TE Teco Energy, Inc. (delisted)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

February 4, 2016

 

 

TECO ENERGY, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Florida		1-8180		59-2052286
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

702 North Franklin Street, Tampa Florida		33602
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (813) 228-1111

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Section 2 – Financial Information

Item 2.02: Results of Operations and Financial Condition

See the Press Release dated February 4, 2016 furnished as Exhibit 99.1 and incorporated herein by reference, reporting on TECO Energy, Inc.’s financial results for the three and twelve months ended December 31, 2015.

Section 9 – Financial Statements and Exhibit

Item 9.01: Financial Statements and Exhibit

 

(d)		Exhibit
99.1		Press Release dated February 4, 2016 reporting on TECO Energy, Inc.’s financial results for the three and twelve months ended December 31, 2015.

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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 hereunto duly authorized.

 

Date: February 4, 2016						TECO ENERGY, INC.
						(Registrant)
						s S. W. Callahan
						S. W. CALLAHAN
						Senior Vice President-Finance & Accounting and Chief Financial Officer

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EXHIBIT INDEX

 

Exhibit No.		Description of Exhibit
99.1		Press Release dated February 4, 2016 reporting on TECO Energy, Inc.’s financial results for the three and twelve months ended December 31, 2015.

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

TECO ENERGY REPORTS FOURTH-QUARTER RESULTS

TAMPA, Fla. (Feb. 4, 2016) — TECO Energy, Inc. (NYSE:TE) today reported fourth-quarter non-GAAP results from continuing operations, which exclude $1.5 million of acquisition-related costs, of $52.5 million, or $0.23 on a per-share basis, compared with $45.0 million, or $0.19 on a per-share basis in 2014.

Fourth-quarter 2015 net income was $50.5 million, or $0.21 per share, compared with $10.8 million, or $0.04 per share, in the fourth quarter of 2014. Net income from continuing operations was $51.0 million, or $0.22 per share, in the 2015 fourth quarter, compared with $27.4 million, or $0.11 per share, for the same period in 2014. The fourth quarter losses in discontinued operations of $0.5 million and $16.6 million in 2015 and 2014, respectively, reflect the operating results and charges associated with TECO Coal, which was sold on Sept. 21.

Full-year 2015 non-GAAP results from continuing operations, which exclude $15.0 million of acquisition-related costs, were $256.2 million, or $1.10 on a per-share basis, compared with $229.7 million, or $1.03 on a per-share basis in 2014.

Full-year net income was $173.5 million, or $0.74 per share, compared with net income of $130.4 million, or $0.58 per share in 2014. Net income from continuing operations was $241.2 million, or $1.03 per share, compared with $206.4 million or $0.92 per share in 2014. The full-year losses from discontinued operations were $67.7 million and $76.0 million in 2015 and 2014, respectively.

TECO Energy President and Chief Executive Officer John Ramil said, “Our operating companies recorded strong earnings in 2015, delivering per-share results almost 7% higher than last year. We continue to see robust customer growth in Florida, with the number of electric and gas customers up 1.8% and 2.1%, respectively. We also had continued success with our New Mexico Gas integration activities, resulting in accretive earnings in 2015, despite disappointing first quarter weather. At the same time, we are making good progress on obtaining the various approvals needed to close our transaction with Emera. TECO Energy’s shareholders approved the transaction in December, and all the other required regulatory filings have been made. With the approval schedule established in New Mexico, we expect to close the transaction this summer.”

Non-GAAP Results

Non-GAAP results in the fourth quarter and full-year periods of 2015 and 2014 exclude costs related to the pending acquisition by Emera, and costs associated with the integration and acquisition of New Mexico Gas Co. (NMGC). The table below compares the TECO Energy GAAP net income with the non-GAAP measures used in this release.

 

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Non-GAAP results exclude charges and gains contained in the Results Reconciliation table later in this release. See the Non-GAAP Presentation section and Results Reconciliation table later in this release for reconciliation to GAAP results and a discussion regarding this presentation of non-GAAP results and management’s use of this information.

All amounts included in the non-GAAP discussion below are after tax, unless otherwise noted.

 

		3 months ended Dec. 31								12 months ended Dec. 31
(millions)		2015				2014				2015				2014
Net income		$	50.5			$	10.8			$	173.5			$	130.4
Discontinued operations			(0.5	)			(16.6	)			(67.7	)			(76.0	)
Net income from continuing operations			51.0				27.4				241.2				206.4
Charges			1.5				17.6				15.0				23.3
Non-GAAP Results from continuing operations		$	52.5			$	45.0			$	256.2			$	229.7

Segment Reporting

The table below includes TECO Energy segment information on a GAAP basis, which includes all charges and gains for the periods shown.

Segment Information

 

(millions)		3 months ended Dec. 31								12 months ended Dec. 31
Net Income Summary		2015				2014				2015				2014
Tampa Electric		$	43.0			$	37.4			$	241.0			$	224.5
Peoples Gas System			6.9				8.9				35.3				35.8
New Mexico Gas Co. (1)			13.1				11.4				24.1				10.5
Other - net			(12.0	)			(30.3	)			(59.2	)			(64.4	)
Net income from continuing operations			51.0				27.4				241.2				206.4
Discontinued operations (2)			(0.5	)			(16.6	)			(67.7	)			(76.0	)
Total net income		$	50.5			$	10.8			$	173.5			$	130.4

 

1.	The 12-months-ended 2014 periods reflect results after the Sept. 2, 2014 closing of the NMGC acquisition.

2.	Discontinued operations for all periods shown include the operating results at TECO Coal, impairment charges and costs associated with the sale of TECO Coal.

