<PAGE>   1

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 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 MARCH 31, 1999


                                       OR


[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

For the transition period from         to        
                              ---------  --------

<TABLE>
<CAPTION>
                                     Exact name of Registrant as specified in                    I.R.S. Employer
 Commission                        its charter, state of incorporation, address                  Identification
   File No.                         of principal executive offices, telephone                         Number
 ------------                      --------------------------------------------                  ---------------

<S>                                <C>                                                           <C> 
    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
</TABLE>

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.

<TABLE>
<CAPTION>
                                   Description of         Shares Outstanding
         Registrant                    Class              at March 31, 1999
         ----------                --------------        ---------------------
<S>                               <C>                    <C>

Florida Progress Corporation      Common Stock,
                                  without par value          97,855,797

Florida Power Corporation         Common Stock,
                                  without par value      100 (all of which 
                                                         were held by Florida
                                                         Progress Corporation)
</TABLE>


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.


<PAGE>   2

                         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)

<TABLE>
<CAPTION>
                                                               Three Months Ended
                                                                    March 31,
                                                               1999           1998
                                                              ------         ------
                                                                   (Unaudited)
<S>                                                        <C>               <C>
REVENUES:
        Electric utility                                      $570.7         $565.2
        Diversified                                            249.7          222.3
                                                              ------         ------
                                                               820.4          787.5
                                                              ------         ------
EXPENSES:
        Electric utility:
               Fuel                                            113.7          109.2
               Purchased power                                  90.3           99.0
               Energy conservation cost                         17.1           16.6
               Operations and maintenance                       97.1          102.4
               Extended nuclear outage - replacement
                      power costs                                 --            5.1
               Depreciation and amortization                    80.8           81.0
               Taxes other than income taxes                    51.9           49.5
                                                              ------         ------
                                                               450.9          462.8
                                                              ------         ------
        Diversified:
               Cost of sales                                   225.1          193.8
               Other                                            14.6           12.7
                                                              ------         ------
                                                               239.7          206.5
                                                              ------         ------
INCOME FROM OPERATIONS                                         129.8          118.2
                                                              ------         ------
INTEREST EXPENSE AND OTHER:
        Interest expense                                        45.0           47.3
        Allowance for funds used during construction            (5.1)          (3.9)
        Other expense (income), net                             (4.3)            --
                                                              ------         ------
                                                                35.6           43.4
                                                              ------         ------
INCOME FROM CONTINUING OPERATIONS
        BEFORE INCOME TAXES                                     94.2           74.8
        Income Taxes                                            26.6           24.3
                                                              ------         ------
NET INCOME                                                    $ 67.6         $ 50.5
                                                              ======         ======
AVERAGE SHARES OF COMMON STOCK OUTSTANDING                      97.5           97.1
                                                              ======         ======
EARNINGS PER AVERAGE COMMON SHARE
        (Basic and Diluted)                                   $  .69         $  .52
                                                              ======         ======
DIVIDENDS PER COMMON SHARE                                    $ .545         $ .535
                                                              ======         ======
</TABLE>

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





                                       2

<PAGE>   3


FLORIDA PROGRESS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In millions)

<TABLE>
<CAPTION>
                                                            March 31,    December 31,
                                                               1999         1998
                                                           -----------   ------------
                                                           (Unaudited)
<S>                                                        <C>           <C>
ASSETS:

PROPERTY, PLANT AND EQUIPMENT:
        Electric utility plant in service and                $6,302.6      $6,307.8
           held for future use
        Less - Accumulated depreciation                       2,765.4       2,716.0
               Accumulated decommissioning for
                  nuclear plant                                 262.5         254.8
               Accumulated dismantlement for
                  fossil plants                                 131.2         130.7
                                                             --------      --------
                                                              3,143.5       3,206.3

        Construction work in progress                           424.4         378.3
        Nuclear fuel, net of amortization of
           $381.5 in 1999 and $377.2 in 1998                     41.6          45.9
                                                             --------      --------
               Net electric utility property                  3,609.5       3,630.5
        Other property, net of depreciation of
           $244.8 in 1999 and $234.6 in 1998                    589.3         560.1
                                                             --------      --------
                                                              4,198.8       4,190.6
                                                             --------      --------
CURRENT ASSETS:
        Cash and equivalents                                      1.7           2.5
        Accounts receivable, net                                406.8         413.4
        Inventories at average cost:
           Fuel                                                  90.6          69.8
           Utility materials and supplies                        87.1          83.3
           Diversified operations                               145.9         137.0
        Deferred income taxes                                    55.3          55.9
        Prepayments and other                                    72.4          92.2
                                                             --------      --------
                                                                859.8         854.1
                                                             --------      --------
DEFERRED CHARGES AND OTHER ASSETS:
        Costs deferred pursuant to regulation:
           Deferred purchased power contract
              termination costs                                 318.8         321.0
           Other                                                106.7         113.6
        Investments in nuclear decommissioning
           fund                                                 336.3         332.1
        Goodwill                                                144.4         139.8
        Joint ventures and partnerships                          66.3          71.5
        Other                                                   144.4         138.1
                                                             --------      --------
                                                              1,116.9       1,116.1
                                                             --------      --------
                                                             $6,175.5      $6,160.8
                                                             ========      ========
</TABLE>


