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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549



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FORM 10-Q

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

For the Quarterly Period Ended September 30, 2000

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

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

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

|                             |  |                                 |  |                                                            
|---------------------------- |  | ------------------------------- |  | -----------------------------------------------------------
|                             |  |                                 |  | Shares Outstanding                                         
|Registrant                   |  | Description of Class            |  | at September 30, 2000                                      
|                             |  |                                 |  |                                                            
|Florida Progress Corporation |  | Common Stock, without par value |  | 98,616,919                                                 
|                            
|                            
|                            
|                            
|Florida Power Corporation    |  | Common Stock, without par value |  | 100(all of which were held by
Florida Progress Corporation)

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

---

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FLORIDA PROGRESS CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS

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

|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |         |       | 
|------------------------------------------ | -------------------------------------------------------------------------------- | ----------------------------------------- | ------- | ------------------ | ----- | ----------------- | ------- | ----- | ----- | ---- | ------- | ------- | ------- | - | ------- | ------- | ----- | 
|                                           |                                                                                  |                                           |         | Three Months Ended |       | Nine Months Ended
|                                           |                                                                                  |                                           |         | September 30,      |       | September 30,    
|                                           |                                                                                  |                                           |         | 2000               |       | 1999              |         | 2000  |       | 1999
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |     
|                                           |                                                                                  |                                           |         | (Unaudited)        |       | (Unaudited)      
|REVENUES:                                 
|                                          
|                                          
|                                          
|                                          
|                                           | Electric utility                                                                 |                                           | $       | 914.5              |       |                   | $       | 794.9 |       |      | $       | 2,237.8 |         |   | $       | 2,037.3 |      
|                                          
|                                          
|                                          
|                                          
|                                           | Diversified                                                                      |                                           |         | 399.4              |       |                   |         | 312.4 |       |      |         | 1,119.7 |         |   |         | 866.7   |      
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |        
|                                           |                                                                                  |                                           | 1,313.9 |                    |       |                   | 1,107.3 |       |       |      | 3,357.5 |         |         |   | 2,904.0 |        
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |        
|EXPENSES:                                 
|                                          
|                                          
|                                          
|                                          
|                                           | Electric utility:                                                               
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                  | Fuel                                      |         |                    | 213.2 |                   |         |       | 191.5 |      |         |         | 501.4   |   |         |         | 448.7 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                  | Purchased power                           |         |                    | 166.3 |                   |         |       | 106.7 |      |         |         | 389.7   |   |         |         | 305.4 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                  | Energy conservation costs                 |         |                    | 20.0  |                   |         |       | 25.4  |      |         |         | 50.0    |   |         |         | 61.9  | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                  | Operation and maintenance                 |         |                    | 98.7  |                   |         |       | 108.0 |      |         |         | 308.2   |   |         |         | 325.9 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                  | Depreciation and amortization             |         |                    | 135.5 |                   |         |       | 86.8  |      |         |         | 313.3   |   |         |         | 260.8 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                  | Taxes other than income taxes             |         |                    | 59.4  |                   |         |       | 56.9  |      |         |         | 165.3   |   |         |         | 159.9 | 
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |        
|                                           |                                                                                  |                                           | 693.1   |                    |       |                   | 575.3   |       |       |      | 1,727.9 |         |         |   | 1,562.6 |        
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |        
|                                           | Diversified:                                                                    
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                  | Cost of sales                             |         |                    | 389.1 |                   |         |       | 273.6 |      |         |         | 1,070.7 |   |         |         | 768.4 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                  | Loss related to life insurance subsidiary |         |                    | 12.8  |                   |         |       |      |      |         |         | 12.8    |   |         |         |      | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                  | Other                                     |         |                    | 21.8  |                   |         |       | 30.3  |      |         |         | 63.7    |   |         |         | 60.7  | 
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |        
|                                           |                                                                                  |                                           | 423.7   |                    |       |                   | 303.9   |       |       |      | 1,147.2 |         |         |   | 829.1   |        
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |        
|INCOME FROM OPERATIONS                     |                                                                                  |                                           | 197.1   |                    |       |                   | 228.1   |       |       |      | 482.4   |         |         |   | 512.3   |        
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |        
|INTEREST EXPENSE AND OTHER:               
|                                          
|                                          
|                                          
|                                          
|                                           | Interest expense                                                                 |                                           |         | 46.1               |       |                   |         | 42.3  |       |      |         | 139.5   |         |   |         | 131.2   |      
|                                          
|                                          
|                                          
|                                          
|                                           | Allowance for funds used during construction                                     |                                           |         | (1.1               | )     |                   |         | (.4   | )     |      |         | (3.0    | )       |   |         | (6.7    | )    
|                                          
|                                          
|                                          
|                                          
|                                           | Distributions on company obligated mandatorily
redeemable
  preferred securities |                                           |         | 5.3                |       |                   |         | 5.3   |       |      |         | 16.0    |         |   |         | 9.9     |      
|                                          
|                                          
|                                          
|                                          
|                                           | Other expense / (income), net                                                    |                                           |         | (4.8               | )     |                   |         | (7.5  | )     |      |         | (8.4    | )       |   |         | (10.8   | )    
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |        
|                                           |                                                                                  |                                           | 45.5    |                    |       |                   | 39.7    |       |       |      | 144.1   |         |         |   | 123.6   |        
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |        
|INCOME BEFORE INCOME TAXES                 |                                                                                  |                                           | 151.6   |                    |       |                   | 188.4   |       |       |      | 338.3   |         |         |   | 388.7   |        
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                  | Income taxes                              |         |                    | 1.3   |                   |         |       | 51.1  |      |         |         | 1.6     |   |         |         | 107.2 | 
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |        
|NET INCOME                                 |                                                                                  | $                                         | 150.3   |                    |       | $                 | 137.3   |       |       | $    | 336.7   |         |         | $ | 281.5   |        
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |        
|AVERAGE SHARES OF COMMON STOCK OUTSTANDING |                                                                                  |                                           | 98.6    |                    |       |                   | 98.3    |       |       |      | 98.6    |         |         |   | 97.9    |        
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |        
|EARNINGS PER AVERAGE COMMON SHARE         
|                                          
|                                          
|                                          
|                                          
|                                           | (Basic and Diluted):                                                             |                                           | $       | 1.53               |       |                   | $       | 1.40  |       |      | $       | 3.42    |         |   | $       | 2.87    |      
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |        
|DIVIDENDS PER COMMON SHARE                 |                                                                                  | $                                         | .555    |                    |       | $                 | .545    |       |       | $    | 1.665   |         |         | $ | 1.635   |        
|                                           |                                                                                  |                                           |         |                    |       |                   |         |       |       |      |         |         |         |   |         |        

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

2



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FLORIDA PROGRESS CORPORATION
Consolidated Balance Sheets
(Dollars in millions)

|                                   |                                                                                            |                                                     |                            |                                               |             |               |         |              |       |         |       | 
|---------------------------------- | ------------------------------------------------------------------------------------------ | --------------------------------------------------- | -------------------------- | --------------------------------------------- | ----------- | ------------- | ------- | ------------ | ----- | ------- | ----- | 
|                                   |                                                                                            |                                                     |                            |                                               |             | September 30, |         | December 31,
|                                   |                                                                                            |                                                     |                            |                                               |             | 2000          |         | 1999        
|                                   |                                                                                            |                                                     |                            |                                               |             |               |         |             
|                                   |                                                                                            |                                                     |                            |                                               | (Unaudited)
|ASSETS                            
|                                  
|                                  
|                                  
|                                  
|PROPERTY, PLANT AND EQUIPMENT:    
|                                  
|                                  
|                                  
|                                  
|                                   | Electric utility plant in service and held for future use                                  |                                                     | $                          | 6,868.6                                       |             |               | $       | 6,784.8      |      
|                                  
|                                  
|                                  
|                                  
|                                   | Less  Accumulated depreciation                                                            |                                                     |                            | 3,095.2                                       |             |               |         | 2,923.8      |      
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            |                                                     |                            | Accumulated decommissioning for nuclear plant |             |               | 313.6   |              |       |         | 285.0 | 
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            |                                                     |                            | Accumulated dismantlement for fossil plants   |             |               | 134.0   |              |       |         | 132.5 | 
|                                   |                                                                                            |                                                     |                            |                                               |             |               |         |             
|                                   |                                                                                            |                                                     | 3,325.8                    |                                               |             |               | 3,443.5 |             
|                                  
|                                  
|                                  
|                                  
|                                   | Construction work in progress                                                              |                                                     |                            | 194.3                                         |             |               |         | 139.7        |      
|                                  
|                                  
|                                  
|                                  
|                                   | Nuclear fuel, net of amortization of $417.5
in 2000 and $401.0 in 1999                     |                                                     |                            | 45.7                                          |             |               |         | 68.7         |      
|                                   |                                                                                            |                                                     |                            |                                               |             |               |         |             
|                                   |                                                                                            |                                                     | Net electric utility plant |                                               |             | 3,565.8       |         |              |       | 3,651.9 |      
|                                  
|                                  
|                                  
|                                  
|                                   | Other property, at cost, net of depreciation of $314.1
in 2000 and $275.0 in 1999          |                                                     |                            | 709.9                                         |             |               |         | 703.4        |      
|                                   |                                                                                            |                                                     |                            |                                               |             |               |         |             
|                                   |                                                                                            |                                                     | 4,275.7                    |                                               |             |               | 4,355.3 |             
|                                   |                                                                                            |                                                     |                            |                                               |             |               |         |             
|CURRENT ASSETS:                   
|                                  
|                                  
|                                  
|                                  
|                                   | Cash and equivalents                                                                       |                                                     |                            | 4.0                                           |             |               |         | 9.6          |      
|                                  
|                                  
|                                  
|                                  
|                                   | Accounts receivable, less allowance for doubtful accounts of
$6.9 in 2000 and $5.8 in 1999 |                                                     |                            | 559.6                                         |             |               |         | 420.6        |      
|                                  
|                                  
|                                  
|                                  
|                                   | Inventories, primarily at average cost:                                                   
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Fuel                                                |                            |                                               | 77.7        |               |         |              | 76.4  |        
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Utility materials and supplies                      |                            |                                               | 96.7        |               |         |              | 90.8  |        
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Diversified operations                              |                            |                                               | 264.3       |               |         |              | 209.3 |        
|                                  
|                                  
|                                  
|                                  
|                                   | Underrecovered utility fuel costs                                                          |                                                     |                            | 70.9                                          |             |               |         |             |      
|                                  
|                                  
|                                  
|                                  
|                                   | Deferred income taxes                                                                      |                                                     |                            | 14.8                                          |             |               |         | 41.3         |      
|                                  
|                                  
|                                  
|                                  
|                                   | Prepayments and other                                                                      |                                                     |                            | 169.2                                         |             |               |         | 113.7        |      
|                                   |                                                                                            |                                                     |                            |                                               |             |               |         |             
|                                   |                                                                                            |                                                     | 1,257.2                    |                                               |             |               | 961.7   |             
|                                   |                                                                                            |                                                     |                            |                                               |             |               |         |             
|DEFERRED CHARGES AND OTHER ASSETS:
|                                  
|                                  
|                                  
|                                  
|                                   | Costs deferred pursuant to regulation:                                                    
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Deferred purchased power contract termination costs |                            |                                               | 232.2       |               |         |              | 297.8 |        
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Other                                               |                            |                                               | 76.1        |               |         |              | 94.0  |        
|                                  
|                                  
|                                  
|                                  
|                                   | Investments in nuclear plant decommissioning fund                                          |                                                     |                            | 409.5                                         |             |               |         | 377.2        |      
|                                  
|                                  
|                                  
|                                  
|                                   | Goodwill                                                                                   |                                                     |                            | 243.8                                         |             |               |         | 171.1        |      
|                                  
|                                  
|                                  
|                                  
|                                   | Joint ventures and partnerships                                                            |                                                     |                            | 88.8                                          |             |               |         | 66.2         |      
|                                  
|                                  
|                                  
|                                  
|                                   | Other                                                                                      |                                                     |                            | 262.8                                         |             |               |         | 204.9        |      
|                                   |                                                                                            |                                                     |                            |                                               |             |               |         |             
|                                   |                                                                                            |                                                     | 1,313.2                    |                                               |             |               | 1,211.2 |             
|                                   |                                                                                            |                                                     |                            |                                               |             |               |         |             
|                                   |                                                                                            | $                                                   | 6,846.1                    |                                               |             | $             | 6,528.2 |             
|                                   |                                                                                            |                                                     |                            |                                               |             |               |         |             

