                                          | Materials and supplies                              |                                               |              | 92.9  |       |         |         | 83.3  |      
|                              
|                              
|                              
|                              
|                               | Deferred income taxes                                                    |                                                     |                                               | 61.4         |       |       |         | 56.0    |      
|                              
|                              
|                              
|                              
|                               | Prepayments and other                                                    |                                                     |                                               | 77.9         |       |       |         | 69.5    |      
|                               |                                                                          |                                                     |                                               |              |       |       |         |        
|                               |                                                                          |                                                     | 605.7                                         |              |       |       | 463.2   |        
|                               |                                                                          |                                                     |                                               |              |       |       |         |        
|OTHER ASSETS:                  |                                                                          |                                                     |                                               |              |       |       |         |        
|                              
|                              
|                              
|                              
|                               | Costs deferred pursuant to regulation:                                   |                                                     |                                               |              |       |       |         |         |      
|                              
|                              
|                              
|                              
|                               |                                                                          | Deferred purchased power contract termination costs |                                               |              | 302.3 |       |         |         | 321.0 |      
|                              
|                              
|                              
|                              
|                               |                                                                          | Other                                               |                                               |              | 96.6  |       |         |         | 113.6 |      
|                              
|                              
|                              
|                              
|                               | Investments in nuclear plant decommissioning fund                        |                                                     |                                               | 354.1        |       |       |         | 332.1   |      
|                              
|                              
|                              
|                              
|                               | Other                                                                    |                                                     |                                               | 48.7         |       |       |         | 56.2    |      
|                               |                                                                          |                                                     |                                               |              |       |       |         |        
|                               |                                                                          |                                                     | 801.7                                         |              |       |       | 822.9   |        
|                               |                                                                          |                                                     |                                               |              |       |       |         |        
|                               |                                                                          | $                                                   | 5,050.1                                       |              |       | $     | 4,928.1 |        
|                               |                                                                          |                                                     |                                               |              |       |       |         |        

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

8



---



##### Table of Contents



FLORIDA POWER CORPORATION

Balance Sheets


(In millions)


|                                        |                                          |               |         |              |         |   |         |         |         | 
|--------------------------------------- | ---------------------------------------- | ------------- | ------- | ------------ | ------- | - | ------- | ------- | ------- | 
|                                        |                                          | September 30, |         | December 31,
|                                        |                                          | 1999          |         | 1998        
|                                        |                                          |               |         |             
|                                        |                                          | (Unaudited)   |         |             
|                                       
|                                       
|                                       
|                                       
|CAPITALIZATION AND LIABILITIES         
|                                       
|                                       
|                                       
|                                       
|CAPITALIZATION:                         |                                          |               |         |              |         |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Common stock                             |               | $       | 1,004.4      |         |   | $       | 1,004.4 |        
|                                       
|                                       
|                                       
|                                       
|                                        | Retained earnings                        |               |         | 914.3        |         |   |         | 815.7   |        
|                                        |                                          |               |         |              |         |   |         |        
|                                        |                                          |               | 1,918.7 |              |         |   | 1,820.1 |        
|                                       
|                                       
|                                       
|                                       
|CUMULATIVE PREFERRED STOCK:             |                                          |               |         |              |         |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Without sinking funds                    |               |         | 33.5         |         |   |         | 33.5    |        
|                                       
|                                       
|                                       
|                                       
|LONG-TERM DEBT                          |                                          |               | 1,473.1 |              |         |   | 1,555.1 |        
|                                        |                                          |               |         |              |         |   |         |        
|                                        |                                          | TOTAL CAPITAL |         |              | 3,425.3 |   |         |         | 3,408.7 | 
|                                        |                                          |               |         |              |         |   |         |        
|CURRENT LIABILITIES:                    |                                          |               |         |              |         |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Accounts payable                         |               |         | 167.1        |         |   |         | 154.2   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Accounts payable to associated companies |               |         | 27.5         |         |   |         | 27.2    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Customers deposits                      |               |         | 105.8        |         |   |         | 104.1   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Income taxes payable                     |               |         | 65.8         |         |   |         |        |        
|                                       
|                                       
|                                       
|                                       
|                                        | Accrued other taxes                      |               |         | 70.4         |         |   |         | 6.3     |        
|                                       
|                                       
|                                       
|                                       
|                                        | Accrued interest                         |               |         | 47.2         |         |   |         | 55.8    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Overrecovered utility fuel costs         |               |         | 37.7         |         |   |         | 22.2    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                    |               |         | 43.0         |         |   |         | 70.6    |        
|                                        |                                          |               |         |              |         |   |         |        
|                                        |                                          |               | 564.5   |              |         |   | 440.4   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Notes payable                            |               |         |             |         |   |         | 47.3    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Current portion of long-term debt        |               |         | 151.7        |         |   |         | 91.6    |        
|                                        |                                          |               |         |              |         |   |         |        
|                                        |                                          |               | 716.2   |              |         |   | 579.3   |        
|                                        |                                          |               |         |              |         |   |         |        
|DEFERRED CREDITS AND OTHER LIABILITIES: |                                          |               |         |              |         |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Deferred income taxes                    |               |         | 542.8        |         |   |         | 563.2   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Unamortized investment tax credits       |               |         | 71.3         |         |   |         | 77.2    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Other postretirement benefit costs       |               |         | 118.2        |         |   |         | 112.9   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                    |               |         | 176.3        |         |   |         | 186.8   |        
|                                        |                                          |               |         |              |         |   |         |        
|                                        |                                          |               | 908.6   |              |         |   | 940.1   |        
|                                        |                                          |               |         |              |         |   |         |        
|                                        |                                          | $             | 5,050.1 |              |         | $ | 4,928.1 |        
|                                        |                                          |               |         |              |         |   |         |        

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

9



---



##### Table of Contents



FLORIDA POWER CORPORATION

Statements of Cash Flows


(In millions)