All amounts included in the operating company discussions below are after tax, unless otherwise noted.

Tampa Electric

Tampa Electric’s net income for the fourth quarter of 2015 was $43.0 million, compared with $37.4 million for the same period in 2014. Results for the quarter reflected a 1.8% higher average number of customers, and higher energy sales primarily due to record high temperatures in November and December. Results reflected operations and maintenance expense slightly higher than 2014, and higher depreciation expense. Fourth-

 

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quarter net income in 2015 included $5.1 million of Allowance for Funds Used During Construction (AFUDC) equity, which represents allowed equity cost capitalized to construction costs, compared with $3.2 million in the 2014 quarter.

Total degree days in Tampa Electric’s service area in the fourth quarter of 2015 were 36% above normal, and 51% above the 2014 period, driven by record high temperatures in November and December. Total net energy for load increased 9.6% in the fourth quarter of 2015, compared with the same period in 2014. In the 2015 period, pretax base revenues were $15.7 million higher than in 2014, driven by customer growth and higher energy sales as warm weather produced significant air conditioning load. The quarter included almost $3 million of higher pretax base revenue from higher base rates, as a result of the 2013 rate case settlement.

While net energy for load, is a calendar measurement of retail energy sales rather than a billing-cycle measurement, the quarterly energy sales shown on the operating statistical summary that accompanies this earnings release reflect the energy sales based on billing cycles, which can vary period to period. Retail energy sales to residential and commercial customers increased primarily from the warm weather and customer growth. Sales to non-phosphate industrial customers increased due to the strength of the Tampa area economy. Sales to lower-margin industrial-phosphate customers increased as self-generation by those customers decreased due to outages at a customer’s facilities.

Operations and maintenance expense, excluding all Florida Public Service Commission (FPSC)-approved cost-recovery clauses, was slightly higher than in the 2014 quarter, reflecting higher costs to safely and reliably operate and maintain the generating, transmission and distribution systems, essentially offset by lower employee-related costs, primarily due to the level of short-term incentive accruals for all employees in 2015 compared to 2014. Results also include a $1.9 million loss on the disposition of small generating units no longer in service.

Depreciation and amortization expense increased $1.4 million in 2015, as a result of normal additions to facilities to reliably serve customers.

Full-year net income was $241.0 million, compared with $224.5 million in 2014, driven by 1.8% higher average number of customers and higher energy sales from customer growth, warmer than normal spring and early winter weather and a stronger economy. Higher operations and maintenance, depreciation and interest expenses partially offset the higher revenues. Full-year net income in 2015 included $17.2 million of AFUDC equity, compared with $10.5 million in 2014.

Full-year total degree days in Tampa Electric’s service area were 12% above normal and 17% above the prior full-year period. Pretax base revenues were more than $37 million higher than in 2014, including approximately $8 million of higher pretax base revenues as a result of the Nov.1, 2014 and 2015 base rate increases. In the 2015 full-year period, total net energy for load was 4.1% higher than in 2014. Higher energy sales were driven by more favorable weather in 2015 than in 2014.

Operations and maintenance expenses, excluding all FPSC-approved cost-recovery clauses, increased $5.4 million in the 2015 full-year period, reflecting higher costs to safely and reliably serve customers partially offset by lower employee-related expenses. Compared to 2014, depreciation and amortization expense increased $5.0 million, reflecting additions to facilities to serve customers. Interest expense increased $1.4 million due to higher long-term debt balances.

 

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Peoples Gas

Peoples Gas System (PGS) reported net income of $6.9 million for the fourth quarter, compared with $8.9 million in the 2014 quarter. Average customer growth was 2.0% in the quarter, and therm sales to retail customers decreased as a result of warm fall and early winter weather partially offset by customer growth and a stronger economy. Sales to power-generation customers and off-system sales increased due to levels of operation by gas-fired generation in the state due to the warm weather. As a result, total retail base revenues and off-system revenues (net of fuel) were unchanged from last year. Fourth-quarter results in 2015 reflected non-fuel operations and maintenance expense $2.4 million higher than in 2014, driven by higher operating costs, partially offset by lower employee-related costs, primarily due to the level of short-term incentive accruals for all employees in 2015 compared to 2014. Depreciation and amortization increased slightly due to normal additions to facilities to serve customers.

PGS reported net income of $35.3 million for the full-year period, compared with $35.8 million in 2014. Results reflect a 2.1% higher average number of customers, lower therm sales to residential customers due to warmer-than-normal spring and winter weather, and increased therm sales to commercial and industrial customers due to strong economic conditions in Florida. Sales to power generation customers and off-system sales increased due to the same reasons as in the fourth quarter. Non-fuel operations and maintenance expense increased $1.9 million compared to the 2014 period, driven by the same factors as the fourth quarter. Operations and maintenance expense in 2014 reflected a first-quarter recovery of $1.6 million of costs incurred in connection with a 2010 outage incident.