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







                                       3

<PAGE>   4


FLORIDA PROGRESS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In millions)

<TABLE>
<CAPTION>
                                                            March 31,    December 31,
                                                              1999           1998
                                                          -----------    ----------
                                                          (Unaudited)
<S>                                                       <C>            <C>     

CAPITAL AND LIABILITIES:

COMMON STOCK EQUITY:
        Common stock                                        $1,242.1       $1,221.1
        Retained earnings                                      655.2          640.9
                                                            --------       --------
                                                             1,897.3        1,862.0
CUMULATIVE PREFERRED STOCK OF FLORIDA POWER:
        Without sinking funds                                   33.5           33.5

LONG-TERM DEBT                                               2,300.4        2,250.4
                                                            --------       --------
TOTAL CAPITAL                                                4,231.2        4,145.9
                                                            --------       --------
CURRENT LIABILITIES:
        Accounts payable                                       203.5          297.9
        Customers' deposits                                    105.5          104.1
        Accrued other taxes                                     30.9           10.1
        Accrued interest                                        54.3           70.4
        Overrecovered utility fuel cost                         35.5           22.2
        Other                                                   71.3           85.8
                                                            --------       --------
                                                               501.0          590.5
        Notes payable                                          310.8          236.2
        Current portion of long-term debt                       94.5          145.9
                                                            --------       --------
                                                               906.3          972.6
                                                            --------       --------
DEFERRED CREDITS AND OTHER LIABILITIES:
        Deferred income taxes                                  595.9          595.4
        Unamortized investment tax credits                      75.8           77.8
        Other postemployment benefit costs                     118.5          116.1
        Other                                                  247.8          253.0
                                                            --------       --------
                                                             1,038.0        1,042.3
                                                            --------       --------
                                                            $6,175.5       $6,160.8
                                                            ========       ========
</TABLE>


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









                                       4

<PAGE>   5


FLORIDA PROGRESS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
<TABLE>
<CAPTION>

                                                               Three Months Ended
                                                                    March 31,
                                                               1999           1998
                                                              ------         ------
                                                                   (Unaudited)
<S>                                                        <C>              <C>    

OPERATING ACTIVITIES:
        Income from continuing operations                    $  67.6        $  50.5
        Adjustments for noncash items:
           Depreciation and amortization                       100.5          100.9
           Deferred income taxes and
              investment tax credits, net                       (6.4)          (7.3)
        Changes in working capital, net of effects
           from acquisition or sale of businesses:
              Accounts receivable                                6.9           10.2
              Inventories                                      (32.8)           3.1
              Underrecovered/(overrecovered) utility
                 fuel cost                                      13.3           (8.3)
              Accounts payable                                 (94.7)         (33.0)
              Income taxes payable                              30.7           29.9
              Accrued other taxes                               20.8           20.5
              Other                                            (40.4)         (11.8)
        Other operating activities                               9.2           (1.1)
                                                             -------        -------
                                                                74.7          153.6
                                                             -------        -------
INVESTING ACTIVITIES:
        Property additions (including allowance for
           borrowed funds used during construction)           (100.7)        (103.0)
        Acquisitions of businesses                             (10.1)          (9.1)
        Other investing activities                              (1.7)         (11.3)
                                                             -------        -------
                                                              (112.5)        (123.4)
                                                             -------        -------
FINANCING ACTIVITIES:
        Issuance of long-term debt                              50.0          144.1
        Repayment of long-term debt                            (51.9)        (169.4)
        Sale of common stock                                    18.1             --
        Dividends paid on common stock                         (53.3)         (51.9)
        Increase in short-term debt                             74.6           52.7
        Other financing activities                               (.5)           (.6)
                                                             -------        -------
                                                                37.0          (25.1)
                                                             -------        -------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS                  (.8)           5.1
        Beginning cash and equivalents                           2.5            3.1
                                                             -------        -------
ENDING CASH AND EQUIVALENTS                                  $   1.7        $   8.2
                                                             =======        =======

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
        Cash paid during the period for:
               Interest (net of amount capitalized)          $  57.4        $  52.7
               Income taxes (net of refunds)                 $   7.3        $   2.3

</TABLE>


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






                                       5

<PAGE>   6

FLORIDA PROGRESS CORPORATION
STATEMENTS OF COMMON EQUITY AND COMPREHENSIVE INCOME 
For the periods ended March 31, 1999 and 1998 
(Dollars in millions)

<TABLE>
<CAPTION>
                                                                           Common                   Retained
                                                 Total                     Stock                    Earnings
                                                --------                  --------                  --------
<S>                                             <C>                       <C>                       <C>   

Balance, December 31, 1997                      $1,776.0                  $1,209.0                   $567.0

    Net income                                      50.5                                               50.5
                                                --------                  --------                   ------
                                                    50.5                        --                     50.5

Common stock redeemed                                (.7)                      (.7)
Cash dividends on common
   stock                                           (51.9)                                             (51.9)
                                                --------                  --------                   ------

Balance, March 31, 1998                         $1,773.9                  $1,208.3                   $565.6
                                                ========                  ========                   ======

Balance, December 31, 1998                      $1,862.0                  $1,221.1                   $640.9