|                                                  |                                                       |                                                       |        |        |       |   |        |        |       |  
|------------------------------------------------- | ----------------------------------------------------- | ----------------------------------------------------- | ------ | ------ | ----- | - | ------ | ------ | ----- | -
|                                                  |                                                       |                                                      
|                                                  |                                                       | Nine Months Ended                                    
|                                                  |                                                       | September 30,                                        
|                                                  |                                                       |                                                      
|                                                  |                                                       | 1999                                                  |        | 1998  
|                                                  |                                                       |                                                       |        |       
|                                                  |                                                       |                                                      
|                                                  |                                                       | (Unaudited)                                          
|                                                 
|                                                 
|                                                 
|                                                 
|OPERATING ACTIVITIES:                             |                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Net income after dividends on preferred stock         |                                                       | $      | 248.9  |       |   | $      | 222.3  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Adjustments for noncash items:                        |                                                       |        |        |       |   |        |        |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Depreciation and amortization                         |        |        | 280.4 |   |        |        | 288.6 |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Deferred income taxes and investment tax credits, net |        |        | (41.0 | ) |        |        | 73.0  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Changes in working capital:                           |                                                       |        |        |       |   |        |        |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Accounts receivable                                   |        |        | (85.3 | ) |        |        | (41.8 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Inventories                                           |        |        | (39.0 | ) |        |        | 14.9  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Overrecovered/Underrecovered utility fuel costs       |        |        | 15.5  |   |        |        | 15.0  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Accounts payable                                      |        |        | (5.6  | ) |        |        | (42.3 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Income taxes payable                                  |        |        | 81.8  |   |        |        | 35.1  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Accrued other taxes                                   |        |        | 64.1  |   |        |        | 59.6  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Other                                                 |        |        | (40.0 | ) |        |        | (25.7 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other operating activities                            |                                                       |        | 13.7   |       |   |        | 15.4   |      
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|                                                  |                                                       |                                                       | 493.5  |        |       |   | 614.1  |       
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|INVESTING ACTIVITIES:                             |                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Construction expenditures                             |                                                       |        | (252.6 | )     |   |        | (191.6 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Allowance for borrowed funds used during construction |                                                       |        | (3.7   | )     |   |        | (5.5   | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other investing activities                            |                                                       |        | (12.9  | )     |   |        | (50.8  | )    
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|                                                  |                                                       |                                                       | (269.2 | )      |       |   | (247.9 | )     
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|FINANCING ACTIVITIES:                             |                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Issuance of long-term debt                            |                                                       |        |       |       |   |        | 144.1  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Repayment of long-term debt                           |                                                       |        | (15.8  | )     |   |        | (158.6 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Decrease in commercial paper with long-term support   |                                                       |        | (6.4   | )     |   |        | (8.4   | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Dividends paid on common stock                        |                                                       |        | (150.3 | )     |   |        | (147.0 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Decrease in short-term debt                           |                                                       |        | (47.3  | )     |   |        | (179.8 | )    
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|                                                  |                                                       |                                                       | (219.8 | )      |       |   | (349.7 | )     
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|NET INCREASE IN CASH AND EQUIVALENTS              |                                                       |                                                       | 4.5    |        |       |   | 16.5   |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Beginning cash and equivalents                        |                                                       |        |       |       |   |        |       |      
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|ENDING CASH AND EQUIVALENTS                       |                                                       | $                                                     | 4.5    |        |       | $ | 16.5   |       
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Cash paid during the period for:                      |                                                       |        |        |       |   |        |        |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Interest (net of amount capitalized)                  |        | $      | 95.8  |   |        | $      | 100.9 |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Income taxes (net of refunds)                         |        | $      | 107.6 |   |        | $      | 21.1  |  

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

10



---



##### Table of Contents



FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION

NOTES TO FINANCIAL STATEMENTS



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1) | Florida Progress principal business segment is the Utility
	segment. 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
	Energy and Related Services, Rail Services and Inland Marine
	Transportation groups. Financial data for business segments for
	the periods covered in this Form 10-Q are presented in the
	table below:

|                                       |                                    |               |   |                  |  |          |   |                |  |       |   |              |  |              |   |       |  |  |   |       |   |  |   |        |   |  |   |         | 
|-------------------------------------- | ---------------------------------- | ------------- | - | ---------------- |  | -------- | - | -------------- |  | ----- | - | ------------ |  | ------------ | - | ----- |  |  | - | ----- | - |  | - | ------ | - |  | - | ------- | 
|                                       |                                    |               |   | Energy and       |  | Rail     |   | Inland Marine  |  |       |   |              |  |             
|                                       |                                    | Utility       |   | Related Services |  | Services |   | Transportation |  | Other |   | Eliminations |  | Consolidated
|                                       |                                    |               |   |                  |  |          |   |                |  |       |   |              |  |             
|                                       |                                    |              
|                                       |                                    | (In millions)
|                                      
|                                      
|                                      
|                                      
|Three months ended September 30, 1999: |                                    |               |   |                  |  |          |   |                |  |       |   |              |  |              |   |       |  |  |   |       |   |  |   |        |   |  |   |        
|                                      
|                                      
|                                      
|                                      
|                                       | Revenues                           |               | $ | 794.9            |  |          | $ | 47.5           |  |       | $ | 223.5        |  |              | $ | 38.2  |  |  | $ | 2.1   |   |  | $ | 1.1    |   |  | $ | 1,107.3 | 
|                                      
|                                      
|                                      
|                                      
|                                       | Intersegment revenues              |               |   |                 |  |          |   | 69.1           |  |       |   | .3           |  |              |   | 3.0   |  |  |   | (.9   | ) |  |   | (71.5  | ) |  |   |        | 
|                                      
|                                      
|                                      
|                                      
|                                       | Segment net income (loss)          |               |   | 121.0            |  |          |   | 17.2           |  |       |   | 5.6          |  |              |   | 3.3   |  |  |   | (9.3  | ) |  |   | (.5    | ) |  |   | 137.3   | 
|                                      
|                                      
|                                      
|                                      
|Nine months ended September 30, 1999:  |                                    |               |   |                  |  |          |   |                |  |       |   |              |  |              |   |       |  |  |   |       |   |  |   |        |   |  |   |        
|                                      
|                                      
|                                      
|                                      
|                                       | Revenues                           |               | $ | 2,037.3          |  |          | $ | 135.1          |  |       | $ | 622.0        |  |              | $ | 101.9 |  |  | $ | 4.2   |   |  | $ | 3.5    |   |  | $ | 2,904.0 | 
|                                      
|                                      
|                                      
|                                      
|                                       | Intersegment revenues              |               |   |                 |  |          |   | 197.2          |  |       |   | 1.3          |  |              |   | 11.1  |  |  |   | (7.4  | ) |  |   | (202.2 | ) |  |   |        | 
|                                      
|                                      
|                                      
|                                      
|                                       | Segment net income (loss)          |               |   | 248.9            |  |          |   | 33.6           |  |       |   | 11.8         |  |              |   | 6.2   |  |  |   | (18.5 | ) |  |   | (.5    | ) |  |   | 281.5   | 
|                                      
|                                      
|                                      
|                                      
|                                       | Total assets at September 30, 1999 |               |   | 5,050.1          |  |          |   | 350.9          |  |       |   | 752.0        |  |              |   | 102.9 |  |  |   | 534.5 |   |  |   | (377.4 | ) |  |   | 6,413.0 | 
|                                      
|                                      
|                                      
|                                      
|Three months ended September 30, 1998: |                                    |               |   |                  |  |          |   |                |  |       |   |              |  |              |   |       |  |  |   |       |   |  |   |        |   |  |   |        
|                                      
|                                      
|                                      
|                                      
|                                       | Revenues                           |               | $ | 795.6            |  |          | $ | 42.2           |  |       | $ | 161.5        |  |              | $ | 31.8  |  |  | $ | (.7   | ) |  | $ | 1.1    |   |  | $ | 1,031.5 | 
|                                      
|                                      
|                                      
|                                      
|                                       | Intersegment revenues              |               |   |                 |  |          |   | 61.3           |  |       |   | .2           |  |              |   | 3.8   |  |  |   | (4.3  | ) |  |   | (61.0  | ) |  |   |        | 
|                                      
|                                      
|                                      
|                                      
|                                       | Segment net income (loss)          |               |   | 108.8            |  |          |   | 4.3            |  |       |   | 3.9          |  |              |   | 3.3   |  |  |   | (3.0  | ) |  |   |       |   |  |   | 117.3   | 
|                                      
|                                      
|                                      
|                                      
|Nine months ended September 30, 1998:  |                                    |               |   |                  |  |          |   |                |  |       |   |              |  |              |   |       |  |  |   |       |   |  |   |        |   |  |   |        
|                                      
|                                      
|                                      
|                                      
|                                       | Revenues                           |               | $ | 2,024.6          |  |          | $ | 128.1          |  |       | $ | 464.5        |  |              | $ | 90.3  |  |  | $ | 11.4  |   |  | $ | 3.2    |   |  | $ | 2,722.1 | 
|                                      
|                                      
|                                      
|                                      
|                                       | Intersegment revenues              |               |   |                 |  |          |   | 196.0          |  |       |   | .6           |  |              |   | 10.7  |  |  |   | (12.1 | ) |  |   | (195.2 | ) |  |   |        | 
|                                      
|                                      
|                                      
|                                      
|                                       | Segment net income (loss)          |               |   | 222.3            |  |          |   | 14.4           |  |       |   | 10.7         |  |              |   | 6.9   |  |  |   | (8.7  | ) |  |   |       |   |  |   | 245.6   | 
|                                       | Total assets at                    |               |   |                  |  |          |   |                |  |       |   |              |  |              |   |       |  |  |   |       |   |  |   |        |   |  |   |         | 
|                                      
|                                      
|                                      
|                                      
|                                       | September 30, 1998                 |               |   | 4,947.0          |  |          |   | 303.7          |  |       |   | 575.1        |  |              |   | 112.0 |  |  |   | 152.0 |   |  |   | (64.6  | ) |  |   | 6,025.2 | 



