FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
X Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1994
OR
Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period _____ to _____
Commission File Number 1-8180
TECO ENERGY, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-2052286
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
TECO Plaza
702 N. Franklin Street
Tampa, Florida 33602
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (813) 228-4111
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, $1.00 par value New York Stock Exchange
Common Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the 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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K.
The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of February 28, 1995 was $2,500,700,067.
Number of shares of the registrant's common stock outstanding as of
February 28, 1995 was 116,311,631.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Definitive Proxy Statement relating to the 1995 Annual
Meeting of Shareholders of the registrant are incorporated by reference
into Part III.<PAGE>
PART I
Item 1. BUSINESS.
TECO ENERGY
TECO Energy, Inc. (TECO Energy) was incorporated in Florida in 1981,
as part of a restructuring in which it became the parent corporation of
Tampa Electric Company (Tampa Electric).
TECO Energy currently owns no operating assets but holds all of the
common stock of Tampa Electric and the other subsidiaries listed below.
TECO Energy is a public utility holding company exempt from registration
under the Public Utility Holding Company Act of 1935.
TECO Energy has five principal, directly-owned subsidiaries:
Tampa Electric, a Florida corporation and TECO Energy's largest
subsidiary, is an electric utility that serves more than 491,000 retail
customers in West Central Florida with a net system generating capability
of 3,393 megawatts (MWs).
TECO Diversified, Inc. (TECO Diversified), a Florida corporation
formed in 1987, has four subsidiaries that conduct a substantial portion of
the diversified activities of TECO Energy: TECO Coal Corporation (TECO
Coal), TECO Coalbed Methane, Inc. (TECO Coalbed Methane), TECO Properties
Corporation (TECO Properties) and TECO Transport & Trade Corporation (TECO
Transport).
TECO Power Services Corporation (TECO Power Services), a Florida
corporation formed in 1987, has subsidiaries that own and operate an
independent power project in Florida and are building a power generating
facility in Guatemala. TECO Power Services also seeks other opportunities
both in and outside Florida to develop other independent power and
cogeneration projects.
TECO Investments, Inc. (TECO Investments), a Florida corporation
formed in 1987, invests capital in short- and long-term financial
investments.
TECO Finance, Inc. (TECO Finance), a Florida corporation formed
in 1987, is a source of debt capital for the diversified activities of TECO
Energy.
For financial information regarding TECO Energy's significant business
segments see Note J on page 53.
TECO Energy and its subsidiaries had 4,440 employees as of Jan. 1,
1995.
2<PAGE>
TAMPA ELECTRIC
T a m pa Electric was incorporated in Florida in 1899 and was
reincorporated in 1949. Tampa Electric is a public utility operating wholly
within the state of Florida and is engaged in the generation, purchase,
transmission, distribution and sale of electric energy. The retail
territory served comprises an area of about 2,000 square miles in West
Central Florida, including substantially all of Hillsborough County and
parts of Polk, Pasco and Pinellas Counties, and has an estimated population
of over one million. The principal communities served are Tampa, Winter
Haven, Plant City and Dade City. In addition, the utility engages in
wholesale sales to other utilities which consist of broker economy,
requirements and other types of service of varying duration and priority.
Tampa Electric has three electric generating stations in or near Tampa and
two electric generating stations located near Sebring, a city located in
Highlands County in South Central Florida.
Tampa Electric had 2,828 employees as of Jan. 1, 1995, of which 1,154
were represented by the International Brotherhood of Electrical Workers
(IBEW) and 333 by the Office and Professional Employees International
Union.
In 1994, approximately 46 percent of Tampa Electric's total operating
revenue was derived from residential sales, 29 percent from commercial
sales, 10 percent from industrial sales and 15 percent from other sales
including bulk power sales for resale.
The sources of operating revenue for the years indicated were as
follows:
(thousands of dollars) 1994 1993 1992
Residential $ 505,491 $ 464,096 $ 444,961
Commercial 316,772 298,281 287,422
Industrial-Phosphate 58,282 55,116 70,175
Industrial-Other 49,946 48,906 46,497
Sales for resale 70,433 76,055 72,957
Other 93,941 98,850 83,770
$1,094,865 $1,041,304 $1,005,782
No material part of Tampa Electric's business is dependent upon a
single customer or a few customers, the loss of any one or more of whom
would have a materially adverse effect on Tampa Electric, except that 8
customers in the phosphate industry accounted for 5 percent of operating
revenues in 1994.
Tampa Electric's business is not a seasonal one, but winter peak loads
are experienced due to fewer daylight hours and colder temperatures, and
summer peak loads are experienced due to use of air conditioning and other
cooling equipment.
3<PAGE>
Regulation
The retail operations of Tampa Electric are regulated by the Florida
Public Service Commission (FPSC), which has jurisdiction over retail rates,
the quality of service, issuances of securities, planning, siting and
construction of facilities, accounting and depreciation practices and other
matters.
Tampa Electric is also subject to regulation by the Federal Energy
Regulatory Commission (FERC) in various respects including wholesale power
sales, certain wholesale power purchases, transmission services and
accounting and depreciation practices.
Federal, state and local environmental laws and regulations cover air
quality, water quality, land use, power plant, substation and transmission
line siting, noise and aesthetics, solid waste and other environmental
matters. See Environmental Matters on pages 7 and 8.
TECO Transport and TECO Coal subsidiaries sell transportation services
and coal to Tampa Electric and to third parties. The transactions between
Tampa Electric and these affiliates and the prices paid by Tampa Electric
are subject to regulation by the FPSC and FERC, and any charges deemed to
be imprudently incurred may not be allowed to be billed to Tampa Electric's
customers. See Utility Regulation on pages 28 and 29. Except for
transportation services performed by TECO Transport under the U.S. bulk
cargo preference program, the prices charged by TECO Transport and TECO
Coal subsidiaries to third-party customers are not subject to regulatory
oversight.
Competition
Tampa Electric's retail business is substantially free from direct
competition with other electric utilities, municipalities and public
agencies. At the present time, the principal form of competition at the
retail level consists of the self-generation option available to larger
industrial users of electric energy. Tampa Electric anticipates that such
users, and possibly commercial and residential customers as well, may seek
to expand their options through legislative and/or regulatory initiatives
that would permit competition at the retail level. Tampa Electric intends
to take all appropriate actions to retain and expand its retail business
and to continue its efforts to reduce costs and provide high quality
service to retail customers.
There is presently active competition in the wholesale power markets,
and this is increasing, largely as a result of the Energy Policy Act of
1992 and related federal initiatives. This Act removed certain regulatory
barriers to independent power producers under the Public Utility Holding
Company Act of 1935 and required utilities to transmit power from such
producers, utilities and others to wholesale customers under certain
circumstances. In a related development, the two largest electric utilities
in Florida have filed new transmission tariffs with FERC. Tampa Electric is
challenging various aspects of these tariffs on the grounds that they have
anti-competitive effects which adversely affect wholesale power markets and
Tampa Electric's ability to compete for wholesale power sales. In addition
to these initiatives, Tampa Electric continues its efforts to increase its
wholesale business by reducing costs and maintaining competitive prices.
4<PAGE>
Retail Pricing
In general, the FPSC's pricing objective is to set rates at a level
that allows the utility to collect total revenues (revenue requirements)
equal to its cost of providing service, including a reasonable return on
invested capital.
The basic costs, other than fuel and purchased power, of providing
electric service are recovered through base rates, which are designed to
recover the costs of owning, operating and maintaining the utility system.
These costs include operation and maintenance expenses, depreciation and
taxes, as well as a return on Tampa Electric's investment in assets used
and useful in providing electric service (rate base). The rate of return on
rate base, which is intended to approximate Tampa Electric's weighted cost
of capital, includes its costs for debt and preferred stock, deferred
income taxes at a zero cost rate and an allowed return on common equity.
Base prices are determined in FPSC price setting hearings that occur at
irregular intervals at the initiative of Tampa Electric, the FPSC or other
parties.
Fuel and certain purchased power costs are recovered through levelized
monthly charges established pursuant to the FPSC's fuel adjustment and cost
recovery clauses. These charges, which are reset semi-annually in an FPSC
hearing, are based on estimated costs of fuel and purchased power and
estimated customer usage for a specific recovery period, with a true-up
adjustment to reflect the variance of actual costs from the projected
charges for prior periods.
The FPSC may disallow recovery of any costs that it considers
imprudently incurred.
Certain non-fuel costs and the accelerated recovery of the costs of
conversion from oil-fired to coal-fired generation at Tampa Electric's
Gannon Station are recovered through the FPSC's oil backout clause.
A c c elerated recovery of this project's costs is obtained through
accelerated depreciation, which is permitted in an amount equal to
two-thirds of the net fuel savings of the project. The remaining one-third
of the savings is realized on a current basis by customers through the fuel
adjustment clause. See further discussion in Note A on page 37.
Fuel
About 99 percent of Tampa Electric's generation for 1994 was from its
coal-fired units. The same level is anticipated for 1995.
Tampa Electric's average fuel cost per million BTU and average cost
per ton of coal burned have been as follows:
Average cost
per million BTU: 1994 1993 1992 1991 1990
Coal $ 2.22 $ 2.26 $ 2.23 $ 2.22 $ 2.11
Oil $ 2.49 $ 2.69 $ 2.76 $ 3.21 $ 5.21
Gas -- $ 3.52 $ 2.43 $ 1.98 --
Composite $ 2.22 $ 2.27 $ 2.24 $ 2.25 $ 2.14
Average cost per ton
of coal burned $53.39 $54.55 $53.65 $53.87 $51.07
5<PAGE>
Tampa Electric's generating stations burn fuels as follows: Gannon
Station burns low-sulfur coal; Big Bend Station burns coal of a somewhat
higher sulfur content; Hookers Point Station burns low-sulfur oil; Phillips
Station burns oil of a somewhat higher sulfur content; and Dinner Lake
Station, which was placed on long-term reserve standby in March 1994, burns
natural gas and oil.
Coal. Tampa Electric burned approximately 6.8 million tons of coal
during 1994 and estimates that its coal consumption will be 6.9 million
tons for 1995. During 1994, Tampa Electric purchased approximately 76
percent of its coal under long-term contracts with seven suppliers,
including TECO Coal, and 24 percent of its coal in the spot market or under
intermediate-term purchase agreements. About 28 percent of Tampa Electric's
1994 coal requirements were supplied by TECO Coal. During December 1994,
the average delivered cost of coal (including transportation) was $52.40
per ton, or $2.18 per million BTU. Tampa Electric expects to obtain
approximately 69 percent of its coal requirements in 1995 under long-term
contracts with six suppliers, including TECO Coal, and the remaining 31
percent in the spot market. Tampa Electric's long-term coal contracts
provide for revisions in the base price to reflect changes in a wide range
of cost factors and for suspension or reduction of deliveries if
environmental regulations should prevent Tampa Electric from burning the
coal supplied, provided that a good faith effort has been made to continue
burning such coal. Tampa Electric estimates that about 23 percent of its
1995 coal requirements will be supplied by TECO Coal. For information
concerning transportation services and sales of coal by affiliated
companies to Tampa Electric, see TECO Coal on pages 8 and 9 and TECO
Transport on pages 10 and 11.