   Net income                                       67.6                                               67.6
                                                --------                  --------                   ------
                                                    67.6                        --                     67.6

Common stock issued                                 21.0                      21.0
Cash dividends on common
   stock                                           (53.3)                                             (53.3)
                                                --------                  --------                   ------

Balance, March 31, 1999                         $1,897.3                  $1,242.1                   $655.2
                                                ========                  ========                   ======
</TABLE>


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





                                       6

<PAGE>   7


                           FLORIDA POWER CORPORATION
                              FINANCIAL STATEMENTS

FLORIDA POWER CORPORATION
STATEMENTS OF INCOME
(In millions)

<TABLE>
<CAPTION>
                                                             Three Months Ended
                                                                 March 31,
                                                             1999         1998
                                                             ----         ----
                                                                (Unaudited)
<S>                                                         <C>          <C>   

OPERATING REVENUES:
           Residential                                      $298.7       $308.7
           Commercial                                        131.4        123.7
           Industrial                                         49.3         47.8
           Sales for resale                                   48.8         36.9
           Other                                              42.5         48.1
                                                            ------       ------

                                                             570.7        565.2
                                                            ------       ------
OPERATING EXPENSES:
        Operation:
           Fuel                                              113.7        109.2
           Purchased power                                    90.3         99.0
           Energy conservation cost                           17.1         16.6
           Operations and maintenance                         97.1        102.4
           Extended nuclear outage - replacement
              power costs                                       --          5.1
           Depreciation and amortization                      80.8         81.0
           Taxes other than income taxes                      51.9         49.5
                                                            ------       ------
                                                             450.9        462.8
                                                            ------       ------
Income taxes:
           Currently payable                                  40.7         32.5
           Deferred, net                                      (6.0)        (6.3)
           Investment tax credits, net                        (2.0)        (2.0)
                                                            ------       ------
                                                              32.7         24.2
                                                            ------       ------
                                                             483.6        487.0
                                                            ------       ------
OPERATING INCOME                                              87.1         78.2
                                                            ------       ------
OTHER INCOME AND DEDUCTIONS:
        Allowance for equity funds used
           during construction                                 2.3          2.2
        Miscellaneous other income, net                        2.0           --
                                                            ------       ------
                                                               4.3          2.2
                                                            ------       ------
INTEREST CHARGES
        Interest on long-term debt                            26.9         30.6
        Other interest expense                                 4.5          5.3
                                                            ------       ------
                                                              31.4         35.9
        Allowance for borrowed funds used
           during construction                                (2.8)        (1.7)
                                                            ------       ------
                                                              28.6         34.2
                                                            ------       ------
NET INCOME                                                    62.8         46.2
DIVIDENDS ON PREFERRED STOCK                                    .4           .4
                                                            ------       ------
NET INCOME AFTER DIVIDENDS
   ON PREFERRED STOCK                                       $ 62.4       $ 45.8
                                                            ======       ======
</TABLE>


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





                                       7

<PAGE>   8


FLORIDA POWER CORPORATION
BALANCE SHEETS
(In millions)


<TABLE>
<CAPTION>
                                                            
                                                           March 31,    December 31,
                                                             1999           1998
                                                           ---------    ------------
                                                          (Unaudited)
<S>                                                         <C>          <C>   

ASSETS

PROPERTY, PLANT AND EQUIPMENT:
        Electric utility plant in service and held         $6,302.6      $6,307.8
           for future use
        Less - Accumulated depreciation                     2,765.4       2,716.0
               Accumulated decommissioning for
                  nuclear plant                               262.5         254.8
               Accumulated dismantlement for
                  fossil plants                               131.2         130.7
                                                           --------      --------
                                                            3,143.5       3,206.3

        Construction work in progress                         424.4         378.3
        Nuclear fuel, net of amortization of
           $381.5 in 1999 and $377.2 in 1998                   41.6          45.9
                                                           --------      --------
                                                            3,609.5       3,630.5

Other property, net                                            10.9          11.5
                                                           --------      --------
                                                            3,620.4       3,642.0
                                                           --------      --------
CURRENT ASSETS:
        Accounts receivable, less reserve of $3.8
           in 1999 and 1998                                   192.3         206.0
        Inventories at average cost:
           Fuel                                                64.9          48.4
           Materials and supplies                              87.1          83.3
        Deferred income taxes                                  55.3          56.0
        Prepayments and other                                  54.4          69.5
                                                           --------      --------
                                                              454.0         463.2
                                                           --------      --------
OTHER ASSETS:
        Costs deferred pursuant to regulation:
           Deferred purchased power contract
               termination costs                              318.8         321.0
            Other                                             106.7         113.6
        Investments in nuclear decommissioning
            fund                                              336.3         332.1
        Other                                                  53.5          56.2
                                                           --------      --------
                                                              815.3         822.9
                                                           --------      --------
                                                           $4,889.7      $4,928.1
                                                           ========      ========
</TABLE>


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









                                       8


<PAGE>   9


FLORIDA POWER CORPORATION
BALANCE SHEETS
(In millions)

<TABLE>
<CAPTION>
                                                           
                                                           March 31,    December 31,
                                                             1999           1998
                                                         -----------    ------------
                                                         (Unaudited)
<S>                                                         <C>          <C>   