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2) | In December 1998, Florida Power received approval from the
	Florida Public Service Commission (FPSC) to defer
	$10.1 million of nonfuel revenues towards the development of a
	plan that would allow customers to realize the benefits of the
	1998 deferred revenues earlier than if the nonfuel revenues were
	used to accelerate the amortization of the Tiger Bay regulatory
	asset. The plan was required to be submitted to the FPSC by
	May 1, 1999. Florida Power was unable to identify any rate
	initiatives that might allow its ratepayers to receive these
	benefits sooner and, in June 1999, recognized $10.1 million of
	revenue and recorded $10.1 million, plus interest, of
	amortization against the Tiger Bay regulatory asset.
|  
|3) | In April 1999, FPC Capital I, a subsidiary business trust,
	completed the sale of $300 million Cumulative Quarterly Income
	Preferred Securities through a public offering, the proceeds of
	which were used to pay down short-term debt and for general
	corporate purposes. The securities are, in effect, fully and
	unconditionally guaranteed by Florida Progress. Quarterly
	distributions are payable at an annual rate of 7.10%.                                                                                                                                                                                                                                                                                                              
|  
|4) | On August 22, 1999, Florida Progress entered into an
	Agreement and Plan of Exchange (the agreement), with
	Carolina Power and Light Company (CP&L) and
	CP&L Holdings, Inc. (CP&L Holdings), a wholly
	 owned subsidiary of CP&L. CP&L is in the process of a
	restructuring whereby CP&L Holdings will become the holding
	company of CP&L. Under terms of the agreement, all of the
	outstanding shares of Florida Progress would be acquired by
	CP&L Holdings in a statutory share exchange. The transaction
	has been approved by the Boards of Directors of Florida Progress
	and CP&L. Completion of the transaction is expected to occur
	shortly after all of the conditions to the agreement,                                        

11



---



##### Table of Contents



FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION




NOTES TO FINANCIAL STATEMENTS  (Continued)




| |                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------
| | including the receipt of certain regulatory approvals, are met or
	 waived. The transaction is expected to be completed by September
	 2000.

5)  CONTINGENCIES



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Off-Balance Sheet Risk  Several of Florida
	Progress subsidiaries are general partners in
	unconsolidated partnerships and joint ventures. Florida Progress
	or its subsidiaries have agreed to support certain loan
	agreements of the partnerships and joint ventures. These credit
	risks are not material to the consolidated financial statements
	of Florida Progress based upon the asset values supporting the
	partnership liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | Insurance  Florida Progress and its
	subsidiaries utilize various risk management techniques to
	protect assets from risk of loss, including the purchase of
	insurance. Risk avoidance, risk transfer and self-insurance
	techniques are utilized depending on Florida Progress
	ability to assume risk, the relative cost and availability of
	methods for transferring risk to third parties, and the
	requirements of applicable regulatory bodies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | Florida Power self-insures its transmission and distribution
	lines against loss due to storm damage and other natural
	disasters. Pursuant to a regulatory order, Florida Power accrues
	$6 million annually to a storm damage reserve and may defer any
	losses in excess of the reserve. The reserve balances at
	September 30, 1999 and December 31, 1998 were $28.6
	million and $24.1 million, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | Under the provisions of the Price Anderson Act, which limits
	liability for accidents at nuclear power plants, Florida Power,
	as an owner of a nuclear plant, can be assessed for a portion of
	any third-party liability claims arising from an accident at any
	commercial nuclear power plant in the United States. If total
	third-party claims relating to a single nuclear incident exceed
	$200 million (the amount of currently available commercial
	liability insurance), Florida Power could be assessed up to $88.1
	 million per incident, with a maximum assessment of $10 million
	per year.                                                                                                                                                                                                                                                                                                              
|
| | Florida Power is a member of the Nuclear Electric Insurance, Ltd.
	 (NEIL), an industry mutual insurer, which provides
	business interruption and extra expense coverage in the event of
	a major accidental outage at a covered nuclear power plant.
	Florida Power is subject to a retroactive premium assessment by
	NEIL under this policy in the event that loss experience exceeds
	NEILs available surplus. Florida Powers present
	maximum share of any such retroactive assessment is $2.7 million
	per policy year.                                                                                                                                                                                                                                                                                                                                                                                         
|
| | Florida Power also maintains nuclear property damage insurance
	and decontamination and decommissioning liability insurance.
	Effective October 1, 1999, the total limit purchased for this
	type of insurance was reduced from $2.1 billion to $1.6 billion.
	The reduction was based on a review of the potential property
	damage exposure, the legal minimum required to be carried, and
	the amount of insurance being purchased by other owners of single
	 unit nuclear sites. The first $500 million layer of the
	insurance is purchased in the commercial insurance market with
	the remaining excess coverage purchased from NEIL. Florida Power
	is self-insured for any losses that are in excess of this
	coverage. Under the terms of the NEIL policy, Florida Power could
	 be assessed up to a maximum of $5.3 million in any policy year
	if losses in excess of NEILs available surplus are
	incurred.
|
| | Florida Power has never been assessed under these nuclear
	indemnities or insurance policies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | Contaminated Site Cleanup  Florida Progress is
	subject to regulation with respect to the environmental impact of
	 its operations. Florida Progress disposal of hazardous
	waste through third-party vendors can result in costs to clean up
	 facilities found to be contaminated. Federal and state statutes
	authorize governmental agencies to compel responsible parties to
	pay for cleanup of these hazardous waste sites.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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##### Table of Contents



FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION




NOTES TO FINANCIAL STATEMENTS  (Continued)




| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Florida Power and certain former subsidiaries of Florida
	Progress, whose properties were sold in prior years, have been
	identified by the U.S. Environmental Protection Agency
	(EPA) as Potentially Responsible Parties
	(PRPs) at certain sites. Liability for the cleanup
	costs at these sites is joint and several.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | One of the sites that Florida Power previously owned and operated
	 is located in Sanford, Florida. There are five parties,
	including Florida Power, that have been identified as PRPs at the
	 Sanford site. An agreement has been reached among the PRPs of
	the Sanford site to spend up to $1.5 million to perform a
	Remedial Investigation and Feasibility Study (RI/FS).
	 Florida Power is liable for approximately 40% of those costs. On
	 September 25, 1998, the EPA formally approved the PRP RI/FS
	 Work Plan. The RI/FS fieldwork was completed in January 1999.
	The EPA is expected to review the final Remedial Investigation
	report and provide further guidance to the PRPs in late 1999.                                                                                                                                                                                                                                                               
|
| | Negotiations are underway within the PRP group at the Sanford
	site to develop a new Participants Agreement. The Agreement
	 will define and allocate future Remedial Design and Remedial
	Action costs among the participants for Phase I of three
	potential separate phases of cleanup. The project will be
	addressed in separate phases for project management purposes.
	Florida Powers future cost share allocation for Phase I is
	expected to be identified by December 1999. 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 consolidated financial position,
	results of operations or liquidity.                                                                                                        
|
| | In December 1998, the EPA conducted an expanded site inspection
	at a former Florida Power plant site designated
	Inglis. Soil and groundwater samples were obtained
	from the Florida Power property, as well as sediment samples from
	 the adjacent Withalacoochee River. A final report is expected
	from the EPA in 1999 regarding the site hazard ranking and
	possible listing on the National Priorities list.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | 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
	$3.0 million to $9.0 million. It has accrued $4.2 million against
	 these potential costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | 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 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 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 attempted settlement of all
	claims. Plaintiffs rejected that offer. Florida Power and the
	then plaintiffs engaged in informal settlement discussions, which
	 were terminated on December 22, 1998. However, plaintiffs
	filed a motion to enforce a purported $11 million oral settlement
	 agreement. Florida Power denied that such an agreement was
	reached. In August 1999, the judge denied the plaintiffs
	motion to enforce the alleged settlement. Florida Power then
	extended another written offer to settle the case for
	approximately $1 million, but the plaintiffs rejected that offer.
	 As a result of the plaintiffs claims, management has
	identified a probable range of $5 million to $100 million with no
	 amount within that

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FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION




NOTES TO FINANCIAL STATEMENTS  (Continued)




| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | range a better estimate of probable loss than any other amount;
	accordingly, Florida Power has accrued $5 million. 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, Inc. (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 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 Advanced Separation
	Technologies for which Florida Progress may be responsible under
	the Stock Purchase Agreement with Calgon is approximately $3.2
	million, and accordingly, has 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.
|
| | 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. In
	September 1999, the final terms of the settlement agreement were
	reduced to writing. Among other things, the agreement will
	generally require Florida Power to pay the firm energy price for
	16 hours per day, and the as-available price for
	8 hours per day. The agreement is conditioned upon receiving
	 the approval of the Dade County Commission and the FPSC.                                                                                                                                                                                                                                                                                                                                                                    
|
| | Management does not expect that the results of these legal
	actions will have a material impact on Florida Powers
	financial position, 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. In addition, tax benefits of approximately $11
	million related to the excess of the tax basis over the book
	value in the investment in Mid-Continent as of December 31,
	1997 were not recorded because of                                                                                                                                                                                                                                                                                                                                                                             

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FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION




NOTES TO FINANCIAL STATEMENTS  (Continued)




| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | uncertainties associated with the timing of a tax deduction.
	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 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.
	 Although both sides appealed the decision to the Oklahoma
	Supreme Court, those appeals were withdrawn in early 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | In December 1997, the Commissioner 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 estimate of the
	additional assets necessary to fund the reserve, after applying
	Mid-Continents statutory surplus, is in the range of $100
	million, rather than in the $350 million range put forth by the
	actuary hired by the former Commissioner. 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. An order agreed upon by both sides
	outlining a plan of rehabilitation was filed on March 18,
	1999. Bids from a variety of parties were received and opened in
	June 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | In October 1999, Oklahoma Insurance Commissioner Fisher signed a
	Letter of Intent 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.
	Florida Progress would assign all of Mid-Continents stock
	to the receiver, and contribute $10 million to help offset future
	 premium rate increases or coverage reductions. The $10 million
	would be held in escrow by the receiver for a period of
	10 years and invested for the benefit of the policyholders.
	The investment is expected to yield approximately $20 million.
	Any proposed premium increases would be offset by this fund until
	 it is exhausted. The receiver in turn would seek to obtain court
	 approval to release Florida Progress from the receivership court
	 and the dismissal of currently pending litigation by
	policyholders, and would cooperate in obtaining the dismissal of
	any other currently pending or future litigation. The
	Mid-Continent plan is scheduled to be considered by the Oklahoma
	County District Court in December 1999. Management believes that
	if the Court approves the proposed rehabilitation plan by
	December 31, 1999, the $10 million contribution would be
	mitigated 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, will
	not have a material impact on Florida Progress consolidated
	 financial position.
|
| | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION




NOTES TO FINANCIAL STATEMENTS  (Continued)




| |                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | with the sale of that policy. The suit seeks unspecified actual
	and punitive damages. The defendants motion to dismiss was
	granted in October 1999. A hearing is scheduled for December on
	the issue of whether the dismissal was with or without prejudice.                                                                                                                                                            
|
| | 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. Florida Progress believes the lawsuits are
	without merit. Because the outcome of the litigation cannot be
	estimated, Florida Progress has not made provision for any
	additional losses that might result.



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6) | In the opinion of management, the accompanying financial
	statements include all adjustments deemed necessary to summarize
	fairly and reflect the financial position and results of
	operations of Florida Progress and Florida Power for the interim
	periods presented. Quarterly results are not necessarily
	indicative of results for the full year. These financial
	statements should be read in conjunction with the financial
	statements and notes thereto in the combined Annual Report on
	Form  10-K of Florida Progress and Florida Power for the
	year ended December 31, 1998 (the 1998
	Form 10-K).

16



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##### Table of Contents








|         |                                                                                          
|-------- | -----------------------------------------------------------------------------------------
|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 September 30, 1999 were $137.3 million, or
$1.40 per share, compared to earnings of $117.3 million, or $1.21
 per share, for the same period in 1998. The substantial earnings
 growth for the quarter resulted from strong customer and
non-weather usage growth at Florida Power Corporation, the
companys electric utility and largest subsidiary, along
with significant growth at Electric Fuels Corporation, lead
company for its diversified operations.

For the nine month period ended September 30, 1999, Florida
Progress consolidated earnings were $281.5 million, or
$2.87 per share, a 14.6 percent increase over the nine
months ended September 30,1998 earnings of $245.6 million,
or $2.53 earnings per share.