NMGC

NMGC reported fourth-quarter net income of $13.1 million, compared with $11.4 million in the 2014 period. Results reflected the benefit of 5% higher heating degree days, 0.8% higher average number of customers, and lower operating and maintenance expenses from acquisition synergies and a focus on cost control. Results included $1.3 million of pretax rate credits to customers under the Certification of Stipulation approved by the New Mexico Public Regulation Commission.

NMGC reported full-year 2015 net income of $24.1 million. Results reflected customer growth of 0.7% and much milder than normal winter weather in the first quarter partially offset by colder fourth quarter 2015 weather that resulted in degree days 5.5% below normal but 1.4% above 2014. Operations and maintenance expense was lower than in the 2014 period from acquisition synergies and a focus on cost control. Results included $2.7 million of pretax rate credits to customers. Net income of $10.5 million in 2014 reflects a partial year beginning with the Sept. 2, 2014 date of acquisition.

Other - net

The fourth quarter 2015 non-GAAP cost from continuing operations for Other – net of $10.5 million excluded $0.9 million of transaction costs related to the pending Emera acquisition and $0.6 million of costs associated with the integration of NMGC, compared with the non-GAAP cost of $12.7 million in 2014, which excluded $3.0 million of NMGC-related costs and a $14.6 million consolidated deferred income tax

 

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balance adjustment to reflect the then pending sale of TECO Coal. Fourth-quarter results in 2015 reflected lower income tax adjustments and lower interest expense as a result of refinancing debt maturities in May. The GAAP cost from continuing operations for Other – net in the fourth quarter of 2015 was $12.0 million, compared with a cost of $30.3 million in 2014.

The 2015 full-year non-GAAP cost from continuing operations for Other – net was $44.2 million, which excluded $13.1 million of transaction costs related to the pending Emera acquisition and $1.9 million of NMGC integration-related costs, compared with $41.1 million in 2014, which excluded $16.6 million of NMGC acquisition and integration-related costs, and net consolidated state deferred tax balance adjustments of $6.7 million. Cost drivers in the 2015 full-year period included $3.1 million of interest at New Mexico Gas Intermediate (the parent company of NMGC), $2.8 million of interest previously allocated to TECO Coal that was offset by lower interest expense on refinanced debt, and a $2.9 million tax expense related to long-term incentive compensation shares that vested below target levels. The 2015 full-year GAAP Other – net cost from continuing operations was $59.2 million, compared with $64.4 million in the 2014 period.

Discontinued Operations

The sale of TECO Coal closed in September 2015. The 2015 loss of $67.7 million recorded in discontinued operations reflects TECO Coal’s operating results prior to its sale, net impairment charges of $50.8 million recorded in the second quarter, and a $7.7 million charge related to black-lung liabilities recorded in the third quarter. Discontinued operations include fourth quarter costs of $0.5 million and $0.2 million in the 2015 and 2014 periods, respectively, and full-year benefits of $1.9 million and $6.0 million in the 2015 and 2014 periods, respectively, recorded in the Other – net segment.

Emera Acquisition Progress

 

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In October, TECO Energy and Emera filed for approval of the merger with the Federal Energy Regulatory Commission (FERC) requesting a decision in March 2016. On Jan. 20, 2016, the FERC issued an order authorizing the merger finding that it is consistent with the public interest.

 

•

On Oct. 19, 2015, TECO Energy and Emera filed for approval of the merger with the New Mexico Public Regulation Commission (NMPRC) Docket No. 15-00327-UT.

 

•

On Dec. 3, 2015, TECO Energy shareholders approved the merger with Emera.

 

•

On Dec. 11, 2015, the hearing examiner in the application with the NMPRC issued a Procedural Oder establishing a schedule for the case. The significant schedule dates are: direct testimony or a settlement to be filed April 22, 2016, and a public hearing is scheduled to begin May 23, 2016.

 

•

On Jan. 6, 2016, TECO Energy and Emera filed a Premerger Notification with the U.S. Department of Justice as required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR).

 

•

On Jan. 6, 2016, TECO Energy and Emera made the initial filings required to obtain approval of the merger with the Committee on Foreign Investment in the U.S. (CFIUS).

 

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2016 Business Drivers

Results in 2016 are expected to be driven by customer growth trends for all three utilities at or above the trends experienced in 2015. Tampa Electric and PGS are expected to continue to earn in the upper half of their allowed Return on Equity ranges of 9.25% to 11.25% and 9.75% to 11.75%, respectively. Expected results for all utilities assume normal weather.

On a weather normalized basis, energy sales at Tampa Electric are expected to increase about 0.3% to 0.5% below the rate of customer growth.

Depreciation expense at all three utilities is expected to increase from normal additions to facilities to safely and reliably serve customers. Tampa Electric expects higher AFUDC-equity earnings from the growing investment in the Polk Power Station conversion project.

Non-GAAP Presentation

Management believes it is helpful to present a non-GAAP measure of performance that reflects the ongoing operations of TECO Energy’s businesses and that allows investors to better understand and evaluate the business as it is expected to operate in future periods.

Management and the board of directors use non-GAAP measures as a tool for measuring the company’s performance, for making decisions that are dependent upon the profitability of the company’s various operating units, and for determining levels of incentive compensation.

The non-GAAP measures of financial performance used by the company are not measures of performance under accounting principles generally accepted in the United States and should not be considered an alternative to net income or other GAAP figures as an indicator of the company’s financial performance or liquidity. TECO Energy’s non-GAAP presentation of results from operations may not be comparable to similarly titled measures used by other companies.