CAPITALIZATION AND LIABILITIES

CAPITALIZATION:
        Common stock                                       $1,004.4      $1,004.4
        Retained earnings                                     828.2         815.7
                                                           --------      --------
                                                            1,832.6       1,820.1
CUMULATIVE PREFERRED STOCK:
        Without sinking funds                                  33.5          33.5

LONG-TERM DEBT                                              1,555.2       1,555.1
                                                           --------      --------
TOTAL CAPITAL                                               3,421.3       3,408.7
                                                           --------      --------
CURRENT LIABILITIES:
        Accounts payable                                      124.4         173.0
        Accounts payable to associated companies               24.5          27.2
        Customers' deposits                                   105.5         104.1
        Accrued other taxes                                    26.7           6.3
        Accrued interest                                       47.6          55.8
        Overrecovered utility fuel cost                        35.5          22.2
        Other                                                  58.5          51.8
                                                           --------      --------
                                                              422.7         440.4
        Notes payable                                          17.7          47.3
        Current portion of long-term debt                      91.6          91.6
                                                           --------      --------
                                                              532.0         579.3
                                                           --------      --------
DEFERRED CREDITS AND OTHER LIABILITIES:
        Deferred income taxes                                 561.8         563.2
        Unamortized investment tax credits                     75.3          77.2
        Other postemployment benefit costs                    115.1         112.9
        Other                                                 184.2         186.8
                                                           --------      --------
                                                              936.4         940.1
                                                           --------      --------
                                                           $4,889.7      $4,928.1
                                                           ========      ========
</TABLE>


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








                                       9


<PAGE>   10


FLORIDA POWER CORPORATION
STATEMENTS OF CASH FLOWS
(In millions)
<TABLE>
<CAPTION>
                                                               Three Months Ended
                                                                    March 31,
                                                               1999          1998
                                                               ----          ----
                                                                  (Unaudited)
<S>                                                           <C>          <C>   

OPERATING ACTIVITIES:
        Net income after dividends on preferred stock         $ 62.4       $  45.8
        Adjustments for noncash items:
           Depreciation and amortization                        86.6          91.6
           Deferred income taxes and
              investment tax credits, net                       (8.3)         (8.3)
        Changes in working capital:
              Accounts receivable                               13.6          22.4
              Inventories                                      (20.3)         (2.3)
              Overrecovered/(Underrecovered) utility
                 fuel cost                                      13.3          (8.3)
              Accounts payable                                 (48.6)        (52.5)
              Accounts payable to associated companies          (2.7)         (3.6)
              Income taxes payable                              39.8          29.2
              Accrued other taxes                               20.4          21.4
              Other                                            (24.7)         (5.2)
        Other operating activities                              12.2           (.2)
                                                              ------       -------
                                                               143.7         130.0
                                                              ------       -------
INVESTING ACTIVITIES:
        Construction expenditures                              (57.6)        (65.5)
        Allowance for borrowed funds used during
           construction                                         (2.8)         (1.7)
        Other investing activities                              (3.8)         (4.6)
                                                              ------       -------
                                                               (64.2)        (71.8)
                                                              ------       -------
FINANCING ACTIVITIES:
        Issuance of long-term debt                                --         144.1
        Repayment of long-term debt                               --        (157.8)
        Dividends paid on common stock                         (49.9)        (49.0)
        Increase (decrease) in short-term debt                 (29.6)         10.1
                                                              ------       -------
                                                               (79.5)        (52.6)
                                                              ------       -------
NET INCREASE IN CASH AND EQUIVALENTS                              --           5.6
        Beginning cash and equivalents                            --            --
                                                              ------       -------
ENDING CASH AND EQUIVALENTS                                   $   --       $   5.6
                                                              ======       =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
        Cash paid during the period for:
           Interest (net of amount capitalized)               $ 35.9       $  36.3
           Income taxes (net of refunds)                      $  5.9       $   3.6

</TABLE>


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







                                       10

<PAGE>   11

FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION
NOTES TO FINANCIAL STATEMENTS


1)  Florida Progress' principal business segment is Florida Power, an electric
    utility engaged in the generation, purchase, transmission, distribution and
    sale of electricity. The other reportable business segments are Electric
    Fuels' Energy and Related Services, Rail Services and Inland Marine
    Transportation units. Energy and Related Services includes coal operations,
    river terminal services and off-shore marine transportation. Rail Services'
    operations include railcar repair, rail parts reconditioning and sales,
    railcar leasing and sales, providing rail and track material, and metal
    recycling. Inland Marine provides transportation of coal, agricultural and
    other dry-bulk commodities as well as fleet management services. The
    "Other" category in the following table includes the parent holding
    company, Florida Progress Corporation, which allocates a portion of its
    operating expenses to business segments. This category also includes
    segments below the quantitative threshold required for separate disclosure.
    Florida Progress' significant operations are geographically located in the
    United States. Financial data for business segments for the periods covered
    in this Form 10-Q are presented in the table below:

<TABLE>
<CAPTION>

                                                   Energy and        Rail     Inland Marine
           (In millions)              Utility   Related Services   Services   Transportation   Other    Elimination   Consolidated
----------------------------------    -------   ----------------   --------   --------------   -----    -----------   ------------
<S>                                   <C>       <C>                <C>        <C>              <C>      <C>           <C>     

Three months ended March 31, 1999:
   Revenues                           $  570.7       $ 42.8         $174.0        $ 30.2      $  1.5      $  1.2        $  820.4
   Intersegment revenues                    --         65.8             .4           4.0        (4.6)      (65.6)             --
   Segment net income (loss)              62.4          8.1             .5            .7        (4.1)         --            67.6
   Total assets                        4,889.7        332.3          712.9         109.2       175.3       (43.9)        6,175.5
Three months ended March 31, 1998:
   Revenues                           $  565.2       $ 46.3         $147.2        $ 28.0      $  (.3)     $  1.1        $  787.5
   Intersegment revenues                    --         70.1             .1           3.1        (3.4)      (69.9)             --
   Segment net income (loss)              45.8          5.1            2.1           1.7        (4.2)         --            50.5
   Total assets                        4,922.8        291.1          419.7         159.3        57.5       (14.0)        5,836.4

</TABLE>

2)  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 financial statements and Florida Progress considers these credit
    risks to be minimal, 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 is accruing $6 million annually to a storm
    damage reserve and may







                                       11


<PAGE>   12


    defer any losses in excess of the reserve. The reserve balances at March
    31, 1999 and December 31, 1998 were $25.6 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 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 totaling $2.1
    billion. The first layer of $500 million 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 $9.5 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.

    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 at 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 Risk Investigation and Feasibility Study ("RI/FS").
    Florida Power is liable for 39.7% of those costs. On September 25, 1998,
    the EPA formally approved the PRP RI/FS Work Plan. The RI/FS field work was
    completed in January 1999. The EPA is expected to review the final
    Treatability Study report and provide further guidance to the PRPs by
    August 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'
    financial position, results of operations or liquidity.

    In December 1998, Florida Power allowed the EPA to conduct an expanded site
    inspection at a former plant site designated "Inglis". Soil and groundwater
    samples were obtained from the Florida Power property, as well as sediment





                                       12


<PAGE>   13

    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 or its present or former subsidiaries may be responsible for
    additional environmental cleanup. Florida Progress' best estimates indicate
    that its share of liability for cleaning up all designated sites ranges
    from $2.5 million to $7.5 million. It has accrued $4.4 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 five 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 has filed a motion to decertify the class, but a hearing date has not
    yet been set. In December 1998, 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. Subsequently, Florida Power and the plaintiffs engaged
    in informal settlement discussions, which were terminated on December 22,
    1998. However, plaintiffs have filed a motion to enforce a purported $11
    million oral settlement agreement. Florida Power denies that such an
    agreement exists and has filed responsive pleadings to that effect. As a
    result, management has identified a probable range of $5 million to $100
    million with no amount within that range a better estimate of probable loss
    than any other amount; accordingly, Florida Power has accrued $5 million.
    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. Calgon filed a lawsuit in January
    1998, 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 Florida Progress of
    failing to disclose flaws in AST's manufacturing process and a lack of
    quality control. No projection of an outcome or estimate of a potential
    liability, if any, can be determined at the date of issuance of these
    financial statements. Florida Progress believes the lawsuit is without
    merit and intends to vigorously defend itself. Accordingly, Florida
    Progress has not made provision for any loss for this matter.

    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 suit against Florida Power
    in state court over the contract payment terms, and one also filed in
    federal court. Two of the suits have been settled, and the federal case was
    dismissed, although the plaintiff has appealed. Of the two remaining suits,
    the trial regarding NCP Lake Power ("Lake") concluded in December 1998. In
    April 1999, the judge entered a non-final trial order. The judge granted
    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. A final order will be entered after
    the amount of damages due Lake is determined. The other remaining suit has
    not yet been set for trial.





                                       13

<PAGE>   14

    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
    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 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 to
    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. The evaluation of bids
    should be completed by the end of June 1999.

    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 Commissioner. The suit
    asserts "Extra Life" policyholders have been injured as a result of
    representations made in connection with the sale of that policy. The suit
    seeks unspecified actual and punitive damages.

    Although Florida Progress hopes to reach a negotiated resolution of these
    matters, it would continue to vigorously defend itself against the two
    lawsuits, should negotiations fail. Florida Progress believes the lawsuits
    are without merit. Because neither the outcome of the litigation nor the
    ultimate effects of any rehabilitation plan, including the possible sale of
    Mid-Continent, can be estimated, Florida Progress has not made provision
    for any additional losses that might result. 





                                      14

<PAGE>   15

3)  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. Results for the first
    quarter are not necessarily indicative of results for the full year. It is
    suggested that these financial statements be read in conjunction with the
    financial statements and notes thereto in the combined Form 10-K of Florida
    Progress and Florida Power for the year ended December 31, 1998 (the "1998
    Form 10-K").


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

OPERATING RESULTS

Florida Progress' consolidated earnings for the three month period ended March
31, 1999, were $67.6 million compared to $50.5 million for the same period in
1998. Florida Progress' earnings per share for the quarter ended March 31,
1999, were $.69 compared to $.52 for the same period in 1998.


