##### Table of Contents









UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, DC 20549




---

FORM 10-Q



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

OR



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

|                |        |                                              |  |                                                                                                                                |  |  |            | 
|--------------- | ------ | -------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------ |  |  | ---------- | 
|                |        | Exact name of Registrant as specified in its |  | I.R.S. Employer                                                                                                               
|Commission File |        | charter, state of incorporation, address of  |  | Identification                                                                                                                
|No.             |        | principal executive offices, telephone       |  | Number                                                                                                                        
|                |        |                                              |  |                                                                                                                               
|                | 1-8349 |                                              |  | FLORIDA PROGRESS CORPORATIONA Florida Corporation
	One Progress Plaza
	St. Petersburg, Florida 33701
	Telephone (727) 824-6400 |  |  | 59-2147112 | 
|               
|               
|               
|               
|               
|                | 1-3274 |                                              |  | FLORIDA POWER CORPORATIONA 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
issuers classes of common stock, as of the latest
practicable date.

|                             |  |                                 |  |                                                             
|---------------------------- |  | ------------------------------- |  | ------------------------------------------------------------
|                             |  |                                 |  | Shares Outstanding                                          
|Registrant                   |  | Description of Class            |  | At June 30, 1999                                            
|                             |  |                                 |  |                                                             
|Florida Progress Corporation |  | Common Stock, without par value |  | 98,203,393                                                  
|                            
|Florida Power Corporation    |  | Common Stock, without par value |  | 100 (all of which were held by Florida Progress Corporation)

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



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TABLE OF CONTENTS



|                                                                                         |                                                                |  |  |  |  |  |  | 
|---------------------------------------------------------------------------------------- | -------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                                                           
|FLORIDA PROGRESS CORPORATION                                                            
|                                                                                         | FLORIDA PROGRESS CORPORATION CONSOLIDATED STATEMENTS OF INCOME
|                                                                                         | CONSOLIDATED BALANCE SHEETS                                   
|                                                                                         | CONSOLIDATED STATEMENTS OF CASH FLOWS                         
|                                                                                         | STATEMENTS OF COMMON EQUITY AND COMPREHENSIVE INCOME          
|FLORIDA POWER CORPORATION                                                               
|                                                                                         | FLORIDA POWER CORPORATION STATEMENTS OF INCOME                
|                                                                                         | BALANCE SHEETS                                                
|                                                                                         | STATEMENTS OF CASH FLOWS                                      
|FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION NOTES TO FINANCIAL STATEMENTS
|PART II. OTHER INFORMATION                                                              
|SIGNATURES                                                                              
|EXHIBIT INDEX                                                                           



---






PART I.   FINANCIAL INFORMATION

Item  1.  Financial Statements




FLORIDA PROGRESS CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS







FLORIDA PROGRESS CORPORATION


CONSOLIDATED STATEMENTS OF INCOME


(In millions, except per share amounts)


|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |         |       | 
|------------------------------------------ | ---------------------------------------------------------------------------------- | ------------------------------------------------- | ----- | ---------------- | ----- | ---- | ----- | ----- | ----- | - | ------- | ------- | ----- | - | ------- | ------- | ----- | 
|                                           |                                                                                    |                                                   |       |                  |       |     
|                                           |                                                                                    | Three Months                                      |       |                 
|                                           |                                                                                    | Ended                                             |       | Six Months Ended
|                                           |                                                                                    | June 30,                                          |       | June 30,        
|                                           |                                                                                    |                                                   |       |                 
|                                           |                                                                                    | 1999                                              |       | 1998             |       | 1999 |       | 1998 
|                                           |                                                                                    |                                                   |       |                  |       |      |       |      
|                                           |                                                                                    |                                                   |       |                 
|                                           |                                                                                    | (Unaudited)                                       |       | (Unaudited)     
|                                          
|                                          
|                                          
|                                          
|REVENUES:                                  |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | Electric utility                                                                   |                                                   | $     | 671.7            |       |      | $     | 663.8 |       |   | $       | 1,242.4 |       |   | $       | 1,229.0 |      
|                                          
|                                          
|                                          
|                                          
|                                           | Diversified                                                                        |                                                   |       | 304.6            |       |      |       | 239.3 |       |   |         | 554.3   |       |   |         | 461.6   |      
|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|                                           |                                                                                    |                                                   | 976.3 |                  |       |      | 903.1 |       |       |   | 1,796.7 |         |       |   | 1,690.6 |        
|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|EXPENSES:                                  |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | Electric utility:                                                                  |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |         |      
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Fuel                                              |       |                  | 143.5 |      |       |       | 135.9 |   |         |         | 257.2 |   |         |         | 245.1 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Purchased power                                   |       |                  | 108.4 |      |       |       | 110.8 |   |         |         | 198.7 |   |         |         | 209.8 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Energy conservation cost                          |       |                  | 19.4  |      |       |       | 19.0  |   |         |         | 36.5  |   |         |         | 35.6  | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Operation and maintenance                         |       |                  | 120.8 |      |       |       | 116.2 |   |         |         | 217.9 |   |         |         | 218.6 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Extended nuclear outage  replacement power costs |       |                  |      |      |       |       |      |   |         |         |      |   |         |         | 5.1   | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Depreciation and amortization                     |       |                  | 93.2  |      |       |       | 90.4  |   |         |         | 174.0 |   |         |         | 171.4 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Taxes other than income taxes                     |       |                  | 51.1  |      |       |       | 51.4  |   |         |         | 103.0 |   |         |         | 100.9 | 
|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|                                           |                                                                                    |                                                   | 536.4 |                  |       |      | 523.7 |       |       |   | 987.3   |         |       |   | 986.5   |        
|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|                                           | Diversified:                                                                       |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |         |      
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Cost of sales                                     |       |                  | 269.7 |      |       |       | 192.8 |   |         |         | 494.8 |   |         |         | 386.6 | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                    | Other                                             |       |                  | 15.8  |      |       |       | 18.9  |   |         |         | 30.4  |   |         |         | 31.6  | 
|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|                                           |                                                                                    |                                                   | 285.5 |                  |       |      | 211.7 |       |       |   | 525.2   |         |       |   | 418.2   |        
|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|INCOME FROM OPERATIONS                     |                                                                                    |                                                   | 154.4 |                  |       |      | 167.7 |       |       |   | 284.2   |         |       |   | 285.9   |        
|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|INTEREST EXPENSE AND OTHER:                |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | Interest expense                                                                   |                                                   |       | 43.9             |       |      |       | 47.7  |       |   |         | 88.9    |       |   |         | 95.0    |      
|                                          
|                                          
|                                          
|                                          
|                                           | Allowance for funds used during construction                                       |                                                   |       | (1.2             | )     |      |       | (4.1  | )     |   |         | (6.3    | )     |   |         | (8.0    | )    
|                                          
|                                          
|                                          
|                                          
|                                           | Distributions on subsidiary-obligated mandatorily redeemable
	preferred securities |                                                   |       | 4.6              |       |      |       |      |       |   |         | 4.6     |       |   |         |        |      
|                                          
|                                          
|                                          
|                                          
|                                           | Other expense / (income), net                                                      |                                                   |       | 1.0              |       |      |       | 1.1   |       |   |         | (3.3    | )     |   |         | 1.1     |      
|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|                                           |                                                                                    |                                                   | 48.3  |                  |       |      | 44.7  |       |       |   | 83.9    |         |       |   | 88.1    |        
|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|INCOME FROM OPERATIONS BEFORE INCOME TAXES |                                                                                    |                                                   | 106.1 |                  |       |      | 123.0 |       |       |   | 200.3   |         |       |   | 197.8   |        
|                                          
|                                          
|                                          
|                                          
|                                           | Income Taxes                                                                       |                                                   |       | 29.5             |       |      |       | 45.2  |       |   |         | 56.1    |       |   |         | 69.5    |      
|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|NET INCOME                                 |                                                                                    | $                                                 | 76.6  |                  |       | $    | 77.8  |       |       | $ | 144.2   |         |       | $ | 128.3   |        
|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|AVERAGE SHARES OF COMMON STOCK OUTSTANDING |                                                                                    |                                                   | 98.0  |                  |       |      | 97.0  |       |       |   | 97.8    |         |       |   | 97.1    |        
|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|EARNINGS PER AVERAGE COMMON SHARE          |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | (Basic and Diluted)                                                                |                                                   | $     | 0.78             |       |      | $     | 0.80  |       |   | $       | 1.48    |       |   | $       | 1.32    |      
|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        
|DIVIDENDS PER COMMON SHARE                 |                                                                                    | $                                                 | 0.545 |                  |       | $    | 0.535 |       |       | $ | 1.09    |         |       | $ | 1.07    |        
|                                           |                                                                                    |                                                   |       |                  |       |      |       |       |       |   |         |         |       |   |         |        

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

2



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##### Table of Contents



FLORIDA PROGRESS CORPORATION




CONSOLIDATED BALANCE SHEETS


(In millions)