The Results Reconciliation table below presents non-GAAP financial results after eliminating the effects of identified charges and gains. This provides investors additional information to assess the company’s results and future earnings potential.

 

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Results Reconciliation (millions)		3 months ended Dec. 31								12 months ended Dec. 31
		2015				2014				2015				2014
GAAP net income		$	50.5			$	10.8			$	173.5			$	130.4
Discontinued operations			(0.5	)			(16.6	)			(67.7	)			(76.0	)
Net income from continuing operations			51.0				27.4				241.2				206.4
Add consolidated deferred tax balance adjustment (net)			—				14.6				—				6.7
Add Emera transaction related costs			0.9				—				13.1				—
Add costs associated with the acquisition and integration of NMGC			0.6				3.0				1.9				16.6
Total charges			1.5				17.6				15.0				23.3
Non-GAAP results (1)		$	52.5			$	45.0			$	256.2			$	229.7

 

(1)	A non-GAAP financial measure is a numerical measure that includes or excludes amounts, or is subject to adjustments that have the effect of including or excluding amounts, from the most directly comparable GAAP measure.

TECO Energy Inc. (NYSE: TE) is an energy-related holding company with regulated electric and gas utilities in Florida and New Mexico. Tampa Electric serves nearly 725,000 customers in West Central Florida; Peoples Gas System serves nearly 365,000 customers across Florida; and New Mexico Gas Co. serves more than 515,000 customers across New Mexico.

Note: This press release contains forward-looking statements, which are subject to the inherent uncertainties in predicting future results and conditions. Actual results may differ materially from those forecasted. The forecasted results are based on the company’s current expectations and assumptions, and the company does not undertake to update that information or any other information contained in this press release, except as may be required by law. Factors that could impact actual results include: the ability to successfully close the merger with Emera on the anticipated schedule; regulatory actions by federal, state or local authorities; the ability to successfully implement the integration plans for NMGC and generate the financial results to make that acquisition accretive; unexpected capital needs or unanticipated reductions in cash flow that affect liquidity; the ability to access the capital and credit markets when required; general economic conditions affecting customer growth and energy sales at the utility companies; economic conditions affecting the Florida and New Mexico economies; weather variations and customer energy usage patterns affecting sales and operating costs at the utilities and the effect of weather conditions on energy consumption; the effect of extreme weather conditions or hurricanes; general operating conditions; input commodity prices affecting cost at all of the operating companies; natural gas demand at the utilities; and the ability of TECO Energy’s subsidiaries to operate equipment without undue accidents, breakdowns or failures. Additional information is contained under “Risk Factors” in TECO Energy, Inc.’s Annual Report on Form 10-K for the period ended Dec. 31, 2014, as updated in subsequent filings with the SEC.

 

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Summary Information (as of Dec. 31)

 

(millions except per share amounts)		Three Months Ended								Twelve Months Ended
		2015				2014				2015				2014
Revenues		$	676.1			$	695.5			$	2,743.5			$	2,566.4
Net income from continuing operations		$	51.0			$	27.4			$	241.2			$	206.4
Net income from discontinued operations			(0.5	)			(16.6	)			(67.7	)			(76.0	)
Net income		$	50.5			$	10.8			$	173.5			$	130.4
Earnings per share from continuing operations- basic		$	0.22			$	0.11			$	1.03			$	0.92
Earnings per share from discontinued operations – basic			(0.01	)			(0.07	)			(0.29	)			(0.34	)
Total earnings per share – basic		$	0.21			$	0.04			$	0.74			$	0.58
Total earnings per share – diluted		$	0.21			$	0.04			$	0.74			$	0.58
Average common shares outstanding – basic			233.4				232.5				233.1				223.1
Average common shares outstanding – diluted			234.9				233.1				234.5				223.7

 

Contact:		News Media: Cherie Jacobs – (813) 228-4945 Investor Relations: Mark Kane – (813) 228-1772 Internet: http://www.tecoenergy.com

 

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DECEMBER 2015

Figures appearing in these statements are presented as general information and not in connection with any sale or offer to sell or solicitation of an offer to buy any securities, nor are they intended as a representation by the company of the value of its securities. All figures reported are subject to adjustments as the annual audit by independent accountants may determine to be necessary and to the explanatory notes affecting income and balance sheet accounts contained in the company’s Annual Report on Form 10-K. Reference should also be made to information contained in that and other reports filed by TECO Energy, Inc. and Tampa Electric Company with the Securities and Exchange Commission.

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TECO ENERGY, Inc.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(All significant intercompany transactions have been eliminated in the consolidated financial statements.)