FLORIDA POWER CORPORATION

Florida Power, the largest subsidiary of Florida Progress, reported earnings of
$.64 per share for the first quarter of 1999, compared with $.47 per share for
the first quarter of 1998.

A reconciliation of Florida Power's 1999 first quarter earnings is as follows:

<TABLE>
<S>                                                                     <C> 
         1998 FIRST QUARTER EPS                                         $ 0.47
                Customer & non-weather usage growth                       0.13
                Estimated weather impact on sales                        (0.06)
                Operations & maintenance                                  0.04
                1998 nuclear outage replacement fuel                      0.03
                Gain on sale of property                                  0.03
                                                                        ------

         1999 FIRST QUARTER EPS                                          $0.64
                                                                         =====
</TABLE>

UTILITY REVENUES AND SALES

Florida Power's operating revenues were $5.5 million, or 1.0 percent, higher
for the three month period ended March 31, 1999, compared to the same period in
1998 due to increased wholesale sales and higher usage from commercial
customers. Most of the increase in the wholesale sales was due to higher sales
in the short-term energy market and higher sales to Florida Power's largest
wholesale customer, Seminole Electric Cooperative, Inc. ("SECI"). Short-term
energy sales have a minimal impact on earnings because the net benefit of the
sales is credited to retail customers through the fuel cost recovery clause. In
January 1999, Florida Power began supplying additional power to SECI, under a
three-year contract.

OTHER UTILITY EXPENSES

Operations and maintenance expenses for the three months ended March 31, 1999,
decreased $5.3 million or 5.2 percent, compared with the same quarter last
year. Lower operations and maintenance costs resulted primarily from the timing
of certain generation plant maintenance costs.

DIVERSIFIED OPERATIONS

Revenues and Cost of sales for Florida Progress' diversified operations were
$27.4 million and $31.3 million higher for the three months ended March 31,
1999 compared to the same period last year. The increase was due primarily to
1998 acquisitions at Electric Fuels' Rail Services Group.





                                       15

<PAGE>   16

ELECTRIC FUELS CORPORATION

Electric Fuels earned $.09 per share in the first quarter of 1999, compared
with $.08 per share during the same period in 1998. The increase was due
primarily to improved operating results for the Energy and Related Services
group, which offset lower earnings at the Inland Marine Transportation and Rail
Services business units.

Earnings at the Energy and Related Services group for the three months ended
March 31, 1999 increased $3.0 million over the same period in 1998. The
improvement in Energy and Related Services was due largely to alternative fuel
tax credits, which are generated from the production and sale of a synthetic
fuel.

Earnings from the Inland Marine Transportation group decreased $1.0 million for
the first quarter of 1999 compared to the same period in 1998. For 1999,
prolonged icing conditions in January and high water conditions in February
disrupted barge operations and limited tow capacity.

Results in the Rail Services group decreased $1.6 million when compared to the
prior year due to several factors. Higher revenues from its recycling
operations were more than offset by lower margins which resulted from depressed
scrap steel prices during the first quarter of 1999 compared to 1998. Also
contributing to the lower results for the group was a temporary decrease in
track work orders, which can fluctuate as railroads reschedule the timing of
track repair work. Partially offsetting the lower results was a strong demand
for rail car parts throughout the quarter.

A new track work facility was opened in Texas in the first quarter of 1999. The
plant was built to meet the needs of the major railroads in that region.
Certain costs associated with the start-up of the new facility were expensed
during the quarter.

Management believes that the outlook for 1999 remains positive for the
diversified operations despite the temporary conditions discussed above. During
March, track work orders returned to expected levels and river conditions
returned to normal.


YEAR 2000

Florida Progress has taken a comprehensive five-step approach in addressing the
Y2K issue. The five steps include awareness, inventory assessment and
prioritization, remediation and verification and contingency planning. (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 the Florida
Progress Year 2000 ("Y2K") progress and planned completion dates for each phase
as of March 31, 1999.


<TABLE>
<CAPTION>

                                        Florida Power                                Electric Fuels
                                 Percent             Planned                 Percent               Planned
                                Complete           Completion               Complete             Completion
                             March 31, 1999           Date               March 31, 1999             Date
                             --------------        ----------            --------------          -----------
<S>                          <C>                  <C>                    <C>                   <C> 

AWARENESS -                         *                   *                       *                     *
INVENTORY -                       100%            January 1999                100%                March 1999
ASSESSMENT AND
   PRIORITIZATION -                99%              May 1999                   67%                June 1999
REMEDIATION AND
   VERIFICATION -                  79%              June 1999                  60%              September 1999
CONTINGENCY
   PLANNING -                      40%           September 1999                20%              December 1999
</TABLE>

*  To continue through duration of project.

June 30, 1999 is the date that the North American Electric Reliability Council
("NERC") has designated for electric utilities to complete remediation and
verification for mission critical systems. Florida Power expects to meet NERC
requirements targeted for this date.






                                      16

<PAGE>   17

There have been several milestones in 1999. On April 9, 1999, NERC and the
Florida Reliability Coordinating Council ("FRCC") sponsored a successful drill
of backup communication capabilities within and between utilities. Customer
call centers have been tested for the ability to receive calls, provide
customer data and dispatch service work. These tests were successful. End to
end testing of the data communication network was completed.