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

3



---



FLORIDA PROGRESS CORPORATION
Consolidated Balance Sheets
(Dollars in millions)

|                                        |                                                                                                                                                                                                           |   |               |         |              |   |         |         |  
|--------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- | ------- | ------------ | - | ------- | ------- | -
|                                        |                                                                                                                                                                                                           |   | September 30, |         | December 31,
|                                        |                                                                                                                                                                                                           |   | 2000          |         | 1999        
|                                        |                                                                                                                                                                                                           |   |               |         |             
|                                        |                                                                                                                                                                                                           |   | (Unaudited)  
|CAPITAL AND LIABILITIES                
|                                       
|                                       
|                                       
|                                       
|COMMON STOCK EQUITY:                   
|                                       
|                                       
|                                       
|                                       
|                                        | Common stock                                                                                                                                                                                              |   | $             | 1,274.2 |              |   | $       | 1,267.3 |  
|                                       
|                                       
|                                       
|                                       
|                                        | Retained earnings                                                                                                                                                                                         |   |               | 914.3   |              |   |         | 741.8   |  
|                                       
|                                       
|                                       
|                                       
|                                        | Other comprehensive income                                                                                                                                                                                |   |               | (.7     | )            |   |         | (.4     | )
|                                        |                                                                                                                                                                                                           |   |               |         |              |   |         |        
|                                        |                                                                                                                                                                                                           |   | 2,187.8       |         |              |   | 2,008.7 |        
|                                       
|                                       
|                                       
|                                       
|PREFERRED SECURITIES:                  
|                                       
|                                       
|                                       
|                                       
|                                        | Cumulative preferred stock of Florida Power without sinking funds                                                                                                                                         |   |               | 33.5    |              |   |         | 33.5    |  
|                                       
|                                       
|                                       
|                                       
|                                        | Company-obligated mandatorily redeemable quarterly income preferred
securities (QUIPS) of
  a subsidiary trust holding solely Florida Progress
guaranteed junior subordinated deferrable
  interest notes |   |               | 300.0   |              |   |         | 300.0   |  
|                                       
|                                       
|                                       
|                                       
|LONG-TERM DEBT                          |                                                                                                                                                                                                           |   | 2,041.9       |         |              |   | 2,154.1 |        
|                                        |                                                                                                                                                                                                           |   |               |         |              |   |         |        
|TOTAL CAPITAL                           |                                                                                                                                                                                                           |   | 4,563.2       |         |              |   | 4,496.3 |        
|                                        |                                                                                                                                                                                                           |   |               |         |              |   |         |        
|CURRENT LIABILITIES:                   
|                                       
|                                       
|                                       
|                                       
|                                        | Accounts payable                                                                                                                                                                                          |   |               | 306.7   |              |   |         | 309.0   |  
|                                       
|                                       
|                                       
|                                       
|                                        | Customers deposits                                                                                                                                                                                       |   |               | 107.7   |              |   |         | 105.6   |  
|                                       
|                                       
|                                       
|                                       
|                                        | Taxes payable                                                                                                                                                                                             |   |               | 76.8    |              |   |         | 10.3    |  
|                                       
|                                       
|                                       
|                                       
|                                        | Accrued interest                                                                                                                                                                                          |   |               | 58.5    |              |   |         | 77.4    |  
|                                       
|                                       
|                                       
|                                       
|                                        | Overrecovered utility fuel costs                                                                                                                                                                          |   |               |        |              |   |         | 31.6    |  
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                                                                                                                                                                                     |   |               | 104.0   |              |   |         | 112.4   |  
|                                        |                                                                                                                                                                                                           |   |               |         |              |   |         |        
|                                        |                                                                                                                                                                                                           |   | 653.7         |         |              |   | 646.3   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Notes payable                                                                                                                                                                                             |   |               | 332.5   |              |   |         | 153.1   |  
|                                       
|                                       
|                                       
|                                       
|                                        | Current portion of long-term debt                                                                                                                                                                         |   |               | 275.9   |              |   |         | 163.2   |  
|                                        |                                                                                                                                                                                                           |   |               |         |              |   |         |        
|                                        |                                                                                                                                                                                                           |   | 1,262.1       |         |              |   | 962.6   |        
|                                        |                                                                                                                                                                                                           |   |               |         |              |   |         |        
|DEFERRED CREDITS AND OTHER LIABILITIES:
|                                       
|                                       
|                                       
|                                       
|                                        | Deferred income taxes                                                                                                                                                                                     |   |               | 538.9   |              |   |         | 565.3   |  
|                                       
|                                       
|                                       
|                                       
|                                        | Unamortized investment tax credits                                                                                                                                                                        |   |               | 64.1    |              |   |         | 70.0    |  
|                                       
|                                       
|                                       
|                                       
|                                        | Other postretirement benefit costs                                                                                                                                                                        |   |               | 127.8   |              |   |         | 123.1   |  
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                                                                                                                                                                                     |   |               | 290.0   |              |   |         | 310.9   |  
|                                        |                                                                                                                                                                                                           |   |               |         |              |   |         |        
|                                        |                                                                                                                                                                                                           |   | 1,020.8       |         |              |   | 1,069.3 |        
|                                        |                                                                                                                                                                                                           |   |               |         |              |   |         |        
|                                        |                                                                                                                                                                                                           | $ | 6,846.1       |         |              | $ | 6,528.2 |        
|                                        |                                                                                                                                                                                                           |   |               |         |              |   |         |        
|                                       

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

4



---



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

|                                                  |                                                                                      |                                                               |                                                 |        |                   |        |        |        |       |       |  
|------------------------------------------------- | ------------------------------------------------------------------------------------ | ------------------------------------------------------------- | ----------------------------------------------- | ------ | ----------------- | ------ | ------ | ------ | ----- | ----- | -
|                                                  |                                                                                      |                                                               |                                                 |        | Nine Months Ended
|                                                  |                                                                                      |                                                               |                                                 |        | September 30,    
|                                                  |                                                                                      |                                                               |                                                 |        | 2000              |        | 1999  
|                                                  |                                                                                      |                                                               |                                                 |        |                   |        |       
|                                                  |                                                                                      |                                                               |                                                 |        | (Unaudited)      
|OPERATING ACTIVITIES:                            
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Net income                                                                           |                                                               | $                                               | 336.7  |                   |        | $      | 281.5  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Adjustments for noncash items:                                                      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      | Depreciation and amortization                                 |                                                 |        | 389.1             |        |        |        | 326.9 |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      | Provision for loss on investment in life insurance subsidiary |                                                 |        | 12.8              |        |        |        |      |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      | Deferred income taxes and investment tax credits, net         |                                                 |        | (11.6             | )      |        |        | (35.2 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Changes in working capital, net of effects from sale or acquisition of
businesses:  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      |                                                               | Accounts receivable                             |        |                   | (138.3 | )      |        |       | (70.9 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      |                                                               | Inventories                                     |        |                   | (24.5  | )      |        |       | (82.6 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      |                                                               | Overrecovered/underrecovered utility fuel costs |        |                   | (102.5 | )      |        |       | 15.5  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      |                                                               | Accounts payable                                |        |                   | (1.7   | )      |        |       | (27.8 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      |                                                               | Taxes payable                                   |        |                   | 16.0   |        |        |       | 148.7 |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      |                                                               | Prepayments and other                           |        |                   | (95.7  | )      |        |       | (44.9 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other operating activities                                                           |                                                               |                                                 | (23.2  | )                 |        |        | 8.6    |      
|                                                  |                                                                                      |                                                               |                                                 |        |                   |        |        |       
|                                                  |                                                                                      |                                                               | 357.1                                           |        |                   |        | 519.8  |       
|                                                  |                                                                                      |                                                               |                                                 |        |                   |        |        |       
|INVESTING ACTIVITIES:                            
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Property additions (including allowance for
borrowed funds used during construction) |                                                               |                                                 | (254.2 | )                 |        |        | (417.2 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Acquisition of businesses                                                            |                                                               |                                                 | (47.0  | )                 |        |        | (8.2   | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Proceeds from sale of properties and businesses                                      |                                                               |                                                 | 4.3    |                   |        |        | 27.2   |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Proceeds from sale and leaseback                                                     |                                                               |                                                 |       |                   |        |        | 47.0   |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other investing activities                                                           |                                                               |                                                 | (21.3  | )                 |        |        | (39.3  | )    
|                                                  |                                                                                      |                                                               |                                                 |        |                   |        |        |       
|                                                  |                                                                                      |                                                               | (318.2                                          | )      |                   |        | (390.5 | )     
|                                                  |                                                                                      |                                                               |                                                 |        |                   |        |        |       
|FINANCING ACTIVITIES:                            
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Issuance of long-term debt                                                           |                                                               |                                                 |       |                   |        |        | 50.0   |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Repayment of long-term debt                                                          |                                                               |                                                 | (76.7  | )                 |        |        | (68.6  | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Increase/(decrease) in commercial paper with long-term support                       |                                                               |                                                 | 16.5   |                   |        |        | (46.5  | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Issuance of company obligated mandatorily redeemable preferred securities            |                                                               |                                                 |       |                   |        |        | 300.0  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Sale of common stock                                                                 |                                                               |                                                 |       |                   |        |        | 43.2   |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Dividends paid on common stock                                                       |                                                               |                                                 | (164.2 | )                 |        |        | (160.4 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Increase/(decrease) in short-term debt                                               |                                                               |                                                 | 179.4  |                   |        |        | (236.2 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other financing activities                                                           |                                                               |                                                 | .5     |                   |        |        | (2.0   | )    
|                                                  |                                                                                      |                                                               |                                                 |        |                   |        |        |       
|                                                  |                                                                                      |                                                               | (44.5                                           | )      |                   |        | (120.5 | )     
|                                                  |                                                                                      |                                                               |                                                 |        |                   |        |        |       
|NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS   |                                                                                      |                                                               | (5.6                                            | )      |                   |        | 8.8    |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Beginning cash and equivalents                                                       |                                                               |                                                 | 9.6    |                   |        |        | 2.5    |      
|                                                  |                                                                                      |                                                               |                                                 |        |                   |        |        |       
|ENDING CASH AND EQUIVALENTS                       |                                                                                      | $                                                             | 4.0                                             |        |                   | $      | 11.3   |       
|                                                  |                                                                                      |                                                               |                                                 |        |                   |        |        |       
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Cash paid during the period for:                                                    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      | Interest (net of amount capitalized)                          |                                                 | $      | 154.8             |        |        | $      | 137.9 |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                      | Income taxes (net of refunds)                                 |                                                 | $      | 120.0             |        |        | $      | 86.4  |      