|                                   |                                                                                           |                                                     |                                               |                            |       |       |         |         |       |       |         | 
|---------------------------------- | ----------------------------------------------------------------------------------------- | --------------------------------------------------- | --------------------------------------------- | -------------------------- | ----- | ----- | ------- | ------- | ----- | ----- | ------- | 
|                                   |                                                                                           | June 30,                                            |                                               | December 31,              
|                                   |                                                                                           | 1999                                                |                                               | 1998                      
|                                   |                                                                                           |                                                     |                                               |                           
|ASSETS                             |                                                                                           | (Unaudited)                                         |                                               |                           
|                                  
|                                  
|                                  
|                                  
|PROPERTY, PLANT AND EQUIPMENT:     |                                                                                           |                                                     |                                               |                            |       |       |         |        
|                                  
|                                  
|                                  
|                                  
|                                   | Electric utility plant in service and held for future use                                 |                                                     | $                                             | 6,615.1                    |       |       | $       | 6,307.8 |      
|                                  
|                                  
|                                  
|                                  
|                                   | Less  Accumulated depreciation                                                           |                                                     |                                               | 2,828.6                    |       |       |         | 2,716.0 |      
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                           |                                                     | Accumulated decommissioning for nuclear plant |                            |       | 269.5 |         |         |       | 254.8 |        
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                           |                                                     | Accumulated dismantlement for fossil plants   |                            |       | 131.8 |         |         |       | 130.7 |        
|                                   |                                                                                           |                                                     |                                               |                            |       |       |         |        
|                                   |                                                                                           |                                                     | 3,385.2                                       |                            |       |       | 3,206.3 |        
|                                  
|                                  
|                                  
|                                  
|                                   | Construction work in progress                                                             |                                                     |                                               | 185.2                      |       |       |         | 378.3   |      
|                                  
|                                  
|                                  
|                                  
|                                   | Nuclear fuel, net of amortization of $387.0 in 1999 and $377.2 in
         1998           |                                                     |                                               | 66.3                       |       |       |         | 45.9    |      
|                                   |                                                                                           |                                                     |                                               |                            |       |       |         |        
|                                   |                                                                                           |                                                     |                                               | Net electric utility plant |       |       | 3,636.7 |         |       |       | 3,630.5 | 
|                                  
|                                  
|                                  
|                                  
|                                   | Other property, at cost, net of depreciation of $255.9 in 1999
        and $234.6 in 1998 |                                                     |                                               | 592.7                      |       |       |         | 560.1   |      
|                                   |                                                                                           |                                                     |                                               |                            |       |       |         |        
|                                   |                                                                                           |                                                     | 4,229.4                                       |                            |       |       | 4,190.6 |        
|                                   |                                                                                           |                                                     |                                               |                            |       |       |         |        
|CURRENT ASSETS:                    |                                                                                           |                                                     |                                               |                            |       |       |         |        
|                                  
|                                  
|                                  
|                                  
|                                   | Cash and equivalents                                                                      |                                                     |                                               | 7.1                        |       |       |         | 2.5     |      
|                                  
|                                  
|                                  
|                                  
|                                   | Accounts receivable, less reserves of $5.2 in 1999 and $5.0 in
        1998               |                                                     |                                               | 428.8                      |       |       |         | 413.4   |      
|                                  
|                                  
|                                  
|                                  
|                                   | Inventories, primarily at average cost:                                                   |                                                     |                                               |                            |       |       |         |         |      
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                           | Fuel                                                |                                               |                            | 106.4 |       |         |         | 69.8  |      
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                           | Utility materials and supplies                      |                                               |                            | 89.5  |       |         |         | 83.3  |      
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                           | Diversified operations                              |                                               |                            | 183.5 |       |         |         | 137.0 |      
|                                  
|                                  
|                                  
|                                  
|                                   | Deferred income taxes                                                                     |                                                     |                                               | 57.7                       |       |       |         | 55.9    |      
|                                  
|                                  
|                                  
|                                  
|                                   | Prepayments and other                                                                     |                                                     |                                               | 78.6                       |       |       |         | 92.2    |      
|                                   |                                                                                           |                                                     |                                               |                            |       |       |         |        
|                                   |                                                                                           |                                                     | 951.6                                         |                            |       |       | 854.1   |        
|                                   |                                                                                           |                                                     |                                               |                            |       |       |         |        
|DEFERRED CHARGES AND OTHER ASSETS: |                                                                                           |                                                     |                                               |                            |       |       |         |        
|                                  
|                                  
|                                  
|                                  
|                                   | Costs deferred pursuant to regulation:                                                    |                                                     |                                               |                            |       |       |         |         |      
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                           | Deferred purchased power contract termination costs |                                               |                            | 306.8 |       |         |         | 321.0 |      
|                                  
|                                  
|                                  
|                                  
|                                   |                                                                                           | Other                                               |                                               |                            | 101.1 |       |         |         | 113.6 |      
|                                  
|                                  
|                                  
|                                  
|                                   | Investments in nuclear plant decommissioning fund                                         |                                                     |                                               | 347.0                      |       |       |         | 332.1   |      
|                                  
|                                  
|                                  
|                                  
|                                   | Goodwill                                                                                  |                                                     |                                               | 147.8                      |       |       |         | 139.8   |      
|                                  
|                                  
|                                  
|                                  
|                                   | Joint ventures and partnerships                                                           |                                                     |                                               | 64.0                       |       |       |         | 71.5    |      
|                                  
|                                  
|                                  
|                                  
|                                   | Other                                                                                     |                                                     |                                               | 154.6                      |       |       |         | 138.1   |      
|                                   |                                                                                           |                                                     |                                               |                            |       |       |         |        
|                                   |                                                                                           |                                                     | 1,121.3                                       |                            |       |       | 1,116.1 |        
|                                   |                                                                                           |                                                     |                                               |                            |       |       |         |        
|                                   |                                                                                           | $                                                   | 6,302.3                                       |                            |       | $     | 6,160.8 |        
|                                   |                                                                                           |                                                     |                                               |                            |       |       |         |        

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

3



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##### Table of Contents



FLORIDA PROGRESS CORPORATION

CONSOLIDATED BALANCE SHEETS


(In millions)


|                                        |                                                                  |               |         |              |         |   |         |         |         | 
|--------------------------------------- | ---------------------------------------------------------------- | ------------- | ------- | ------------ | ------- | - | ------- | ------- | ------- | 
|                                        |                                                                  | June 30,      |         | December 31,
|                                        |                                                                  | 1999          |         | 1998        
|                                        |                                                                  |               |         |             
|CAPITAL AND LIABILITIES                 |                                                                  | (Unaudited)   |         |             
|                                       
|                                       
|                                       
|                                       
|COMMON STOCK EQUITY:                    |                                                                  |               |         |              |         |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Common stock                                                     |               | $       | 1,256.4      |         |   | $       | 1,221.1 |        
|                                       
|                                       
|                                       
|                                       
|                                        | Retained earnings                                                |               |         | 678.4        |         |   |         | 640.9   |        
|                                        |                                                                  |               |         |              |         |   |         |        
|                                        |                                                                  |               | 1,934.8 |              |         |   | 1,862.0 |        
|                                       
|                                       
|                                       
|                                       
|PREFERRED SECURITIES:                   |                                                                  |               |         |              |         |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Cumulative preferred stock of Florida Power                      |               |         | 33.5         |         |   |         | 33.5    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Subsidiary obligated mandatorily redeemable preferred securities |               |         | 300.0        |         |   |         |        |        
|                                       
|                                       
|                                       
|                                       
|LONG-TERM DEBT                          |                                                                  |               | 2,282.5 |              |         |   | 2,250.4 |        
|                                        |                                                                  |               |         |              |         |   |         |        
|                                        |                                                                  | TOTAL CAPITAL |         |              | 4,550.8 |   |         |         | 4,145.9 | 
|                                        |                                                                  |               |         |              |         |   |         |        
|CURRENT LIABILITIES:                    |                                                                  |               |         |              |         |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Accounts payable                                                 |               |         | 221.7        |         |   |         | 279.1   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Customers deposits                                              |               |         | 107.4        |         |   |         | 104.1   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Taxes payable                                                    |               |         | 94.1         |         |   |         | 10.1    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Accrued interest                                                 |               |         | 72.4         |         |   |         | 70.4    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Overrecovered utility fuel costs                                 |               |         | 21.7         |         |   |         | 22.2    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                                            |               |         | 65.4         |         |   |         | 104.6   |        
|                                        |                                                                  |               |         |              |         |   |         |        
|                                        |                                                                  |               | 582.7   |              |         |   | 590.5   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Notes payable                                                    |               |         | 46.4         |         |   |         | 236.2   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Current portion of long-term debt                                |               |         | 94.5         |         |   |         | 145.9   |        
|                                        |                                                                  |               |         |              |         |   |         |        
|                                        |                                                                  |               | 723.6   |              |         |   | 972.6   |        
|                                        |                                                                  |               |         |              |         |   |         |        
|DEFERRED CREDITS AND OTHER LIABILITIES: |                                                                  |               |         |              |         |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Deferred income taxes                                            |               |         | 587.2        |         |   |         | 595.4   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Unamortized investment tax credits                               |               |         | 73.9         |         |   |         | 77.8    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Other postretirement benefit costs                               |               |         | 120.8        |         |   |         | 116.1   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                                            |               |         | 246.0        |         |   |         | 253.0   |        
|                                        |                                                                  |               |         |              |         |   |         |        
|                                        |                                                                  |               | 1,027.9 |              |         |   | 1,042.3 |        
|                                        |                                                                  |               |         |              |         |   |         |        
|                                        |                                                                  | $             | 6,302.3 |              |         | $ | 6,160.8 |        
|                                        |                                                                  |               |         |              |         |   |         |        

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

4



---



##### Table of Contents



FLORIDA PROGRESS CORPORATION




CONSOLIDATED STATEMENTS OF CASH FLOWS


(In millions)