A reconciliation of Florida Progress 1999 third quarter
earnings per share is as follows:

|                                        |                   |                                     |  |  |       |   |      |       |   | 
|--------------------------------------- | ----------------- | ----------------------------------- |  |  | ----- | - | ---- | ----- | - | 
|                                       
|                                       
|                                       
|                                       
|1998 Florida Progress Third Quarter EPS |                   |                                     |  |  |       |   |      |      
|                                       
|                                       
|                                       
|                                       
|                                        | Florida Power     |                                     |  |  |       |   | $    | 1.21  |  
|                                       
|                                       
|                                       
|                                       
|                                        |                   | Customer & non-weather usage growth |  |  | 0.13  |   |      |       |   | 
|                                       
|                                       
|                                       
|                                       
|                                        |                   | Estimated weather impact on sales   |  |  | (0.05 | ) |      |       |   | 
|                                       
|                                       
|                                       
|                                       
|                                        |                   | 1998 Accelerated amortization       |  |  | 0.04  |   |      |       |   | 
|                                       
|                                       
|                                       
|                                       
|                                        |                   | Depreciation & amortization         |  |  | (0.03 | ) |      |       |   | 
|                                       
|                                       
|                                       
|                                       
|                                        |                   | Interest, AFUDC & other             |  |  | 0.02  |   |      |       |   | 
|                                        |                   |                                     |  |  |       |   |      |      
|                                        |                   |                                     |  |  |       |   | 0.11 |      
|                                       
|                                       
|                                       
|                                       
|                                        | Electric Fuels    |                                     |  |  |       |   |      | 0.13  |  
|                                       
|                                       
|                                       
|                                       
|                                        | Corporate & other |                                     |  |  |       |   |      | (0.05 | )
|                                        |                   |                                     |  |  |       |   |      |      
|1999 Florida Progress Third Quarter EPS |                   |                                     |  |  |       | $ | 1.40 |      
|                                        |                   |                                     |  |  |       |   |      |      

Florida Power Corporation

Florida Power reported earnings, after intercompany eliminations
of $.5 million, of $120.5 million, or $1.23 per share for the
third quarter of 1999, compared with 1998 results of $108.8
million, or $1.12 per share.

Florida Powers earnings for the nine month period ended
September 30, 1999, after intercompany eliminations of $.5
million, were $248.4 million or $2.54 per share compared to
earnings of $ 222.3 million, or $2.29 per share for the same
period last year. The increase at Florida Power for the nine
month period was due largely to lower amortization of regulatory
assets, excluding the $10.1 million of amortization recorded in
1999 (see Note 2 to the Financial Statements on page 11), and
lower interest expense due to debt refinancings in 1998.

Florida Powers total kilowatt-hour sales during the third
quarter of 1999, increased 5.1 percent over the same period
in 1998. Increased retail sales of 3.3 percent accounted for
 almost half of the improvement, despite a return to more normal
weather conditions when compared with the third quarter of 1998.

Florida Power served approximately 27,000 new retail customers
during the third quarter of 1999 compared with last year, as it
continued to benefit from strong residential and commercial
customer growth of 1.9 percent and 3.2 percent,
respectively.

Floridas strong economy, with unemployment well below the
national average, is another factor contributing to Florida
Powers retail sales growth.

Wholesale kilowatt-hour sales were up 18.3 percent in the
third quarter over 1999, compared with the same period in 1998.
The increase was primarily due to additional kilowatt-hour sales
to Florida Powers largest customer, Seminole Electric
Cooperative. Most of the 1999 sales to Seminole Electric were
billed under a new, restructured contract that became effective
in January 1999. As a result, non-fuel revenues from sales to
Seminole Electric were essentially unchanged from last year.

17



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##### Table of Contents



Depreciation and amortization expense decreased $2.7 million in
the third quarter of 1999, compared with last year. Excluding
$7.0 million of accelerated Tiger Bay amortization in the third
quarter of 1998, depreciation and amortization increased $4.3
million for the three months ended September 30, 1999 compared to
 the same period last year. The increase was primarily due to
additional depreciation expense related to the 500-megawatt Hines
 plant, which was placed in service during the second quarter of
1999.

Diversified Operations

Revenues for diversified operations increased $76.5 million and
$169.2 million for the three and nine months ended
September 30, 1999 compared to the same periods in the prior
 year. Cost of sales for Florida Progress diversified
operations were $72.6 million and $180.8 million higher for the
three and nine months ended September 30, 1999 compared to
the same periods last year. The increases were due primarily to
1998 acquisitions at Electric Fuels Rail Services Group.

Electric Fuels Corporation

Electric Fuels earned $23.4 million, or $.24 per share, in the
third quarter of 1999, compared with $10.5 million, or $.11 per
share, in 1998. The substantial increase in earnings per share
was primarily due to synthetic fuel (synfuel) sales
and the related tax credits by the Energy and Related Services
group and an income tax rate true-up related to synthetic fuel
tax credits.

Earnings at the Energy and Related Services group were up $6.5
million for the third quarter, before an income tax adjustment,
compared with the same period last year. Earnings for the nine
month period were $12.8 million higher, before the income tax
adjustment, compared to the same period last year. Sales of a
coal based synthetic fuel and the related tax credits accounted
for most of the increase for both periods.

Due primarily to the rapid growth of the synfuel operations and
the resulting increase in expected synfuel tax credits available
for 1999, Electric Fuels reduced the estimate of its expected
1999 effective tax rate. The lower effective tax rate reduced
income tax expense by approximately $6 million compared with the
tax expense that would have been recorded using the effective tax
 rate that was utilized in prior 1999 quarters. The only effect
of the true-up is on the timing of recognizing the tax credits
this calendar year.

Earnings from the Inland Marine Transportation group were
essentially unchanged for both the three and nine month periods
ended September 30, 1999 compared to the same periods in
1998. The benefits of a larger barge fleet were offset by higher
diesel fuel costs and low-water conditions that limited barge
tonnage on the Ohio River.

Earnings at the Rail Services group increased $1.7 million and
$1.1 million for the three and nine month periods ended
September 30, 1999 compared with the same periods in 1998.
The increase for the three and nine month periods was due to
higher earnings from the mechanical and trackwork divisions and
sales of railcars from the lease portfolio.

Corporate and Other

Corporate and other expenses increased $.05 per share, resulting
in a $.07 loss in the third quarter of 1999, compared with a $.02
 loss in 1998. For the nine month period ending
September 30, 1999, Corporate and other expenses increased
$.09 per share. On August 23, 1999, Florida Progress and
Carolina Power & Light announced that the two companies had
agreed to combine. Transaction costs incurred by Florida Progress
 associated with this proposed combination reduced results by
$.05 a share for both the three and nine month periods compared
to 1998. (See Proposed Share Exchange With Carolina Power
And Light Company on page 20.) In addition, Florida
Progress realized a one-time gain of $.04 per share in the second
 quarter of 1998 for the buy-out of a purchased power contract
associated with a cogeneration facility in which a Florida
Progress subsidiary is a minority partner.

18



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##### Table of Contents



Year 2000

Florida Progress has taken a comprehensive five-step approach to
address the Year 2000 (Y2K) issue. The five steps
include awareness, inventory, assessment and prioritization,
remediation and verification, and contingency planning. The
Florida Progress Y2K effort is now overseen by the Director of
Information Technology of Florida Power. (See 1998
Form 10-K, Item 7, Managements Discussion
and Analysis of Financial Condition and Results of
Operations  Year 2000.)