In 1994, about 85 percent of Tampa Electric's coal supply was
d e ep-mined and approximately 15 percent was surface-mined. Federal
surface-mining laws and regulations have not had any material adverse
impact on Tampa Electric's coal supply or results of its operations. Tampa
Electric, however, cannot predict the effect on the market price of coal of
any future mining laws and regulations. Although there are reserves of
surface-mineable coal dedicated by suppliers to Tampa Electric's account,
h i g h -quality coal reserves in Kentucky that can be economically
surface-mined are being depleted and in the future more coal will be
deep-mined. This trend is not expected to result in any significant
additional costs to Tampa Electric.
Oil. Tampa Electric has supply agreements through Dec. 31, 1995 for
No. 2 fuel oil and No. 6 fuel oil for its four combustion turbine units,
Hookers Point Station and Phillips Station at prices based on Gulf Coast
Cargo spot prices. The price for No. 2 fuel oil deliveries taken in
December 1994 was $23.00 per barrel, or $3.96 per million BTU. The price
for No. 6 fuel oil deliveries taken in August 1994 was $15.10 per barrel,
or $2.39 per million BTU. There were no No. 6 fuel oil deliveries taken
from September through December 1994.
Franchises
Tampa Electric holds franchises and other rights that, together with
its charter powers, give it the right to carry on its retail business in
the localities it serves. The franchises are irrevocable and are not
subject to amendment without the consent of Tampa Electric, although, in
certain events, they are subject to forfeiture.
6<PAGE>
Florida municipalities are prohibited from granting any franchise for
a term exceeding 30 years. If a franchise is not renewed by a municipality,
the franchisee has the statutory right to require the municipality to
purchase any and all property used in connection with the franchise at a
v a l u ation to be fixed by arbitration. In addition, all of the
municipalities except for the cities of Tampa and Winter Haven have
reserved the right to purchase Tampa Electric's property used in the
exercise of its franchise, if the franchise is not renewed.
T a m pa Electric has franchise agreements with 13 incorporated
municipalities within its retail service area. These agreements have
various expiration dates ranging from December 2005 to September 2021,
including the agreement with the city of Tampa, which expires in August
2006. Tampa Electric has no reason to believe that any of these franchises
will not be renewed.
Franchise fees payable by Tampa Electric, which totaled $19.9 million
in 1994, are calculated using a formula based primarily on electric
revenues.
Utility operations in Hillsborough, Pasco, Pinellas and Polk Counties
outside of incorporated municipalities are conducted in each case under one
or more permits to use county rights-of-way granted by the county
commissioners of such counties. There is no law limiting the time for which
such permits may be granted by counties. There are no fixed expiration
dates for the Hillsborough County and Pinellas County agreements. The
agreements covering electric operations in Pasco and Polk counties expire
in September 2033 and March 2005, respectively.
Environmental Matters
Tampa Electric's operations are subject to county, state and federal
environmental regulations. The Hillsborough County Environmental Protection
C o mmission and the Florida Environmental Regulation Commission are
responsible for promulgating environmental regulations and coordinating
most of the environmental regulation functions performed by the various
departments of state government. The Florida Department of Environmental
Protection (FDEP) is responsible for the administration and enforcement of
the state regulations. The U.S. Environmental Protection Agency (EPA) is
the primary federal agency with environmental responsibility.
Tampa Electric has all required environmental permits. In addition, a
monitoring program is in place to assure compliance with permit conditions.
The company has been identified as one of numerous potentially responsible
parties (PRP) with respect to nine Superfund Sites. While the total costs
of remediation at these sites may be significant, Tampa Electric shares
potential liability with other PRPs, many of which have substantial assets.
Tampa Electric expects that its liability in connection with these sites
will not be significant.
Expenditures. During the five years ended Dec. 31, 1994, Tampa
Electric spent $98.6 million on capital additions to meet environmental
requirements, including $45.7 million for the Polk Power Station project.
Environmental expenditures are estimated at $69 million for 1995 and $58
million in total for 1996-1999, including, respectively, $65 million and
$48 million for the planned Polk Power Station. These totals exclude
amounts required to comply with Phase II of the 1990 amendments to the
7<PAGE>
Clean Air Act.
Tampa Electric is complying with the Phase I emission limitations
imposed by the Clean Air Act which became effective Jan. 1, 1995 by using
blends of lower-sulfur coal and the use of a small quantity of purchased
sulfur dioxide allowances. In support of its Phase I compliance plan, Tampa
Electric has entered into two long-term contracts effective in late 1994
for the purchase of low-sulfur coal.
To comply with Phase II emission standards set for 2000, Tampa
Electric would likely use blends of low-sulfur coal and flue gas scrubbing.
It expects to spend $35 million of capital to comply with Phase II of the
Clean Air Act as described in the Capital Expenditures section on page 27.
The aggregate effect of Phase I and Phase II compliance on the
utility's price structure is estimated to be 2 percent or less.
In addition to recovering prudently incurred environmental costs
through base rates, Tampa Electric can petition the FPSC for such
recoveries on a current basis pursuant to a statutory environmental cost
recovery procedure.
TECO DIVERSIFIED
TECO Diversified owns all of the common stock of TECO Coal, TECO
Coalbed Methane, TECO Properties and TECO Transport. TECO Diversified and
its subsidiaries had 1,493 employees as of Jan. 1, 1995. TECO Diversified
is a holding company that owns no operating assets.
TECO Coal
TECO Coal, a Florida corporation, owns no operating assets but holds
all of the common stock of Gatliff Coal Company (Gatliff), Rich Mountain
Coal Company (Rich Mountain), Clintwood Elkhorn Mining Company (Clintwood),
Pike-Letcher Land Company (Pike-Letcher) and Premier Elkhorn Coal Company
(Premier). TECO Coal's subsidiaries own and/or operate surface and
underground mines and coal processing and loading facilities in Kentucky
and Tennessee.
In 1994, TECO Coal subsidiaries sold 4.9 million tons of coal, with
approximately 60 percent sold to third parties and 40 percent sold to Tampa
Electric. About 55 percent of Gatliff's production and third-party
purchases were sold to Tampa Electric. This specialty coal has low-ash
fusion temperature and low-sulfur characteristics specifically suited for
Tampa Electric's Gannon Station units. Rich Mountain has no reserves; it
mines coal reserves owned by Gatliff. The majority of production from
Clintwood and Premier is sold to third parties.
Tampa Electric is reducing its specialty coal purchases from Gatliff
a s a result of its efforts to reduce costs and its successful
experimentation with fluxing conventional steam coal from other sources.
TECO Coal's objective is to more than offset the adverse effects of this
reduction by increasing the amount of coal sold to third parties,
principally from the reserves being developed by Premier.
Primary competitors of TECO Coal's subsidiaries are other coal
suppliers, many of which are located in Central Appalachia.
8<PAGE>
The operations of underground mines, including all related surface
facilities, are subject to the Federal Coal Mine Safety and Health Act of
1977. TECO Coal's subsidiaries are also subject to various Kentucky and
Tennessee mining laws that require approval of roof control, ventilation,
dust control and other facets of the coal mining business. Federal and
state inspectors inspect the mines to ensure compliance with these laws.
TECO Coal's subsidiaries are in compliance with the standards of the
various enforcement agencies. TECO Coal is unaware of any mining laws or
regulations having a prospective effective date that would materially
affect the market price of coal sold by its subsidiaries.
TECO Coal's subsidiaries have not experienced difficulty in complying
with federal, state and local air and water pollution standards in their
mining operations. In 1994, approximately $1.1 million was spent on
environmental protection and reclamation programs. TECO Coal expects to
spend about $2 million in 1995 on these programs.
The coal mining operations are also subject to the Surface Mining
Control and Reclamation Act of 1977 which places a charge of $.15 and $.35
on every net ton mined of underground and surface coal, respectively, to
create a fund for reclaiming land and water adversely affected by past coal
m i n i ng. Other provisions establish standards for the control of
environmental effects and reclamation of surface coal mining and the
surface effects of underground coal mining, and requirements for federal
and state inspections.
TECO Coalbed Methane
TECO Coalbed Methane, an Alabama corporation, participates in the
production of natural gas from coalbeds located in Alabama's Black Warrior
Basin. The company has invested $191 million as the principal investor in
three joint ventures that control, in the aggregate, approximately 100,000
acres of lease holdings. In December 1994, TECO Coalbed Methane acquired 10
billion cubic feet of proven reserves in the Black Warrior Basin through
its purchase of royalty interests in wells located on or near existing
holdings. At the end of 1994, TECO Coalbed Methane had interests in 750
wells that were operational and producing gas for sale. These wells are
operated by Taurus Exploration, a unit of Energen Corporation, and, to a
much lesser extent, the River Gas Corporation and other third-party
operators.
A non-conventional fuel tax credit is available on all production
through the year 2002. The tax credit, a major economic factor, escalates
with inflation and could be limited by domestic oil prices. In 1994,
domestic oil prices would have had to exceed $46 per barrel for this
limitation to be effective.
TECO Properties
TECO Properties, a Florida corporation, has invested $58 million in
eight projects, primarily as a limited partner, and in undeveloped land in
the Tampa area. TECO Properties plans to continue a conservative
investment approach.
9<PAGE>
TECO Transport
TECO Transport, a Florida corporation, owns all of the common stock of
four subsidiaries that transport, store and transfer coal and other bulk
commodities. TECO Transport currently owns no operating assets.
All of TECO Transport's subsidiaries perform substantial services for
Tampa Electric as well as for other customers. In 1994, approximately 46
percent of TECO Transport's revenues were from third-party customers and 54
percent from Tampa Electric. The pricing for services performed by TECO
Transport's operating companies for Tampa Electric is based on a fixed
price per ton, adjusted quarterly for changes in certain fuel and price
indices. Most of the third-party utilization of the ocean-going barges is
for domestic phosphate movements and domestic and international movements
of other bulk commodities. Both the terminal and river transport operations
handle a variety of bulk commodities for third-party customers.
A substantial portion of TECO Transport's business is dependent upon
Tampa Electric, industrial phosphate customers, export coal customers and
participation in the U.S. bulk cargo preference program.
On Nov. 2, 1993 Gulfcoast Transit Company (Gulfcoast) and its
affiliated transport companies, all subsidiaries of TECO Transport,
received notice from the Commodity Credit Corporation (CCC) of the United
S t a t es Department of Agriculture of a temporary suspension from
participating in the U.S. bulk cargo preference program. Effective April
22, 1994, the CCC terminated the suspension, allowing Gulfcoast to resume
participation in the U.S. bulk cargo preference program.
Primary competitors of TECO Transport's barge subsidiaries, Gulfcoast,
which transports products in the Gulf of Mexico and worldwide, and
Mid-South Towing Company (Mid-South), which operates on the Mississippi and
Ohio rivers, are other barge and shipping lines and railroads. There are a
number of companies offering transportation services on the waterways
s e r v e d by TECO Transport's subsidiaries. To date, physical and
technological improvements have allowed barge operators to maintain
competitive rate structures with alternate methods of transporting bulk
commodities when the origin and destination of such shipments are
contiguous to navigable waterways.