Consultants have assisted Florida Progress in preparing fossil and nuclear
generation facilities for Y2K readiness, in addition to assisting with
contingency planning. Florida Progress continues to work with the Florida
Public Service Commission ("FPSC"), FRCC, neighboring utilities, third party
vendors and customers to ensure a smooth transition into the year 2000.
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."

Florida Progress currently estimates that the total cost of addressing Y2K
issues is between $15 million and $25 million. No Florida Progress systems have
been replaced on an accelerated basis due to the Y2K issue. As of March 31,
1999, Florida Progress has incurred a total of approximately $8 million of
internal and external costs related to Y2K. The company does not track internal
and external costs separately. All costs have been expensed as incurred.


POWER GENERATION

HINES UNIT I CONSTRUCTION

On April 23, 1999, Florida Power placed into service a 500MW combined cycle
generation plant, located in Polk County, Florida. The plant will be included
in Florida Power's rate base, upon which Florida Power will be able to earn its
regulated return on equity. (See 1998 Form 10-K, Item 2, "Properties - Planned
Generation and Energy Sales".)


LIQUIDITY AND CAPITAL RESOURCES

Florida Progress' capital expenditures are expected to be approximately $495
million for 1999, excluding allowance for funds used during construction, of
which $340 million is designated for Florida Power and $155 million for
diversified operations. Florida Power's construction program is expected to be
funded from internally generated funds. Diversified capital expenditures will
be funded by internally generated funds, debt, and equity contributions. During
the first three months of 1999, $57.6 million was spent on the Florida Power
construction program and $43.1 million was spent in diversified operations. The
capital expenditures were financed primarily with funds from operations and
short-term debt.

Florida Power's ratio of earnings to fixed charges was 4.17 for the twelve
months ended March 31, 1999. (See Exhibit 12 filed herewith).

In 1998, Progress Capital Holdings Inc., 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 March 31, 1999, $225 million
was outstanding under these bid facilities. The funds were used for general
corporate purposes.

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






                                       17

<PAGE>   18

In November 1998, the Progress Plus Stock Plan and Employee Savings Plan (the
Plans) began issuing new shares of common stock instead of purchasing shares in
the open market. Florida Progress received approximately $18.1 million of new
equity through this program in the first quarter of 1999.

Florida Progress and Florida Power believe their available sources of liquidity
will be sufficient to fund their long-term and short-term capital requirements.


"SAFE HARBOR" STATEMENT UNDER
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report contains certain forward looking statements, including projections
regarding the liability for cleaning up certain environmental sites; the
results of certain legal proceedings relating to Mid-Continent; and the costs
associated with modifying computers 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 projections and estimates relate to
the pricing of services, the actions of regulatory bodies, and the effects of
competition. The words "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
projections include continued annual growth in customers, successful cost
containment efforts and the efficient operation of Florida Power's existing and
future generating units. Also, in developing its forward-looking statements,
Florida Progress has 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 projections and estimates regarding
the economy, the electric utility business and other factors differ materially
from what actually occurs, or if various proceedings have unfavorable outcomes,
then actual results could vary significantly from the performance projected in
the forward-looking statements.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

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

A hypothetical 49 basis point increase in interest rates (10% of Florida
Progress' weighted average interest rate) affecting Florida Progress' variable
rate debt ($814.3 million at March 31, 1999) would have an immaterial effect on
Florida Progress' pre-tax earnings over the next fiscal year. A hypothetical
10% decrease in interest rates would also have an immaterial effect on the
estimated fair value of Florida Progress' long-term debt at March 31, 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.






                                      18

<PAGE>   19

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

1.  METROPOLITAN DADE COUNTY ("DADE") AND MONTENAY POWER CORP. ("MONTENAY") 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 PROGRESS
    CORPORATION, FLORIDA POWER CORPORATION AND ELECTRIC FUELS CORPORATION, U.S.
    DISTRICT COURT, SOUTHERN DISTRICT, MIAMI DIVISION, FLORIDA, CASE NO
    96-594-DIV-LENARD.

    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 and Note 2 to the Financial Statements contained herein. In the
    Federal Court appeal, the Eleventh Circuit rules require that all appeals
    go to mediation. Court-ordered mediation was held on March 17, 1999.
    Although no resolution was reached, the parties are continuing their
    discussions.

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 and Note 2 to the Financial Statements contained herein. On
    April 6, 1999, in the Circuit Court case, the judge entered a non-final
    trial order. The judge granted Lake's breach of contract claim and ruled
    that Lake is entitled to receive "firm" energy payments during the on-peak
    hours, but for all other hours Lake is entitled to the "as-available" rate.
    The judge denied Lake's breach of contract claim relating to the coal
    pricing dispute, denied Lake's claim for injunctive relief and denied the
    Florida Power counterclaim. A hearing on damages has not yet been set.

3.  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





                                       19


<PAGE>   20


    See prior discussion in this matter in the 1998 Form 10-K, Item 3,
    paragraph 6 and Note 2 to the Financial Statements contained herein. An
    agreed order outlining a plan of rehabilitation was filed on March 18,
    1999. The evaluation of bids should be completed by the end of June 1999.
    The Defendants' motion to transfer the Farrimond case to the receivership
    court was denied on March 18, 1999, and Defendants filed their motions to
    dismiss on March 29, 1999. The hearings on Defendants' motions are set for
    May 1999.