The following chart represents an estimate of the current status
of all of Florida Progress Y2K efforts, including those
addressing both mission critical and non-mission critical
systems, and planned completion dates for all phases as of
September 30, 1999.

|                              |  |               |     |                |  |               |               |                |  |  |     |   |  |  |               | 
|----------------------------- |  | ------------- | --- | -------------- |  | ------------- | ------------- | -------------- |  |  | --- | - |  |  | ------------- | 
|                              |  |               |     |               
|                              |  | Florida Power |     | Electric Fuels
|                              |  |               |     |               
|                              |  | Percent       |     |                |  | Percent       |               |               
|                              |  | Complete      |     | Actual/Planned |  | Complete      |               | Actual/Planned
|                              |  | September 30, |     | Completion     |  | September 30, |               | Completion    
|                              |  | 1999          |     | Date           |  | 1999          |               | Date          
|                              |  |               |     |                |  |               |               |               
|Awareness                     |  |               | *   |                |  |               | *             |                |  |  | *   |   |  |  | *             | 
|                             
|                             
|                             
|                             
|Inventory                     |  |               | 100 | %              |  |               | January 1999  |                |  |  | 100 | % |  |  | March 1999    | 
|                             
|                             
|                             
|                             
|Assessment and prioritization |  |               | 100 | %              |  |               | May 1999      |                |  |  | 100 | % |  |  | August 1999   | 
|                             
|                             
|                             
|                             
|Remediation and verification  |  |               | 99  | %              |  |               | December 1999 |                |  |  | 93  | % |  |  | November 1999 | 
|                             
|                             
|                             
|                             
|Contingency planning          |  |               | 100 | %              |  |               | June 1999     |                |  |  | 78  | % |  |  | December 1999 | 

* To continue through duration of project.

Florida Power achieved Y2K readiness for mission-critical systems
 on schedule with the June 30, 1999 target date set by the
North American Electric Reliability Council (NERC)
and the Nuclear Regulatory Commission. Florida Power has also
developed contingency plans for all mission critical systems.
Florida Power will continually evaluate, and if needed, modify
contingency plans throughout the remainder of the year.

Florida Power achieved readiness through a comprehensive program
that included the identification, review, correction and
verification of all mission-critical components and systems that
could be affected by the Y2K event dates. Work on certain
non-critical systems is continuing, and is expected to be
completed during the fourth quarter of 1999.

Florida Power hired consultants to assist in preparing fossil and
 nuclear generation facilities for Y2K readiness and to draft
contingency plans. The need for a contingency plan is similar to
the need for a plan in the event of a hurricane, lightning strike
 or ordinary equipment malfunction. As part of Y2K contingency
planning, Florida Power has enhanced emergency operating
procedures to include situations that could arise relative to Y2K
 issues. Florida Power has identified mission critical operations
 and is prepared to have additional employees at these locations
during the Y2K rollover period. Florida Power also plans to carry
 higher inventory balances at year end to prepare for the effects
 of any potential interruption of shipments from key suppliers.
During the third quarter of 1999, Florida Power participated in
drills conducted by NERC and continued conducting internal
testing to determine the adequacy of the contingency plans. These
 drills and testing were completed successfully.

Florida Progress continues to work with the FPSC, the Florida
Reliability Coordinating Council (FRCC), neighboring
utilities, third party vendors, and customers to ensure a smooth
transition into the year 2000. The State of Florida has also
adopted legislation that may in certain circumstances provide a
safe harbor against Y2K related litigation for
companies that undertake certain Y2K remedial efforts.
Nevertheless, achieving Y2K readiness is subject to various risks
 and uncertainties, as explained in greater detail in the 1998
Form 10-K, under Item 7, Year 2000, and
there can be no assurances that Florida Progress will not incur
legal or other costs associated with Y2K related problems or
litigation.

19



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##### Table of Contents



Florida Progress currently estimates that the total cost for it
to address Y2K issues will be between $15 million and $20
million. No Florida Progress systems have been replaced on an
accelerated basis due to the Y2K issue. As of September 30,
1999, Florida Progress has incurred a total of approximately
$13.0 million of internal and external costs related to Y2K. The
company does not track internal and external costs separately.
All significant costs have been expensed as incurred.

Proposed Share Exchange with Carolina Power and Light Company

On August 22, 1999, Florida Progress entered into an
Agreement and Plan of Exchange (the Exchange
Agreement), with CP&L and CP&L Holdings. Under
terms of the Exchange Agreement, all of the outstanding shares of
 Florida Progress would be acquired by CP&L Holdings in a
statutory share exchange. In connection therewith, Florida
Progress executed a Second Amendment to Shareholder Rights
Agreement, dated as of August 22, 1999, with BankBoston,
N.A. (the Rights Amendment). This Rights Amendment
provides, among other things, that the consummation of the
transactions contemplated by the Exchange Agreement will not
cause the occurrence of a Triggering Event (as defined in the
Rights Agreement). The transactions under the Exchange Agreement
have been approved by the Boards of Directors of Florida Progress
 and CP&L, but consummation of the exchange is subject to the
 satisfaction or waiver of certain closing conditions, including
the approval of the shareholders of Florida Progress and
CP&L, and the approval or regulatory review by certain state
and federal government agencies. The transaction is expected to
be completed by September 2000. For further information about
this transaction, see the combined Florida Progress and Florida
Power Form 8-K dated August 23, 1999, as filed with the
 SEC on August 24, 1999, and Form 8-K dated
August 22, 1999, as filed with the SEC on August 30,
1999.

Other

In November 1999, Florida Power submitted a request to the FPSC
to defer a portion of nonfuel revenues towards the development of
 a plan that would allow customers to realize the benefits of the
 1999 deferred revenues earlier than if the nonfuel revenues were
 used to accelerate the amortization of the Tiger Bay regulatory
asset. The amount of the deferral is not expected to be
determinable until January, 2000. The request would require a
plan to be submitted to the FPSC by October 1, 2000. If the
plan is not filed by October 1, 2000, or filed but not
approved by the FPSC, Florida Power would apply the deferred
revenues, plus accrued interest, to accelerate the amortization
of the Tiger Bay regulatory asset.

Liquidity and Capital Resources

Florida Progress capital expenditures are expected to be
approximately $570 million for 1999, excluding allowance for
funds used during construction, of which $340 million is
designated for Florida Power and $230 million for diversified
operations. Florida Progress capital expenditures are
expected to be funded primarily from internally generated funds
and debt. During the first nine months of 1999, $252.6 million
was spent on the Florida Power construction program and $160.9
million was spent in diversified operations.

Florida Powers unaudited ratio of earnings to fixed charges
 was 4.45 for the twelve months ended September 30, 1999.
(See Exhibit 12 filed herewith).

In 1998, Progress Capital Holdings, Inc. (PCH), a
subsidiary of Florida Progress that provides financing for
Florida Progress diversified operations, established
uncommitted bank bid facilities allowing it to borrow and
re-borrow, and have outstanding at any time, up to $300 million.
At September 30, 1999, there were no loans outstanding under
 these bid facilities.

In August 1998, MEMCO Barge Line Inc. (MEMCO), a
wholly owned subsidiary of Electric Fuels, entered into a
synthetic lease financing, accomplished through a sale and
leaseback, for an aggregate of approximately $175 million in
inland river barges and $25 million in towboats
(vessels). As of December 31, 1998, MEMCO had
sold and leased back $153 million of vessels. The acquisition and
 subsequent sale and leaseback of the remaining $47 million of
vessels was completed in May 1999. (See 1998 Form 10-K,
Item 8, Financial Statements and Supplementary
Data  Combined Notes to the Financial Statements,
Note 11  Leases.)

20



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##### Table of Contents



In November 1998, Florida Progress began issuing new shares of
its common stock to satisfy the requirements of participants in
the Progress Plus Stock Plan and Savings Plan for Employees
(the plans). Florida Progress received approximately
$43.2 million of new equity through these plans during the first
nine months of 1999. In August 1999, Florida Progress stopped
issuing new shares and the plans returned to purchasing shares in
 the open market.