 

		Three Months Ended								Twelve Months Ended
		Dec. 31,								Dec. 31,
(millions except share data)		2015				2014				2015				2014
Revenues
Regulated electric and gas		$	672.8			$	692.9			$	2,731.7			$	2,557.3
Unregulated			3.3				2.6				11.8				9.1
Total revenues			676.1				695.5				2,743.5				2,566.4
Expenses
Regulated operations & maintenance
Fuel			146.1				168.5				638.6				692.3
Purchased power			18.4				12.3				78.9				71.4
Cost of natural gas sold			77.5				99.2				271.6				209.7
Other			164.7				162.5				613.2				547.8
Operations & maintenance other expense			3.9				6.9				22.7				29.5
Depreciation and amortization			88.7				85.3				349.0				315.3
Taxes, other than income			50.8				48.7				207.4				195.0
Total expenses			550.1				583.4				2,181.4				2,061.0
Income from operations			126.0				112.1				562.1				505.4
Other income (expense)
Allowance for other funds used during construction			5.2				3.2				17.4				10.5
Other income			(1.0	)			0.9				3.4				0.5
Total other income			4.2				4.1				20.8				11.0
Interest charges
Interest expense			48.7				49.6				195.1				176.4
Allowance for borrowed funds used during construction			(2.7	)			(1.7	)			(8.7	)			(5.3	)
Total interest charges			46.0				47.9				186.4				171.1
Income before provision for income taxes			84.2				68.3				396.5				345.3
Provision for income taxes			33.2				40.9				155.3				138.9
Income from continuing operations			51.0				27.4				241.2				206.4
Discontinued operations
Loss from discontinued operations			(0.8	)			(27.8	)			(106.3	)			(125.4	)
Benefit from income taxes			(0.3	)			(11.2	)			(38.6	)			(49.4	)
Loss from discontinued operations, net			(0.5	)			(16.6	)			(67.7	)			(76.0	)
Net income		$	50.5			$	10.8			$	173.5			$	130.4
Average common shares outstanding - basic (millions)			233.4				232.5				233.1				223.1
Average common shares outstanding - diluted (millions)			234.9				233.1				234.5				223.7
Earnings per average common share outstanding:
Earnings per share from continuing operations — basic		$	0.22			$	0.11			$	1.03			$	0.92
Earnings per share from continuing operations — diluted		$	0.22			$	0.11			$	1.03			$	0.92
Earnings per share from discontinued operations — basic		($	0.01	)		($	0.07	)		($	0.29	)		($	0.34	)
Earnings per share from discontinued operations — diluted		($	0.01	)		($	0.07	)		($	0.29	)		($	0.34	)
Earnings per share attributable to TECO Energy — basic		$	0.21			$	0.04			$	0.74			$	0.58
Earnings per share attributable to TECO Energy — diluted		$	0.21			$	0.04			$	0.74			$	0.58

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TECO ENERGY, Inc.

CONSOLIDATED BALANCE SHEETS (Unaudited)

(All significant intercompany transactions have been eliminated in the consolidated financial statements.)

 

		Dec. 31,				Dec. 31,
(millions)		2015				2014
Assets
Current assets
Cash and cash equivalents		$	23.8			$	25.4
Receivables			280.7				299.8
Inventories at average cost
Fuel			113.4				96.4
Materials and supplies			76.8				75.4
Deferred income taxes			0.0				72.8
Prepayments and other current assets			30.8				22.6
Regulatory assets			44.8				53.6
Assets held for sale			0.0				109.6
Total current assets			570.3				755.6
Property, plant and equipment
Utility plant in service
Electric			7,270.3				7,094.8
Gas			2,113.8				1,984.6
Construction work in progress			794.7				640.0
Other property			15.9				14.5
Property plant and equipment at original cost			10,194.7				9,733.9
Accumulated depreciation			(2,712.9	)			(2,645.7	)
Total property, plant and equipment, net			7,481.8				7,088.2
Other assets
Regulatory assets			395.2				348.5
Goodwill			408.4				408.3
Deferred charges and other assets			105.4				65.8
Assets held for sale			0.0				59.8
Total other assets			909.0				882.4
Total assets		$	8,961.1			$	8,726.2
Liabilities and capital
Current liabilities
Long-term debt due within one year		$	333.3			$	274.5
Notes payable			247.0				139.0
Accounts payable			255.4				288.6
Other current liabilities			22.6				16.8
Customer deposits			182.1				176.2
Derivative liabilities			24.1				36.6
Interest accrued			36.2				39.9
Taxes accrued			13.2				29.9
Regulatory liabilities			84.8				57.0
Liabilities associated with assets held for sale			0.0				39.4
Total current liabilities			1,198.7				1,097.9
Other liabilities
Deferred income taxes			570.7				519.2
Investment tax credits			10.5				9.0
Regulatory liabilities			715.8				729.0
Derivative liabilities			2.1				6.1
Deferred credits and other liabilities			387.4				370.9
Liabilities associated with assets held for sale			0.0				65.4
Long-term debt, less amount due within one year			3,516.9				3,354.0
Total other liabilities			5,203.4				5,053.6
Total liabilities			6,402.1				6,151.5
Capital
Common equity			235.3				234.9
Additional paid in capital			1,894.5				1,875.9
Retained earnings			441.4				479.6
Accumulated other comprehensive loss			(12.2	)			(15.7	)
Total capital			2,559.0				2,574.7
Total liabilities and capital		$	8,961.1			$	8,726.2
Book Value Per Share		$	10.88			$	10.96

---

TECO ENERGY, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(All significant intercompany transactions have been eliminated in the consolidated financial statements.)