|                                                  |                                                                                       |                                                       |        |        |       |   |        |        |       |  
|------------------------------------------------- | ------------------------------------------------------------------------------------- | ----------------------------------------------------- | ------ | ------ | ----- | - | ------ | ------ | ----- | -
|                                                  |                                                                                       |                                                      
|                                                  |                                                                                       | Six Months                                           
|                                                  |                                                                                       | Ended                                                
|                                                  |                                                                                       | June 30,                                             
|                                                  |                                                                                       |                                                      
|                                                  |                                                                                       | 1999                                                  |        | 1998  
|                                                  |                                                                                       |                                                       |        |       
|                                                  |                                                                                       |                                                      
|                                                  |                                                                                       | (Unaudited)                                          
|                                                 
|                                                 
|                                                 
|                                                 
|OPERATING ACTIVITIES:                             |                                                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Net income                                                                            |                                                       | $      | 144.2  |       |   | $      | 128.3  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Adjustments for noncash items:                                                        |                                                       |        |        |       |   |        |        |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Depreciation and amortization                         |        |        | 216.2 |   |        |        | 208.9 |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Deferred income taxes and investment tax credits, net |        |        | (22.3 | ) |        |        | (27.1 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Changes in working capital, net of effects from acquisition or
	sale of businesses:   |                                                       |        |        |       |   |        |        |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Accounts receivable                                   |        |        | (13.7 | ) |        |        | (27.9 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Inventories                                           |        |        | (89.2 | ) |        |        | 18.0  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Overrecovered / underrecovered utility fuel costs     |        |        | (.5   | ) |        |        | (10.1 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Accounts payable                                      |        |        | (79.1 | ) |        |        | (15.2 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Taxes payable                                         |        |        | 107.0 |   |        |        | 123.6 |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Other                                                 |        |        | (24.2 | ) |        |        | (14.4 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other operating activities                                                            |                                                       |        | (.5    | )     |   |        |       |      
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|                                                  |                                                                                       |                                                       | 237.9  |        |       |   | 384.1  |       
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|INVESTING ACTIVITIES:                             |                                                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Property additions (including allowance for borrowed funds used
	during construction) |                                                       |        | (279.9 | )     |   |        | (217.1 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Acquisition of businesses                                                             |                                                       |        | (9.5   | )     |   |        | (104.3 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Proceeds from sale and leaseback                                                      |                                                       |        | 47.0   |       |   |        |       |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other investing activities                                                            |                                                       |        | (6.3   | )     |   |        | (84.9  | )    
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|                                                  |                                                                                       |                                                       | (248.7 | )      |       |   | (406.3 | )     
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|FINANCING ACTIVITIES:                             |                                                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Issuance of long-term debt                                                            |                                                       |        | 50.0   |       |   |        | 189.1  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Repayment of long-term debt                                                           |                                                       |        | (52.8  | )     |   |        | (170.1 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Decrease in commercial paper with long-term support                                   |                                                       |        | (16.7  | )     |   |        |       |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Issuance of subsidiary-obligated mandatorily redeemable preferred
	 securities        |                                                       |        | 300.0  |       |   |        |       |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Sale of common stock                                                                  |                                                       |        | 32.4   |       |   |        |       |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Dividends paid on common stock                                                        |                                                       |        | (106.7 | )     |   |        | (103.9 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Increase / (decrease) in short-term debt                                              |                                                       |        | (189.8 | )     |   |        | 115.6  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other financing activities                                                            |                                                       |        | (1.0   | )     |   |        | (1.9   | )    
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|                                                  |                                                                                       |                                                       | 15.4   |        |       |   | 28.8   |       
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|NET INCREASE IN CASH AND EQUIVALENTS              |                                                                                       |                                                       | 4.6    |        |       |   | 6.6    |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Beginning cash and equivalents                                                        |                                                       |        | 2.5    |       |   |        | 3.1    |      
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|ENDING CASH AND EQUIVALENTS                       |                                                                                       | $                                                     | 7.1    |        |       | $ | 9.7    |       
|                                                  |                                                                                       |                                                       |        |        |       |   |        |       
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |                                                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Cash paid during the period for:                                                      |                                                       |        |        |       |   |        |        |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Interest (net of amount capitalized)                  |        | $      | 86.2  |   |        | $      | 86.0  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                       | Income taxes (net of refunds)                         |        | $      | 28.8  |   |        | $      | 16.4  |  

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

5



---



##### Table of Contents



FLORIDA PROGRESS CORPORATION




STATEMENTS OF COMMON EQUITY AND COMPREHENSIVE INCOME


For the periods ended June 30, 1999 and 1998


(Dollars in millions)


|                               |  |       |         |        |  |          |         |   |  |   |        |  
|------------------------------ |  | ----- | ------- | ------ |  | -------- | ------- | - |  | - | ------ | -
|                               |  |       |         | Common |  | Retained
|                               |  | Total |         | Stock  |  | Earnings
|                               |  |       |         |        |  |         
|Balance, December 31, 1997     |  | $     | 1,776.0 |        |  | $        | 1,209.0 |   |  | $ | 567.0  |  
|                              
|                              
|                              
|                              
|Net income                     |  |       | 128.3   |        |  |          |        |   |  |   | 128.3  |  
|                              
|                              
|                              
|                              
|Common stock redeemed          |  |       | (.6     | )      |  |          | (.6     | ) |  |   |       |  
|                              
|                              
|                              
|                              
|Cash dividends on common stock |  |       | (103.9  | )      |  |          |        |   |  |   | (103.9 | )
|                               |  |       |         |        |  |          |         |   |  |   |        |  
|Balance, June 30, 1998         |  | $     | 1,799.8 |        |  | $        | 1,208.4 |   |  | $ | 591.4  |  
|                               |  |       |         |        |  |          |         |   |  |   |        |  
|Balance, December 31, 1998     |  | $     | 1,862.0 |        |  | $        | 1,221.1 |   |  | $ | 640.9  |  
|                              
|                              
|                              
|                              
|Net income                     |  |       | 144.2   |        |  |          |        |   |  |   | 144.2  |  
|                              
|                              
|                              
|                              
|Common stock issued            |  |       | 35.3    |        |  |          | 35.3    |   |  |   |       |  
|                              
|                              
|                              
|                              
|Cash dividends on common stock |  |       | (106.7  | )      |  |          |        |   |  |   | (106.7 | )
|                               |  |       |         |        |  |          |         |   |  |   |        |  
|Balance, June 30, 1999         |  | $     | 1,934.8 |        |  | $        | 1,256.4 |   |  | $ | 678.4  |  
|                               |  |       |         |        |  |          |         |   |  |   |        |  

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

6



---



##### Table of Contents






FLORIDA POWER CORPORATION

FINANCIAL STATEMENTS







FLORIDA POWER CORPORATION


STATEMENTS OF INCOME


(In millions)


|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |       |       |  
|--------------------------------------------- | ----------------------------------------------------- | ------------------------------------------------- | ----- | ---------------- | ----- | ---- | ----- | ----- | ----- | - | ------- | ----- | ----- | - | ------- | ----- | ----- | -
|                                              |                                                       |                                                   |       |                  |       |     
|                                              |                                                       | Three Months                                      |       |                 
|                                              |                                                       | Ended                                             |       | Six Months Ended
|                                              |                                                       | June 30,                                          |       | June 30,        
|                                              |                                                       |                                                   |       |                 
|                                              |                                                       | 1999                                              |       | 1998             |       | 1999 |       | 1998 
|                                              |                                                       |                                                   |       |                  |       |      |       |      
|                                              |                                                       |                                                   |       |                 
|                                              |                                                       | (Unaudited)                                       |       | (Unaudited)     
|                                             
|                                             
|                                             
|                                             
|OPERATING REVENUES:                           |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|                                             
|                                             
|                                             
|                                             
|                                              | Residential                                           |                                                   | $     | 326.9            |       |      | $     | 335.5 |       |   | $       | 625.6 |       |   | $       | 644.2 |      
|                                             
|                                             
|                                             
|                                             
|                                              | Commercial                                            |                                                   |       | 153.3            |       |      |       | 153.7 |       |   |         | 284.7 |       |   |         | 277.4 |      
|                                             
|                                             
|                                             
|                                             
|                                              | Industrial                                            |                                                   |       | 51.7             |       |      |       | 55.2  |       |   |         | 101.0 |       |   |         | 103.0 |      
|                                             
|                                             
|                                             
|                                             
|                                              | Sales for resale                                      |                                                   |       | 43.8             |       |      |       | 43.8  |       |   |         | 92.6  |       |   |         | 80.7  |      
|                                             
|                                             
|                                             
|                                             
|                                              | Other                                                 |                                                   |       | 96.0             |       |      |       | 75.6  |       |   |         | 138.5 |       |   |         | 123.7 |      
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|                                              |                                                       |                                                   | 671.7 |                  |       |      | 663.8 |       |       |   | 1,242.4 |       |       |   | 1,229.0 |      
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|OPERATING EXPENSES:                           |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|                                             
|                                             
|                                             
|                                             
|                                              | Operation:                                            |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |       |      
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Fuel                                              |       |                  | 143.5 |      |       |       | 135.9 |   |         |       | 257.2 |   |         |       | 245.1 |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Purchased power                                   |       |                  | 108.4 |      |       |       | 110.8 |   |         |       | 198.7 |   |         |       | 209.8 |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Energy conservation cost                          |       |                  | 19.4  |      |       |       | 19.0  |   |         |       | 36.5  |   |         |       | 35.6  |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Operation and maintenance                         |       |                  | 120.8 |      |       |       | 116.2 |   |         |       | 217.9 |   |         |       | 218.6 |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Extended nuclear outage - replacement power costs |       |                  |      |      |       |       |      |   |         |       |      |   |         |       | 5.1   |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Depreciation and amortization                     |       |                  | 93.2  |      |       |       | 90.4  |   |         |       | 174.0 |   |         |       | 171.4 |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Taxes other than income taxes                     |       |                  | 51.1  |      |       |       | 51.4  |   |         |       | 103.0 |   |         |       | 100.9 |  
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|                                              |                                                       |                                                   | 536.4 |                  |       |      | 523.7 |       |       |   | 987.3   |       |       |   | 986.5   |      
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|                                              | Income taxes:                                         |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |       |      
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Currently payable                                 |       |                  | 54.8  |      |       |       | 61.4  |   |         |       | 95.5  |   |         |       | 93.9  |  
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Deferred, net                                     |       |                  | (14.7 | )    |       |       | (19.2 | ) |         |       | (20.7 | ) |         |       | (25.5 | )
|                                             
|                                             
|                                             
|                                             
|                                              |                                                       | Investment tax credits, net                       |       |                  | (1.9  | )    |       |       | (1.9  | ) |         |       | (3.9  | ) |         |       | (3.9  | )
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|                                              |                                                       |                                                   | 38.2  |                  |       |      | 40.3  |       |       |   | 70.9    |       |       |   | 64.5    |      
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|                                              |                                                       |                                                   | 574.6 |                  |       |      | 564.0 |       |       |   | 1,058.2 |       |       |   | 1,051.0 |      
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|INCOME FROM OPERATIONS                        |                                                       |                                                   | 97.1  |                  |       |      | 99.8  |       |       |   | 184.2   |       |       |   | 178.0   |      
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|OTHER INCOME AND DEDUCTIONS:                  |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|                                             
|                                             
|                                             
|                                             
|                                              | Allowance for equity funds used during construction   |                                                   |       | .5               |       |      |       | 2.2   |       |   |         | 2.8   |       |   |         | 4.4   |      
|                                             
|                                             
|                                             
|                                             
|                                              | Misc. other income/(expense), net                     |                                                   |       | (1.3             | )     |      |       | (.6   | )     |   |         | .7    |       |   |         | (.6   | )    
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|                                              |                                                       |                                                   | (.8   | )                |       |      | 1.6   |       |       |   | 3.5     |       |       |   | 3.8     |      
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|INTEREST CHARGES                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|                                             
|                                             
|                                             
|                                             
|                                              | Interest on long-term debt                            |                                                   |       | 26.7             |       |      |       | 29.0  |       |   |         | 53.6  |       |   |         | 59.6  |      
|                                             
|                                             
|                                             
|                                             
|                                              | Other interest expense                                |                                                   |       | 4.4              |       |      |       | 6.2   |       |   |         | 8.9   |       |   |         | 11.5  |      
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|                                              |                                                       |                                                   | 31.1  |                  |       |      | 35.2  |       |       |   | 62.5    |       |       |   | 71.1    |      
|                                             
|                                             
|                                             
|                                             
|                                              | Allowance for borrowed funds used during construction |                                                   |       | (.7              | )     |      |       | (1.9  | )     |   |         | (3.5  | )     |   |         | (3.6  | )    
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|                                              |                                                       |                                                   | 30.4  |                  |       |      | 33.3  |       |       |   | 59.0    |       |       |   | 67.5    |      
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|NET INCOME                                    |                                                       |                                                   | 65.9  |                  |       |      | 68.1  |       |       |   | 128.7   |       |       |   | 114.3   |      
|                                             
|                                             
|                                             
|                                             
|DIVIDENDS ON PREFERRED STOCK                  |                                                       |                                                   | .4    |                  |       |      | .4    |       |       |   | .8      |       |       |   | .8      |      
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      
|NET INCOME AFTER DIVIDENDS ON PREFERRED STOCK |                                                       | $                                                 | 65.5  |                  |       | $    | 67.7  |       |       | $ | 127.9   |       |       | $ | 113.5   |      
|                                              |                                                       |                                                   |       |                  |       |      |       |       |       |   |         |       |       |   |         |      