Electro-Coal Transfer Corporation (Electro-Coal) operates a major
transfer and storage terminal on the Mississippi River south of New
Orleans. Demand for the use of such terminals is dependent upon customers'
use of water transportation versus alternate means of moving bulk
commodities and the demand for these commodities. Competition consists
primarily of mid-stream operators and another land-based terminal located
nearby.
The business of TECO Transport's subsidiaries, taken as a whole, is
not subject to significant seasonal fluctuation.
The Interstate Commerce Act, as amended in December 1973, exempts from
r e gulation water transportation of dry bulk commodities that were
transported in bulk as of June 1, 1939. In 1994, all water transportation
by TECO Transport's subsidiaries was within this exemption.
TECO Transport's subsidiaries are also subject to the provisions of
the Clean Water Act of 1977 that authorizes the Coast Guard and the EPA to
assess penalties for oil and hazardous substance discharges. Under this
Act, these agencies are also empowered to assess clean-up costs for such
discharges. Compliance with this Act has had no material effect on TECO
Transport's capital expenditures, earnings and competitive position, and no
such effect is anticipated. In 1994, TECO Transport spent $331,000 for
10<PAGE>
environmental control. Environmental expenditures are estimated at $272,000
in 1995, primarily for work on solid waste disposal and storm water
drainage at the Electro-Coal facility in Louisiana.
TECO POWER SERVICES
TECO Power Services, a Florida corporation, has subsidiaries that own
and operate an independent power project in Florida and are building a
power generating facility in Guatemala. TECO Power Services also seeks
opportunities to develop other independent power and cogeneration projects.
TECO Power Services had 45 employees as of Jan. 1, 1995.
Hardee Power Partners Limited (Hardee Power), a Florida limited
p a r t nership whose general and limited partners are wholly owned
subsidiaries of TECO Power Services, owns the Hardee Power Station, a
295-MW combined cycle electric generating facility located in Hardee
County, Florida, which began commercial operation on Jan. 1, 1993. Hardee
Power has 20-year power service agreements, for all of the capacity and
energy of the Hardee Power Station, with Seminole Electric Cooperative
(Seminole Electric), a Florida electric cooperative that provides wholesale
power to 11 electric distribution cooperatives, and with Tampa Electric.
Under the Seminole contract, Hardee Power has agreed to supply Seminole
Electric with an additional 145 MWs of capacity during the first 10 years
of the contract, which it is purchasing from Tampa Electric's coal-fired
Big Bend Unit Four for resale to Seminole Electric, and at the option of
Seminole Electric, to expand the Hardee Power Station's capacity by 145 MWs
for the second 10 years of the contract. Tampa Electric also has the right
under its contract to require the expansion of the Hardee Power Station,
subordinate to Seminole Electric's expansion option.
The Hardee Power Station is fueled by natural gas and No. 2 fuel oil.
Hardee Power has contracted for the supply and transportation of natural
gas for the Hardee Power Station through Dec. 31, 2002 with an option to
extend the contract through Dec. 31, 2012. About 93 percent of Hardee
Power Station's generation for 1994 was from natural gas.
Hardee Power's average fuel cost per million BTU has been as follows:
Average cost
per million BTU: 1994 1993
Oil $3.68 $ 4.86
Gas $2.02 $ 2.51
Composite $2.40 $ 2.74
The price for natural gas deliveries taken in December 1994 was $2.47
per thousand cubic feet, or $2.40 per million BTU. The price for fuel oil
deliveries taken in May 1994 was $23.45 per barrel, or $4.03 per million
BTU. There were no fuel oil deliveries taken in the third and fourth
quarters of 1994.
11<PAGE>
Through its ownership and operation of wholesale generating facilities
in the U.S., TECO Power Services is subject to regulation by the FERC in
various respects. Depending upon the nature of the project, FERC may
regulate, among other things, the rates, terms and conditions for the sale
of electric energy.
Like Tampa Electric, the U.S. operations of TECO Power Services are
subject to federal, state and local environmental laws and regulations
covering air quality, water quality, land use, power plant, substation and
transmission line siting, noise and aesthetics, solid waste and other
environmental matters.
A project entity substantially owned by a subsidiary of TECO Power
Services has signed a dollar-denominated power sales agreement with an
electric utility in Guatemala, to provide 78 MWs of capacity for 15 years
starting in mid-1995. The TECO Power Services subsidiary will initially own
an 87.5-percent interest in the project, and a prominent Guatemalan
business group will own the remaining 12.5-percent interest with an option
to increase its interest to 25 percent after commercial operation. TECO
Power Services has obtained a letter of commitment from the Overseas
Private Investment Corporation, an agency of the U.S. government, for
political risk insurance covering up to 90 percent of TECO Power Services'
equity investment and economic returns. The project, which is currently
under construction, will consist of two combustion turbines and cost
approximately $50 million.
TECO INVESTMENTS
TECO Investments' assets consist of short- and long-term financial
investments. The portfolio includes a continuing investment in leveraged
leases of $66 million. At Dec. 31, 1994, the net leveraged lease
investment had a zero balance.
TECO FINANCE
TECO Finance raises short- and long-term debt capital for the
diversified activities of TECO Energy. It has its own credit ratings, based
on a guarantee by TECO Energy. TECO Finance owns no operating assets.
Item 2. PROPERTIES.
TECO Energy believes that the physical properties of its operating
companies are adequate to carry on their businesses as currently conducted.
The properties of Tampa Electric and the subsidiaries of TECO Power
Services are generally subject to liens securing long-term debt.
TAMPA ELECTRIC
Tampa Electric had four electric generating plants and four combustion
turbine units in service with a total net generating capability at Dec. 31,
1994 of 3,393 MWs, including Big Bend (1,747-MW capability for four coal
units), Gannon (1,196-MW capability for six coal units), Hookers Point
(212-MW capability for five oil units), Phillips (34-MW capability for two
diesel units) and four combustion turbine units located at the Big Bend and
Gannon stations (204 MWs). Capability as used herein represents the
demonstrable dependable load carrying abilities of the generating units
during peak periods as proven under actual operating conditions. Units at
12<PAGE>
Hookers Point went into service from 1948 to 1955, at Gannon from 1957 to
1967, and at Big Bend from 1970 to 1985. In 1991, Tampa Electric purchased
two power plants (Dinner Lake and Phillips) from the Sebring Utilities
Commission (Sebring). Dinner Lake (11-MW capability for one natural gas
unit) and Phillips were placed in service by Sebring in 1966 and 1983,
respectively. In March 1994, Dinner Lake Station was placed on long-term
reserve standby.
Tampa Electric owns approximately 4,350 acres of previously mined
phosphate land located in Polk County, Florida. This site will accommodate
the planned Polk Unit One electric power plant and additional generating
capacity in the future. Polk Unit One is discussed further under Capital
Expenditures on page 27.
Tampa Electric owns 176 substations having an aggregate transformer
c a p a city of 15,231,497 KVA. The transmission system consists of
approximately 1,183 pole miles of high voltage transmission lines, and the
distribution system consists of 6,791 pole miles of overhead lines and
2,357 trench miles of underground lines. As of Dec. 31, 1994, there were
491,101 meters in service. All of the foregoing property is located within
Florida.
All plants and important fixed assets are held in fee except that
title to some of the properties are subject to easements, leases,
contracts, covenants and similar encumbrances and minor defects, of a
nature common to properties of the size and character of those of Tampa
Electric.
Tampa Electric has easements for rights-of-way adequate for the
maintenance and operation of its electrical transmission and distribution
lines that are not constructed upon public highways, roads and streets. It
has the power of eminent domain under Florida law for the acquisition of
any such rights-of-way for the operation of transmission and distribution
lines. Transmission and distribution lines located in public ways are
maintained under franchises or permits.
Tampa Electric has a long-term lease for the office building in
downtown Tampa, Florida, that serves as headquarters for TECO Energy, Tampa
Electric, and certain other TECO Energy subsidiaries.
TECO COAL
TECO Coal's subsidiary, Gatliff, has 76,000 acres of coal reserves and
mining property in Knox and Whitley Counties, Kentucky and Campbell County,
Tennessee. Gatliff owns 9,300 acres in fee and leases 66,700 acres under
long-term leases. These properties contain estimated proven and probable
coal reserves of 50 million tons. This coal, which combines low-sulfur and
low-ash fusion temperature characteristics, is found in both deep and
surface mines. Gatliff owns and operates a rapid-loading rail tipple and a
coal preparation plant near its deep mines.
Clintwood has 5,000 acres of coal reserves held under long-term leases
in Pike County, Kentucky. These properties contain estimated proven and
probable reserves of 7 million tons. Clintwood owns and operates a rail
tipple and a coal preparation plant near the mines.
Rich Mountain operates a surface mine for Gatliff in Campbell County,
Tennessee, and does not own any coal reserves.
13<PAGE>
Pike-Letcher controls 50,000 acres in Pike and Letcher Counties,
Kentucky. These properties contain estimated proven and probable reserves
in excess of 115 million tons.
Premier owns and operates a preparation plant and unit-train loadout
facility in Pike County, Kentucky and conducts surface and deep mining
operations of reserves, which are leased from Pike-Letcher. Premier does
not own any coal reserves.
TECO COALBED METHANE
TECO Coalbed Methane's interest in proven gas reserves at Dec. 31,
1994 was independently estimated to be 172.7 billion cubic feet for 462
wells. Its interests in proven and probable recoverable gas reserves are
estimated at 190 billion cubic feet for a total of 750 wells.
TECO Coalbed Methane's share of production for 1994 was 19.5 billion
cubic feet.
TECO TRANSPORT
TECO Transport's principal office is in leased premises in Tampa,
Florida.
Electro-Coal's storage and transfer terminal is on a 1,070-acre site
fronting on the Mississippi River approximately 40 miles south of New
Orleans. Electro-Coal owns 342 of these acres in fee, with the remainder
held under long-term leases.
Mid-South operates a fleet of 14 towboats and 538 river barges, nearly
all of which it owns, on the Mississippi and Ohio rivers. Mid-South owns 15
acres of land fronting on the Ohio River at Metropolis, Illinois on which
its operating offices, warehouse and repair facilities are located.
Fleeting services for its barges and those of other barge lines are
performed at this location and on the upper Mississippi River near the
mouth of the Kaskaskia River.
Gulfcoast operates a fleet of 13 ocean-going tug/barge units, with a
combined cargo capacity of over 339,000 tons.
TECO POWER SERVICES
Hardee Power has a 22-year lease for approximately 1,300 acres of land
in Hardee and Polk Counties, Florida on which the Hardee Power Station is
located.
In addition, a TECO Power Services' subsidiary has a significant
interest in a project entity that owns 7.4 acres in Guatemala on which a
78-MW generating facility is being constructed.
Item 3. LEGAL PROCEEDINGS.
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted during the fourth quarter of 1994 to a vote of
TECO Energy's security holders, through the solicitation of proxies or
otherwise.