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

5



---



FLORIDA PROGRESS CORPORATION
Consolidated Statements of Common Equity and Comprehensive Income (Unaudited)
For the periods ended September 30, 2000 and 1999
(Dollars in millions, except per share amounts)

|                                        |                      |   |         |       |       |   |          |   |          |   |               |       |  |   |             |     |  
|--------------------------------------- | -------------------- | - | ------- | ----- | ----- | - | -------- | - | -------- | - | ------------- | ----- |  | - | ----------- | --- | -
|                                        |                      |   |         |       |       |   |          |   |          |   |               |       |  |   | Accumulated
|                                        |                      |   |         |       |       |   |          |   |          |   |               |       |  |   | Other      
|                                        |                      |   |         |       |       |   | Common   |   | Retained |   | Comprehensive
|                                        |                      |   | Total   |       | Stock |   | Earnings |   | Income  
|                                        |                      |   |         |       |       |   |          |   |         
|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         |       |  |   |            |    
|                                        |                      |   |         |       |       |   |          |   |          |   |               |       |  |   |             |    
|Balance, December 31, 1999              |                      |   | 2,008.7 |       |       |   | 1,267.3  |   |          |   | 741.8         |       |  |   | (.4         | )  
|                                       
|                                       
|                                       
|                                       
|Net income                              |                      |   | 336.7   |       |       |   |          |   |          |   | 336.7         |      
|                                       
|                                       
|                                       
|                                       
|Foreign currency translation adjustment |                      |   | (.3     | )     |       |   |          |   |          |   |               |       |  |   | (.3         | )  
|                                        |                      |   |         |       |       |   |          |   |          |   |               |       |  |   |             |    
|                                        | Comprehensive income |   |         | 336.4 |       |   |          |  |          |   |               | 336.7 |  |   |             | (.3 | )
|                                       
|                                       
|                                       
|                                       
|Common stock issued                     |                      |   | 6.9     |       |       |   | 6.9      |  
|                                       
|                                       
|                                       
|                                       
|Cash dividends on common stock          |                      |   | (164.2  | )     |       |   |          |   |          |   | (164.2        | )    
|                                        |                      |   |         |       |       |   |          |   |          |   |               |       |  |   |             |    
|Balance, September 30, 2000             |                      | $ | 2,187.8 |       |       | $ | 1,274.2  |   |          | $ | 914.3         |       |  | $ | (.7         | )  
|                                        |                      |   |         |       |       |   |          |   |          |   |               |       |  |   |             |    

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

6



---



FLORIDA POWER CORPORATION
Statements of Income
(Dollars in millions)

|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |   |         |  
|--------------------------------------------- | ------------- | ----------------------------------------------------- | ----- | ------------------ | ----- | ----------------- | ----- | ---- | ----- | ---- | ------- | - | ------- | - | ------- | - | ------- | -
|                                              |               |                                                       |       | Three Months Ended |       | Nine Months Ended
|                                              |               |                                                       |       | September 30,      |       | September 30,    
|                                              |               |                                                       |       | 2000               |       | 1999              |       | 2000 |       | 1999
|                                              |               |                                                       |       |                    |       |                   |       |      |       |     
|                                              |               |                                                       |       | (Unaudited)        |       | (Unaudited)      
|OPERATING REVENUES:                          
|                                             
|                                             
|                                             
|                                             
|                                              |               | Residential                                           |       | $                  | 468.7 |                   |       | $    | 446.9 |      |         | $ | 1,135.0 |   |         | $ | 1,072.5 |  
|                                             
|                                             
|                                             
|                                             
|                                              |               | Commercial                                            |       |                    | 197.0 |                   |       |      | 180.0 |      |         |   | 498.2   |   |         |   | 464.7   |  
|                                             
|                                             
|                                             
|                                             
|                                              |               | Industrial                                            |       |                    | 55.8  |                   |       |      | 54.8  |      |         |   | 160.3   |   |         |   | 155.8   |  
|                                             
|                                             
|                                             
|                                             
|                                              |               | Sales for resale                                      |       |                    | 81.7  |                   |       |      | 72.1  |      |         |   | 195.7   |   |         |   | 164.7   |  
|                                             
|                                             
|                                             
|                                             
|                                              |               | Other                                                 |       |                    | 111.3 |                   |       |      | 41.1  |      |         |   | 248.6   |   |         |   | 179.6   |  
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  
|                                              |               |                                                       | 914.5 |                    |       |                   | 794.9 |      |       |      | 2,237.8 |   |         |   | 2,037.3 |  
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  
|OPERATING EXPENSES:                          
|                                             
|                                             
|                                             
|                                             
|                                              | Operation:   
|                                             
|                                             
|                                             
|                                             
|                                              |               | Fuel                                                  |       |                    | 213.2 |                   |       |      | 191.5 |      |         |   | 501.4   |   |         |   | 448.7   |  
|                                             
|                                             
|                                             
|                                             
|                                              |               | Purchased power                                       |       |                    | 166.3 |                   |       |      | 106.7 |      |         |   | 389.7   |   |         |   | 305.4   |  
|                                             
|                                             
|                                             
|                                             
|                                              |               | Energy conservation costs                             |       |                    | 20.0  |                   |       |      | 25.4  |      |         |   | 50.0    |   |         |   | 61.9    |  
|                                             
|                                             
|                                             
|                                             
|                                              |               | Operation and maintenance                             |       |                    | 98.7  |                   |       |      | 108.0 |      |         |   | 308.2   |   |         |   | 325.9   |  
|                                             
|                                             
|                                             
|                                             
|                                              |               | Depreciation and amortization                         |       |                    | 135.5 |                   |       |      | 86.8  |      |         |   | 313.3   |   |         |   | 260.8   |  
|                                             
|                                             
|                                             
|                                             
|                                              |               | Taxes other than income taxes                         |       |                    | 59.4  |                   |       |      | 56.9  |      |         |   | 165.3   |   |         |   | 159.9   |  
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  
|                                              |               |                                                       | 693.1 |                    |       |                   | 575.3 |      |       |      | 1,727.9 |   |         |   | 1,562.6 |  
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  
|                                              | Income taxes:
|                                             
|                                             
|                                             
|                                             
|                                              |               | Currently payable                                     |       |                    | 83.6  |                   |       |      | 87.2  |      |         |   | 181.0   |   |         |   | 182.7   |  
|                                             
|                                             
|                                             
|                                             
|                                              |               | Deferred, net                                         |       |                    | (11.3 | )                 |       |      | (14.4 | )    |         |   | (22.3   | ) |         |   | (35.1   | )
|                                             
|                                             
|                                             
|                                             
|                                              |               | Investment tax credits, net                           |       |                    | (2.0  | )                 |       |      | (2.0  | )    |         |   | (5.9    | ) |         |   | (5.9    | )
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  
|                                              |               |                                                       | 70.3  |                    |       |                   | 70.8  |      |       |      | 152.8   |   |         |   | 141.7   |  
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  
|                                              |               |                                                       | 763.4 |                    |       |                   | 646.1 |      |       |      | 1,880.7 |   |         |   | 1,704.3 |  
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  
|INCOME FROM OPERATIONS                        |               |                                                       | 151.1 |                    |       |                   | 148.8 |      |       |      | 357.1   |   |         |   | 333.0   |  
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  
|OTHER INCOME AND DEDUCTIONS:                 
|                                             
|                                             
|                                             
|                                             
|                                              |               | Allowance for equity funds used during construction   |       |                    | .6    |                   |       |      | .2    |      |         |   | 1.6     |   |         |   | 3.0     |  
|                                             
|                                             
|                                             
|                                             
|                                              |               | Other income, net                                     |       |                    | 1.9   |                   |       |      | 3.1   |      |         |   | 2.4     |   |         |   | 3.8     |  
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  
|                                              |               |                                                       | 2.5   |                    |       |                   | 3.3   |      |       |      | 4.0     |   |         |   | 6.8     |  
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  
|INTEREST CHARGES                             
|                                             
|                                             
|                                             
|                                             
|                                              |               | Interest on long-term debt                            |       |                    | 25.1  |                   |       |      | 26.5  |      |         |   | 77.1    |   |         |   | 80.1    |  
|                                             
|                                             
|                                             
|                                             
|                                              |               | Other interest expense                                |       |                    | 6.8   |                   |       |      | 4.5   |      |         |   | 19.5    |   |         |   | 13.4    |  
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  
|                                              |               |                                                       | 31.9  |                    |       |                   | 31.0  |      |       |      | 96.6    |   |         |   | 93.5    |  
|                                             
|                                             
|                                             
|                                             
|                                              |               | Allowance for borrowed funds used during construction |       |                    | (.5   | )                 |       |      | (.2   | )    |         |   | (1.4    | ) |         |   | (3.7    | )
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  
|                                              |               |                                                       | 31.4  |                    |       |                   | 30.8  |      |       |      | 95.2    |   |         |   | 89.8    |  
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  
|NET INCOME                                    |               |                                                       | 122.2 |                    |       |                   | 121.3 |      |       |      | 265.9   |   |         |   | 250.0   |  
|                                             
|                                             
|                                             
|                                             
|DIVIDENDS ON PREFERRED STOCK                  |               |                                                       | .3    |                    |       |                   | .3    |      |       |      | 1.1     |   |         |   | 1.1     |  
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  
|NET INCOME AFTER DIVIDENDS ON PREFERRED STOCK |               | $                                                     | 121.9 |                    |       | $                 | 121.0 |      |       | $    | 264.8   |   |         | $ | 248.9   |  
|                                              |               |                                                       |       |                    |       |                   |       |      |       |      |         |   |         |   |         |  

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

7



---



FLORIDA POWER CORPORATION
Balance Sheets
(Dollars in millions)

|                                   |                                                                                            |                                                     |                                               |         |               |       |              |         |       |       | 
|---------------------------------- | ------------------------------------------------------------------------------------------ | --------------------------------------------------- | --------------------------------------------- | ------- | ------------- | ----- | ------------ | ------- | ----- | ----- | 
|                                   |                                                                                            |                                                     |                                               |         | September 30, |       | December 31,
|                                   |                                                                                            |                                                     |                                               |         | 2000          |       | 1999        
|                                   |                                                                                            |                                                     |                                               |         |               |       |             
|                                   |                                                                                            |                                                     |                                               |         | (Unaudited)  
|ASSETS                            
|                                  
|                                  
|                                  
|                                  
|PROPERTY, PLANT AND EQUIPMENT:    
|                                  
|                                  
|                                  
|                                  
|                                   | Electric utility plant in service and held for future use                                  |                                                     | $                                             | 6,868.6 |               |       | $            | 6,784.8 |      
|                                  
|                                  
|                                  
|                                  
|                                   | Less  Accumulated depreciation                                                            |                                                     |                                               | 3,095.2 |               |       |              | 2,923.8 |      
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            |                                                     | Accumulated decommissioning for nuclear plant |         |               | 313.6 |              |         |       | 285.0 | 
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            |                                                     | Accumulated dismantlement for fossil plants   |         |               | 134.0 |              |         |       | 132.5 | 
|                                   |                                                                                            |                                                     |                                               |         |               |       |              |        
|                                   |                                                                                            |                                                     | 3,325.8                                       |         |               |       | 3,443.5      |        
|                                  
|                                  
|                                  
|                                  
|                                   | Construction work in progress                                                              |                                                     |                                               | 194.3   |               |       |              | 139.7   |      
|                                  
|                                  
|                                  
|                                  
|                                   | Nuclear fuel, net of amortization of $417.5
in 2000 and $401.0 in 1999                     |                                                     |                                               | 45.7    |               |       |              | 68.7    |      
|                                   |                                                                                            |                                                     |                                               |         |               |       |              |        
|                                   |                                                                                            |                                                     | 3,565.8                                       |         |               |       | 3,651.9      |        
|                                  
|                                  
|                                  
|                                  
|                                   | Other property, net                                                                        |                                                     |                                               | 9.3     |               |       |              | 10.0    |      
|                                   |                                                                                            |                                                     |                                               |         |               |       |              |        
|                                   |                                                                                            |                                                     | 3,575.1                                       |         |               |       | 3,661.9      |        
|                                   |                                                                                            |                                                     |                                               |         |               |       |              |        
|CURRENT ASSETS:                   
|                                  
|                                  
|                                  
|                                  
|                                   | Cash and equivalents                                                                       |                                                     |                                               | 2.2     |               |       |              |        |      
|                                  
|                                  
|                                  
|                                  
|                                   | Accounts receivable, less allowance for doubtful accounts of $4.9
in 2000 and $4.0 in 1999 |                                                     |                                               | 304.9   |               |       |              | 210.8   |      
|                                  
|                                  
|                                  
|                                  
|                                   | Inventories, primarily at average cost:                                                   
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Fuel                                                |                                               |         | 77.7          |       |              |         | 76.4  |      
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Materials and supplies                              |                                               |         | 96.7          |       |              |         | 90.8  |      
|                                  
|                                  
|                                  
|                                  
|                                   | Underrecovered utility fuel costs                                                          |                                                     |                                               | 70.9    |               |       |              |        |      
|                                  
|                                  
|                                  
|                                  
|                                   | Deferred income taxes                                                                      |                                                     |                                               | 14.8    |               |       |              | 41.4    |      
|                                  
|                                  
|                                  
|                                  
|                                   | Prepayments and other                                                                      |                                                     |                                               | 127.0   |               |       |              | 101.3   |      
|                                   |                                                                                            |                                                     |                                               |         |               |       |              |        
|                                   |                                                                                            |                                                     | 694.2                                         |         |               |       | 520.7        |        
|                                   |                                                                                            |                                                     |                                               |         |               |       |              |        
|DEFERRED CHARGES AND OTHER ASSETS:
|                                  
|                                  
|                                  
|                                  
|                                   | Costs deferred pursuant to regulation:                                                    
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Deferred purchased power contract termination costs |                                               |         | 232.2         |       |              |         | 297.8 |      
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                            | Other                                               |                                               |         | 76.1          |       |              |         | 94.0  |      
|                                  
|                                  
|                                  
|                                  
|                                   | Investments in nuclear plant decommissioning fund                                          |                                                     |                                               | 409.5   |               |       |              | 377.2   |      
|                                  
|                                  
|                                  
|                                  
|                                   | Other                                                                                      |                                                     |                                               | 51.4    |               |       |              | 50.9    |      
|                                   |                                                                                            |                                                     |                                               |         |               |       |              |        
|                                   |                                                                                            |                                                     | 769.2                                         |         |               |       | 819.9        |        
|                                   |                                                                                            |                                                     |                                               |         |               |       |              |        
|                                   |                                                                                            | $                                                   | 5,038.5                                       |         |               | $     | 5,002.5      |        
|                                   |                                                                                            |                                                     |                                               |         |               |       |              |        