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

7



---



##### Table of Contents



FLORIDA POWER CORPORATION




BALANCE SHEETS


(In millions)


|                               |                                                                                 |                                                     |                                               |              |       |       |         |         |       |       | 
|------------------------------ | ------------------------------------------------------------------------------- | --------------------------------------------------- | --------------------------------------------- | ------------ | ----- | ----- | ------- | ------- | ----- | ----- | 
|                               |                                                                                 | June 30,                                            |                                               | December 31,
|                               |                                                                                 | 1999                                                |                                               | 1998        
|                               |                                                                                 |                                                     |                                               |             
|                               |                                                                                 | (Unaudited)                                         |                                               |             
|ASSETS                         |                                                                                 |                                                     |                                               |             
|                              
|                              
|                              
|                              
|PROPERTY, PLANT AND EQUIPMENT: |                                                                                 |                                                     |                                               |              |       |       |         |        
|                              
|                              
|                              
|                              
|                               | Electric utility plant in service and held for future use                       |                                                     | $                                             | 6,615.1      |       |       | $       | 6,307.8 |      
|                              
|                              
|                              
|                              
|                               | Less  Accumulated depreciation                                                 |                                                     |                                               | 2,828.6      |       |       |         | 2,716.0 |      
|                              
|                              
|                              
|                              
|                               |                                                                                 |                                                     | Accumulated decommissioning for nuclear plant |              |       | 269.5 |         |         |       | 254.8 | 
|                              
|                              
|                              
|                              
|                               |                                                                                 |                                                     | Accumulated dismantlement for fossil plants   |              |       | 131.8 |         |         |       | 130.7 | 
|                               |                                                                                 |                                                     |                                               |              |       |       |         |        
|                               |                                                                                 |                                                     | 3,385.2                                       |              |       |       | 3,206.3 |        
|                              
|                              
|                              
|                              
|                               | Construction work in progress                                                   |                                                     |                                               | 185.2        |       |       |         | 378.3   |      
|                              
|                              
|                              
|                              
|                               | Nuclear fuel, net of amortization of $387.0 in 1999 and $377.2 in
         1998 |                                                     |                                               | 66.3         |       |       |         | 45.9    |      
|                               |                                                                                 |                                                     |                                               |              |       |       |         |        
|                               |                                                                                 |                                                     | 3,636.7                                       |              |       |       | 3,630.5 |        
|                              
|                              
|                              
|                              
|Other property, net            |                                                                                 |                                                     | 10.5                                          |              |       |       | 11.5    |        
|                               |                                                                                 |                                                     |                                               |              |       |       |         |        
|                               |                                                                                 |                                                     | 3,647.2                                       |              |       |       | 3,642.0 |        
|                               |                                                                                 |                                                     |                                               |              |       |       |         |        
|CURRENT ASSETS:                |                                                                                 |                                                     |                                               |              |       |       |         |        
|                              
|                              
|                              
|                              
|                               | Cash and equivalents                                                            |                                                     |                                               | 5.4          |       |       |         |        |      
|                              
|                              
|                              
|                              
|                               | Accounts receivable, less reserve of $3.9 in 1999 and $3.8 in
        1998      |                                                     |                                               | 224.3        |       |       |         | 206.0   |      
|                              
|                              
|                              
|                              
|                               | Inventories at average cost:                                                    |                                                     |                                               |              |       |       |         |         |      
|                              
|                              
|                              
|                              
|                               |                                                                                 | Fuel                                                |                                               |              | 76.7  |       |         |         | 48.4  |      
|                              
|                              
|                              
|                              
|                               |                                                                                 | Materials and supplies                              |                                               |              | 89.5  |       |         |         | 83.3  |      
|                              
|                              
|                              
|                              
|                               | Deferred income taxes                                                           |                                                     |                                               | 57.7         |       |       |         | 56.0    |      
|                              
|                              
|                              
|                              
|                               | Prepayments and other                                                           |                                                     |                                               | 60.9         |       |       |         | 69.5    |      
|                               |                                                                                 |                                                     |                                               |              |       |       |         |        
|                               |                                                                                 |                                                     | 514.5                                         |              |       |       | 463.2   |        
|                               |                                                                                 |                                                     |                                               |              |       |       |         |        
|OTHER ASSETS:                  |                                                                                 |                                                     |                                               |              |       |       |         |        
|                              
|                              
|                              
|                              
|                               | Costs deferred pursuant to regulation:                                          |                                                     |                                               |              |       |       |         |         |      
|                              
|                              
|                              
|                              
|                               |                                                                                 | Deferred purchased power contract termination costs |                                               |              | 306.8 |       |         |         | 321.0 |      
|                              
|                              
|                              
|                              
|                               |                                                                                 | Other                                               |                                               |              | 101.1 |       |         |         | 113.6 |      
|                              
|                              
|                              
|                              
|                               | Investments in nuclear plant decommissioning fund                               |                                                     |                                               | 347.0        |       |       |         | 332.1   |      
|                              
|                              
|                              
|                              
|                               | Other                                                                           |                                                     |                                               | 56.3         |       |       |         | 56.2    |      
|                               |                                                                                 |                                                     |                                               |              |       |       |         |        
|                               |                                                                                 |                                                     | 811.2                                         |              |       |       | 822.9   |        
|                               |                                                                                 |                                                     |                                               |              |       |       |         |        
|                               |                                                                                 | $                                                   | 4,972.9                                       |              |       | $     | 4,928.1 |        
|                               |                                                                                 |                                                     |                                               |              |       |       |         |        

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

8



---



##### Table of Contents



FLORIDA POWER CORPORATION

BALANCE SHEETS


(In millions)


|                                        |                                          |               |         |              |         |   |         |         |         | 
|--------------------------------------- | ---------------------------------------- | ------------- | ------- | ------------ | ------- | - | ------- | ------- | ------- | 
|                                        |                                          | June 30,      |         | December 31,
|                                        |                                          | 1999          |         | 1998        
|                                        |                                          |               |         |             
|CAPITALIZATION AND LIABILITIES          |                                          | (Unaudited)   |         |             
|                                       
|                                       
|                                       
|                                       
|CAPITALIZATION:                         |                                          |               |         |              |         |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Common stock                             |               | $       | 1,004.4      |         |   | $       | 1,004.4 |        
|                                       
|                                       
|                                       
|                                       
|                                        | Retained earnings                        |               |         | 843.5        |         |   |         | 815.7   |        
|                                        |                                          |               |         |              |         |   |         |        
|                                        |                                          |               | 1,847.9 |              |         |   | 1,820.1 |        
|                                       
|                                       
|                                       
|                                       
|CUMULATIVE PREFERRED STOCK:             |                                          |               |         |              |         |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Without sinking funds                    |               |         | 33.5         |         |   |         | 33.5    |        
|                                       
|                                       
|                                       
|                                       
|LONG-TERM DEBT                          |                                          |               | 1,554.5 |              |         |   | 1,555.1 |        
|                                        |                                          |               |         |              |         |   |         |        
|                                        |                                          | TOTAL CAPITAL |         |              | 3,435.9 |   |         |         | 3,408.7 | 
|                                        |                                          |               |         |              |         |   |         |        
|CURRENT LIABILITIES:                    |                                          |               |         |              |         |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Accounts payable                         |               |         | 131.6        |         |   |         | 154.2   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Accounts payable to associated companies |               |         | 27.4         |         |   |         | 27.2    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Customers deposits                      |               |         | 107.4        |         |   |         | 104.1   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Income taxes payable                     |               |         | 40.5         |         |   |         |        |        
|                                       
|                                       
|                                       
|                                       
|                                        | Accrued other taxes                      |               |         | 50.1         |         |   |         | 6.3     |        
|                                       
|                                       
|                                       
|                                       
|                                        | Accrued interest                         |               |         | 55.1         |         |   |         | 55.8    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Overrecovered utility fuel costs         |               |         | 21.7         |         |   |         | 22.2    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                    |               |         | 43.6         |         |   |         | 70.6    |        
|                                        |                                          |               |         |              |         |   |         |        
|                                        |                                          |               | 477.4   |              |         |   | 440.4   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Notes payable                            |               |         | 46.4         |         |   |         | 47.3    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Current portion of long-term debt        |               |         | 91.7         |         |   |         | 91.6    |        
|                                        |                                          |               |         |              |         |   |         |        
|                                        |                                          |               | 615.5   |              |         |   | 579.3   |        
|                                        |                                          |               |         |              |         |   |         |        
|DEFERRED CREDITS AND OTHER LIABILITIES: |                                          |               |         |              |         |   |         |        
|                                       
|                                       
|                                       
|                                       
|                                        | Deferred income taxes                    |               |         | 552.6        |         |   |         | 563.2   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Unamortized investment tax credits       |               |         | 73.3         |         |   |         | 77.2    |        
|                                       
|                                       
|                                       
|                                       
|                                        | Other postretirement benefit costs       |               |         | 117.3        |         |   |         | 112.9   |        
|                                       
|                                       
|                                       
|                                       
|                                        | Other                                    |               |         | 178.3        |         |   |         | 186.8   |        
|                                        |                                          |               |         |              |         |   |         |        
|                                        |                                          |               | 921.5   |              |         |   | 940.1   |        
|                                        |                                          |               |         |              |         |   |         |        
|                                        |                                          | $             | 4,972.9 |              |         | $ | 4,928.1 |        
|                                        |                                          |               |         |              |         |   |         |        