14<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning the current executive officers of TECO Energy is as
follows:
Current Positions and Principal
Name Age Occupations During Last Five Years
Timothy L. Guzzle 58 Chairman of the Board and Chief
Executive Officer, July 1994 to date;
Chairman of the Board, President and
Chief Executive Officer, 1991 to July
1994; and
prior thereto, President and
Chief Operating Officer.
Girard F. Anderson 63 President and Chief Operating Officer,
July 1994 to date; and prior thereto,
Executive Vice President-Utility
Operations and President and Chief
Operating Officer of Tampa Electric
Company.
Alan D. Oak 48 Senior Vice President-Finance,
Treasurer and Chief Financial Officer.
Roger H. Kessel 58 Vice President-General Counsel and
Secretary, 1992 to date; and prior
thereto, Vice President-General
Counsel.
Keith S. Surgenor 47 Vice President-Human Resources and
President and Chief Operating Officer
of Tampa Electric Company, July 1994 to
date; and prior thereto, Vice
President-Human Resources.
__________________________
There is no family relationship between any of the persons named
above. The term of office of each officer extends to the meeting of the
Board of Directors following the next annual meeting of shareholders,
scheduled to be held on April 19, 1995, and until his successor is elected
and qualified.
15<PAGE>
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The following table shows the composite high, low and closing sale
prices for shares of TECO Energy common stock, which is listed on the New
York Stock Exchange, and dividends paid per share, per quarter.
1st 2nd 3rd 4th
1994
High 22 5/8 20 7/8 21 21
Low 19 1/8 18 1/4 18 1/8 18 1/2
Close 19 1/2 19 1/8 19 1/4 20 1/4
Dividend $.24s $.2525 $.2525 $.2525
(1)
1993
High 23 23 13/16 25 7/8 25 5/8
Low 20 3/16 21 13/16 23 5/8 22 1/8
Close 23 23 5/8 25 1/2 22 5/8
Dividend $.2275 $.24 $.24 $.24
___________________
(1) Restated to reflect a two-for-one stock split on Aug. 30, 1993.
The approximate number of shareholders of record of common stock of
TECO Energy as of Feb. 28, 1995 was 32,543.
TECO Energy's primary source of funds is dividends from its operating
companies. Tampa Electric's Restated Articles of Incorporation and certain
of the supplemental indentures relating to different series of its First
Mortgage Bonds contain restrictions as to the payment of dividends on the
common stock of Tampa Electric and as to the purchase or retirement of
capital stock of Tampa Electric. Substantially all of Tampa Electric's
retained earnings were available for dividends throughout 1994.
16<PAGE>
Item 6. SELECTED FINANCIAL DATA.
Year ended Dec. 31, 1994 1993 1992 1991 1990
Revenues (1) $1,350.9 $1,283.9 $1,183.2 $1,154.1 $1,097.1
Income before
restructuring
charge and
cumulative effect
of change in
accounting
principle(1) $ 168.6 $ 150.3 $ 149.0 $ 145.3 $ 139.4
Restructuring
charge (after tax) (15.4) -- -- -- --
Income before
cumulative effect
of change in
accounting principle 153.2 150.3 149.0 145.3 139.4
Cumulative effect
of change in
accounting
principle (1) -- 11.2 -- -- --
Net income (1) $ 153.2 $ 161.5 $ 149.0 $ 145.3 $ 139.4
Earnings per average
share outstanding:
Before restructuring
charge and cumulative
effect of change
in accounting
principle (2) $ 1.45 $ 1.30 $ 1.30 $ 1.28 $ 1.23
Restructuring
charge (.13) -- -- -- --
Before cumulative
effect of change
in accounting
principle 1.32 1.30 1.30 1.28 1.23
Cumulative effect
of change in
accounting
principle(2) -- .10 -- -- --
Earnings per average
common share
outstanding(2) $ 1.32 $ 1.40 $ 1.30 $ 1.28 $ 1.23
Common dividends
paid per share(2) $ .9975 $ .9475 $ .8975 $ .8475 $ .7975
Total assets (1)(3) $3,312.2 $3,123.3 $3,020.6 $2,833.6 $2,513.0
Long-term debt(1)(3) $1,023.9 $1,038.8 $1,044.9 $ 907.9 $ 762.9
_________________
(1) Millions of dollars.
(2) Restated to reflect a two-for-one stock split on Aug. 30, 1993.
(3) The total asset and long-term debt balances for 1993 and 1992 have been
restated to reflect current year presentation.
17<PAGE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
EARNINGS SUMMARY
TECO Energy achieved earnings of $1.45 per share in 1994, before
a corporate restructuring charge, a 4-percent increase over 1993
earnings of $1.39 per share. After the one-time 13-cent charge in the
fourth quarter for corporate restructuring, earnings were reported at
$1.32.
Earnings grew in 1994 on the strength of increased retail energy
sales at Tampa Electric and greater third-party business at TECO Coal
while overall diversified earnings declined.
Earnings growth in 1993 came primarily from the diversified
companies while Tampa Electric's earnings were level with 1992's. In
1993 TECO Coalbed Methane had a nearly 50-percent increase in
production along with higher gas prices and TECO Coal increased sales
to third parties from the reserves acquired in 1991. Also in January
1993, TECO Power Services began commercial operation of the Hardee
Power Station, which added 5 cents per share.
The restructuring charge recorded in the fourth quarter reduced
1994 reported earnings per share by 13 cents. Approximately 70 percent
of the charge represents costs associated with retirement benefits.
The restructuring program included a 10-percent reduction in staffing
levels and other cost reductions primarily at Tampa Electric. 1993's
results included three non-operating items: a 5-cent-per-share non-
recurring charge at Tampa Electric associated with a coal pricing
settlement; a 4-cent-per-share charge primarily due to the impact on
deferred tax balances caused by an increase in the federal corporate
income tax rate; and a 10-cent-per-share benefit resulting from the
adoption of Financial Accounting Standard (FAS) No. 109, on accounting
for income taxes.
Earnings per share and shares outstanding for years prior to 1993
have been restated throughout this report to reflect a two-for-one
stock split on Aug. 30, 1993.
Earnings per share 1994 Change 1993 Change 1992
Earnings before
restructuring charge
and non-operating
items, net $1.45 4.3% $1.39 6.9% $1.30
Restructuring charge (.13) - - - -
Non-operating items, net - - .01 - -
Earnings per share $1.32 -5.7% $1.40 7.7% $1.30
Net income before
restructuring
charge (millions) $168.6 4.8% $160.9 8.0% $149.0
Net income (millions) $153.2 -5.1% $161.5 8.4% $149.0
Average common shares
outstanding (millions) 115.9 .5% 115.3 .6% 114.6
Return on average
common equity 14.8%(1) 15.0% 14.7%
(1) Excludes the effect of a one-time corporate restructuring charge.
18<PAGE>
OPERATING RESULTS
TECO Energy's Operating Results
A strong performance in 1994 by Tampa Electric, where operating
income before the restructuring charge increased 5 percent over 1993,
contributed to an increase in consolidated operating income before the
restructuring charge. Growth in 1993's consolidated operating income
resulted from a strong performance by the diversified companies.
Almost 4-percent higher retail energy sales, higher retail energy
prices effective in 1994 and a continued focus on cost control
contributed to the rise in Tampa Electric's operating income in 1994.
TECO Coal increased coal shipments to third parties, although weak
markets in the marine shipping business resulted in lower operating
income from the diversified companies.
The following table identifies the unconsolidated revenues and
operating income of the significant operating groups.
Contributions by operating group (unconsolidated)
Revenues (millions) 1994 Change 1993 Change 1992
Tampa Electric $1,094.9 5.1% $1,041.3 3.5% $1,005.7
Diversified Companies $ 470.9 -.7% $ 474.4 26.2% $ 375.8
Operating income before restructuring charge (millions)
Tampa Electric $225.8 5.2% $214.6 -.2% $215.0
Diversified companies* $ 71.1 -6.3% $ 75.9 23.4% $ 61.5
* Operating income includes items which are reclassified for
consolidated financial statement purposes. The principal items are
the non-conventional fuels tax credit related to coalbed methane
production and interest expense of the non-recourse debt related to
the independent power operations. In the Consolidated Statements of
Income, the tax credit is part of the provision for income taxes and
the interest is part of interest expense.
Tampa Electric's Operating Results
Tampa Electric's operating income before the restructuring charge
increased 5 percent in 1994. Higher base revenues from retail customer
growth, increased retail energy usage and a retail price increase
effective in January were partially offset by higher operating
expenses.
Tampa Electric's 1993 operating income was even with 1992's as
increased operating income from nearly 2-percent customer growth and a
retail price increase were offset by higher operating expenses.
19<PAGE>
1994 Change 1993 Change 1992
(millions of dollars)
Revenues $1,094.9 5.1% $1,041.3 3.5% $1,005.7
Operating expenses 869.1 5.1% 826.7 4.6% 790.7
Operating income
before restructuring
charge 225.8 5.2% 214.6 -.2% 215.0
Restructuring charge 21.3 - - - -
Operating income $ 204.5 -4.7% $ 214.6 -.2% $ 215.0
Tampa Electric's Operating Revenues
Tampa Electric's revenues rose in 1994 with retail customer
growth of 2 percent and increased retail energy sales of almost 4
percent. In 1993 customer growth of almost 2 percent and higher long-
term contract sales to other utilities increased operating revenues.
Retail price increases of $16 million and $12 million became effective
January 1994 and February 1993, respectively.
Retail megawatt-hour sales declined slightly in 1993, as a result
of the significant reduction in energy demand from industrial
phosphate customers. This industry experienced a sharp recession in
1993.
The economy in Tampa Electric's service area showed significant
strength in 1994 after slow growth in 1993 and 1992. As a result
residential and commercial energy sales were up by 4 percent in 1994.
Sales to the phosphate industry also grew, up by more than 3 percent
in 1994 as these companies recovered from their industry-wide
recession.
With continued economic recovery, total retail energy sales are
expected to remain strong. Energy sales growth in the residential and
commercial sectors are expected to be 2.5-3.0 percent for the next
five years. Energy sales to industrial customers are expected to
represent a smaller percentage of total energy sales over the same
period. This is primarily due to the depletion of phosphate reserves
and the resulting movement of mining activities out of Tampa
Electric's service area.
Non-fuel revenues from sales to other utilities were $33 million
in 1994, $34 million in 1993 and $33 million in 1992. Energy sold to
other utilities declined in 1994 because of lower-priced oil and gas-
fired generation available on other systems. By shifting to higher-
margin longer-term power sales agreements, the 10-percent decline in
sales to other utilities in 1994 resulted in only a 3-percent decline
in non-fuel revenues.
Signing of longer-term wholesale power sales agreements remains a
priority. Within the last three years, Tampa Electric has added seven
bulk power sales contracts of varying capacities and terms. Low-cost,
coal-fired generation has allowed Tampa Electric to market its
available capacity successfully.