 

		Three Months Ended								Twelve Months Ended
		Dec. 31,								Dec. 31,
(millions)		2015				2014				2015				2014
Cash flows from operating activities
Net income		$	50.5			$	10.8			$	173.5			$	130.4
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization			88.7				86.2				350.2				341.9
Deferred income taxes & Investment tax credits			32.9				31.0				117.5				89.4
Allowance for other funds used during construction			(5.2	)			(3.2	)			(17.4	)			(10.5	)
Non-cash stock compensation			3.0				2.5				13.1				12.7
Loss (gain) on disposals of business / assets, pretax			3.2				0.0				13.2				(0.2	)
Deferred recovery clause			13.3				(9.7	)			26.4				(15.2	)
Asset impairment, pretax			0.0				17.5				78.6				115.9
Receivables, less allowance for uncollectibles			(10.1	)			(10.7	)			36.0				(36.6	)
Inventories			23.1				22.4				(22.6	)			12.8
Prepayments and other current assets			6.2				8.3				(8.0	)			2.8
Taxes accrued			(47.5	)			(47.5	)			(15.9	)			1.1
Interest accrued			(18.3	)			(20.5	)			(3.6	)			7.3
Accounts payable			24.1				52.8				(61.6	)			23.4
Other			(33.7	)			18.7				(69.8	)			(10.4	)
			130.2				158.6				609.6				664.8
Cash flows from investing activities
Capital expenditures			(228.7	)			(219.3	)			(739.7	)			(703.8	)
Purchase of a business, net of cash acquired			0.0				1.0				0.0				(751.5	)
Net proceeds from sale of business / assets			0.0				(0.1	)			0.0				0.2
Other investments			(0.1	)			(7.9	)			(0.3	)			(7.9	)
			(228.8	)			(226.3	)			(740.0	)			(1,463.0	)
Cash flows from financing activities
Dividends paid			(52.9	)			(51.7	)			(211.7	)			(199.2	)
Proceeds from sale of common stock			0.9				5.7				7.3				302.3
Proceeds from long-term debt			0.0				(0.6	)			499.7				563.6
Repayment of long-term debt / Purchase in lieu of redemption			0.0				0.0				(274.5	)			(83.3	)
Net increase in short-term debt			119.0				67.0				108.0				55.0
			67.0				20.4				128.8				638.4
Net decrease in cash and cash equivalents			(31.6	)			(47.3	)			(1.6	)			(159.8	)
Cash and cash equivalents at beginning of period			55.4				72.7				25.4				185.2
Cash and cash equivalents at end of period		$	23.8			$	25.4			$	23.8			$	25.4
Supplemental disclosure of non-cash activities
Debt assumed in NMGI acquisition		$	0.0			$	0.0			$	0.0			$	200.0
Change in accrued capital expenditures - excluded above		$	16.1			$	3.1			$	8.0			$	13.3

---

TECO ENERGY, Inc.

SEGMENT INFORMATION (Unaudited)

 

				Tampa				Peoples				TECO				New Mexico Gas												TECO
(millions)				Electric				Gas				Coal				Company (4)				Other (5)				Eliminations (5)				Energy
Three months ended Dec. 31,
2015		Revenues - outsiders		$	474.1			$	99.5			$	—			$	99.8			$	2.7			$	—			$	676.1
		Sales to affiliates			1.0				1.5				—				—				—				(2.5	)			—
		Total revenues			475.1				101.0				—				99.8				2.7				(2.5	)			676.1
		Depreciation and amortization			65.2				14.5				—				8.5				0.5				—				88.7
		Total interest charges (2)			23.9				3.7				—				3.2				15.5				(0.3	)			46.0
		Allocated interest expense (2)			—				—				—				—				0.3				(0.3	)			—
		Provision (Benefit) for income taxes			27.3				4.4				—				8.3				(6.8	)			—				33.2
		Net income (loss) from continuing operations			43.0				6.9				—				13.1				(12.0	)			—				51.0
		Income (loss) from discontinued operations, net of tax (3)			—				—				—				—				(0.5	)			—				(0.5	)
		Net income (loss) (1)		$	43.0			$	6.9			$	—			$	13.1			$	(12.5	)		$	—			$	50.5
2014		Revenues - outsiders		$	473.0			$	98.5			$	—			$	121.3			$	2.7			$	—			$	695.5
		Sales to affiliates			0.3				0.5				—				—				—				(0.8	)			—
		Total revenues			473.3				99.0				—				121.3				2.7				(0.8	)			695.5
		Depreciation and amortization			63.0				13.7				—				8.2				0.4				—				85.3
		Total interest charges (2)			23.7				3.5				—				3.1				17.8				(0.2	)			47.9
		Allocated interest expense (2)			—				—				—				—				0.2				(0.2	)			—
		Provision (Benefit) for income taxes			21.0				5.7				—				7.6				6.6				—				40.9
		Net income (loss) from continuing operations			37.4				8.9				—				11.4				(30.3	)			—				27.4
		Income (loss) from discontinued operations, net of tax (3)			—				—				(16.4	)			—				(0.2	)			—				(16.6	)
		Net income (loss) (1)		$	37.4			$	8.9			$	(16.4	)		$	11.4			$	(30.5	)		$	—			$	10.8
Twelve months ended Dec. 31,
2015		Revenues - outsiders		$	2,014.9			$	401.5			$	—			$	316.5			$	10.6			$	—			$	2,743.5
		Sales to affiliates			3.4				6.0				—				—				0.1				(9.5	)			—
		Total revenues			2,018.3				407.5				—				316.5				10.7				(9.5	)			2,743.5
		Depreciation and amortization			256.7				56.8				—				33.8				1.7				—				349.0
		Total interest charges (2)			95.1				14.5				—				13.0				65.1				(1.3	)			186.4
		Allocated interest expense (2)			—				—				—				—				1.3				(1.3	)			—
		Provision (Benefit) for income taxes			143.6				21.9				—				15.4				(25.6	)			—				155.3
		Net income (loss) from continuing operations			241.0				35.3				—				24.1				(59.2	)			—				241.2
		Income (loss) from discontinued operations, net of tax (3)			—				—				(69.6	)			—				1.9				—				(67.7	)
		Net income (loss) (1)		$	241.0			$	35.3			$	(69.6	)		$	24.1			$	(57.3	)		$	—			$	173.5
2014		Revenues - outsiders		$	2,019.9			$	398.5			$	—			$	137.5			$	10.5			$	—			$	2,566.4
		Sales to affiliates			1.1				1.1				—				—				0.2				(2.4	)			—
		Total revenues			2,021.0				399.6				—				137.5				10.7				(2.4	)			2,566.4
		Depreciation and amortization			248.6				54.0				—				11.0				1.7				—				315.3
		Total interest charges (2)			92.8				13.8				—				4.2				66.1				(5.8	)			171.1
		Allocated interest expense (2)			—				—				—				—				5.8				(5.8	)			—
		Provision (Benefit) for income taxes			133.2				22.7				—				7.1				(24.1	)			—				138.9
		Net income (loss) from continuing operations			224.5				35.8				—				10.5				(64.4	)			—				206.4
		Income (loss) from discontinued operations, net of tax (3)			—				—				(82.0	)			—				6.0				—				(76.0	)
		Net income (loss) (1)		$	224.5			$	35.8			$	(82.0	)		$	10.5			$	(58.4	)		$	—			$	130.4