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

9



---



##### Table of Contents



FLORIDA POWER CORPORATION




STATEMENTS OF CASH FLOWS


(In millions)


|                                                  |                                                       |                                                       |        |        |       |   |        |        |       |  
|------------------------------------------------- | ----------------------------------------------------- | ----------------------------------------------------- | ------ | ------ | ----- | - | ------ | ------ | ----- | -
|                                                  |                                                       |                                                      
|                                                  |                                                       | Six Months Ended                                     
|                                                  |                                                       | June 30,                                             
|                                                  |                                                       |                                                      
|                                                  |                                                       | 1999                                                  |        | 1998  
|                                                  |                                                       |                                                       |        |       
|                                                  |                                                       |                                                      
|                                                  |                                                       | (Unaudited)                                          
|                                                 
|                                                 
|                                                 
|                                                 
|OPERATING ACTIVITIES:                             |                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Net income after dividends on preferred stock         |                                                       | $      | 127.9  |       |   | $      | 113.5  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Adjustments for noncash items:                        |                                                       |        |        |       |   |        |        |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Depreciation and amortization                         |        |        | 186.7 |   |        |        | 189.9 |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Deferred income taxes and investment tax credits, net |        |        | (24.6 | ) |        |        | (29.8 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Changes in working capital:                           |                                                       |        |        |       |   |        |        |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Accounts receivable                                   |        |        | (18.4 | ) |        |        | (29.1 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Inventories                                           |        |        | (34.5 | ) |        |        | (7.7  | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Overrecovered / underrecovered utility fuel costs     |        |        | (.5   | ) |        |        | (10.1 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Accounts payable                                      |        |        | (41.4 | ) |        |        | (8.0  | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Accounts payable to associated companies              |        |        | .2    |   |        |        | (4.7  | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Income taxes payable                                  |        |        | 56.5  |   |        |        | 79.2  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Accrued other taxes                                   |        |        | 43.8  |   |        |        | 43.3  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Other                                                 |        |        | (12.9 | ) |        |        | (21.6 | )
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other operating activities                            |                                                       |        | 4.2    |       |   |        | 8.9    |      
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|                                                  |                                                       |                                                       | 287.0  |        |       |   | 323.8  |       
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|INVESTING ACTIVITIES:                             |                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Construction expenditures                             |                                                       |        | (168.2 | )     |   |        | (125.1 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Allowance for borrowed funds used during construction |                                                       |        | (3.5   | )     |   |        | (3.6   | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other investing activities                            |                                                       |        | (8.2   | )     |   |        | (52.9  | )    
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|                                                  |                                                       |                                                       | (179.9 | )      |       |   | (181.6 | )     
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|FINANCING ACTIVITIES:                             |                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Issuance of long-term debt                            |                                                       |        |       |       |   |        | 144.1  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Repayment of long-term debt                           |                                                       |        | (.8    | )     |   |        | (158.6 | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Dividends paid on common stock                        |                                                       |        | (100.0 | )     |   |        | (98.0  | )    
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Decrease in short-term debt                           |                                                       |        | (.9    | )     |   |        | (20.3  | )    
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|                                                  |                                                       |                                                       | (101.7 | )      |       |   | (132.8 | )     
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|NET INCREASE IN CASH AND EQUIVALENTS              |                                                       |                                                       | 5.4    |        |       |   | 9.4    |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Beginning cash and equivalents                        |                                                       |        |       |       |   |        |       |      
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|ENDING CASH AND EQUIVALENTS                       |                                                       | $                                                     | 5.4    |        |       | $ | 9.4    |       
|                                                  |                                                       |                                                       |        |        |       |   |        |       
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |                                                       |                                                       |        |        |       |   |        |       
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Cash paid during the period for:                      |                                                       |        |        |       |   |        |        |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Interest (net of amount capitalized)                  |        | $      | 57.9  |   |        | $      | 63.2  |  
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                       | Income taxes (net of refunds)                         |        | $      | 42.9  |   |        | $      | 15.2  |  

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

10



---



##### Table of Contents






FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION

NOTES TO FINANCIAL STATEMENTS



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Florida Progress principal business segment is the Utility
	segment. Florida Power, the largest subsidiary of Florida
	Progress, engages in the generation, purchase, transmission,
	distribution and sale of electricity. Florida Progress
	other reportable business segments are Electric Fuels
	Energy and Related Services, Rail Services and Inland Marine
	Transportation 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  |  |       |   |             |  |             
|                                   |                                | Utility       |   | Related Services |  | Services |   | Transportation |  | Other |   | Elimination |  | Consolidated
|                                   |                                |               |   |                  |  |          |   |                |  |       |   |             |  |             
|                                   |                                |              
|                                   |                                | (In millions)
|                                  
|                                  
|                                  
|                                  
|Three months ended June  30, 1999: |                                |               |   |                  |  |          |   |                |  |       |   |             |  |              |   |       |  |  |   |       |   |  |   |        |   |  |   |        
|                                  
|                                  
|                                  
|                                  
|                                   | Revenues                       |               | $ | 671.7            |  |          | $ | 44.8           |  |       | $ | 224.5       |  |              | $ | 33.5  |  |  | $ | .6    |   |  | $ | 1.2    |   |  | $ | 976.3   | 
|                                  
|                                  
|                                  
|                                  
|                                   | Intersegment revenues          |               |   |                 |  |          |   | 62.3           |  |       |   | .6          |  |              |   | 4.1   |  |  |   | (1.9  | ) |  |   | (65.1  | ) |  |   |        | 
|                                  
|                                  
|                                  
|                                  
|                                   | Segment net income (loss)      |               |   | 65.5             |  |          |   | 8.3            |  |       |   | 5.7         |  |              |   | 2.2   |  |  |   | (5.1  | ) |  |   |       |   |  |   | 76.6    | 
|                                  
|                                  
|                                  
|                                  
|Six months ended June  30, 1999:   |                                |               |   |                  |  |          |   |                |  |       |   |             |  |              |   |       |  |  |   |       |   |  |   |        |   |  |   |        
|                                  
|                                  
|                                  
|                                  
|                                   | Revenues                       |               | $ | 1,242.4          |  |          | $ | 87.6           |  |       | $ | 398.5       |  |              | $ | 63.7  |  |  | $ | 2.1   |   |  | $ | 2.4    |   |  | $ | 1,796.7 | 
|                                  
|                                  
|                                  
|                                  
|                                   | Intersegment revenues          |               |   |                 |  |          |   | 128.1          |  |       |   | 1.0         |  |              |   | 8.1   |  |  |   | (6.5  | ) |  |   | (130.7 | ) |  |   |        | 
|                                  
|                                  
|                                  
|                                  
|                                   | Segment net income (loss)      |               |   | 127.9            |  |          |   | 16.4           |  |       |   | 6.2         |  |              |   | 2.9   |  |  |   | (9.2  | ) |  |   |       |   |  |   | 144.2   | 
|                                  
|                                  
|                                  
|                                  
|                                   | Total assets at June  30, 1999 |               |   | 4,972.9          |  |          |   | 326.5          |  |       |   | 754.2       |  |              |   | 96.5  |  |  |   | 523.9 |   |  |   | (371.7 | ) |  |   | 6,302.3 | 
|                                  
|                                  
|                                  
|                                  
|Three months ended June  30, 1998: |                                |               |   |                  |  |          |   |                |  |       |   |             |  |              |   |       |  |  |   |       |   |  |   |        |   |  |   |        
|                                  
|                                  
|                                  
|                                  
|                                   | Revenues                       |               | $ | 663.8            |  |          | $ | 39.6           |  |       | $ | 155.8       |  |              | $ | 30.5  |  |  | $ | 12.3  |   |  | $ | 1.1    |   |  | $ | 903.1   | 
|                                  
|                                  
|                                  
|                                  
|                                   | Intersegment revenues          |               |   |                 |  |          |   | 64.6           |  |       |   | .3          |  |              |   | 3.8   |  |  |   | (4.3  | ) |  |   | (64.4  | ) |  |   |        | 
|                                  
|                                  
|                                  
|                                  
|                                   | Segment net income (loss)      |               |   | 67.7             |  |          |   | 5.0            |  |       |   | 4.7         |  |              |   | 1.9   |  |  |   | (1.5  | ) |  |   |       |   |  |   | 77.8    | 
|                                  
|                                  
|                                  
|                                  
|Six months ended June  30, 1998:   |                                |               |   |                  |  |          |   |                |  |       |   |             |  |              |   |       |  |  |   |       |   |  |   |        |   |  |   |        
|                                  
|                                  
|                                  
|                                  
|                                   | Revenues                       |               | $ | 1,229.0          |  |          | $ | 85.9           |  |       | $ | 303.0       |  |              | $ | 58.5  |  |  | $ | 12.0  |   |  | $ | 2.2    |   |  | $ | 1,690.6 | 
|                                  
|                                  
|                                  
|                                  
|                                   | Intersegment revenues          |               |   |                 |  |          |   | 134.7          |  |       |   | .4          |  |              |   | 6.9   |  |  |   | (7.8  | ) |  |   | (134.2 | ) |  |   |        | 
|                                  
|                                  
|                                  
|                                  
|                                   | Segment net income (loss)      |               |   | 113.5            |  |          |   | 10.1           |  |       |   | 6.8         |  |              |   | 3.6   |  |  |   | (5.7  | ) |  |   |       |   |  |   | 128.3   | 
|                                  
|                                  
|                                  
|                                  
|                                   | Total assets at June  30, 1998 |               |   | 5,013.1          |  |          |   | 289.2          |  |       |   | 510.5       |  |              |   | 183.5 |  |  |   | 67.7  |   |  |   | 16.9   |   |  |   | 6,080.9 | 



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | In December 1998, Florida Power received approval from the
	Florida Public Service Commission (FPSC) to defer
	$10.1 million of nonfuel revenues towards the development of a
	plan that would allow customers to realize the benefits of the
	1998 deferred revenues earlier than if the nonfuel revenues were
	used to accelerate the amortization of the Tiger Bay regulatory
	asset. The plan was required to be submitted to the FPSC by
	May 1, 1999. Florida Power was unable to identify any rate
	initiatives that might allow its ratepayers to receive these
	benefits sooner and, in June 1999, recognized $10.1 million of
	revenue and recorded $10.1 million, plus interest, of
	amortization against the Tiger Bay regulatory asset.