20<PAGE>
Tampa Electric 1994 Change 1993 Change 1992
Megawatt-hour sales
(thousands)
Residential 5,947 4.2% 5,706 2.6% 5,560
Commercial 4,583 3.4% 4,432 2.3% 4,333
Industrial 2,278 1.9% 2,236 -14.8% 2,625
Other 1,124 4.7% 1,073 3.8% 1,034
Total retail 13,932 3.6% 13,447 -.8% 13,552
Sales for resale 2,102 -9.8% 2,330 -14.0% 2,710
Total energy sold 16,034 1.6% 15,777 -3.0% 16,262
Retail customers 485,698 1.8% 477,010 1.7% 468,997
(average)
Tampa Electric's Operating Expenses
Effective cost management and efficiency improvements continued
to be principal objectives at Tampa Electric. Total operating
expenses in 1994 include the restructuring charge discussed in the
Earnings Summary section, the $4-million annual charge to develop a
t r ansmission and distribution property storm-damage reserve in
accordance with regulatory directives described in the Utility
Regulation section and the effects of accounting for fuel expense in
accordance with Florida Public Service Commission (FPSC) requirements.
Absent these three items, total operating expense increased 4 percent
over 1993.
1994 Change 1993 Change 1992
(millions of dollars)
Other operating expenses $171.6 8.8% $157.7 9.8% $143.6
Maintenance 72.9 2.1% 71.4 4.2% 68.5
Depreciation 115.1 2.9% 111.9 9.6% 102.1
Taxes, other than income 86.8 3.9% 83.5 6.2% 78.6
Operating expenses 446.4 5.2% 424.5 8.1% 392.8
Restructuring charge 21.3 - - - -
Fuel 389.3 7.2% 363.2 -4.0% 378.2
Purchased power 33.4 -14.4% 39.0 98.0% 19.7
Total fuel cost 422.7 5.1% 402.2 1.1% 397.9
Total operating expenses $890.4 7.7% $826.7 4.6% $790.7
Other operating expenses increased 5 percent, excluding amounts
r e covered through FPSC-approved cost recovery clauses and the
$4 million accrual for the storm damage reserve. Included in the
increase were higher employee-related expenses, higher accruals for
s e l f -insurance liability reserves and increased expenses for
regulatory activity.
21<PAGE>
The largest employee-related increase in expense was the pay-at-
risk program for all employees. This program, which began in 1992,
places a percentage of all employees' pay at risk subject to the
company achieving or surpassing various annual goals. The program is
strongly linked to operating results; good results in 1994 produced a
higher payout than in 1993. This program will continue with an
increasing pay-at-risk component for all employees in 1995.
The restructuring actions taken in 1994 will help mitigate future
increases in other operating expenses. Tampa Electric expects to
recover the $21.3 million corporate restructuring charge through lower
operating expenses within two years.
The increase in other operating expense in 1993 included $6.3
million related to changes in accounting for postemployment benefits.
Higher medical coverage costs and other employee-related expenses and
greater regulatory activity increased 1993 expenses.
Continued efforts at cost control reduced maintenance expense in
many areas of the company in 1994 and helped partially offset
increased scheduled generating unit maintenance expenses during the
year. Ongoing work redesign efforts and equipment modifications and
enhancements will help moderate maintenance expense increases in the
future.
Maintenance expense in 1993 were unchanged from 1992, excluding
$2.5 million of oil backout costs which are recovered through a
specific FPSC-approved recovery clause.
Depreciation expense increased both years because of normal
additions to plant and equipment. A large increase in 1993 was due
primarily to the transfer of the assets of the Gannon Project Trust
to Tampa Electric.
Taxes, other than those on income, were up each year, mainly
reflecting higher gross receipts taxes and franchise fees which were
included in customer bills. Property taxes also contributed to the
increase in 1993.
Total fuel cost and purchased power expense was 5 percent higher
in 1994 due to the accounting for deferred fuel expense consistent
with the FPSC-approved fuel clause. Actual system fuel cost was in
line with 1993 due to the mix in operating generating units and Tampa
Electric's success in using lower-priced coals. In 1993 the average
fuel price increased due to an unavailability of lower-priced spot
coal caused by the United Mine Workers' strike.
Tampa Electric purchased less energy in 1994 because its
g e n erating units performed at higher levels of availability.
Substantially all fuel and purchased power expenses were recovered
through the Fuel and Purchased Power Cost Recovery Clause.
Nearly all of Tampa Electric's generation in the last three years
has been from coal, and the fuel mix will continue to be substantially
coal. Coal prices are expected to remain stable during the next few
years compared with either oil or gas prices, and the company
continues to work to reduce its fuel costs.
22<PAGE>
Coal Contract Buyout
In December 1994 Tampa Electric bought out an existing long-term
coal supply contract which would have expired in 2004 for a lump sum
payment of $25.5 million and entered into two new contracts with the
supplier. The price of the coal supplied under the new contracts was
competitive in price with coals of comparable quality.
The new contracts will allow Tampa Electric to increase its
participation in a more favorable coal market. At the same time,
Tampa Electric customers will benefit from anticipated net fuel
savings of more than $40 million through the year 2004.
Tampa Electric requested and the FPSC authorized it to recover
the buy-out cost plus carrying costs through the Fuel and Purchased
Power Cost Recovery Clause over the next ten years.
Diversified Companies' Operating Results
The diversified companies had operating income of $71.1 million
in 1994 before the $2.5 million restructuring charge compared with
$75.9 million in 1993 and $61.5 million in 1992.
The decrease in 1994 operating income from the diversified
companies reflected the effects of a difficult year for TECO Transport
& Trade in the ocean shipping business. TECO Coalbed Methane's
operating income was reduced by lower gas prices in the second half of
the year, despite a 16-percent increase in production. These results
more than offset improvements in other diversified businesses. The
increase in 1993 resulted from the sale of energy and capacity from
the Hardee Power Station and higher gas and coal production.
1994 Change 1993 Change 1992
(millions of dollars)
Revenues $470.9 -.7% $474.4 26.2% $375.8
Operating expenses 399.8 .3% 398.5 26.8% 314.3
Operating income 71.1 -6.3% 75.9 23.4% 61.5
before charge(1)
Restructuring charge 2.5 - - - -
Operating income $ 68.6 -9.6% $ 75.9 23.4% $ 61.5
(1) Operating income includes items which are reclassified for
consolidated financial statement purposes. The principal items are
the non-conventional fuels tax credit related to coalbed methane
production and interest expense on the non-recourse debt related to
independent power operations, both of which are included in operating
income for the diversified companies. In the Consolidated Statements
of Income, the tax credit is part of the provision for income taxes
and the interest is part of interest expense.
23<PAGE>
Late in 1994, TECO Coal completed construction of a high-speed
unit-train loading facility and a state-of-the-art coal washing and
preparation plant. This infrastructure will enable TECO Coal to mine
and sell the coal reserves acquired in 1991 more effectively. Total
tonnage grew almost 7 percent to 4.9 million tons in 1994, up from 4.6
million tons in 1993 and 3.7 million tons in 1992. This growth came
from sales to third parties and more than offset reduced tonnage to
Tampa Electric, where lower energy sales to other utilities reduced
the demand for this coal.
In 1993, higher sales to third parties offset the impact of lower
pricing to Tampa Electric under a settlement agreement approved by the
FPSC in 1993.
TECO Coal expects sales to increase to more than 6 million tons
in 1995 as eastern utilities meet increased demand with existing coal-
fired generating capacity and use low-sulfur coal to comply with the
Clean Air Act.
TECO Coalbed Methane's production rose to 19.5 billion cubic feet
(Bcf) in 1994, up from 16.8 Bcf in 1993 and 12.2 Bcf in 1992.
O p e rating income, including the Section 29 tax credit, grew
substantially in 1993 with increased production and higher gas prices.
Average gas prices declined significantly in the second half of 1994
more than offsetting the impact of 16-percent higher production in
1994.
In December 1994 TECO Coalbed Methane acquired 10 Bcf of proven
reserves in the Black Warrior Basin through its purchase of royalty
interests in wells located on or near TECO Coalbed Methane's existing
holdings. Production from all of these reserves through the year 2002
are eligible for alternative energy tax credits under Section 29.
Expected production increases from this acquisition should more than
offset the gradual decline in output from the existing wells in 1995.
In 1993 TECO Coalbed Methane purchased Transco Energy Company's
coalbed methane properties, also adjacent to the existing holdings.
Operating income from TECO Power Services remained stable in
1994. In 1993, TECO Power Services made its initial contribution to
operating income from its Hardee Power Station which began commercial
operation in January of that year.
A project entity owned by TECO Power Services and a Guatemalan
party has signed a power sales agreement with an electric distribution
utility in Guatemala to provide 78 megawatts (MW) of capacity for 15
years starting in mid-1995. TECO Power Services will initially own an
87.5-percent interest in the project and a prominent Guatemalan
business group will own the remaining 12.5-percent interest with the
option to increase it to 25 percent after commercial operation.
The project will consist of two combustion turbines and cost
approximately $50 million. TECO Power Services expects to secure
project debt to finance a portion of the project cost.
TECO Transport & Trade reported lower operating income in 1994
due to reduced overseas grain business and adverse weather early in
the year, which more than offset improved utilization of the river
fleet and good performance at the storage and transfer facility. TECO
Transport's overseas grain business was adversely impacted by the U.S.
Department of Agriculture's suspension that was lifted in April 1994,
reduced U. S. bulk cargo preference program tonnage, lower grain
charter prices and a late start to 1994 movements caused by high grain
24<PAGE>
prices. Grain movements have returned to more normal levels, but
transportation prices continue to be weak. In addition, the loss of an
ocean barge in a winter storm off the coast of Louisiana had an
adverse impact on the fleet's utilization. The barge was fully insured
and there was no loss of life.
Diversified Companies' Operating Revenues
The diversified companies revenues decreased slightly in 1994 as
growth in coal revenues was more than offset by decreased revenues
from the water transportation business. Revenues increased in 1993
from the sale of capacity and energy from TECO Power Services and
higher coalbed methane gas and coal production.
Most of the gas production from TECO Coalbed Methane during the
three-year period was sold to an interstate pipeline company under a
long-term contract with prices based on the spot market for on-shore
Louisiana gas. The contract expires in March 1995, and a replacement
contract is being negotiated.
Diversified Companies' Operating Expenses
Operating expenses for the diversified companies increased only
slightly in 1994 reflecting higher coal and natural gas production.
1993's operating expense increase is primarily due to the addition of
the Hardee Power Station and changes in accounting for post-employment
benefits, as described in the Accounting Standards section.
T h e diversified companies recorded a one-time charge of
$2.5 million for corporate restructuring in 1994. This charge included
reductions in staffing levels and other cost reductions.
NON-OPERATING ITEMS
Other Income (Expense)
Other income in 1994 consisted mostly of investment earnings
which increased because of higher returns in 1994.
Allowance for funds used during construction (AFUDC) in 1994 more
than doubled from 1993 levels. AFUDC will continue to increase in 1995
and 1996 with the construction of Tampa Electric's Polk Unit One.
In 1993, Tampa Electric recorded as other expense a one-time
$10-million pretax charge, or 5 cents per share, associated with an
FPSC-approved settlement agreement between Tampa Electric and the
Office of Public Counsel, described in the Utility Regulation section.