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

8



---



FLORIDA POWER CORPORATION
Balance Sheets
(Dollars in millions)

|                                        |                                          |   |               |         |              |   |         |         | 
|--------------------------------------- | ---------------------------------------- | - | ------------- | ------- | ------------ | - | ------- | ------- | 
|                                        |                                          |   | September 30, |         | December 31,
|                                        |                                          |   | 2000          |         | 1999        
|                                        |                                          |   |               |         |             
|                                        |                                          |   | (Unaudited)  
|CAPITALIZATION AND LIABILITIES         
|                                       
|                                       
|                                       
|                                       
|CAPITALIZATION:                        
|                                       
|                                       
|                                       
|                                       
|                                        | Common stock                             |   | $             | 1,004.4 |              |   | $       | 1,004.4 | 
|                                       
|                                       
|                                       
|                                       
|                                        | Retained earnings                        |   |               | 991.7   |              |   |         | 880.6   | 
|                                        |                                          |   |               |         |              |   |         |        
|                                        |                                          |   | 1,996.1       |         |              |   | 1,885.0 |        
|                                       
|                                       
|                                       
|                                       
|CUMULATIVE PREFERRED STOCK:            
|                                       
|                                       
|                                       
|                                       
|                                        | Without sinking funds                    |   |               | 33.5    |              |   |         | 33.5    | 
|                                       
|                                       
|                                       
|                                       
|LONG-TERM DEBT                          |                                          |   | 1,398.0       |         |              |   | 1,478.8 |        
|                                        |                                          |   |               |         |              |   |         |        
|TOTAL CAPITAL                           |                                          |   | 3,427.6       |         |              |   | 3,397.3 |        
|                                        |                                          |   |               |         |              |   |         |        
|CURRENT LIABILITIES:                   
|                                       
|                                       
|                                       
|                                       
|                                        | Accounts payable                         |   |               | 147.5   |              |   |         | 152.9   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Accounts payable to associated companies |   |               | 15.2    |              |   |         | 23.1    | 
|                                       
|                                       
|                                       
|                                       
|                                        | Customers deposits                      |   |               | 107.7   |              |   |         | 105.6   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Income taxes payable                     |   |               | 56.2    |              |   |         |        | 
|                                       
|                                       
|                                       
|                                       
|                                        | Accrued other taxes                      |   |               | 69.6    |              |   |         | 5.8     | 
|                                       
|                                       
|                                       
|                                       
|                                        | Accrued interest                         |   |               | 47.8    |              |   |         | 59.6    | 
|                                       
|                                       
|                                       
|                                       
|                                        | Overrecovered utility fuel costs         |   |               |        |              |   |         | 31.6    | 
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                    |   |               | 41.0    |              |   |         | 79.3    | 
|                                        |                                          |   |               |         |              |   |         |        
|                                        |                                          |   | 485.0         |         |              |   | 457.9   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Notes payable                            |   |               | 200.5   |              |   |         | 153.1   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Current portion of long-term debt        |   |               | 81.9    |              |   |         | 76.8    | 
|                                        |                                          |   |               |         |              |   |         |        
|                                        |                                          |   | 767.4         |         |              |   | 687.8   |        
|                                        |                                          |   |               |         |              |   |         |        
|DEFERRED CREDITS AND OTHER LIABILITIES:
|                                       
|                                       
|                                       
|                                       
|                                        | Deferred income taxes                    |   |               | 467.5   |              |   |         | 509.9   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Unamortized investment tax credits       |   |               | 63.6    |              |   |         | 69.5    | 
|                                       
|                                       
|                                       
|                                       
|                                        | Other postretirement benefit costs       |   |               | 123.7   |              |   |         | 119.4   | 
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                    |   |               | 188.7   |              |   |         | 218.6   | 
|                                        |                                          |   |               |         |              |   |         |        
|                                        |                                          |   | 843.5         |         |              |   | 917.4   |        
|                                        |                                          |   |               |         |              |   |         |        
|                                        |                                          | $ | 5,038.5       |         |              | $ | 5,002.5 |        
|                                        |                                          |   |               |         |              |   |         |        

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

9



---



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

|                                                  |                                                       |                                                       |        |                   |        |      |        |        |       |  
|------------------------------------------------- | ----------------------------------------------------- | ----------------------------------------------------- | ------ | ----------------- | ------ | ---- | ------ | ------ | ----- | -
|                                                  |                                                       |                                                       |        | Nine Months Ended
|                                                  |                                                       |                                                       |        | September 30,    
|                                                  |                                                       |                                                       |        | 2000              |        | 1999
|                                                  |                                                       |                                                       |        |                   |        |     
|                                                  |                                                       |                                                       |        | (Unaudited)      
|OPERATING ACTIVITIES:                            
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Net income after dividends on preferred stock         |                                                       | $      | 264.8             |        |      | $      | 248.9  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Adjustments for noncash items:                       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Depreciation and amortization                         |        |                   | 338.9  |      |        |        | 280.4 |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Deferred income taxes and investment tax credits, net |        |                   | (28.2  | )    |        |        | (41.0 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Changes in working capital:                          
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Accounts receivable                                   |        |                   | (94.1  | )    |        |        | (85.3 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Inventories                                           |        |                   | (7.2   | )    |        |        | (39.0 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Overrecovered/underrecovered utility fuel costs       |        |                   | (102.6 | )    |        |        | 15.5  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Accounts payable                                      |        |                   | (13.3  | )    |        |        | (5.6  | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Taxes payable                                         |        |                   | 130.2  |      |        |        | 145.9 |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Prepayments and other                                 |        |                   | (83.8  | )    |        |        | (40.0 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other operating activities                            |                                                       |        | (18.8             | )      |      |        | 13.7   |      
|                                                  |                                                       |                                                       |        |                   |        |      |        |       
|                                                  |                                                       |                                                       | 385.9  |                   |        |      | 493.5  |       
|                                                  |                                                       |                                                       |        |                   |        |      |        |       
|INVESTING ACTIVITIES:                            
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Construction expenditures                             |                                                       |        | (186.1            | )      |      |        | (252.6 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Allowance for borrowed funds used during construction |                                                       |        | (1.4              | )      |      |        | (3.7   | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other investing activities                            |                                                       |        | (14.0             | )      |      |        | (12.9  | )    
|                                                  |                                                       |                                                       |        |                   |        |      |        |       
|                                                  |                                                       |                                                       | (201.5 | )                 |        |      | (269.2 | )     
|                                                  |                                                       |                                                       |        |                   |        |      |        |       
|FINANCING ACTIVITIES:                            
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Repayment of long-term debt                           |                                                       |        | (75.9             | )      |      |        | (15.8  | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Decrease in commercial paper with long-term support   |                                                       |        |                  |        |      |        | (6.4   | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Dividends paid on common stock                        |                                                       |        | (153.7            | )      |      |        | (150.3 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Increase/(decrease) in short-term debt                |                                                       |        | 47.4              |        |      |        | (47.3  | )    
|                                                  |                                                       |                                                       |        |                   |        |      |        |       
|                                                  |                                                       |                                                       | (182.2 | )                 |        |      | (219.8 | )     
|                                                  |                                                       |                                                       |        |                   |        |      |        |       
|NET INCREASE IN CASH AND EQUIVALENTS              |                                                       |                                                       | 2.2    |                   |        |      | 4.5    |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Beginning cash and equivalents                        |                                                       |        |                  |        |      |        |       |      
|                                                  |                                                       |                                                       |        |                   |        |      |        |       
|ENDING CASH AND EQUIVALENTS                       |                                                       | $                                                     | 2.2    |                   |        | $    | 4.5    |       
|                                                  |                                                       |                                                       |        |                   |        |      |        |       
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Cash paid during the period for:                     
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Interest (net of amount capitalized)                  |        | $                 | 104.8  |      |        | $      | 95.8  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Income taxes (net of refunds)                         |        | $                 | 117.8  |      |        | $      | 107.6 |  