11



---



##### Table of Contents



FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION


NOTES TO FINANCIAL STATEMENTS  (Continued)



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | In April 1999, FPC Capital I, a subsidiary business trust,
	completed the sale of $300 million Cumulative Quarterly Income
	Preferred Securities through a public offering, the proceeds of
	which were used to pay down short-term debt and for general
	corporate purposes. The securities are, in effect, fully and
	unconditionally guaranteed by Florida Progress. Quarterly
	distributions are payable at an annual rate of 7.10%.

4.  Contingencies

Off-Balance Sheet Risk  Several of Florida
 Progress subsidiaries are general partners in
unconsolidated partnerships and joint ventures. Florida Progress
or its subsidiaries have agreed to support certain loan
agreements of the partnerships and joint ventures. These credit
risks are not material to the financial statements of Florida
Progress, and Florida Progress considers these credit risks to be
 minimal, based upon the asset values supporting the partnership
liabilities.

Insurance  Florida Progress and its
subsidiaries utilize various risk management techniques to
protect assets from risk of loss, including the purchase of
insurance. Risk avoidance, risk transfer and self-insurance
techniques are utilized depending on Florida Progress
ability to assume risk, the relative cost and availability of
methods for transferring risk to third parties, and the
requirements of applicable regulatory bodies.

Florida Power self-insures its transmission and distribution
lines against loss due to storm damage and other natural
disasters. Pursuant to a regulatory order, Florida Power accrues
$6 million annually to a storm damage reserve and may defer any
losses in excess of the reserve. The reserve balances at
June 30, 1999 and December 31, 1998 were $27.1 million
and $24.1 million, respectively.

Under the provisions of the Price Anderson Act, which limits
liability for accidents at nuclear power plants, Florida Power,
as an owner of a nuclear plant, can be assessed for a portion of
any third-party liability claims arising from an accident at any
commercial nuclear power plant in the United States. If total
third-party claims relating to a single nuclear incident exceed
$200 million (the amount of currently available commercial
liability insurance), Florida Power could be assessed up to $88.1
 million per incident, with a maximum assessment of $10 million
per year.

Florida Power is a member of the Nuclear Electric Insurance, Ltd.
 (NEIL), an industry mutual insurer, which provides
business interruption and extra expense coverage in the event of
a major accidental outage at a covered nuclear power plant.
Florida Power is subject to a retroactive premium assessment by
NEIL under this policy in the event that loss experience exceeds
NEILs available surplus. Florida Powers present
maximum share of any such retroactive assessment is $2.7 million
per policy year.

Florida Power also maintains nuclear property damage insurance
and decontamination and decommissioning liability insurance
totaling $2.1 billion. The first layer of $500 million is
purchased in the commercial insurance market with the remaining
excess coverage purchased from NEIL. Florida Power is
self-insured for any losses that are in excess of this coverage.
Under the terms of the NEIL policy, Florida Power could be
assessed up to a maximum of $9.5 million in any policy year if
losses in excess of NEILs available surplus are incurred.

Florida Power has never been assessed under these nuclear
indemnities or insurance policies.

Contaminated Site Cleanup  Florida
Progress is subject to regulation with respect to the
environmental impact of its operations. Florida Progress
disposal of hazardous waste through third-party vendors can
result in costs to clean up facilities found to be contaminated.
Federal and state statutes authorize governmental agencies to
compel responsible parties to pay for cleanup of these hazardous
waste sites.

Florida Power and certain former subsidiaries of Florida
Progress, whose properties were sold in prior years, have been
identified by the U.S. Environmental Protection Agency
(EPA) as Potentially Responsible Parties
(PRPs) at certain sites. Liability for the cleanup
costs at these sites is joint and several.

12



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##### Table of Contents



FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION


NOTES TO FINANCIAL STATEMENTS  (Continued)

One of the sites that Florida Power previously owned and operated
 is located in Sanford, Florida. There are five parties,
including Florida Power, that have been identified as PRPs at the
 Sanford site. An agreement has been reached among the PRPs of
the Sanford site to spend up to $1.5 million to perform a
Remedial Investigation and Feasibility Study (RI/FS).
 Florida Power is liable for 40% of those costs. On
September 25, 1998, the EPA formally approved the PRP RI/FS
Work Plan. The RI/FS fieldwork was completed in January 1999. The
 EPA is expected to review the final Remedial Investigation
report and provide further guidance to the PRPs by August 1999.
Negotiations are underway within the PRP group to develop a new
Participants Agreement. The Agreement will define and
allocate future Remedial Design and Remedial Action costs among
the participants for Phase I of three potential separate phases
of cleanup. The project will be addressed in separate phases for
project management purposes. FPCs future cost share
allocation for Phase I is expected to be identified by December
1999.

The discussions and resolution of liability for cleanup costs
could cause Florida Power to increase the estimate of its
liability for those costs. Although estimates of any additional
costs are not currently available, the outcome is not expected to
 have a material effect on Florida Progress financial
position, results of operations or liquidity.

In December 1998, Florida Power allowed the EPA to conduct an
expanded site inspection at a former plant site designated
Inglis. Soil and groundwater samples were obtained
from the Florida Power property, as well as sediment samples from
 the adjacent Withalacoochee River. A final report is expected
from the EPA in 1999 regarding the site hazard ranking and
possible listing on the National Priorities list.

In addition to these designated sites, there are other sites
where Florida Progress may be responsible for additional
environmental cleanup. Florida Progress best estimates
indicate that its share of liability for cleaning up all
designated sites ranges from $3.0 million to $9.0 million. It has
 accrued $4.6 million against these potential costs.

Age Discrimination Suit  Florida Power and
 Florida Progress have been named defendants in an age
discrimination lawsuit. The number of plaintiffs remains at 116,
but four of those plaintiffs have had their federal claims
dismissed and five others have had their state age claims
dismissed. While no dollar amount was requested, each plaintiff
seeks back pay, reinstatement or front pay through their
projected dates of normal retirement, costs and attorneys
fees. In October 1996, the court approved an agreement between
the parties to provisionally certify this case as a class action
suit under the Age Discrimination in Employment Act. Florida
Power has filed a motion to decertify the class, but a hearing
date has not yet been set. In December 1998, during mediation,
plaintiffs alleged damages of $100 million. Company management,
while not believing plaintiffs claim to have merit, offered
 $5 million in an attempted settlement of all claims. Plaintiffs
rejected that offer. Subsequently, Florida Power and the
plaintiffs engaged in informal settlement discussions, which were
 terminated on December 22, 1998. However, plaintiffs have
filed a motion to enforce a purported $11 million oral settlement
 agreement. Florida Power denies that such an agreement exists
and has filed responsive pleadings to that effect. As a result,
management has identified a probable range of $5 million to $100
million with no amount within that range a better estimate of
probable loss than any other amount; accordingly, Florida Power
has accrued $5 million. There can be no assurance that this
litigation will be settled, or if settled, that the settlement
will not exceed $5 million. Additionally, the ultimate outcome,
if litigated, cannot presently be determined.

Advanced Separation Technologies, Inc. (AST)
  In 1996, Florida Progress sold its 80% interest
 in AST to Calgon Carbon Corporation (Calgon) for net
 proceeds of $56 million in cash. 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.
No projection of an outcome or estimate of a potential liability,
 if any, can be determined at the date of issuance of these
financial statements. Florida Progress

13



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##### Table of Contents



FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION


NOTES TO FINANCIAL STATEMENTS  (Continued)

believes the lawsuit is without merit and intends to vigorously
defend itself. Accordingly, Florida Progress has not made
provision for any loss for this matter.

Qualifying Facilities Contracts  Florida
Powers purchased power contracts with qualifying facilities
 employ separate pricing methodologies for capacity payments and
energy payments. Florida Power has interpreted the pricing
provision in these contracts to allow it to pay an as-available
energy price rather than a higher firm energy price when the
avoided unit upon which the applicable contract is based would
not have been operated.

The owners of four qualifying facilities filed suit against
Florida Power in state court over the contract payment terms, and
 one owner also filed suit in federal court. Two of the state
suits have been settled, and the federal case was dismissed,
although the plaintiff has appealed. Of the two remaining state
suits, the trial regarding NCP Lake Power (Lake)
concluded in December 1998. In April 1999, the judge entered a
non-final trial order. The judge granted Lakes breach of
contract claim and ruled that Lake is entitled to receive
firm energy payments during on-peak hours, but for
all other hours, Lake is entitled to the as-available
 rate. The Court ruled in late July 1999, for calculation of
damages, that the breach of contract occurred at the inception of
 the contract. The Court deferred ruling on whether payments for
energy are capped at the firm rate during off peak hours, when
the as-available rate exceeds the usually higher
firm rate. The Court is expected to rule shortly on
the deferred issue. A final order will be entered after the
amount of damages due Lake is determined.

In the other remaining suit regarding Dade County, in May 1999
the parties reached an agreement in principal to settle their
dispute in its entirety, including all of the ongoing litigation,
 except the Florida Supreme Court appeal of an FPSC ruling. The
terms of the settlement have not yet been finalized, and the
agreement will be conditioned upon receiving FPSC approval.

Management does not expect that the results of these legal
actions will have a material impact on Florida Powers
financial position, operations or liquidity. Florida Power
anticipates that all fuel and capacity expenses will be recovered
 from its customers.

Mid-Continent Life Insurance Company
(Mid-Continent)  As discussed
below, a series of events in 1997 significantly jeopardized the
ability of Mid-Continent to implement a plan to eliminate a
projected reserve deficiency, resulting in the impairment of
Florida Progress investment in Mid-Continent. Therefore,
Florida Progress recorded a provision for loss on investment of
$86.9 million in 1997. In addition, tax benefits of approximately
 $11 million related to the excess of the tax basis over the book
 value in the investment in Mid-Continent as of December 31,
 1997 were not recorded because of uncertainties associated with
the timing of a tax deduction. Florida Progress also recorded an
accrual at December 31, 1997 for legal fees associated with
defending its position in current Mid-Continent legal
proceedings.

In the spring of 1997, the Oklahoma State Insurance Commissioner
(Commissioner) received court approval to seize
control of the operations of Mid-Continent. The commissioner had
alleged that Mid-Continents reserves were understated by
more than $125 million, thus causing Mid-Continent to be
statutorily impaired. The Commissioner further alleged that
Mid-Continent had violated Oklahoma law relating to deceptive
trade practices in connection with the sale of its Extra
Life insurance policies and was not entitled to raise
premiums, a key element of Mid-Continents plan to address
the projected reserve deficiency. While sustaining the
receivership, the court also ruled that premiums could be raised.
 Although both sides appealed the decision to the Oklahoma
Supreme Court, those appeals were withdrawn in early 1999.