Excluding this $10-million charge, other income was $2.9 million in
1993, down from $4.6 million in 1992. These amounts consist mostly of
investment earnings which declined in 1993 because of lower prevailing
short-term interest rates.
Interest Charges
Interest charges were $77.1 million in 1994, up slightly from
1993. Savings from the refinancing of long-term debt accomplished in
1993 substantially offset the impact of rising short-term interest
rates in 1994. The increase in 1993 reflected the interest on the
Hardee Power Station which had been capitalized prior to 1993.
Interest costs in 1993 also were affected by lower interest rates
offset by higher average balances of long-term debt.
25<PAGE>
Income Taxes
1994 income tax expense was almost 17 percent below 1993 levels,
primarily due to a higher Section 29 tax credit related to coalbed
methane gas production and lower taxable income because of the
restructuring charge. In addition, 1993 income tax expense included a
charge for restating deferred income tax balances to reflect the
federal income tax rate increase to 35 percent.
Primarily due to the tax credits related to the production of
coalbed methane, income tax expense was reduced to 23 percent of
pretax income in 1994, 26 percent in 1993 and 27 percent in 1992.
Reflecting increased production, these tax credits totaled
$19.6 million in 1994, up from $16.6 million in 1993 and $12.0 million
in 1992. The tax credit rate was estimated at $1.01 per thousand
cubic feet in 1994 and was 98 cents in 1993 and 96 cents in 1992.
This rate escalates with inflation and could be limited by domestic
oil prices. In 1994, domestic oil prices would have had to exceed
$46 per barrel for this limitation to have become effective. The
federal tax credit on production of coalbed methane is available
through the year 2002.
Effective Jan. 1, 1993, the federal corporate income tax rate
increased from 34 percent to 35 percent. The impact of this change in
1993 was $4.4 million, about half of which related to the adjustment
of deferred tax balances as required by FAS 109.
ACCOUNTING STANDARDS
Income Tax Accounting
In 1993 TECO Energy and its subsidiaries adopted FAS 109,
Accounting for Income Taxes, which required the use of the liability
method in accounting for income taxes. The cumulative effect of the
adoption of FAS 109 increased net income by $11.2 million or 10 cents
per share. As permitted by FAS 109, TECO Energy elected not to restate
the financial statements for prior years.
Postemployment Benefits
TECO Energy and its subsidiaries adopted FAS 106, Accounting for
Postretirement Benefits Other than Pensions, effective Jan. 1, 1993.
The rates approved by the FPSC for Tampa Electric in 1993 and 1994
reflect full cost accrual of postretirement benefits as required by
FAS 106. Therefore the effect on earnings of adopting this new
standard was limited to the diversified companies and reduced earnings
per share by 2 cents in 1993. TECO Energy and its subsidiaries also
adopted FAS 112, Accounting for Postemployment Benefits, in 1993.
Adoption of this new standard reduced earnings per share by 2 cents in
1993.
Investments in Securities
In 1994 TECO Energy adopted FAS 115, Accounting for Certain
Investments in Debt and Equity Securities, which requires fair value
accounting for these securities. Adopting this standard did not have a
significant impact on TECO Energy's financial position or results of
operations.
26<PAGE>
CAPITAL EXPENDITURES
TECO Energy's 1994 capital expenditures of $309 million consisted
of $231 million for Tampa Electric, which included $6 million of
AFUDC, and $78 million for the diversified companies.
Tampa Electric spent $97 million in 1994 on construction of Polk
Unit One, a 250-megawatt coal-gasification plant. The cash cost of
the plant is estimated at about $450 million, net of $110 million in
construction funding from the U.S. Department of Energy under its
Clean Coal Technology Program. Site preparation and construction
began in mid-1994 with commercial operation expected in the fourth
quarter of 1996. In addition, Tampa Electric spent $128 million for
equipment and facilities to serve the growing customer base and
provide for generating equipment improvements.
At the diversified companies in 1994, TECO Transport & Trade
spent $19 million for a river towboat, river barges, and normal
e q uipment replacement and improvements. TECO Coalbed Methane's
investment of $12 million in 1994 included the purchase of royalty
rights to 10 Bcf of additional reserves in the Black Warrior Basin and
enhancements to existing wells. TECO Coal spent $47 million primarily
on completion of the unit-train loading facilities and a coal washing
and preparation plant.
TECO Energy estimates total capital expenditures for ongoing
operations at $420 million for 1995 and $670 million from 1996 through
1999, excluding AFUDC.
Tampa Electric expects to spend $320 million in 1995 and $570
m i l lion during the 1996-1999 period, mainly for distribution
facilities to meet customer growth and for construction of Polk Unit
One. An estimated $205 million will be spent on this project in 1995,
and $60 million in 1996. At the end of 1994, Tampa Electric had
outstanding commitments of about $175 million for the construction of
Polk Unit One.
Included in Tampa Electric's expected capital expenditures is
$35 million in the 1995 to 1999 period to comply with Phase II of the
Clean Air Act, primarily for nitrogen oxide emission reductions,
emissions monitoring equipment and sulfur dioxide emission reductions
through scrubbing. This amount excludes the capital expenditures that
may be required for an additional new scrubber, if required, to comply
with the Clean Air Act.
The diversified companies expect capital expenditures of about
$100 million in 1995 and $100 million for the 1996-1999 period,
including a 78-MW power generating facility in Guatemala in 1995, coal
mining equipment and normal asset replacement and enhancement.
At the end of 1994, $21 million had been committed including TECO
Transport & Trade's purchase of a self-unloading ocean barge it had
previously leased. In January 1995, a TECO Power Services subsidiary
and a Guatemalan party entered into a power sales agreement to supply
78 MW of capacity to a Guatemalan utility from a plant to be built in
that country. TECO Power Services will spend $43 million for its
share of the $50 million total construction cost.
27<PAGE>
ENVIRONMENTAL COMPLIANCE
Tampa Electric is complying with the Phase I emission limitations
imposed by the Clean Air Act which became effective Jan. 1, 1995 by
using blends of lower-sulfur coal and the use of a small quantity of
purchased sulfur dioxide allowances. In connection with its Phase I
compliance plan, Tampa Electric has entered into two long-term
contracts effective in late 1994 for the purchase of low-sulfur coal.
To comply with Phase II emission standards set for 2000, Tampa
Electric would likely use blends of low-sulfur coal and flue gas
scrubbing. The aggregate effect of Phase I and Phase II compliance on
the utility's price structure is estimated to be 2 percent or less.
Tampa Electric expects to spend $35 million of capital to comply
with Phase II of the Clean Air Act as described in the Capital
Expenditures section.
UTILITY REGULATION
Price Increase
The FPSC granted Tampa Electric a $1.2 million base revenue increase
and a $10.3 million revenue increase primarily associated with
recovery of purchased power capacity payments effective in early
February 1993. The utility received an additional base revenue
increase of $16 million effective Jan. 1, 1994. The FPSC decision
reflected overall allowed regulatory rates of return of 8.20 percent
in 1993 and 8.34 percent in 1994, which include an allowed regulatory
rate of return on common equity of 12 percent, the midpoint of a
range of 11 percent to 13 percent. The FPSC approved for inclusion in
rate base $19 million of construction work in progress in 1993 and $55
million in 1994.
On March 25, 1994 the FPSC issued an order that changed Tampa
Electric's authorized regulatory rate of return on common equity to an
11.35 percent midpoint with a range of 10.35 percent to 12.35 percent,
while leaving in effect the rates it had previously established. The
FPSC also ordered a $4-million annual accrual to establish an unfunded
storm damage reserve for transmission and distribution property and
ordered Tampa Electric to prepare a study of the appropriate annual
accrual and the appropriate balance for this reserve. Tampa Electric
filed this study with the FPSC in September 1994. In February 1995 the
FPSC approved the accrual of $4 million annually and a total amount to
be reserved of $55 million as supported by the study. The $55 million
total amount is subject to review in future years.
On July 18, 1994 the FPSC issued an order approving an agreement
between its staff and Tampa Electric to cap the utility's authorized
regulatory rate of return on common equity at 12.45 percent for
calendar year 1994 only. Any earnings above that amount would be used
to increase the storm damage reserve. Tampa Electric did not exceed
the 12.45 percent cap in 1994 and, therefore, accrued only the
$4 million to the storm damage reserve.
Tampa Electric expects to file for inclusion of the Polk Unit One
in rate base in 1996. Tampa Electric is exploring a number of
alternatives in addition to its cost reduction efforts to mitigate the
impact of any base price change on the total bill that customers pay.
28<PAGE>
Coal Settlement
In February 1993, the FPSC approved an agreement between Tampa
Electric and Public Counsel that resolved all issues relating to
prices for coal purchased in the years 1990 through 1992 by Tampa
Electric from its affiliate, Gatliff Coal, a subsidiary of TECO Coal.
Tampa Electric agreed to refund $10 million plus interest to its
customers through the fuel adjustment clause over a 12-month period
beginning April 1, 1993. In 1993, Tampa Electric refunded $7.6 million
to its customers and refunded the remaining $2.4 million in 1994.
FERC Transmission/Interchange Proceedings
Tampa Electric is one of several utilities that have intervened
in Florida Power & Light's (FPL) proceeding before the Federal Energy
Regulatory Commission (FERC) in which FPL has requested to change
s u b s tantially the terms for providing interchange power and
transmission services. In addition to challenging the reasonableness
and fairness of many provisions of FPL's filing, Tampa Electric
m a intains that aspects of the transmission tariffs are anti-
competitive and violate FERC's new comparability standard governing
open access to transmission.
By order of the FERC, evidentiary hearings on the reasonableness
of FPL's filing commenced before an administrative law judge in
January 1995. Final resolution of the matters at issue is not expected
until 1996 or 1997.
In response to a transmission tariff filing by Florida Power
Corporation (FPC), Tampa Electric filed with the FERC, on March 16,
1995, a protest and request for hearing claiming ambiguities regarding
the availability of transmission services, the lack of support for the
tariff rates and charges, the anti-competitive effects of the tariff
and lack of compliance with the FERC's comparability standard. Tampa
Electric has requested that FPC be required to clarify the ambiguities
in the tariff and provide cost support. Additionally, Tampa Electric
has requested that the FERC set for hearing the comparability issues
and competitive impacts of the filing.
INVESTMENT ACTIVITY
At Dec. 31, 1994, TECO Energy had $136 million in cash, cash
equivalents and short-term investments, including a $30-million
investment in a hedged-equity utility portfolio. The company also had
$ 1 0 7 million in longer-term passive investments, including a
c o ntinuing investment in leveraged leases of $66 million. At
Dec. 31, 1994, the net leveraged lease investment had a zero balance
and all leases were performing on a current basis. The company has
made no further investment in leveraged leases since 1989.
A s of Jan. 31, 1995 the company had reduced short-term
investments by $79 million and applied the proceeds to reduce short-
term debt.
TECO Properties has invested $58 million of equity in eight
projects, primarily as a limited partner, and in undeveloped land.