 

(1)	Results are based on GAAP net income. For a complete reconciliation between GAAP and non-GAAP items, see Results Reconciliation in Earnings Release.

(2)

Segment net income is reported on a basis that includes internally allocated financing costs. Internally allocated costs were at pretax rates of 6.00% for 2015 and 2014. Rates were based on the average of each subsidiary’s equity and indebtedness to TECO Energy assuming a 50/50 debt/equity capital structure. Internally allocated interest charges are a component of total interest charges.

(3)	All periods have been adjusted to reflect the reclassification of results from operations to discontinued operations for TECO Coal, along with certain charges at Other, including Parent and TECO Diversified, that directly relate to TECO Coal and TECO Guatemala.

(4)	Results for New Mexico Gas Company are reflective of results since the date of acquisition, Sep. 2, 2014.

(5)	Represents a change in presentation to segment previously combined and reported as Other & Eliminations.

---

TAMPA ELECTRIC COMPANY

ELECTRIC OPERATING STATISTICS (Unaudited)

 

		Operating Revenues*												Sales — Kilowatt-hours*
Three Months Ended Dec. 31,		2015				2014				Percent Change				2015				2014				Percent Change
Residential		$	247,667			$	229,978				7.7				2,146,182				1,964,382				9.3
Commercial			153,095				146,735				4.3				1,587,043				1,488,904				6.6
Industrial — Phosphate			14,818				12,636				17.3				183,467				153,800				19.3
Industrial — Other			26,745				25,877				3.4				301,656				287,088				5.1
Other sales of electricity			45,523				45,445				0.2				461,368				452,181				2.0
			487,848				460,671				5.9				4,679,716				4,346,355				7.7
Deferred and other revenues			(27,354	)			(6,172	)			(343.2	)			—				—				—
Provision for Revenue Stipulation			—				—				—				—				—				—
Sales for resale			654				3,254				(79.9	)			25,582				87,826				(70.9	)
Other operating revenue			13,919				15,543				(10.4	)			—				—				—
SO2 Allowance Sales			—				—				—				—				—				—
NOx Allowance Sales			—				—				—				—				—				—
		$	475,067			$	473,296				0.4				4,705,298				4,434,181				6.1
Average customers			722,826				709,873				1.8				—				—				—
Retail Net Energy For Load															4,758,271				4,342,208				9.6
Total Degree Days															1,029				682				50.9
		Operating Revenues*												Sales — Kilowatt-hours*
Twelve Months Ended Dec. 31,		2015				2014				Percent Change				2015				2014				Percent Change
Residential		$	1,040,263			$	1,007,570				3.2				9,045,021				8,655,850				4.5
Commercial			608,003				602,093				1.0				6,300,667				6,142,206				2.6
Industrial — Phosphate			53,079				59,912				(11.4	)			655,239				737,576				(11.2	)
Industrial — Other			107,082				104,581				2.4				1,214,302				1,163,210				4.4
Other sales of electricity			177,190				181,897				(2.6	)			1,791,245				1,826,897				(2.0	)
			1,985,617				1,956,053				1.5				19,006,474				18,525,739				2.6
Deferred and other revenues			(28,791	)			(7,502	)			(283.8	)			—				—				—
Provision for Revenue Stipulation			—				—				—				—				—				—
Sales for resale			3,721				12,955				(71.3	)			115,288				259,172				(55.5	)
Other operating revenue			57,721				59,493				(3.0	)			—				—				—
SO2 Allowance Sales			—				1				(100.0	)			—				—				—
NOx Allowance Sales			—				—				—				—				—				—
		$	2,018,268			$	2,021,000				(0.1	)			19,121,762				18,784,911				1.8
Average customers			718,713				706,161				1.8				—				—				—
Retail Net Energy For Load															20,103,257				19,314,740				4.1
Total Degree Days															4,729				4,038				17.1