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

10



---



FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION

NOTES TO FINANCIAL STATEMENTS



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

|                                       |                              |         |   |                  |  |          |            |                |      |       |               |              |  |              |   |       |  |  |   |       |   |  |   |        |   |  |   |         | 
|-------------------------------------- | ---------------------------- | ------- | - | ---------------- |  | -------- | ---------- | -------------- | ---- | ----- | ------------- | ------------ |  | ------------ | - | ----- |  |  | - | ----- | - |  | - | ------ | - |  | - | ------- | 
|                                       |                              |         |   |                  |  |          | Energy and |                | Rail |       | Inland Marine
|(In millions)                          |                              | Utility |   | Related Services |  | Services |            | Transportation |      | Other |               | Eliminations |  | Consolidated
|                                       |                              |         |   |                  |  |          |            |                |      |       |               |              |  |             
|Three months ended
September 30, 2000:
|                                      
|                                      
|                                      
|                                      
|                                       | Revenues                     |         | $ | 914.5            |  |          | $          | 97.7           |      |       | $             | 250.2        |  |              | $ | 42.8  |  |  | $ | 7.7   |   |  | $ | 1.0    |   |  | $ | 1,313.9 | 
|                                      
|                                      
|                                      
|                                      
|                                       | Intersegment revenues        |         |   |                 |  |          |            | 57.9           |      |       |               | .2           |  |              |   | 4.3   |  |  |   | (2.1  | ) |  |   | (60.3  | ) |  |   |        | 
|                                      
|                                      
|                                      
|                                      
|                                       | Income tax expense (benefit) |         |   | 72.1             |  |          |            | (62.9          | )    |       |               | 1.0          |  |              |   | 2.0   |  |  |   | (10.8 | ) |  |   | (.1    | ) |  |   | 1.3     | 
|                                      
|                                      
|                                      
|                                      
|                                       | Segment net income (loss)    |         |   | 121.9            |  |          |            | 42.6           |      |       |               | .1           |  |              |   | 3.1   |  |  |   | (17.3 | ) |  |   | (.1    | ) |  |   | 150.3   | 
|                                      
|                                      
|                                      
|                                      
|Nine months ended
September 30, 2000: 
|                                      
|                                      
|                                      
|                                      
|                                       | Revenues                     |         | $ | 2,237.8          |  |          | $          | 203.7          |      |       | $             | 775.2        |  |              | $ | 124.3 |  |  | $ | 13.2  |   |  | $ | 3.3    |   |  | $ | 3,357.5 | 
|                                      
|                                      
|                                      
|                                      
|                                       | Intersegment revenues        |         |   |                 |  |          |            | 188.9          |      |       |               | .5           |  |              |   | 13.8  |  |  |   | (7.1  | ) |  |   | (196.1 | ) |  |   |        | 
|                                      
|                                      
|                                      
|                                      
|                                       | Income tax expense (benefit) |         |   | 155.9            |  |          |            | (141.7         | )    |       |               | 4.4          |  |              |   | 5.0   |  |  |   | (21.7 | ) |  |   | (.3    | ) |  |   | 1.6     | 
|                                      
|                                      
|                                      
|                                      
|                                       | Segment net income (loss)    |         |   | 264.8            |  |          |            | 95.9           |      |       |               | 2.9          |  |              |   | 7.9   |  |  |   | (34.3 | ) |  |   | (.5    | ) |  |   | 336.7   | 
|                                      
|                                      
|                                      
|                                      
|                                       | Total assets                 |         |   | 5,038.5          |  |          |            | 685.5          |      |       |               | 852.7        |  |              |   | 104.0 |  |  |   | 496.9 |   |  |   | (331.5 | ) |  |   | 6,846.1 | 
|                                      
|                                      
|                                      
|                                      
|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  | ) |  |   |        | 
|                                      
|                                      
|                                      
|                                      
|                                       | Income tax expense (benefit) |         |   | 73.6             |  |          |            | (20.6          | )    |       |               | 4.7          |  |              |   | 2.1   |  |  |   | (8.4  | ) |  |   | (.3    | ) |  |   | 51.1    | 
|                                      
|                                      
|                                      
|                                      
|                                       | 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 | ) |  |   |        | 
|                                      
|                                      
|                                      
|                                      
|                                       | Income tax expense (benefit) |         |   | 145.3            |  |          |            | (32.3          | )    |       |               | 10.1         |  |              |   | 3.9   |  |  |   | (19.5 | ) |  |   | (.3    | ) |  |   | 107.2   | 
|                                      
|                                      
|                                      
|                                      
|                                       | Segment net income (loss)    |         |   | 248.9            |  |          |            | 33.6           |      |       |               | 11.8         |  |              |   | 6.2   |  |  |   | (18.5 | ) |  |   | (.5    | ) |  |   | 281.5   | 
|                                      
|                                      
|                                      
|                                      
|                                       | Total assets                 |         |   | 5,050.1          |  |          |            | 350.9          |      |       |               | 752.0        |  |              |   | 102.9 |  |  |   | 534.5 |   |  |   | (377.4 | ) |  |   | 6,413.0 | 



|2) |  | In November 1999, Florida Power received approval from the Florida Public
Service Commission (FPSC) to defer nonfuel revenues towards the
development of a plan that would allow customers to realize the benefits
earlier than if they are used to accelerate the amortization of the Tiger
Bay regulatory asset. The approval required that a plan be submitted to the
FPSC by August 1, 2000. On July 31, 2000, Florida Power filed a motion with
the FPSC requesting a two-month extension. The plan was required to be
filed by October 2, 2000. Florida Power was unable to identify a
satisfactory rate initiative that might allow its ratepayers to receive
these benefits sooner and, therefore, applied the deferred revenues of
$44.4 million, plus accrued interest, to the amortization of the Tiger Bay
regulatory asset for the month ended September 30, 2000. There was no
impact to earnings.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|3) |  | FLORIDA PROGRESS OBLIGATED MANDATORILY REDEEMABLE CUMULATIVE QUARTERLY
INCOME PREFERRED SECURITIES (QUIPS) OF A SUBSIDIARY TRUST HOLDING
SOLELY FLORIDA PROGRESS GUARANTEED SUBORDINATED DEFERRABLE INTEREST
NOTES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   |  | In April 1999, FPC Capital I (the Trust), an indirect wholly owned
subsidiary of Florida Progress, issued 12 million shares of $25 par
cumulative Company-obligated mandatorily redeemable preferred securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

11



---





|   |  | (Preferred Securities) due 2039, with an aggregate liquidation value of
$300 million and a quarterly distribution rate of 7.10%. Currently, all 12
million shares of the Preferred Securities that were issued are
outstanding. Concurrent with the issuance of the Preferred Securities, the
Trust issued to Florida Progress Funding Corporation (Funding Corp.) all
of the common securities of the Trust (371,135 shares), for $9.3 million.
Funding Corp. is a direct wholly owned subsidiary of the Company.                                                                                                                                                                                                                                                                                   
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The existence of the Trust is for the sole purpose of issuing the Preferred
Securities and the common securities and using the proceeds thereof to
purchase from Funding Corp. its 7.10% Junior Subordinated Deferrable
Interest Notes (subordinated notes) due 2039, for a principal amount of
$309.3 million. The subordinated notes and the Notes Guarantee (as
discussed below) are the sole assets of the Trust. Funding Corp.s proceeds
from the sale of the subordinated notes were advanced to Progress Capital
Holdings, Inc. (PCH), a subsidiary of Florida Progress that provides
financing for Florida Progress diversified operations, and used for
general corporate purposes including the repayment of a portion of certain
outstanding short-term bank loans and commercial paper.
|  
|   |  | The Company has fully and unconditionally guaranteed the obligations of
Funding Corp. under the subordinated notes (the Notes Guarantee). In
addition, the Company has guaranteed the payment of all distributions
required to be made by the Trust, but only to the extent that the Trust has
funds available for such distributions (Preferred Securities Guarantee).
The Preferred Securities Guarantee, considered together with the Notes
Guarantee, constitutes a full and unconditional guarantee by the Company of
the Trusts obligations under the Preferred Securities.                                                                                                                                                                                                                   
|  
|   |  | The subordinated notes may be redeemed at the option of Funding Corp.
beginning in 2004 at par value plus accrued interest through the redemption
date. The proceeds of any redemption of the subordinated notes will be used
by the Trust to redeem proportional amounts of the Preferred Securities and
common securities in accordance with their terms. Upon liquidation or
dissolution of Funding Corp., holders of the Preferred Securities would be
entitled to the liquidation preference of $25 per share plus all accrued
and unpaid dividends thereon to the date of payment.                                                                                                                                                                                                                 
|  
|4) |  | CONTINGENCIES -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   |  | Insurance  Florida Progress and its subsidiaries utilize various risk
management techniques to protect certain assets from risk of loss,
including the purchase of insurance. Risk avoidance, risk transfer and
self-insurance techniques are utilized depending on the Companys 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 defer any losses in excess of the reserve. The
reserve balances at September 30, 2000 and 1999 were $30.1 million and
$28.6 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 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 full amount of insurance is purchased from
Nuclear Electric                                                                                                                                                                                                                                                            

12



---





| |  | Insurance Ltd. (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 $8.7 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  The Company is subject to regulation with
respect to the environmental impact of its operations. The Companys
disposal of hazardous waste through third-party vendors or through a
release of hazardous materials to the environment 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 former subsidiaries of the Company, 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 of 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. A
Participation Agreement was signed, and subsequently amended, among the
PRPs of the Sanford site to allocate $1.9 million to perform a Remedial
Investigation, Baseline Risk Assessment and Feasibility Study (RI/FS) for
phases one and two of the cleanup. Florida Power is liable for
approximately 40% of the costs for the RI/FS as agreed to in the
Participation Agreement. In March 2000, the EPA selected a preferred
remedy for the cleanup of the contaminated soils at the site, which was
documented in a Record of Decision on July 5, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Cleanup will be addressed in three phases for project management purposes.
A second participation agreement was negotiated in late summer 2000 that
defined and allocated Remedial Design and Remedial Action costs among the
participants for all three phases of the cleanup. Florida Powers future
cost share allocation is approximately 43%. The discussions and resolution
of liability for cleanup costs could cause Florida Power to increase the
estimate of its liability for those costs. The range of any additional
costs are not expected to have a material effect on Florida Progress or
Florida Powers financial position, results of operations or liquidity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | In December 1998, the EPA conducted an Expanded Site Inspection at a former
Florida Power plant site near Inglis, Florida. Soil and groundwater samples
were obtained from the Florida Power property, as well as sediment samples
from the adjacent Withlacoochee River. A final copy of the report, along
with a Request for Information under the Comprehensive Environmental
Response Compensation and Liability Act (CERCLA or Superfund) was
received in December 1999. Upon review of Florida Powers reply and further
testing at the site, the EPAs conclusions may change the current hazard
ranking and ultimately result in the Inglis site being placed on the
National Priorities List (NPL). If this property is placed on the NPL,
then the EPA could conduct remediation actions at the site and seek
repayment of those costs as well as investigative costs from any PRPs. Past
costs currently exceed $3.5 million with Florida Power identified as the
only major viable business associated with this site. In June 2000, Florida
Power received confirmation that the EPA intends to issue a Consent Order,
which would require Florida Power to enter into an agreement to conduct an
RI/FS on the property. After the EPA has reviewed the findings associated
with the Expanded Site Investigation conducted in December 1998, and some
additional sediment sampling in the Withlacoochee River that it will
conduct in the fourth quarter of 2000, negotiations with respect to Florida
Powers participation will take place late in the fourth quarter of 2000.
The results of such sampling could expand the scope, and thus the cost, of
any required cleanup.
|
| |  | In addition to these designated sites, there are other sites where Florida
Progress may be responsible for additional environmental cleanup. Florida
Progress estimates that its share of liability for cleaning up all
designated sites ranges from $9 million to $13 million. It has accrued $9
million against these potential costs. There can be no assurance that the
Companys estimates will not change in the future.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

13



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| |  | Age Discrimination Suit  Florida Power and Florida Progress have been
named defendants in an age discrimination lawsuit. The number of plaintiffs
remains at 116, but four of those plaintiffs have had their federal claims
dismissed and 74 others have had their state age claims dismissed. While no
dollar amount was requested, each plaintiff seeks back pay, reinstatement
or front pay through their projected dates of normal retirement, costs and
attorneys fees. In October 1996, the Federal Court approved an agreement
between the parties to provisionally certify this case as a class action
suit under the Age Discrimination in Employment Act. Florida Power filed a
motion to decertify the class and in August 1999, the Court granted Florida
Powers motion. In October 1999, the judge certified the question of
whether the case should be tried as a class action to the Eleventh Circuit
Court of Appeals for immediate appellate review. In December 1999, the
Court of Appeals agreed to review the judges order decertifying the class
and scheduled oral arguments for December 2000. In anticipation of a
potential ruling decertifying the case as a class action, plaintiffs filed
a virtually identical lawsuit which identified all opt-in plaintiffs as
named plaintiffs. This case had been held in abeyance until reactivated in
July 2000 upon motion of the plaintiffs.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | In December 1998, during mediation in this age discrimination suit,
plaintiffs alleged damages of $100 million. Company management, while not
believing plaintiffs claim to have merit, offered $5 million in an attempt
to settle all claims. Plaintiffs rejected that offer. Florida Power and the
plaintiffs engaged in informal settlement discussions, which terminated on
December 22, 1998. As a result of the plaintiffs claims, management has
identified a probable range of $5 million to $100 million with no amount
within that range a better estimate of probable loss than any other amount;
accordingly, Florida Power has accrued $5 million. In December 1999,
Florida Power also recorded an accrual of $4.8 million for legal fees
associated with defending its position in these proceedings. There can be
no assurance that this litigation will be settled, or if settled, that the
settlement will not exceed $5 million. Additionally, the ultimate outcome,
if litigated, cannot presently be determined.                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | Advanced Separation Technologies
(AST)  In 1996, Florida Progress sold
its 80% interest in AST to Calgon Carbon Corporation (Calgon) for net
proceeds of $56 million in cash. In January 1998, Calgon filed a lawsuit
against Florida Progress and the other selling shareholder and amended it
in April 1998, alleging misstatement of ASTs 1996 revenues, assets and
liabilities, seeking damages and granting Calgon the right to rescind the
sale. The lawsuit also accused the sellers of failing to disclose flaws in
ASTs manufacturing process and a lack of quality control. Florida Progress
believes that the aggregate total of all legitimate warranty claims by
customers of AST for which it is probable that Florida Progress will be
responsible for under the Stock Purchase Agreement with Calgon is
approximately $3.2 million, and accordingly, accrued $3.2 million in the
third quarter of 1999 as an estimate of probable loss.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | Qualifying Facilities Contracts Florida Powers purchased power
contracts with qualifying facilities employ separate pricing methodologies
for capacity payments and energy payments. Florida Power has interpreted
the pricing provision in these contracts to allow it to pay an as-available
energy price rather than a higher firm energy price when the avoided unit
upon which the applicable contract is based would not have been operated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | The owners of four qualifying facilities filed suits against Florida Power
in state court over the contract payment terms, and one owner also filed
suit in federal court. Three of the state court suits have been settled,
and the federal case was dismissed. The most recent case to settle involved
Dade County/Dade Cogen. In May 1999, the parties reached an agreement to
settle their dispute in its entirety, including all of the ongoing
litigation. The definitive settlement agreement was approved by the Dade
County Commission in December 1999 and by the FPSC in June 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | In the remaining state court suit, 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