4.  PEAK OIL COMPANY, MISSOURI ELECTRIC WORKS, 62ND STREET, AKO BAYSIDE BLUFF 
    ELECTRIC AND HOLLOWAY SUPERFUND SITES.

    See prior discussion of this matter in the 1998 Form 10-K, Item 3,
    paragraph 7. The EPA has advised Florida Power that it no longer considers
    Florida Power to be a "potentially responsible party" or to have liability
    under the Comprehensive Environmental Response Compensation and Liability
    Act ("CERCLA") in connection with the Holloway site.

5.  IN RE: JOINT PETITION FOR DETERMINATION OF NEED FOR AN ELECTRICAL POWER
    PLANT IN VOLUSIA COUNTY BY THE UTILITIES COMMISSION, CITY OF NEW SMYRNA
    BEACH, AND DUKE ENERGY NEW SMYRNA BEACH POWER COMPANY LTD., L.L.P. PUBLIC
    SERVICE COMMISSION, DOCKET NO. 981042-EM.

    See prior discussion of this matter in the 1998 Form 10-K, Item 3,
    paragraph 11. On April 21, 1999, Florida Power filed an appeal of the
    FPSC's decision with the Florida Supreme Court.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

The Annual meeting of Shareholders of Florida Progress was held on April 16,
1999. There were 97,390,973 shares of common stock entitled to vote. The
following matters were voted upon at the meeting:

Election of Directors

         Class III - Terms expiring in 2002

<TABLE>
<CAPTION>
                                        VOTES                      VOTES
                                         FOR                      WITHHELD
<S>                                   <C>                        <C>      

         Clarence V. McKee, Esq       78,537,563                 1,064,523
         Richard A. Nunis             78,599,786                 1,002,300
         Jean Giles Wittner           78,596,398                 1,005,688

         Class II - Terms expiring in 2001

         Richard Korpan               78,578,611                 1,023,475
</TABLE>







                                       20

<PAGE>   21

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  EXHIBITS:

<TABLE>
<CAPTION>

                                                                      FLORIDA         FLORIDA
              NUMBER                        EXHIBIT                   PROGRESS         POWER
              ------                        -------                   --------        -------
             <S>               <C>                                   <C>             <C>

                10              Agreement between Florida                 X
                                Progress and Edward W. Moneypenny
                                dated as of March 15, 1999,
                                regarding change in control

                12              Statement Regarding Computation                          X
                                of Ratio of Earnings to Fixed
                                Charges for Florida Power

              27.(a)            Florida Progress Financial Data           X
                                Schedule.

              27.(b)            Florida Power Financial Data                             X
                                Schedule.

              X  =              Exhibit is filed for that respective company
</TABLE>

         (b)  REPORTS ON FORM 8-K:

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

              Form 8-K dated January 25, 1999, reporting under Item 5 "Other
              Events" a press release and related Investor news report which
              stated Florida Progress' and Florida Power's 1998 year-end
              earnings.

              Form 8-K dated February 18, 1999 reporting under Item 5 "Other
              Events" an increase in Florida Progress' annual dividend and the
              construction by Florida Power of peaking units.

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

              Form 8-K dated April 16, 1999, reporting under Item 5 "Other
              Events" Florida Progress' and Florida Power's first quarter 1999
              earnings.





                                       21

<PAGE>   22

                                   SIGNATURES


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



                                          FLORIDA PROGRESS CORPORATION






Date: May 13, 1999                        /s/ John Scardino, Jr.
                                          -------------------------------------
                                              John Scardino, Jr.
                                              Vice President and Controller






Date: May 13, 1999                        /s/ Edward W. Moneypenny
                                          -------------------------------------
                                              Edward W. Moneypenny
                                              Senior Vice President and
                                              Chief Financial Officer





<PAGE>   23

                                   SIGNATURES


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





                                          FLORIDA POWER CORPORATION






Date:  May 13, 1999                       /s/ John Scardino, Jr.
                                          -------------------------------------
                                              John Scardino, Jr.
                                              Vice President and Controller






Date:  May 13, 1999                       /s/ Jeffrey R. Heinicka
                                          -------------------------------------
                                              Jeffrey R. Heinicka
                                              Senior Vice President and
                                              Chief Financial Officer





<PAGE>   24


                                 EXHIBIT INDEX

<TABLE>
<CAPTION>

                                                                      FLORIDA         FLORIDA
              NUMBER                        EXHIBIT                   PROGRESS         POWER
              ------                        -------                   --------        -------
             <S>               <C>                                   <C>             <C>

                10              Agreement dated March 15, 1999 with       X
                                Edward W. Moneypenny regarding
                                change of control

                12              Statement Regarding computation of Ratio                 X
                                of Earnings to Fixed Charges for Florida
                                Power.

              27.(a)            Florida Progress Financial Data Schedule  X

              27.(b)            Florida Power Financial Data Schedule                    X

               X =              Exhibit is filed for that respective company.
</TABLE>