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.

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 estimates regarding the expected closing date of the
share exchange with CP&L; the liability for cleaning up
certain environmental sites; the results of certain legal
proceedings relating to Mid-Continent and the yield on funds to
be escrowed for the benefit of Mid-Continent policyholders; the
savings associated with the restructuring of certain cogeneration
 contracts; and the costs associated with modifying computer
systems and equipment for the year 2000.

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 escrow investment results; the actions of
 regulatory bodies in approving various aspects of the share
exchange with CP&L; 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 share exchange with CP&L, 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.

21



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##### Table of Contents






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 54 basis point increase in interest rates (10% of
Florida Progress weighted average interest rate at
September 30, 1999) affecting Florida Progress
variable rate debt ($455 million at September 30, 1999)
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
September 30, 1999.

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.

22



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##### Table of Contents






PART  II.  OTHER INFORMATION




Item  1.  Legal Proceedings



|   |                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Metropolitan Dade County and Montenay Power Corp. v. Florida
	Power Corporation, Circuit Court of the Eleventh Circuit for Dade
	 County, Florida, Case No. 96-09598-CA-30.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Metropolitan Dade County and Montenay Power Corp. v. Florida
	Power Corporation, U.S. District Court, Southern District, Miami
	Division, Case No. 96-0594-C.V.-LENNARD.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | In re: Petition for Declaratory Statement That Energy Payments
	 Are Limited to Analysis of Avoided Units Contractually
	Specified Characteristics, Florida Public Service Commission,
	Docket No. 980283-EQ.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | See prior discussion of this matter in the 1998 Form 10-K,
	Item 3, paragraph 1; the combined Florida Progress and
	Florida Power Quarterly Report on Form 10-Q for the
	Quarterly Period Ended March 31, 1999 (First Quarter
	Form 10-Q) Part II, Item 1, paragraph 1; and the
	combined Florida Progress and Florida Power Quarterly Report on
	Form 10-Q for the Quarterly Period Ended June 30, 1999
	(Second Quarter Form 10-Q) Part II, Item 1,
	 paragraph 1. In September 1999, the final terms of the
	settlement agreement were reduced to writing. Among other things,
	 the agreement will generally require Florida Power to pay the
	firm energy price for 16 hours per day, and the as-available
	price for 8 hours per day. The agreement is conditioned upon
	receiving the approval of the Dade County Commission in addition
	to the FPSC.



|   |                                                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------
|2. | NCP Lake Power, Inc. v. Florida Power Corporation, Florida
	Circuit Court, Fifth Judicial Circuit for Lake County, Case
	No.  94-2354-CA-01



| |                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In re: Petition for Declaratory Statement Regarding the
	Negotiated Contract for Purchase of Firm Capacity and Energy
	between Florida Power Corporation and Lake Cogen, LTD., Florida
	Public Service Commission, Docket No. 980509-EQ.                                                                                                                                                          
|
| | See prior discussion of this matter in the 1998 Form 10-K,
	Item 3, paragraph 2; the First Quarter Form 10-Q, Part
	II, Item 1, paragraph 2; and the Second Quarter
	Form 10-Q, Part II, Item 1, paragraph 2. In August
	1999, a Final Judgment was entered for Lake in the amount of
	$4,480,247, and Lake filed a Notice of Appeal. In September,
	Florida Power filed a notice of cross appeal.



|   |                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------
|3. | FOCAS, Inc. v. Florida Power Corporation, U.S. District Court,
	 Northern District of Georgia, Atlanta Division, Case
	No. CV-822-CC.



| |                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | See prior discussion of this matter in the 1998 Form 10-K,
	Item 3, paragraph 9. In August 1999, the parties agreed to
	settle this case for the payment by FOCAS to Florida Power of
	$1.9 million in cash, credits for replacement cable and payments
	over a three-year period. This concludes this matter for
	reporting purposes.



|   |                                                                                                                                                                                       
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | 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 1998 Form 10-K,
	Item 3, paragraph 3. In August 1999, the Court dismissed the
	 state law claims of an additional 69 plaintiffs who executed
	releases upon termination (bringing the total number of state law
	 claims dismissed to 74), granted the Florida Power motion to
	decertify the class, and denied the plaintiffs motion to
	enforce the alleged $11 million oral settlement agreement. 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.

23



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##### Table of Contents





|   |                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | Calgon Carbon Corporation v. Potomac Capital Investment
	Corporation, Potomac Electric Power Company, Progress Capital
	Holdings, Inc., and Florida Progress Corporation, United States
	District Court fort the Western District of Pennsylvania, Civil
	Action No. 98-0072.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | See prior discussion of this matter in the 1998 Form 10-K,
	Item 3, paragraph 8. Based on information obtained during
	discovery, Florida Progress believes that the aggregate total of
	all legitimate warranty claims by customers of Advanced
	Separation Technologies for which Florida Progress may be
	responsible under the Stock Purchase Agreement with Calgon Carbon
	 Corporation is approximately $3.2 million, and therefore has
	accrued $3.2 million in the third quarter of 1999 in connection
	therewith.



|   |                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. | 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 1998 Form 10-K,
	Item 3, paragraph 6; the First Quarter Form 10-Q,
	Part II, Item 1, paragraph 3; and the Second Quarter
	Form 10-Q, Part II, Item 1, paragraph 3. In the
	rehabilitation proceeding, in October 1999, Oklahoma Insurance
	Commissioner Fisher signed a Letter of Intent with Iowa-based
	Life Investors Insurance company of America, a wholly owned
	subsidiary of AEGEON USA, Inc. concerning the assumption of all
	policies of Mid-Continent Life Insurance Company
	(Mid-Continent). Pursuant to a second Letter of
	Intent between the Commissioner and Florida Progress, Florida
	Progress would assign all of Mid-Continents stock to the
	receiver, and contribute $10 million to help offset future
	premium rate increases or coverage reductions. The $10 million
	would be held by the receiver in escrow and invested for the
	benefit of the policyholders, and is expected to yield
	approximately $20 million. Any proposed premium increases would
	be offset by this fund until it is exhausted. The receiver in
	turn would seek to obtain court approval to release Florida
	Progress from the receivership court and the dismissal with
	prejudice of currently pending litigation by policyholders, and
	would cooperate in obtaining the dismissal of any other currently
	 pending or future litigation. The Mid-Continent plan is
	scheduled to be considered by the Oklahoma County District Court
	in December 1999.
|
| | In the Farrimond case, the Defendants motion to dismiss was
	granted on October 12, 1999. A hearing is scheduled for
	December 1999 on the issue of whether the dismissal was with or
	without prejudice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



|   |                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7. | Lisa Fruchter, on behalf of herself and all others similarly
	situated v. Florida Progress Corporation; Richard Korpan;
	Clarence V. McKee; Richard A. Nunis; Jean Giles Wittner; Michael
	P. Graney; Joan D. Ruffier; Robert T. Stuart, Jr.; W. D.
	Frederick; and Vincent J. Naimoli. Circuit Court of the 6th
	Judicial Circuit in and for Pinellas County, Florida. Case No.
	99-6167CI-20