14



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| |  | approximately $4.5 million and Lake filed a Notice
of Appeal. Oral argument was heard by the 5th District court of Appeals in
September 2000, and in an unusual action, the court suggested that the
parties again attempt mediation. The parties have agreed to do so and have
attempted to schedule a mutually convenient time. Also in this case, in
April 1998, Florida Power filed a petition with the FPSC for a Declaratory
Statement that the contract between the parties limits energy payments
thereunder to the avoided costs based upon an analysis of a hypothetical
unit having the characteristics specified in the contract. In October 1998,
the FPSC denied the petition, but Florida Power appealed to the Florida
Supreme Court.                                                                                                                                                                                                               
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Management does not expect that the results of these legal actions will
have a material impact on Florida Powers financial position, results of
operations or liquidity. Florida Power anticipates that all fuel and
capacity expenses, including any settlement amounts incurred as a result of
the matters discussed above, will be recovered from its customers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | Mid-Continent Life Insurance Company (Mid-Continent)  As discussed
below, a series of events in 1997 significantly jeopardized the ability of
Mid-Continent to implement a plan to eliminate a projected reserve
deficiency, resulting in the impairment of Florida Progress investment in
Mid-Continent. Therefore, Florida Progress recorded a provision for loss on
investment of $86.9 million in 1997. Florida Progress also recorded an
accrual at December 31, 1997, for legal fees associated with defending its
position in current Mid-Continent legal proceedings.                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | In the spring of 1997, the Oklahoma State Insurance Commissioner
(Commissioner) received court approval to seize control as receiver of
the operations of Mid-Continent. The Commissioner had alleged that
Mid-Continents reserves were understated by more than $125 million, thus
causing Mid-Continent to be statutorily impaired. The Commissioner further
alleged that Mid-Continent had violated Oklahoma law relating to deceptive
trade practices in connection with the sale of its Extra Life insurance
policies and was not entitled to raise premiums, a key element of
Mid-Continents plan to address the projected reserve deficiency. While
sustaining the receivership, the court also ruled that premiums could be
raised. Although both sides appealed the decision to the Oklahoma Supreme
Court, those appeals were withdrawn in early 1999.                                                                                              
|
| |  | In December 1997, the receiver filed a lawsuit against Florida Progress,
certain of its directors and officers, and certain former Mid-Continent
officers, making a number of allegations and seeking access to Florida
Progress assets to satisfy policyholder and creditor claims. In April
1998, the court granted motions to dismiss the individual defendants,
leaving Florida Progress as the sole remaining defendant in the lawsuit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | A new Commissioner was elected in November 1998 and has stated his
intention to work with Florida Progress and others to develop a plan to
rehabilitate Mid-Continent rather than pursue litigation against Florida
Progress. Based on data through December 31, 1998, Florida Progress
actuarial estimate of the additional assets necessary to fund the reserve,
after applying Mid-Continents statutory surplus is in the range of $100
million. The amount put forth by the actuary hired by the former
Commissioner was in the range of $350 million. Florida Progress believes
that any estimate of the projected reserve deficiency would affect only the
assets of Mid-Continent, because Florida Progress has legal defenses to any
claims asserted against it. Florida Progress is working with the new
Commissioner to develop a viable plan to rehabilitate Mid-Continent, which
would include the sale of that company or assumption of its policies.
|
| |  | In January 1999, five Mid-Continent policyholders filed a purported class
action against Mid-Continent and the same defendants named in the case
filed by the former Commissioner. The complaint contains substantially the
same factual allegations as those made by the former Commissioner. The suit
asserts Extra Life policyholders have been injured as a result of
representations made in connection with the sale of that policy. The suit
seeks actual and punitive damages.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | On April 17, 2000, Florida Progress filed an answer in the purported
policyholder class action. That answer denied all material allegations of
the petition. On April 27, 2000, Florida Progress filed an amended answer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

15



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| |  | and third
party petition, which asserted claims for indemnity and contribution against
John P. Crawford in his capacity as a prior actuary to Mid-Continent and
Lewis & Ellis, Inc., the actuarial firm that designed the Mid-Continent
Extra Life policy. The Commissioner has filed a motion in the
rehabilitation court proceeding to enjoin the policyholder action.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Proposals for a plan of rehabilitation were received and opened in June 1999.
In October 1999, the new Commissioner signed a Letter of Intent, subject to
approval by the Oklahoma District Court, with Iowa-based Life Investors
Insurance Company of America, a wholly owned subsidiary of AEGON USA, Inc.,
concerning the assumption of all policies of Mid-Continent. In a letter of
intent in connection with the proposed plan of rehabilitation, Florida
Progress agreed to assign all of Mid-Continents stock to the receiver, and
contribute $10 million to help offset future premium rate increases or
coverage reductions, provided that, among other things, Florida Progress
receives a full release from liability, and the receivers action against
Florida Progress is dismissed, with prejudice. The $10 million was proposed
to be held in escrow by the Commissioner for a period of 10 years and
invested for the benefit of the policyholders. Any proposed premium
increases would have been offset by this fund until it was exhausted. The
Mid-Continent plan was originally scheduled to be considered by the Oklahoma
County District Court in December 1999, but the Court postponed its
consideration. Florida Progress accrued an additional provision for loss of
$10 million in December 1999. The loss was more than offset by the
recognition of tax benefits of approximately $11 million, related to the
excess of the tax basis over the current book value of the investment in
Mid-Continent, and thus, did not have a material impact on Florida Progress
consolidated financial position, results of operations, or liquidity. This
benefit had not been recorded earlier due to uncertainties associated with
the timing of the tax deduction.
|
| |  | The Court ordered the filing of new proposals by May 22, 2000. The
Commissioner recommended the proposal submitted by American Fidelity
Assurance Company (American Fidelity). In September 2000, the Oklahoma
County District Court began a hearing to approve the rehabilitation plan
proposed by the Oklahoma Insurance Commissioner, under which American
Fidelity would acquire Mid-Continents policies. On September 26, 2000, the
Court approved acquisition of the Mid-Continent policies by American
Fidelity. In addition, Florida Progress reached a settlement to resolve the
policyholder litigation relating to Mid-Continent. Under the terms of the
settlement, Florida Progress agreed to contribute an additional $7.5 million,
plus attorneys fees and expenses up to $4.875 million, towards protecting
policyholders in the event that future premium rate increases are necessary.
Florida Progress also agreed with the Commissioner to provide approximately
$.6 million to fund welfare benefits for retired Mid-Continent employees.
Accordingly Florida Progress accrued $12.8 million in September 2000. The
settlement of the policyholder litigation is subject to approval by the
Oklahoma County District Court. The additional $7.5 million brings the total
contribution by Florida Progress to $17.5 million. In the event that future
premium rate increases are necessary, the $17.5 million, plus interest
accrued, will offset increases until the fund is exhausted. Dismissal of the
1997 lawsuit filed by the receiver is part of the settlement. The
policyholder case has been transferred to the rehabilitation court.                                                                                                                    
|
| |  | Share Exchange Litigation In August 1999, Florida Progress announced that
it entered into an Agreement and Plan of Exchange with Carolina Power & Light
Company (CP&L), and CP&L Energy, Inc., a wholly owned subsidiary of CP&L.
A lawsuit was filed in September 1999, against Florida Progress and its
directors seeking class action status, an unspecified amount of damages and
injunctive relief, including a declaration that the agreement and plan of
exchange was entered into in breach of the fiduciary duties of the Florida
Progress board of directors, and enjoining Florida Progress from proceeding
with the share exchange. The complaint also seeks an award of costs and
attorneys fees. In September, Florida Progress and the individual
defendants filed an answer to the complaint, which denied all material
allegations of the complaint. Florida Progress believes this suit is without
merit and intends to vigorously defend itself against this action.
Management does not expect that the result of this legal action will have a
material adverse impact on Florida Progress financial position, results of
operations or liquidity. Accordingly, no provision for loss has been
recorded pertaining to this matter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

16



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|   |  | Easement Litigation In December 1998, Florida Power was served with a class
action lawsuit seeking damages, declaratory and injunctive relief for the
alleged improper use of electric transmission easements. The plaintiffs
contend that the licensing of fiber optic telecommunications lines to third
parties or telecommunications companies for other than Florida Powers
internal use along the electric transmission line right-of-way exceeds the
authority granted in the easements. In June 1999, plaintiffs amended their
complaint to add Progress Telecommunications Corporation, an indirect wholly
owned subsidiary of Florida Progress, as a defendant and to add counts for
unjust enrichment and constructive trust. In January 2000, the court
conditionally certified the class statewide. In a mediation held in March
2000, the parties reached a tentative settlement of this claim, which is
subject to the resolution of procedural issues relating to class matters as
well as court approval. Management does not expect that the results of these
legal actions will have a material impact on Florida Progress financial
position, results of operations or liquidity. Accordingly, no provision for
loss has been recorded pertaining to this matter.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Other Legal Matters Florida Progress and Florida Power are involved in
various other claims and legal actions arising in the ordinary course of
business. In the opinion of management, the ultimate disposition of these
matters will not have a material adverse effect upon either companys
consolidated financial position, results of operations or liquidity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|5) |  | 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, 1999 (the 1999
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
September 30, 2000 were $150.3 million, or $1.53 per share, compared to
earnings of $137.3 million, or $1.40 per share, for the same period in 1999.
For the nine-month period ended September 30, 2000, Florida Progress
consolidated earnings were $336.7 million, or $3.42 per share, a 19 percent
increase over earnings of $281.5 million, or $2.87 earnings per share, reported
for the same period in 1999.

Earnings for the quarter include after-tax charges of approximately $13 million
or $.13 per share related to a proposed lawsuit settlement agreement and merger
transaction costs. In addition, third-quarter results include a reduction in
income taxes of $16.8 million and $32.5 million, respectively, for the three
and nine-month periods ended September 30, 2000. For the same three and
nine-month periods in the prior year, results included after-tax charges of $5
million for merger transaction costs and a $6.4 million income tax reduction,
which also increased net income for these periods. Excluding these items,
Florida Progress operating earnings for the third quarter were $146.5 million,
or $1.49 per share, compared with $136.3 million, or $1.39 per share, for the
third quarter last year.