TECO Energy plans to continue its conservative real estate investment
approach. These properties are performing at a level that supports the
investments made. The company anticipates no change in carrying value.
29<PAGE>
FINANCING ACTIVITY
TECO Energy's 1994 year-end capital structure, excluding the
effect of unearned compensation related to its ESOP, was 53 percent
debt, 45 percent common equity and 2 percent preferred equity. The
company's objective is to maintain a capital structure over time that
will support its current credit ratings.
Credit Ratings/Senior Debt
Duff & Phelps Moody's(1) Standard & Poor's
Tampa Electric AA+ Aa1 AA
TECO Finance/TECO Energy AA- Aa3 AA-
(1) Credit rating under review, March 1995.
In June 1993, the Hillsborough County Industrial Development
Authority issued $20 million of Pollution Control Revenue Bonds for
the benefit of Tampa Electric to finance the cost of waste disposal
facilities. The bonds bear interest at a floating rate set daily. On
Dec. 31, 1994, $3.7 million remained on deposit with the trustee to
finance future expenditures for qualified facilities.
In July 1993, Tampa Electric entered into a forward refunding
arrangement for $85.95 million of outstanding Pollution Control
Revenue Bonds. Under this arrangement, $85.95 million of new tax-
exempt bonds due Dec. 1, 2034 were issued on Dec. 1, 1994 at a 6.25
percent interest rate. The proceeds were used on Feb. 1, 1995 to
refund the original series having a 9.9 percent interest rate. For
accounting and rate-making purposes, Tampa Electric recorded interest
expense using a blended rate for the original and refunding bonds from
July 1993 and will continue to use this blended rate through the
maturity dates of the original bonds.
TECO Energy raised $10.6 million of common equity in 1994 and
$8.3 million in 1993 from the sale of common stock through its
Dividend Reinvestment and Common Stock Purchase Plan (DRP) implemented
in 1992. The company expects to raise a similar amount of equity
through this plan in 1995.
TECO Energy has entered into an interest rate exchange agreement,
described in Note E on pages 46 and 47. The company has no other
derivative instruments.
LIQUIDITY, CAPITAL RESOURCES
TECO Energy and its operating companies met cash needs during
1994 largely with internally generated funds with the balance from
debt and from equity raised through the DRP.
At Dec. 31, 1994, TECO Energy had bank credit lines of $290
million, of which $288 million were available.
TECO Energy expects to meet its capital requirements for ongoing
o p erations in 1995 through 1999 substantially from internally
generated funds. The company anticipates some debt financing in 1995
and 1996 including non-recourse financing for the TECO Power Services'
Guatemalan project scheduled for completion in 1995.
30<PAGE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Page
No.
Report of Independent Accountants 32
Consolidated Balance Sheets, Dec. 31, 1994 and 1993 33
Consolidated Statements of Income for the years ended
Dec. 31, 1994, 1993 and 1992 34
Consolidated Statements of Cash Flows for the years
ended Dec. 31, 1994, 1993 and 1992 35
Consolidated Statements of Common Equity for the years
ended Dec. 31, 1994, 1993 and 1992 36
Notes to Consolidated Financial Statements 37-55
Financial Statement Schedules have been omitted since they are
not required, are inapplicable or the required information is
presented in the financial statements or notes thereto.
31<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
of TECO Energy, Inc.,
We have audited the consolidated balance sheets of TECO Energy,
Inc. and subsidiaries as of Dec. 31, 1994 and 1993, and the related
consolidated statements of income, common equity and cash flows for
each of the three years in the period ended Dec. 31, 1994. These
f i n ancial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
s t atement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of TECO Energy, Inc. and subsidiaries as of Dec. 31, 1994 and
1993, and the consolidated results of their operations and their cash
flows for each of the three years in the period ended Dec. 31, 1994,
in conformity with generally accepted accounting principles.
As discussed in Note A to the consolidated financial statements,
effective Jan. 1, 1993 the company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes."
COOPERS & LYBRAND L.L.P.
Certified Public Accountants
Tampa, Florida
Jan. 16, 1995
32<PAGE>
CONSOLIDATED BALANCE SHEETS
(thousands of dollars)
Assets
Dec. 31, 1994 1993
Current Assets
Cash and cash equivalents $ 35,797 $ 33,180
Short-term investments 100,539 113,000
Receivables, less allowance for uncollectibles 144,615 131,666
Inventories, at average cost
Fuel 101,819 80,277
Materials and supplies 49,679 47,516
Prepayments 8,600 14,400
441,049 420,039
Property, Plant and Equipment, at Original Cost
Utility plant in service 3,060,759 2,980,417
Construction work in progress 286,624 158,325
Other property 748,357 707,342
4,095,740 3,846,084
Less accumulated depreciation (1,475,452) (1,363,131)
2,620,288 2,482,953
Other Assets
Other investments 106,993 99,133
Deferred income taxes 52,299 38,536
Deferred charges and other assets 91,533 82,652
250,825 220,321
$3,312,162 $3,123,313
Liabilities and Capital
Current Liabilities
Long-term debt due within one year $ 7,841 $ 11,033
Notes payable 349,900 265,840
Accounts payable 145,323 102,215
Customer deposits 49,457 47,358
Interest accrued 15,391 14,802
Taxes accrued 212 1,201
568,124 442,449
Other Liabilities
Deferred income taxes 390,795 391,187
Investment tax credits 66,627 70,726
Regulatory liability-tax related 57,500 61,973
Other deferred credits 66,058 35,703
Long-term debt, less amount due within one year 1,023,881 1,038,769
Preferred Stock of Tampa Electric 54,956 54,956
Capital
Common equity 1,163,371 1,112,419
Unearned compensation related to ESOP (79,150) (84,869)
$3,312,162 $3,123,313
The accompanying notes are an integral part of the consolidated financial
statements.
33<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
(thousands of dollars)
Year ended Dec. 31, 1994 1993 1992
Revenues $ 1,350,853 $ 1,283,936 $ 1,183,150
Expenses
Operation 670,829 624,868 583,765
Maintenance 101,066 98,921 94,312
Restructuring charge and
other cost reductions 25,037 -- --
Depreciation 173,987 165,348 142,480
Taxes, other than income 110,123 104,348 93,569
1,081,042 993,485 914,126
Income from Operations 269,811 290,451 269,024
Other Income (Expense)
Allowance for other funds used
during construction 3,541 1,585 --
Other income (expense), net 6,335 (7,050) 4,599
Preferred dividend requirements of
Tampa Electric (3,568) (3,568) (3,567)
6,308 (9,033) 1,032
Income Before Interest and
Income Taxes 276,119 281,418 270,056
Interest Charges
Interest expense 79,271 78,158 65,627
Allowance for borrowed funds
used during construction (2,134) (2,096) (1,104)
77,137 76,062 64,523
Income Before Provision for
Income Taxes 198,982 205,356 205,533
Provision for income taxes 45,805 55,048 56,505
Income before cumulative effect
of change in accounting principle 153,177 150,308 149,028
Cumulative effect of change in
accounting principle -- 11,228 --
Net Income $ 153,177 $ 161,536 $ 149,028
Average common shares
outstanding during year(1) 115,922,649 115,339,620 114,610,788
Earnings per Average Common Share
Outstanding: (1)
Before cumulative effect of change
in accounting principle(1) $ 1.32 $ 1.30 $ 1.30
Cumulative effect of change in
accounting principle(1) -- .10 --
Earnings per average common share
outstanding(1) $ 1.32 $ 1.40 $ 1.30
The accompanying notes are an integral part of the consolidated financial
statements.
(1) Restated to reflect a two-for-one stock split on Aug. 30, 1993.
34<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of dollars)
Year ended Dec. 31, 1994 1993 1992
Cash Flows from Operating Activities
Net income $153,177 $161,536 $149,028
Adjustments to reconcile net
income to net cash
Depreciation 173,987 165,348 142,480
Deferred income taxes (12,141) 7,783 6,963
Cumulative effect of change in
accounting principle -- (11,228) --
Restructuring charge and other
cost reductions 25,037 -- --
Investment tax credits, net (6,781) (5,568) (4,793)
Allowance for funds used
during construction (5,675) (3,681) (1,104)
Amortization of unearned
compensation related to ESOP 5,719 4,200 4,432
Deferred fuel cost 19,101 (10,018) 2,030
Fuel cost settlement -- 10,000 --
Refund to customers (2,428) (7,572) --
Coal contract buyout (25,500) -- --
Receivables, less allowance for
uncollectibles (10,521) (2,788) (5,988)
Inventories (23,705) 9,887 11,147
Taxes accrued (1,002) (3,887) 3,993
Interest accrued 589 (1,534) 1,163
Accounts payable 30,021 4,194 8,996
Other 18,348 729 2,390
338,226 317,401 320,737
Cash Flows from Investing Activities
Capital expenditures (309,099) (270,570) (255,190)
Allowance for funds used
during construction 5,675 3,681 1,104
Investment in short-term investments 12,461 14,208 7,261
Other non-current investments (5,941) (1,457) 5
(296,904) (254,138) (246,820)
Cash Flows from Financing Activities
Common stock 11,146 12,101 11,466
Proceeds from long-term debt 686 15,636 185,804
Repayment of long-term debt (19,004) (73,196) (45,164)
Net increase (decrease) in
short-term debt 84,060 68,640 (93,265)
Dividends (115,593) (109,245) (102,825)
(38,705) (86,064) (43,984)
Net increase (decrease) in
cash and cash equivalents 2,617 (22,801) 29,933
Cash and cash equivalents at
beginning of year 33,180 55,981 26,048
Cash and cash equivalents at
end of year $ 35,797 $ 33,180 $ 55,981
Supplemental Disclosure of Cash Flow Information
Cash paid during the year for:
Interest (net of amounts capitalized) $ 85,135 $ 79,964 $ 68,661
Income taxes $ 69,227 $ 53,336 $ 49,962
The accompanying notes are an integral part of the consolidated financial
statements.
35<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF COMMON EQUITY
(thousands)
<CAPTION>
Additional Total
Common Paid-in Retained Unearned Common
Shares(1) Stock(1) Capital(1) Earnings Compensation Equity
<S> <C> <C> <C> <C> <C> <C>
Balance, Dec. 31, 1991 114,219 $114,219 $297,786 $572,796 $(93,501) $ 891,300
Net income for 1992 149,028 149,028
Common stock issued 747 747 10,719 11,466
Cash dividends declared
($.8975 per share)(1) (102,825) (102,825)
Unearned compensation related
to ESOP 4,432 4,432
Tax benefits-ESOP dividends 2,346 2,346
Balance, Dec. 31, 1992 114,966 114,966 308,505 621,345 (89,069) 955,747
Net income for 1993 161,536 161,536
Common stock issued 655 655 11,447 12,102
Cash dividends declared
($.9475 per share)(1) (109,245) (109,245)
Unearned compensation related
to ESOP 4,200 4,200
Tax benefits-ESOP dividends
and stock options 985 2,225 3,210
Balance, Dec. 31, 1993 115,621 115,621 320,937 675,861 (84,869) 1,027,550
Net income for 1994 153,177 153,177
Common stock issued 578 578 10,568 11,146
Cash dividends declared
($.9975 per share) (115,593) (115,593)
Unearned compensation related
to ESOP 5,719 5,719
Tax benefits-ESOP dividends 2,222 2,222
Balance, Dec. 31, 1994 116,199 $116,199 $331,505 $715,667 $(79,150) $1,084,221
The accompanying notes are an integral part of the consolidated financial statements.