 

*	in thousands

---

PEOPLES GAS SYSTEM

GAS OPERATING STATISTICS (Unaudited)

 

		Operating Revenues*												Therms*
Three Months Ended Dec. 31,		2015				2014				Percent Change				2015				2014				Percent Change
By Customer Segment:
Residential		$	32,914			$	37,534				(12.3	)			17,011				21,562				(21.1	)
Commercial			33,934				34,311				(1.1	)			116,706				117,226				(0.4	)
Industrial			3,204				3,205				0.0				73,833				72,359				2.0
Off System Sales			14,123				8,532				65.5				53,688				20,262				165.0
Power generation			1,566				1,187				31.9				190,686				149,322				27.7
Other revenues			12,052				11,740				2.7				—				—				—
		$	97,793			$	96,509				1.3				451,924				380,731				18.7
By Sales Type:
System supply		$	55,775			$	55,771				0.0				76,616				48,795				57.0
Transportation			29,966				28,998				3.3				375,308				331,936				13.1
Other revenues			12,052				11,740				2.7				—				—				—
		$	97,793			$	96,509				1.3				451,924				380,731				18.7
Average customers			362,918				355,902				2.0				—				—				—
		Operating Revenues*												Therms*
Twelve Months Ended Dec. 31,		2015				2014				Percent Change				2015				2014				Percent Change
By Customer Segment:
Residential		$	137,024			$	144,117				(4.9	)			74,892				80,775				(7.3	)
Commercial			138,801				139,075				(0.2	)			470,777				460,510				2.2
Industrial			12,978				13,101				(0.9	)			288,969				274,283				5.4
Off System Sales			49,822				39,358				26.6				166,430				84,026				98.1
Power generation			7,198				6,794				5.9				758,288				643,512				17.8
Other revenues			50,491				48,472				4.2				—				—				—
		$	396,314			$	390,917				1.4				1,759,356				1,543,106				14.0
By Sales Type:
System supply		$	225,348			$	225,723				(0.2	)			268,672				194,225				38.3
Transportation			120,475				116,722				3.2				1,490,684				1,348,881				10.5
Other revenues			50,491				48,472				4.2				—				—				—
		$	396,314			$	390,917				1.4				1,759,356				1,543,106				14.0
Average customers			361,178				353,903				2.1				—				—				—

 

*	in thousands

---

NEW MEXICO GAS COMPANY

GAS OPERATING STATISTICS (Unaudited)

 

		Operating Revenues*								Therms*
Three Months Ended Dec. 31,		2015				2014				Percent Change				2015				2014				Percent Change
By Customer Segment:
Residential		$	73,159			$	88,787				(17.6	)			108,580				100,509				8.0
Commercial			17,812				23,742				(25.0	)			34,877				33,507				4.1
Industrial			689				824				(16.4	)			1,521				1,355				12.3
Off System Sales			—				—				—				—				—				—
On System Transportation			6,280				6,108				2.8				100,607				91,302				10.2
Off System Transportation			236				226				4.4				12,460				11,973				4.1
Other revenues			1,686				1,667				1.1				—				—				—
		$	99,862			$	121,354				(17.7	)			258,045				238,646				8.1
By Sales Type:
System supply		$	91,660			$	113,353				(19.1	)			144,978				135,371				7.1
Transportation			6,516				6,334				2.9				113,067				103,275				9.5
Other revenues			1,686				1,667				1.1				—				—				—
		$	99,862			$	121,354				(17.7	)			258,045				238,646				8.1
Average customers			517,258				513,403				0.8
Total Degree Days															1,693				1,605				5.5
		Operating Revenues*								Therms*
Twelve Months Ended Dec. 31,		2015				2014 (1)				Percent Change				2015				2014 (1)				Percent Change
By Customer Segment:
Residential		$	229,166			$	281,051				(18.5	)			291,236				284,429				2.4
Commercial			59,598				83,054				(28.2	)			104,359				108,913				(4.2	)
Industrial			1,202				1,866				(35.6	)			2,557				2,967				(13.8	)
Off System Sales			308				2,175				(85.8	)			1,200				4,251				(71.8	)
On System Transportation			19,114				19,302				(1.0	)			328,673				329,726				(0.3	)
Off System Transportation			903				895				0.9				47,196				46,956				0.5
Other revenues			6,243				6,496				(3.9	)			—				—				—
		$	316,534			$	394,839				(19.8	)			775,221				777,242				(0.3	)
By Sales Type:
System supply		$	290,274			$	368,146				(21.2	)			399,352				400,560				(0.3	)
Transportation			20,017				20,197				(0.9	)			375,869				376,682				(0.2	)
Other revenues			6,243				6,496				(3.9	)			—				—				—
		$	316,534			$	394,839				(19.8	)			775,221				777,242				(0.3	)
Average customers			516,066				512,471				0.7
Total Degree Days															4,090				4,035				1.4

 

(1)	Information presented for 2014 is for comparative purposes only, as this was before the date of acquisition (Sep. 2, 2014).

*	in thousands