17



---



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

|                                        |                   |                                       |  |  |      |   |      |      |   | 
|--------------------------------------- | ----------------- | ------------------------------------- |  |  | ---- | - | ---- | ---- | - | 
|1999 Florida Progress Third
Quarter EPS |                   |                                       |  |  |      | $ | 1.40 |     
|                                       
|                                       
|                                       
|                                       
|                                        | Florida Power     |                                       | 
|                                       
|                                       
|                                       
|                                       
|                                        |                   | Sales of electricity & other revenues |  |  | (.02 | )
|                                       
|                                       
|                                       
|                                       
|                                        |                   | Operations & maintenance              |  |  | .06  |  
|                                       
|                                       
|                                       
|                                       
|                                        |                   | Depreciation & other, net             |  |  | (.03 | )
|                                        |                   |                                       |  |  |      |  
|                                       
|                                       
|                                       
|                                       
|                                        |                   |                                       |  |  |      |   | .01  |     
|                                       
|                                       
|                                       
|                                       
|                                        | Electric Fuels    |                                       |  |  |      |   |      | .19  |  
|                                       
|                                       
|                                       
|                                       
|                                        | Corporate & other |                                       |  |  |      |   |      | (.07 | )
|                                        |                   |                                       |  |  |      |   |      |     
|2000 Florida Progress Third
Quarter EPS |                   |                                       |  |  |      | $ | 1.53 |     
|                                        |                   |                                       |  |  |      |   |      |     

FLORIDA POWER CORPORATION

Florida Power, reported earnings of $1.24 per share, for the third quarter of
2000, up slightly compared with $1.23 per share for the same period last year.
Florida Powers earnings for the nine-month period ended September 30, 2000
were $2.69 per share compared to earnings of $2.54 per share for the same
period last year.

Florida Powers total retail kilowatt-hour sales increased .7 percent and 3.8 percent,
respectively, during the three and nine month periods of 2000, compared with
1999. During the quarter, Florida Power served approximately 30,000 new
customers when compared with the same period last year. However, lower sales
to industrial customers partially offset the benefit of strong customer growth.
Lower industrial sales resulted primarily from reduced demand from phosphate
customers. Higher retail base revenues were offset by lower wholesales base
revenues, which resulted from the expiration and restructuring of certain
contracts.

Operation and maintenance expense was down $9.3 million and $17.7 million
during the quarter and year-to-date periods. Most of the decrease is due
primarily to the timing of planned maintenance and reliability projects, as
well as lower employee benefit costs.

Florida Powers depreciation and amortization expense increased $48.7 million
for the quarter due primarily to $44.4 million of accelerated amortization of
the Tiger Bay regulatory asset. The additional amortization did not affect net
income because it was offset by the recognition of $44.4 million of revenues
deferred pursuant to a regulatory order in the fourth quarter of 1999.

DIVERSIFIED OPERATIONS

Revenues for diversified operations increased $87 million and $253 million,
respectively, for the three and nine months ended September 30, 2000 compared
to the same periods in the prior year. Cost of sales for Florida Progress
diversified operations were $115.5 million and $302.3 million higher for the
three and nine months ended September 30, 2000 compared to the same periods
last year. The increases were due primarily to acquisitions in Electric Fuels
Rail Services group and increased synfuel operations.

The sale of synthetic fuel results in a loss before the benefit of alternative
fuel tax credits. Primarily because of the increase in sales of synthetic fuel
for the three and nine month periods ended September 30, 2000 as compared to
the same periods in the prior year, overall diversified operations gross profit
declined in both periods of the current year.

ELECTRIC FUELS CORPORATION

Electric Fuels earned $.43 per share, in the third quarter, compared with $.24
per share during the same period last year. Electric Fuels earnings include a
reduction to income taxes of $.17 per share and $.36 per share for the three
and nine months ended September 30, 2000 compared to $.06 per share for both
the quarter and year-to-date periods last year.

18



---



This reduction, as required to reflect interim period tax allocation, relates
to the timing of the recognition of alternative fuel tax credits. One effect
of the reduction is the recognition of the benefit of alternative fuel tax
credits during an interim period different from the period when the synthetic
fuel is sold and the cost of sales is recognized. The companys annual results
are not affected.

Earnings at the Energy & Related Services group were up $25.5 million and $62.3
million for the three and nine months ended September 30, 2000 over the same
periods in 1999, of which approximately $11 million and $29 million was due to
the timing of the recognition of alternative fuel tax credits. The remaining
amount of the increase for both periods was due primarily to higher synthetic
fuel sales, and the related alternative fuel tax credits, compared with last year.

Income tax expense for the nine month period ended September 30, 2000 reflects
the Companys estimate of its consolidated annual effective tax rate. The rate
differs from the U.S. Federal statutory rate of 35% primarily because of the
estimated amount of alternative fuel tax credits expected to be generated
during 2000.

Electric Fuels share of third-quarter sales of the coal-based synthetic fuel
were approximately 1.5 million tons, triple the tons sold during the same
period last year. Electric Fuels share of total synthetic fuel sales for 2000
are expected to be approximately 6 million tons compared with 1.6 million tons
sold in 1999.

Earnings from the Inland Marine Transportation group of $3.1 million and $7.9
million were $.2 million lower and $1.7 million higher for the three and
nine-month periods ended September 30, 2000 compared to the same periods in
1999. The lower earnings for the quarter were due primarily to higher diesel
fuel costs which were up over 60 percent over the same period last year.
Earnings for the nine-month period were higher compared to last year due
primarily to a larger barge fleet and more favorable weather conditions which
more than offset the effect of higher diesel fuel prices.

Earnings from the Rail Services group were essentially zero for the quarter and
$2.9 million for the nine month period, down $5.5 million and $8.9 million for
these periods when compared to 1999. Rail Services continues to be impacted by
weak demand from the major railroad carriers for mechanical and track work and
a decline in new railcar construction. In addition, higher interest expense
has also contributed to lower earnings.

CORPORATE & OTHER

Corporate and other expenses were $.07 per share and $.12 per share higher
during the three and nine months ended September 30, 2000 compared with 1999
due primarily to costs associated with a proposed lawsuit settlement and costs
associated with the business combination with Carolina Power & Light. The
settlement relates to Mid-Continent and a policyholder class action lawsuit
against Florida Progress, and is subject to court approval.

2000 EARNINGS OUTLOOK

For the nine-months ended September 30, 2000, Florida Progress operating
earnings are $3.21 per share. This amount excludes non-recurring charges of
$.15 per share and the interim period effective tax rate adjustments. The
current estimate of year 2000 operating earnings per share is between $3.65 and
$3.70 per share. The increase over the companys previous estimate of $3.60
per share is due primarily to a projected increase in synthetic fuel sales for
2000, partially offset by lower expected earnings from its Rail Services group.
Florida Progress estimate is about 15 percent over 1999s operating earnings
per share of $3.18, which excludes a $.03 per share non-recurring gain.

19



---



LIQUIDITY AND CAPITAL RESOURCES

Florida Progress capital expenditures are expected to be funded primarily from
internally generated funds and debt. During the first nine months of 2000,
$186.1 million was spent on the Florida Power construction program and $65.6
million was spent in diversified operations.

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

Florida Powers ratio of earnings to fixed charges was 4.50 for the twelve
months ended September 30, 2000. (See Exhibit 12 filed herewith).

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

In March 2000, Florida Power established an uncommitted bank bid facility
allowing it to borrow and re-borrow and have loans outstanding at any time, up
to $100 million. The facility was established to temporarily supplement
commercial paper borrowings, as needed. As of September 30, 2000, $25 million
was outstanding under this bid facility.

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

PCH has uncommitted bank bid facilities authorizing it to borrow and re-borrow,
and have outstanding at any time, up to $300 million. These facilities are used
to temporarily supplement commercial paper borrowings, as needed. The bank
bid facilities were not drawn on as of September 30, 2000.

In July 2000, PCH established a new $200 million, 364-day revolving bank credit
facility. The facility is used to support the issuance of commercial paper.
PCH has two additional revolving bank credit facilities: a 364-day, $100
million facility and a $300 million long-term facility that expires in 2003.
In connection with the closing of the new $200 million credit facility, PCH
increased its commercial paper program from $400 million to $600 million.

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.

OTHER  COMBINATION WITH CP&L ENERGY

Florida Progress mailed a Proxy Statement dated July 5, 2000, to its
shareholders of record on June 29, 2000, regarding the Annual Meeting of
Shareholders held on August 17, 2000. At the meeting, shareholders approved
the amended and restated agreement and plan of exchange among Florida Progress
and Carolina Power & Light Company and CP&L Energy, Inc., pursuant to which
Florida Progress will become a wholly owned subsidiary of CP&L Energy. (See
Part II, Item 4 Submission of Matters to a Vote of Security-Holders.) A copy
of the Proxy Statement, which shareholders should read because it contains
important information, is available, without charge, at the Securities and
Exchange Commissions web site at http://www.sec.gov, or by contacting Florida Progress Investor Services at P.O. Box 14042, St.
Petersburg, FL 33733.

20



---



On July 7, 2000, the FPSC opened a docket to review Florida Powers earnings
including the effects of the combination with CP&L Energy. The FPSC Staff
recommendation is due in March, 2001 with a decision expected by the FPSC in
late March, 2001. The FPSC does not have the authority to approve or
disapprove the combination, and the review is not expected to delay the closing
of the combination, which is expected to occur in the second half of November
or December 2000.

On July 12, 2000, CP&Ls combination with Florida Progress received approval by
the Federal Energy Regulatory Commission (FERC) and Department of Justice (See Part II, Item 1, paragraph 5).
The FERC order approved the acquisition with the requirement that the companies
must make a filing on or before October 15, 2000 (as required under FERC Order
2000), to transfer operational control of their transmission facilities to a
regional transmission organization (RTO) on or before December 15, 2001. In
October 2000, Florida Power , along with Florida Power & Light Company and
Tampa Electric Company, filed with the FERC a comprehensive application for
approval of an RTO for peninsular Florida. In its review, the Department of
Justice found no adverse effects on competition as a result of the
combination.

On October 2, 2000, in preparation for the share exchange between CP&L Energy
and Florida Progress, the Notice of Share Exchange and Election Form were
mailed to Florida Progress shareholders. If Florida Progress shareholders want
to state a preference regarding the mix of shares and cash they wish to
receive, their Election Forms must be received by the election deadline. The
date of the election deadline is two business days prior to the closing of the
share exchange. The closing is currently expected to occur in the second half
of November or December 2000, following receipt of the final utility regulatory
approval from the SEC. The closing date will be announced in a press release
delivered to the Dow Jones News Service and posted on the websites of CP&L
Energy and Florida Progress as soon as practicable, but in no event less than
five business days prior to the closing.

On October 9, 2000, the Insurance Commissioner of the State of Oklahoma issued
an order granting Florida Progress request for an exemption concerning the
completion of the business combination between Florida Progress and CP&L
Energy, Inc. The order exempts CP&L Energy from the requirements of the
Oklahoma Insurance Code that otherwise would have required the Commissioners
approval of the change in control of Mid-Continent Life Insurance Company due
to the combination with CP&L Energy.

FORWARD-LOOKING STATEMENTS

This report contains certain forward-looking statements including: the expected closing
date of the combination with CP&L Energy; the expected liability for cleaning
up certain environmental sites; the impact of various legal proceedings on
Florida Progress financial condition; the effect of interest rate fluctuations
on pretax earnings over the next fiscal year; and the 2000 earnings outlook for
Florida Progress.

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

Key factors that have a direct impact on the ability to attain these estimates
include continued annual growth in customers; successful cost containment
efforts; actions of various other regulatory authorities and the efficient
operation of Florida Powers existing and future generating units. Other key
factors include the continued successful operation of synthetic fuel plants,
market acceptance of synthetic fuel, competition from competing products,

21



---



impact of environmental regulations on potential buyers, favorable
determinations by the Internal Revenue Service, and economic and weather
conditions affecting the demand for, and supply of, not only electricity but
also Electric Fuels barge, rail and other services.

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

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

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

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

A hypothetical 66 basis point increase in interest rates (10% of Florida
Progress weighted average interest rate at September 30, 2000) affecting
Florida Progress variable rate debt ($832.6 million at September 30, 2000)
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 September 30, 2000.