In December 1997, the Commissioner filed a lawsuit against
Florida Progress, certain of its directors and officers, and
certain former Mid-Continent officers, making a number of
allegations and seeking access to Florida Progress assets
to satisfy policyholder and creditor claims. In April 1998, the
court granted motions to dismiss the individual defendants,
leaving Florida Progress as the sole remaining defendant in the
lawsuit.

14



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##### Table of Contents



FLORIDA PROGRESS CORPORATION AND FLORIDA POWER CORPORATION


NOTES TO FINANCIAL STATEMENTS  (Continued)

A new Commissioner was elected in November 1998 and has stated
his intention to work with Florida Progress and others to develop
 a plan to rehabilitate Mid-Continent rather than pursue
litigation against Florida Progress. Based on data through
December 31, 1998, Florida Progress estimate of the
additional assets necessary to fund the reserve, after applying
Mid-Continents statutory surplus, is in the range of $100
million, rather than in the $350 million range put forth by the
actuary hired by the former Commissioner. Florida Progress
believes that any estimate of the projected reserve deficiency
would affect only the assets of Mid-Continent, because Florida
Progress has legal defenses to any claims asserted against it.
Florida Progress is working with the new Commissioner to develop
a viable plan to rehabilitate Mid-Continent, which would include
the sale of that company. An order agreed upon by both sides
outlining a plan of rehabilitation was filed on March 18,
1999. Bids from a variety of parties were received and opened in
June, and are currently being evaluated.

In January 1999, five Mid-Continent policyholders filed a
purported class action against Mid-Continent and the same
defendants named in the case filed by the former Commissioner.
The complaint contains substantially the same factual allegations
 as those made by the Commissioner. The suit asserts Extra
Life policyholders have been injured as a result of
representations made in connection with the sale of that policy.
The suit seeks unspecified actual and punitive damages.

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



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 Form 10-K of
	Florida Progress and Florida Power for the year ended
	December 31, 1998 (the 1998 Form 10-K).

15



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##### Table of Contents





|         |                                                                                              
|-------- | ---------------------------------------------------------------------------------------------
|Item  2. | Managements Discussion and Analysis of Financial
        Condition and Results of Operations

Operating Results

Florida Progress consolidated earnings for the three-month
period ended June 30, 1999 were $.78 per share compared to
earnings of $.80 per share for the same period in 1998. Excluding
 a one-time gain of $.04 per share recognized in the second
quarter of 1998 from the buy-out of a purchased power contract
associated with a cogeneration facility in which a Florida
Progress subsidiary is a minority partner, Florida Progress
 second quarter earnings per share increased over 1998, despite
milder weather in 1999.

For the six-month period ended June 30, 1999, Florida
Progress consolidated earnings were $1.48 per share, a
12 percent increase over the $1.32 earnings per share
reported for the same period in 1998.

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

|                        |                   |                                     |  |  |       |   |       |       |   | 
|----------------------- | ----------------- | ----------------------------------- |  |  | ----- | - | ----- | ----- | - | 
|                       
|                       
|                       
|                       
|1998 Second Quarter EPS |                   |                                     |  |  |       | $ | 0.80  |      
|                       
|                       
|                       
|                       
|                        | Florida Power     |                                     |  |  |       |   |       |       |  
|                       
|                       
|                       
|                       
|                        |                   | Customer & non-weather usage growth |  |  | 0.10  |   |       |       |   | 
|                       
|                       
|                       
|                       
|                        |                   | Estimated weather impact on sales   |  |  | (0.16 | ) |       |       |   | 
|                       
|                       
|                       
|                       
|                        |                   | 1998 Accelerated amortization       |  |  | 0.09  |   |       |       |   | 
|                       
|                       
|                       
|                       
|                        |                   | Operations & maintenance            |  |  | (0.03 | ) |       |       |   | 
|                       
|                       
|                       
|                       
|                        |                   | Depreciation & amortization         |  |  | (0.03 | ) |       |       |   | 
|                        |                   |                                     |  |  |       |   |       |      
|                        |                   |                                     |  |  |       |   | (0.03 | )    
|                       
|                       
|                       
|                       
|                        | Electric Fuels    |                                     |  |  |       |   |       | 0.04  |  
|                       
|                       
|                       
|                       
|                        | Corporate & other |                                     |  |  |       |   |       | (0.03 | )
|                        |                   |                                     |  |  |       |   |       |      
|1999 Second Quarter EPS |                   |                                     |  |  |       | $ | 0.78  |      
|                        |                   |                                     |  |  |       |   |       |      

Florida Power Corporation

Florida Power, the largest subsidiary of Florida Progress,
reported earnings of $.67 per share for the three months ended
June 30, 1999, compared with earnings of $.70 per share for
the same period last year. In 1998, earnings were higher than
normal due to unusually hot weather experienced during the second
 quarter.

Florida Powers earnings for the six-month period ended
June 30, 1999 were $1.31 per share compared to earnings of
$1.17 per share for the same period last year. The increase at
Florida Power for the six-month period was due largely to lower
amortization of regulatory assets, excluding the $10.1 million of
 amortization recorded in 1999 (See Note 2 to the Financial
Statements on page 11), and lower interest expense due to debt
refinancings in late 1998.

During the second quarter of 1999, Florida Power served
approximately 25,000 (1.9%) more retail customers than it did in
1998. In addition, Florida Power experienced strong non-weather
related usage growth among its residential and commercial
customers.

Despite solid customer growth and strong non-weather related
usage growth, Florida Powers total retail kilowatt-hour
sales decreased 3.3 percent during the second quarter of
1999, compared with the same period in 1998. The decrease was
attributable to milder than normal temperatures during the second
 quarter of 1999, compared with the unusually hot temperatures in
 the second quarter of 1998.

Wholesale kilowatt-hour sales were up 15.7 percent in the
second quarter over 1998. The improvement was largely due to
increased sales to Florida Powers largest wholesale
customer, Seminole Electric Cooperative. In January 1999, Florida
 Power began supplying additional power to Seminole Electric
under a three-year contract.

Operations and maintenance expenses were $4.6 million higher and
$.7 million lower for the three and six months ended
June 30, 1999 compared to the same periods in 1998. The
higher costs for the second quarter were largely due to the
timing of certain plant maintenance projects and reliability
expenditures. On a year-to-date basis, Florida Powers
operation and maintenance expenses are in line with the
companys expectations.

16



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##### Table of Contents



Depreciation and amortization expense, excluding accelerated
amortizations, increased $4.7 million for the three months ended
June 30, 1999 compared to the same period last year. The
increase was primarily due to additional depreciation expense
related to the Hines plant, a 500MW combined cycle generation
plant which was placed in service in April 1999.

Diversified Operations

Revenues for diversified operations increased $65.3 million and
$92.7 million for the three and six months ended June 30,
1999 over the prior year. Cost of sales for Florida
Progress diversified operations were $76.9 million and
$108.2 million higher for the three and six months ended
June 30, 1999 compared to the same period last year. The
increases were due primarily to 1998 acquisitions at Electric
Fuels Rail Services Group.

Electric Fuels Corporation

Electric Fuels earnings increased $.04 per share and $.05
per share for the three and six month periods ended June 30,
 1999, compared with the same periods in 1998. The increases were
 due primarily to synthetic fuel sales by the Energy and Related
Services Group. In addition, the Rail Services and the Inland
Marine Transportation business units also experienced improved
operating results during the second quarter of 1999.

Earnings at the Energy and Related Services Group for the three
and six months ended June 30, 1999 increased $3.3 million
and $6.3 million over the same periods in 1998 due primarily to
sales of a coal-based synthetic fuel and the related tax credits.

Earnings from the Inland Marine Transportation Group were $.3
million higher and $.7 million lower for the three and six-month
periods ended June 30, 1999 compared to the same periods in
1998 due primarily to the companys growing barge fleet
which currently stands at approximately 1,200 barges. In 1999,
operating conditions returned to normal during the second quarter
 from the prolonged icing conditions and high water conditions
experienced during the first quarter that negatively impacted
earnings due to disrupted barge operations and limited tow sizes.

Results in the Rail Services Group were $1.0 million higher and
$.6 million lower for the three and six-month periods compared to
 the prior year. The increase for the three-month period was due
to higher earnings from the mechanical and trackwork divisions as
 a result of strong demand for railcar parts and a return to
projected sales levels for trackwork. Lower earnings for the
six-month period were due to the decrease in rail and track work
experienced during the first quarter, partially offset by a
strong demand for rail car parts.

Rail Services also experienced an increase in scrap tons sold in
its recycling division, however, the increased earnings on the
sales were offset by lower margins. The groups lower
margins were the result of scrap steel prices that were
approximately 30 percent below 1998 second quarter prices.

YEAR 2000

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

17



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##### Table of Contents



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

|                              |  |               |     |                |  |               |                |                |  |  |     |   |  |  |                | 
|----------------------------- |  | ------------- | --- | -------------- |  | ------------- | -------------- | -------------- |  |  | --- | - |  |  | -------------- | 
|                              |  |               |     |               
|                              |  | Florida Power |     | Electric Fuels
|                              |  |               |     |               
|                              |  | Percent       |     | Actual/Planned |  | Percent       |                | Actual/Planned
|                              |  | Complete      |     | Completion     |  | Complete      |                | Completion    
|                              |  | June 30, 1999 |     | Date           |  | June 30, 1999 |                | Date          
|                              |  |               |     |                |  |               |                |               
|Awareness                     |  |               | *   |                |  |               | *              |                |  |  | *   |   |  |  | *              | 
|                             
|                             
|                             
|                             
|Inventory                     |  |               | 100 | %              |  |               | January 1999   |                |  |  | 100 | % |  |  | March 1999     | 
|                             
|                             
|                             
|                             
|Assessment and prioritization |  |               | 100 | %              |  |               | May 1999       |                |  |  | 98  | % |  |  | August 1999    | 
|                             
|                             
|                             
|                             
|Remediation and Verification  |  |               | 96  | %              |  |               | September 1999 |                |  |  | 73  | % |  |  | September 1999 | 
|                             
|                             
|                             
|                             
|Contingency planning          |  |               | 100 | %              |  |               | June 1999      |                |  |  | 53  | % |  |  | December 1999  | 



|  |                                         
|- | ----------------------------------------
|* | To continue through duration of project.