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In August 1999, Florida Progress announced that it entered into
	an Agreement and Plan of Exchange with Carolina Power and Light
	Company (CP&L) and CP&L Holdings, Inc. a
	wholly owned subsidiary of CP&L (Holdco). Under
	the terms of the Agreement, all of the outstanding shares of
	common stock of Florida Progress would be acquired by Holdco in a
	 statutory share exchange. On September 27, 1999, Florida
	Progress and its directors were served with the above-referenced
	lawsuit, that was filed on September 14, 1999, seeking class
	 action status and injunctive relief (1) declaring that

24



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##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | the Agreement and Plan of Exchange was entered into in breach of
	the fiduciary duties of the Florida Progress board of directors,
	(2) enjoining Florida Progress from proceeding with the
	share exchange, (3) rescinding the Agreement and Plan of
	Exchange, (4) enjoining any other business combination until
	 an action is conducted to obtain the highest price possible for
	Florida Progress, (5) directing the Florida Progress board
	of directors to commence such an auction, and (6) awarding
	the class appropriate damages. The complaint also seeks an award
	of costs and attorneys fees. Florida Progress believes this
	 suit is without merit, and intends to vigorously defend against
	this action.




Item  5.  Other

Certain Relationships and Related Transactions

Florida Progress has a $5 million limited partnership interest in
 the Tampa Bay Devil Rays, Ltd. (Devil Rays), a
Florida limited partnership that, in 1995, acquired a Major
League Baseball franchise to play scheduled home baseball games
at Tropicana Field in St. Petersburg, Florida. The managing
general partner and a limited partner of the Devil Rays is a
corporation controlled by Vincent J. Naimoli, a director of
Florida Progress.

Florida Power has entered into a new and comprehensive
Sponsorship, Promotion and Advertising Agreement (the
Agreement) with the Devil Rays which replaces all
previous agreements between the two entities. The term of the
Agreement is from August 1999 through December 31, 2007 and
provides for advertising, signage, sponsorships and naming
rights. Annual fees total $770,000, with individual components
having zero or 3  1/2% annual escalation.

The Agreement includes a lump sum payment of $5 million, which
was made in August 1999, for other promotions and advertising to
be determined based on Florida Powers annual marketing
plans. Activities have fixed pricing for the term of the
Agreement. Florida Progress has the option to convert any unused
funds to equity in the partnership during the term of the
Agreement.

In March 1998, Florida Progress entered into a Private
Suite License Agreement (License) for the use of
 a private suite in Tropicana Field for a ten-year term. The
$125,000 annual License fee is subject to annual increases equal
to the percentage increase in the Consumer Price Index or 2 
 1/2%, whichever is less. The terms and conditions of the License
 are substantially similar to those entered into with other
licensees.

25



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##### Table of Contents






Item  6.  Exhibits and Reports on Form 8-K

(a)  Exhibits:

|       |  |                                                                                                                                                                                                                                                                                                                    |  |          |   |         |  |  |   | 
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------- | - | ------- |  |  | - | 
|       |  |                                                                                                                                                                                                                                                                                                                    |  | Florida  |   | Florida
|Number |  | Exhibit                                                                                                                                                                                                                                                                                                            |  | Progress |   | Power  
|       |  |                                                                                                                                                                                                                                                                                                                    |  |          |   |        
|2      |  | Agreement and Plan of Exchange by and among Carolina Power &
	Light Company, Florida Progress Corporation and CP&L
	Holdings, Inc., dated as of August 22, 1999. (Filed as
	Exhibit 2 to the combined Florida Progress and Florida Power
	 Form 8-K dated August 22, 1999, and incorporated
	herein by reference.) |  |          | X |         |  |  |   | 
|4      |  | Second Amendment to Shareholder Rights Agreement dated as of
	August 22, 1999, between Florida Progress and BankBoston,
	N.A. (Filed as Exhibit 4 to the combined Florida Progress
	and Florida Power Form 8-K dated August 22, 1999, and
	incorporated herein by reference.)                                      |  |          | X |         |  |  |   | 
|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 | 



(b)  Reports on form 8-K:

During the third quarter of 1999, Florida Progress and Florida
Power filed the following combined reports on Form 8-K:



| |                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Form 8-K dated July 16, 1999, reporting under
	Item 5 Other Events an Investor News report
	concerning Florida Progress and Florida Powers second
	 quarter 1999 earnings.                                            
|
| | Form 8-K dated August 23, 1999, reporting under
	Item 5 Other the execution of an Agreement and
	Plan of Exchange with Carolina Power & Light.                                                                          
|
| | Form 8-K dated August 22, 1999, reporting under
	Item 5 Other the amendment to the Florida
	Progress Shareholder Rights Agreement, and filing a copy of the
	Agreement and Plan of Exchange with Carolina Power & Light.

In addition, Florida Progress and Florida Power filed the
following combined reports on Form 8-K subsequent to the
third quarter 1999:



| |                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Form 8-K dated October 14, 1999, reporting under
	Item 5 Other Events Florida Progress and
	Florida Powers third quarter of 1999 earnings, and
	providing updates on litigation concerning Mid-Continent and the
	transaction with CP&L.

26



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##### Table of Contents






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



| |     |                       
| | --- | ----------------------
| | By: | /s/ JOHN SCARDINO, JR.

| |                              
| | -----------------------------
| |                              
| | John Scardino, Jr.           
| | Vice President and Controller

Date: November 10, 1999



| |     |                         
| | --- | ------------------------
| | By: | /s/ EDWARD W. MONEYPENNY

| |                          
| | -------------------------
| |                          
| | Edward W. Moneypenny     
| | Senior Vice President and
| | Chief Financial Officer  

27



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##### Table of Contents






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



| |     |                       
| | --- | ----------------------
| | By: | /s/ JOHN SCARDINO, JR.

| |                              
| | -----------------------------
| |                              
| | John Scardino, Jr.           
| | Vice President and Controller

Date: November 10, 1999



| |     |                        
| | --- | -----------------------
| | By: | /s/ JEFFREY R. HEINICKA

| |                          
| | -------------------------
| |                          
| | Jeffrey R. Heinicka      
| | Senior Vice President and
| | Chief Financial Officer  

28



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EXHIBIT INDEX

|       |  |                                                                                                                                                                                                                                                                                                                    |  |          |   |         |  |  |   | 
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------- | - | ------- |  |  | - | 
|       |  |                                                                                                                                                                                                                                                                                                                    |  | Florida  |   | Florida
|Number |  | Exhibit                                                                                                                                                                                                                                                                                                            |  | Progress |   | Power  
|       |  |                                                                                                                                                                                                                                                                                                                    |  |          |   |        
|2      |  | Agreement and Plan of Exchange by and among Carolina Power &
	Light Company, Florida Progress Corporation and CP&L
	Holdings, Inc., dated as of August 22, 1999. (Filed as
	Exhibit 2 to the combined Florida Progress and Florida Power
	 Form 8-K dated August 22, 1999, and incorporated
	herein by reference.) |  |          | X |         |  |  |   | 
|4      |  | Second Amendment to Shareholder Rights Agreement dated as of
	August 22, 1999, between Florida Progress and BankBoston,
	N.A. (Filed as Exhibit 4 to the combined Florida Progress
	and Florida Power Form 8-K dated August 22, 1999, and
	incorporated herein by reference.)                                      |  |          | X |         |  |  |   | 
|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.

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