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 and synfuel
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



---



PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS



|1. |  | State of Oklahoma, ex rel. John P. Crawford, Insurance Commissioner v.
Mid-Continent Life Insurance Company, District Court of Oklahoma County,
State of Oklahoma, Case No. CJ-97-2518-62                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | State of Oklahoma, ex rel, John P. Crawford, Insurance Commissioner as
Receiver for Mid-Continent Life Insurance Company v. Florida Progress
Corporation, a Florida corporation, Jack Barron Critchfield, George
Ruppel, Thomas Steven Krzesinski, Richard Korpan, Richard Donald Keller,
James Lacy Harlan, Gerald William McRae, Thomas Richard Dlouhy, Andrew
Joseph Beal and Robert Terry Stuart, Jr., District Court of Oklahoma
County, State of Oklahoma, Case No. CJ-97-2518-62 (part of the same case
noted above).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   |  | Michael Farrimond, Pamela S. Farrimond, Angela Fry, Jowhna Hill, and
Barbara Hodges, for themselves and all others similarly situated v.
Florida Progress Corporation, a Florida corporation, Jack Barron
Critchfield, George Ruppel, Thomas Steven Krzesinski, Richard Korpan,
Richard Donald Keller, James Lacy Harlan, Gerald William McRae, Thomas
Richard Dlouhy, Andrew Joseph Beal and Robert Terry Stuart, Jr.,
District Court of Oklahoma County, State of Oklahoma, Case No.
CJ-99-130-65                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   |  | See prior discussion of this matter in the 1999 Form 10-K, Item 3,
paragraph 5; the Form 10-Q for the quarter ended March 31, 2000, Part II,
Item 1, paragraph 5; and the Form 10-Q for the quarter ended June 30,
2000, Part II, Item 1, paragraph 2. In September 2000, the Oklahoma
County District Court began a hearing to approve the rehabilitation plan
proposed by Oklahoma Insurance Commissioner Carroll Fisher, under which
American Fidelity Assurance Company would acquire Mid-Continents
policies. On September 26, 2000, the Court approved acquisition of the
Mid-Continent policies by American Fidelity. In addition, Florida
Progress reached a settlement to resolve the Farrimondlitigation against
it relating to Mid-Continent. Under the terms of the settlement, Florida
Progress agreed to contribute an additional $7.5 million towards
protecting policyholders in the event that future premium increases are
necessary, plus attorneys fees and expenses up to $4.875 million. The
settlement is subject to approval by the Oklahoma County District Court.
The additional $7.5 million brings the total contribution by Florida
Progress to $17.5 million. Florida Progress had already agreed in October
1999 to contribute $10 million as part of a settlement with Commissioner
Fisher in connection with the rehabilitation plan he proposed. In the
event that future premium rate increases are necessary, the $17.5 million,
plus interest accrued, will offset increases until the fund is exhausted.
Florida Progress also agreed with the Commissioner to provide
approximately $.6 million to fund welfare benefits for retired
Mid-Continent employees. Dismissal of State of Oklahoma, ex rel John P.
Crawford v. Florida Progress et alis part of the settlement. The
Farrimondcase has been transferred to the rehabilitation court. (See
Note 4 to the Financial Statements  Contingencies  Mid-Continent Life
Insurance Company.)
|  
|2. |  | In Re: Joint Petition for Determination of Need for an Electrical Power
Plant in Volusia County by the Utilities Commission, City of New Smyrna
Beach, and Duke Energy New Smyrna Beach Power Company Ltd., L.L.P. Public
Service Commission, Docket No. 981042-EM.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   |  | See prior discussion of this matter in the 1999 Form 10-K, Item 3,
paragraph 7, and Form 10-Q for the quarter ended March 31, 2000, Part II,
Item 1, paragraph 2. In September 2000, the Florida Supreme Court denied
the appelees motions for rehearing of the Courts April 2000 ruling in
favor of Florida Power.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

23



---





|3. |  | Sanford Gasification Plant Site, Sanford, Florida (Sanford Site).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | See prior discussion of this matter in the 1999 Form 10-K, Item 3,
paragraph 11; the Form 10-Q for the quarter ended March 31, 2000, Part II,
Item 1, paragraph 3; and the Form 10-Q for the quarter ended June 30,
2000, Part II, Item 1, paragraph 3. A draft consent decree regarding the
cleanup of the soil was received in September. The PRP group is currently
reviewing that draft. The PRP group also finalized a second Participant
Agreement that assigned approximately 43% of the total cleanup costs to
Florida Power for future phases of the cleanup effort. (See Note 4 to the
Financial Statements  Contingencies  Contaminated Site Cleanup.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|4. |  | In the Matter of CP&L Holdings, Inc. on Behalf of its Public Utility
Subsidiaries and Florida Progress Corporation on behalf of its Public
Utility Subsidiaries, Federal Energy Regulatory Commission Docket Nos.
EC00-55-000 and ER00-1520-000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   |  | See prior discussion of this matter in the Form 10-Q for the quarter ended
June 30, 2000, Part II, Item 1, paragraph 5. In August 2000, PG&E
National Energy Group, PG&E Generating Company and PG&E Energy
Trading-Power, L.P. filed motions with the Federal Energy Regulatory
Commission (FERC) in support of Tampa Electric Companys (TECOs) Request
for Clarification or Rehearing of the FERC order, which authorized the
combination of Florida Progress and CP&L Energy with the requirement that
the companies make a filing on or before October 15, 2000 to transfer
operational control of their transmission facilities. Also in August, the
City of Fayetteville, North Carolina filed a Request for Rehearing and a
separate Request for Reconsideration with the FERC. On August 23, 2000,
the FERC issued a tolling order granting rehearing solely for the
limited purpose of further consideration. Rehearing requests are
sometimes tolled in this manner to allow FERC additional time in which
to rule. In October 2000, Tampa Electric Company filed with the FERC a
notice of withdrawal of its request for clarification or rehearing. In
connection therewith, Florida Power, along with Florida Power & Light
Company and TECO, also filed with the FERC in October a comprehensive
application for approval of an RTO for peninsular Florida. (See Part I,
Item 2, Managements Discussion & Analysis  Other  Combination with CP&L
Energy.)
|  
|5. |  | In re Form A for the Proposed Merger of FLORIDA PROGRESS CORPORATION with
CAROLINA POWER & LIGHT [sic] ENERGY, INC. Insurance Commissioner, State
of Oklahoma, Case No. 00-0723-TRN.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   |  | On October 9, 2000, the Insurance Commissioner of the State of Oklahoma
issued an order granting Florida Progress request for an exemption
concerning the completion of the business combination between Florida
Progress and CP&L Energy, Inc. The order exempts CP&L Energy from the
requirements of the Oklahoma Insurance Code that otherwise would have
required the Commissioners approval of the change in control of
Mid-Continent Life Insurance Company due to the combination with CP&L
Energy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|6. |  | In re: Review of Florida Power Corporations earnings, including effects
of proposed acquisition of Florida Power Corporation by Carolina Power &
Light. Florida Public Service Commission Docket No. 000824-EI.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   |  | On July 7, 2000, the FPSC opened a docket to review Florida Powers
earnings including the effects of the combination with CP&L Energy. The
FPSC Staff recommendation is due in March 2001 with a decision expected by
the FPSC in late March 2001. The FPSC does not have the authority to
approve or disapprove the combination, and the review is not expected to
delay the closing of the combination, which is expected to occur in the
second half of November or December 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

24



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

The Annual meeting of Shareholders of Florida Progress was held on August 17,
2000. There were 98,614,831 shares of common stock entitled to vote. The
following matters were voted upon at the meeting:



|1) |  | Election of Directors
|-- |  | ---------------------

Class I  Terms expiring in 2003

|                  |  |       |            |          |  |  |           |  |  |  |  | 
|----------------- |  | ----- | ---------- | -------- |  |  | --------- |  |  |  |  | 
|                  |  | Votes |            | Votes   
|                  |  | For   |            | Withheld
|                  |  |       |            |         
|Michael P. Graney |  |       | 85,153,923 |          |  |  | 2,874,534 | 
|                 
|                 
|                 
|                 
|Joan D. Ruffier   |  |       | 86,109,025 |          |  |  | 1,919,432 | 
|                 
|                 
|                 
|                 
|Robert T. Stuart  |  |       | 85,757,819 |          |  |  | 2,270,638 | 



|2) |  | Approval of the Amended and Restated Agreement and Plan of Exchange,
dated as of August 22, 1999, as amended and restated as of March 3, 2000,
by and among Florida Progress, Carolina Power & Light Company and CP&L
Energy, Inc., formerly known as CP&L Holdings, Inc., including the related
Plan of Share Exchange.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                      |  |  |            | 
|--------------------- |  |  | ---------- | 
|For the proposal:     |  |  | 74,579,379 | 
|                     
|                     
|                     
|                     
|Against the proposal: |  |  | 2,370,079  | 
|                     
|                     
|                     
|                     
|Abstentions:          |  |  | 555,280    | 
|                     
|                     
|                     
|                     
|Broker non-votes:     |  |  | 10,523,719 | 

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K



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

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



|(b) |  | Reports on form 8-K:                                                                                                                                                                                                                                                                                                                       
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | During the third quarter of 2000, Florida Progress and Florida Power filed
the following combined reports on Form 8-K:                                                                                                                                                                                                                     
|   
|    |  | Form 8-K dated (date of earliest event reported) July 11, 2000, as filed
with the SEC on July 11, 2000, reporting under Item 5 Other Events the
opening of a new Florida Public Service Commission Docket to review
Florida Powers earnings, including the effects of the business
combination between Florida Progress and CP&L Energy.

25



---





| |  | Form 8-K dated (date of earliest event reported) July 12, 2000, as filed
with the SEC on July 14, 2000, reporting under Item 5 Other Events the
receipt of the approval of the Federal Energy Regulatory Commission, and
the expiration of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act, in connection with the pending business combination
transaction between Florida Progress and CP&L Energy.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Form 8-K dated (date of earliest event reported) August 1, 2000, as filed
with the SEC on August 2, 2000, reporting under Item 5 Other Events
Florida Progress and Florida Powers second quarter 2000 earnings.                                                                                                                                                                                                              
|
| |  | Form 8-K dated (date of earliest event reported) August 16, 2000, as filed
with the SEC on August 17, 2000, reporting under Item 5 Other Events the
approval by Florida Progress and CP&L shareholders of the proposed
combination between the two companies.                                                                                                                                                                  
|
| |  | Form 8-K dated (date of earliest event reported) August 31, 2000, as filed
with the SEC on August 31, 2000, reporting under Item 5 Other Events the
filing of an intervention with the SEC by Edwin Dove in connection with
the proposed combination with CP&L.                                                                                                                                                                
|
| |  | Form 8-K dated (date of earliest event reported) September 27, 2000, as
filed with the SEC on September 27, 2000, reporting under Item 5 Other
Events that a settlement had been reached to resolve policyholder
litigation relating to Mid-Continent Life Insurance Company.                                                                                                                                                  

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



| |  | Form 8-K dated (date of earliest event reported) October 25, 2000, as
filed with the SEC on October 25, 2000, reporting under Item 5 Other
Events Florida Progress and Florida Powers third quarter 2000
earnings.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

26



---



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: |  | November 1, 2000 |  | By:  /s/ John Scardino, Jr.
____________________________________
John Scardino, Jr.
Vice President and Controller                       
|     
|     
|     
|Date: |  | November 1, 2000 |  | By:  /s/ Edward W. Moneypenny
___________________________________
Edward W. Moneypenny
Senior Vice President and
Chief Financial Officer

27



---



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: |  | November 1, 2000 |  | By:  /s/ John Scardino, Jr.
____________________________________
John Scardino, Jr.
Vice President and Controller                     
|     
|     
|     
|Date: |  | November 1, 2000 |  | By:  /s/ Jeffrey R. Heinicka
___________________________________
Jeffrey R. Heinicka
Senior Vice President and
Chief Financial Officer

28



---



Exhibit Index

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

29