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

Florida Power achieved readiness through a comprehensive program
that included the identification, review, correction and
verification of all mission-critical components and systems
throughout Florida Power that could be affected by the Y2K event
dates.

Even though Florida Power has accomplished an important milestone
 in its Y2K readiness efforts, work on certain non-critical
systems is continuing, and is expected to be completed before or
during the fourth quarter of this year.

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

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

Florida Progress currently estimates that the total cost for it
to address Y2K issues will be between $15 million and $20
million. No Florida Progress systems have been replaced on an
accelerated basis due to the Y2K issue. As of June 30, 1999,
 Florida Progress has incurred a total of approximately $9.5
million of internal and external costs related to Y2K. The
company does not track internal and external costs separately.
All significant costs have been expensed as incurred.

18



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##### Table of Contents



Other

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

Liquidity and Capital Resources

Florida Progress capital expenditures are expected to be
approximately $495 million for 1999, excluding allowance for
funds used during construction, of which $340 million are
designated for Florida Power and $155 million for diversified
operations. Florida Progress capital expenditures are
expected to be funded from internally generated funds, debt and
the ongoing sale of common stock through the Progress Plus Stock
Plan and the Savings Plan for Employees. During the first six
months of 1999, $168.2 million was spent on the Florida Power
construction program and $108.2 million was spent in diversified
operations

Florida Powers ratio of earnings to fixed charges was 4.23
for the twelve months ended June 30, 1999. (See
Exhibit 12 filed herewith).

In 1998, Progress Capital Holdings Inc., a subsidiary of Florida
Progress that provides financing for Florida Progress
diversified operations, established uncommitted bank bid
facilities allowing it to borrow and re-borrow, and have
outstanding at any time, up to $300 million. At June 30,
1999, there were no loans outstanding under these bid facilities,
 compared to $225 million outstanding at March 31, 1999.

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

In November 1998, the Progress Plus Stock Plan and Savings Plan
for Employees began issuing new shares of common stock instead of
 purchasing shares in the open market. Florida Progress received
approximately $32.4 million of new equity through these plans
during the first six months of 1999.

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

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

Forward-Looking Statements

This report contains certain forward-looking statements,
including projections regarding the liability for cleaning up
certain environmental sites; the results of certain legal
proceedings relating to Mid-Continent, and the costs associated
with modifying computers for the year 2000.

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

19



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##### Table of Contents



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

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

Item  3.  Quantitative and Qualitative
Disclosures about Market Risk

Interest Rate Risk

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

A hypothetical 51 basis point increase in interest rates (10% of
Florida Progress weighted average interest rate at
June 30, 1999) affecting Florida Progress variable
rate debt ($533.2 million at June 30, 1999) would have an
immaterial affect on Florida Progress pre-tax earnings over
 the next fiscal year. A hypothetical 10% decrease in interest
rates would also have an immaterial effect on the estimated fair
value of Florida Progress long-term debt at June 30,
1999.

Commodity Price Risk

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

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

20



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##### Table of Contents






PART  II.  OTHER INFORMATION

Item  1.  Legal Proceedings



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

Metropolitan Dade County and Montenay Power Corp. v. Florida
Progress Corporation, Florida Power Corporation and Electric
Fuels Corporation, U.S. District Court, Southern District, Miami
Division, Florida, Case No. 96-594-DIV-LENARD

In re: Petition for Declaratory Statement that Energy Payments
 are Limited to Analysis of Avoided Units Contractually
Specified Characteristics, Florida Public Service Commission,
Docket No. 980283-EQ

See prior discussion of this matter in the 1998 Form 10-K,
Item 3, paragraph 1, and the First Quarter Form 10-Q,
Part II, Item 1, paragraph 1. On May 27, 1999, the
parties reached an agreement in principal to settle the dispute
in its entirety, including all of the ongoing litigation, except
the Florida Supreme Court appeal of the FPSC order in the docket
cited above. The terms of the settlement have not yet been
finalized, and the agreement will be conditioned upon receiving
FPSC approval.



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

In re: Petition for Declaratory Statement Regarding the
Negotiated Contract for Purchase of Firm Capacity and Energy
between Florida Power Corporation and Lake Cogen, LTD., Florida
Public Service Commission, Docket No. 980509-EQ.

See prior discussion of this matter in the 1998 Form 10-K,
Item 3, paragraph 2, and the First Quarter Form 10-Q,
Part II, Item 1, paragraph 2. In the Circuit Court case, a
hearing on the award of damages was held on July 29, 1999.
The Court heard arguments on two issues: (i) what date the
breach occurred for purposes of calculation of damages, and
(ii) whether payments for energy when the as
available rate exceeds the usually higher firm
rate during off peak hours are capped at the firm rate. The Court
 ruled on the first issue, and held that the breach occurred at
the inception of the contract. The Court deferred ruling on the
second issue, but is expected to rule shortly.



|   |                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | State of Oklahoma, ex rel. John P. Crawford, Insurance
	Commissioner v. Mid-Continent Life Insurance Company, District
	Court of Oklahoma County, State of Oklahoma, Case No. 
	CJ-97-2518-62

State of Oklahoma, ex rel, John P. Crawford, Insurance
Commissioner as Receiver for Mid-Continent Life Insurance Company
 v. Florida Progress Corporation, a Florida corporation, Jack
Barron Critchfield, George Ruppel, Thomas Steven Krzesinski,
Richard Korpan, Richard Donald Keller, James Lacy Harlan, Gerald
William McRae, Thomas Richard Dlouhy, Andrew Joseph Beal and
Robert Terry Stuart, Jr., District Court of Oklahoma County,
State of Oklahoma, Case No. CJ-97-2518-62 (part of the same
case noted above).

Michael Farrimond, Pamela S. Farrimond, Angela Fry, Jowhna
Hill, and Barbara Hodges, for themselves and all others similarly
 situated v. Florida Progress Corporation, a Florida corporation,
 Jack Barron Critchfield, George Ruppel, Thomas Steven
Krzesinski, Richard Korpan, Richard Donald Keller, James Lacy
Harlan, Gerald William McRae, Thomas Richard Dlouhy, Andrew
Joseph Beal and Robert Terry Stuart, Jr., District Court of
Oklahoma County, State of Oklahoma, Case No.  CJ-99-130-65.

See prior discussion of this matter in the 1998 Form 10-K,
Item 3, paragraph 6, and the First Quarter Form 10-Q,
Part II, Item 1, paragraph 3. In the rehabilitation
proceeding, bids from a variety of parties were received and
opened in June, and are continuing to be evaluated. In the
Farrimond case, the Defendants motion to dismiss was
granted on June 3, 1999. Subsequently, the Plaintiffs in
Farrimond filed an Application for Leave to Amend, which was
granted by the Court on July 16, 1999. The Plaintiffs
amended petition was deemed filed as of that date. In August
1999, the Court ruled in response to the Defendants Motion
to Stay

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##### Table of Contents







|   |                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------
|4. | Peak Oil Company, Missouri Electric Works, 62nd Street, AKO
	Bayside, and Bluff Electric Superfund Sites

See prior discussion of this matter in the 1998 Form 10-K,
Item 3, paragraph 7, and the First Quarter Form 10-Q,
Part II, Item 1, paragraph 4. The EPA superfund
database indicates that the AKO Site is no longer active and does
 not require further remedial action. Likewise, the Bluff
Electric site has been fully remediated and the EPAs file
is closed. This concludes these two matters for reporting
purposes.

Item  4.  Submission of Matters to a Vote of
 Security-Holders

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



| |                                   
| | ----------------------------------
| | Election of Directors             
|
| | Class III  Terms expiring in 2002

|                                 |  |       |            |          |  |  |           | 
|-------------------------------- |  | ----- | ---------- | -------- |  |  | --------- | 
|                                 |  | Votes |            | Votes   
|                                 |  | For   |            | Withheld
|                                 |  |       |            |         
|Clarence V. McKee, Esq           |  |       | 78,537,563 |          |  |  | 1,064,523 | 
|                                
|                                
|                                
|                                
|Richard A. Nunis                 |  |       | 78,599,786 |          |  |  | 1,002,300 | 
|                                
|                                
|                                
|                                
|Jean Giles Wittner               |  |       | 78,596,398 |          |  |  | 1,005,688 | 
|Class II  Term expiring in 2001 |  |       |            |          |  |  |           | 
|                                
|                                
|                                
|                                
|Richard Korpan                   |  |       | 78,578,611 |          |  |  | 1,023,475 | 

Item  6.  Exhibits and Reports on
Form 8-K

(a)  Exhibits:

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

(b)  Reports on form 8-K:

During the second quarter 1999, Florida Progress and Florida
Power filed the following combined report on Form 8-K:



| |                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Form 8-K dated April 16, 1999, reporting under
	Item 5 Other Events an Investor News report
	concerning Florida Progress and Florida Powers first
	quarter 1999 earnings.
|
| | In addition, Florida Progress and Florida Power filed the
	following combined report on Form 8-K subsequent to the
	second quarter 1999:                                     
|
| | Form 8-K dated July 16, 1999, reporting under
	Item 5 Other Events Florida Progress and
	Florida Powers second quarter 1999 earnings.                                    

22



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##### Table of Contents






SIGNATURES

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

|                      |  |                                                                                                   
|--------------------- |  | --------------------------------------------------------------------------------------------------
|                      |  | FLORIDA PROGRESS CORPORATION                                                                      
|                     
|Date: August 11, 1999 |  | By: /s/ JOHN SCARDINO, JR.John Scardino, Jr.Vice President and Controller                         
|                     
|Date: August 11, 1999 |  | By: /s/ EDWARD W. MONEYPENNYEdward W. MoneypennySenior Vice President and
	Chief Financial Officer

23



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##### Table of Contents



SIGNATURES

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

|                      |  |                                                                                                 
|--------------------- |  | ------------------------------------------------------------------------------------------------
|                      |  | FLORIDA POWER CORPORATION                                                                       
|                     
|Date: August 11, 1999 |  | By: /s/ JOHN SCARDINO, JR.John Scardino, Jr.Vice President and Controller                       
|                     
|Date: August 11, 1999 |  | By: /s/ JEFFREY R. HEINICKAJeffrey R. HeinickaSenior Vice President
	and Chief Financial Officer

24



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##### Table of Contents






EXHIBIT INDEX

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

25