(1) Restated to reflect a two-for-one stock split on Aug. 30, 1993.
</TABLE>
36<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. Summary of Significant Accounting Policies
Principles of Consolidation
The significant accounting policies for both utility and diversified
operations are as follows:
The consolidated financial statements include the accounts of TECO
Energy, Inc. (TECO Energy) and its wholly owned subsidiaries.
The equity method of accounting is used to account for investments in
partnership arrangements in which TECO Energy or its subsidiary
companies do not have majority ownership or exercise control.
The proportional share of expenses, revenues and assets reflecting
TECO Coalbed Methane, Inc.'s (TECO Coalbed Methane) undivided
interest in joint venture property is included in the consolidated
financial statements.
All significant intercompany balances and intercompany transactions
have been eliminated in consolidation.
Basis of Accounting
Tampa Electric Company (Tampa Electric) maintains its accounts in
accordance with recognized policies prescribed or permitted by the
Florida Public Service Commission (FPSC) and the Federal Energy
Regulatory Commission (FERC). These policies conform with generally
accepted accounting principles in all material respects.
The impact of Financial Accounting Standard (FAS) No. 71, Accounting
for the Effects of Certain Types of Regulation, has been minimal in
Tampa Electric's experience, but when cost recovery is ordered over a
longer period than a fiscal year, costs are recognized in the period
that the regulatory agency recognizes them in accordance with FAS 71.
Tampa Electric's retail and wholesale businesses are regulated by the
FPSC and the FERC, respectively. Prices allowed by both agencies are
generally based on recovery of prudent costs incurred plus a
reasonable return on invested capital.
Revenues and Fuel Costs
Revenues include amounts resulting from cost recovery clauses which
provide for monthly billing charges to reflect increases or decreases
in fuel, purchased capacity, oil backout and conservation costs.
These adjustment factors are based on costs projected by Tampa
Electric for a specific recovery period. Any over-recovery or under-
recovery of costs plus an interest factor are refunded or billed to
customers during the subsequent recovery period. Over-recoveries of
costs are recorded as deferred credits and under-recoveries of costs
are recorded as deferred debits.
Certain other costs incurred by Tampa Electric are allowed to be
recovered from customers through prices approved in the regulatory
process. These costs are recognized as the associated revenues are
billed.
37<PAGE>
Tampa Electric accrues base revenues for services rendered but
unbilled to provide a closer matching of revenues and expenses.
On Oct. 27, 1992, pursuant to FPSC approval, the Gannon Project Trust
was terminated and the Trust's net assets and debt were placed on
Tampa Electric's balance sheet. At that time, the net assets of the
Trust totaled $54.2 million, which included $140.3 million of
p r o perty, plant and equipment, $87.6 million of accumulated
depreciation and $1.5 million of other assets and liabilities.
C o n c urrently, the Hillsborough County Industrial Development
Authority issued $54.2 million of variable-rate Pollution Control
Revenue Refunding Bonds due May 15, 2018 for the benefit of Tampa
Electric, the proceeds of which were used to redeem all of the
outstanding debt of the Gannon Project Trust. The effect of this
n o n - cash transaction has been netted to arrive at capital
expenditures and proceeds from long-term debt in the Consolidated
Statements of Cash Flows.
In February 1993, the FPSC approved an agreement between Tampa
Electric and the Office of Public Counsel that resolved all issues
relating to prices for coal purchased in the years 1990 through 1992
by Tampa Electric from its affiliate, Gatliff Coal, a subsidiary of
TECO Coal. Tampa Electric recognized a $10-million liability in
February 1993 and agreed to return this amount plus interest during
the 12-month period effective April 1, 1993. The $10-million charge
related to this agreement is classified in "Other income (expense)"
on the income statement.
Depreciation
TECO Energy provides for depreciation primarily by the straight-line
method at annual rates that amortize the original cost, less net
salvage, of depreciable property over its estimated service life.
The provision for utility plant in service, expressed as a percentage
of the original cost of depreciable property, was 4.2% for 1994, 1993
and 1992.
The original cost of utility plant retired or otherwise disposed of
and the cost of removal less salvage are charged to accumulated
depreciation.
Deferred Income Taxes
Effective Jan.1, 1993, TECO Energy adopted FAS 109, which changed the
requirements for accounting for income taxes. Although FAS 109
r e t ains the concept of comprehensive interperiod income tax
allocation, it adopts the liability method in the measurement of
deferred income taxes rather than the deferred method. Under the
liability method, the temporary differences between the financial
statement and tax bases of assets and liabilities are reported as
deferred taxes measured at current tax rates. The cumulative effect
of adopting FAS 109 increased TECO Energy's earnings by $11.2 million
in 1993. Since Tampa Electric is a regulated enterprise and reflects
the approved regulatory treatment, the adoption of FAS 109 resulted
in certain adjustments to accumulated deferred income taxes and the
establishment of a corresponding regulatory tax liability reflecting
the amount payable to customers through future rates and had no
effect on earnings.
38<PAGE>
Investment Tax Credits
Investment tax credits have been recorded as deferred credits and are
being amortized to income tax expense over the service lives of the
related property.
Allowance for Funds Used During Construction (AFUDC)
AFUDC is a non-cash credit to income with a corresponding charge to
utility plant which represents the cost of borrowed funds and a
reasonable return on other funds used for construction. The rate
u s e d to calculate AFUDC is revised periodically to reflect
significant changes in Tampa Electric's cost of capital. The rate
was 7.28% for the final 10 months of 1994, 7.70% for the first two
months of 1994 and for all of 1993, and 7.93% for 1992. The base on
which AFUDC is calculated excludes construction work in progress
which has been included in rate base.
Interest Capitalized
Interest costs for the construction of TECO Coal's preparation plant
and loadout facility and the Hardee Power Station were capitalized
and will be depreciated over the service lives of the related
property. Such interest costs capitalized totaled $0.9 million in
1994 for TECO Coal's preparation plant and $0.1 million and $15.3
million 1993 and 1992, respectively, for the Hardee Power Station.
Cash and Cash Equivalents and Short-Term Investments
Included in cash and cash equivalents and short-term investments at
Dec. 31, 1994 is $20.8 million and $70.2 million, respectively, of
securities classified as available-for-sale. Securities classified as
available-for-sale are highly liquid, high-quality debt instruments
purchased with a maturity of three months or less.
Short-term investments also includes $30.3 million at Dec. 31, 1994
of tradings securities, which have a cost basis of $29.9 million.
The estimated fair market value of $30.3 million was based on quoted
market prices. Trading securities consist of a hedged equity
investment in a utility portfolio. The utility portfolio is
comprised of various utility equities, hedged by selling short other
utility equities. Realized gains and losses are determined on the
specific identification cost basis. In 1994 TECO Energy adopted FAS
1 1 5 , Accounting for Certain Investments in Debt and Equity
Securities, which requires fair value accounting for debt and equity
securities. The change in net unrealized gains and losses on trading
securities included in earnings in 1994 was not significant.
Other Investments
Other investments include longer-term passive investments, primarily
leveraged leases.
39<PAGE>
Gas Properties
TECO Coalbed Methane, a subsidiary of TECO Energy formed in 1989, has
entered into agreements with others to develop jointly the natural
gas potential in a portion of Alabama's Black Warrior Basin.
TECO Coalbed Methane utilizes the successful efforts method to
account for its gas operations. Under this method, expenditures for
unsuccessful exploration activities are expensed currently.
Capitalized costs are amortized on the unit-of-production method
using estimates of proven reserves. Investments in unproven
properties and major development projects are not amortized until
proven reserves associated with the projects can be determined or
until impairment occurs.
Aggregate capitalized costs related to wells producing and under
development at Dec. 31, 1994 and 1993 were $190.9 million and $178.5
million, respectively. Net proven reserves at Dec. 31, 1994 and 1993
were 172.7 billion cubic feet for 462 wells and 156.4 billion cubic
feet for 450 wells, respectively.
Reclassification
Certain 1993 and 1992 amounts were reclassified to conform with
current year presentation.
B. Common Equity
Stock Options
The 1980 Stock Option and Appreciation Rights Plan was succeeded by
the 1990 Equity Incentive Plan. Under the Equity Incentive Plan, the
Compensation Committee of the Board of Directors may grant options to
purchase common stock to officers and key employees of TECO Energy
and its subsidiaries. The stock options are exercisable at a price
not less than the fair market value of the common stock on the date
of grant. The plan also provides that the Committee may issue stock
appreciation rights. The exercise price of the stock appreciation
rights may not be less than the fair market value of the common stock
on the date of grant or if issued with a stock option, the exercise
price of the related option. Stock appreciation rights provide for
the issuance of common stock or the payment of cash or a combination
of both equal to the difference between the exercise price of the
stock appreciation right and the fair market value of the common
stock on the date of exercise.
40<PAGE>
Transactions during the last three years under the Equity Incentive
Plan and the Stock Option and Appreciation Rights Plan are summarized
as follows:
Equity Incentive Plan and Stock Option and Appreciation Rights Plan
Option
Shares Option
(thousands) Price
1994
Outstanding, beginning of year 1,567 $ 8.6563-$23.5625
Granted 401 $19.4375-$20
Exercised 55 $10.0469-$18.8438
Canceled --
Outstanding, end of year 1,913 $ 8.6563-$23.5625
Exercisable, end of year 1,505 $ 8.6563-$19.4375
Available for grant 2,386
1993
Outstanding, beginning of year 1,463 $ 8.6563-$18.8438
Granted 416 $23.5625
Exercised 305 $ 8.6563-$23.5625
Canceled 7 $23.5625
Outstanding, end of year 1,567 $ 8.6563-$23.5625
Exercisable, end of year 1,567 $ 8.6563-$23.5625
Available for grant 2,787
1992
Outstanding, beginning of year 1,453 $ 6.0625-$17.375
Granted 421 $18.8438
Exercised 411 $ 6.0625-$18.8438
Canceled --
Outstanding, end of year 1,463 $ 8.6563-$18.8438
Exercisable, end of year 1,463 $ 8.6563-$18.8438
Available for grant 3,196
41<PAGE>
In April 1991, the shareholders approved a Director Stock Option Plan
to provide annual grants of stock options to non-employee directors
o n the first trading day following each annual meeting of
shareholders. This plan provides for an initial grant of options for
10,000 shares to each new director, and an annual grant of options
for 2,000 shares thereafter, with an exercise price equal to the fair
market value on the date of grant. Transactions during the last
three years under the Director Stock Option Plan are summarized as
follows:
Director Stock Option Plan
Option
Shares Option
(thousands) Price
1994
Outstanding, beginning of year 149 $17.7188-$23.4063
Granted 22 $19.8125
Exercised --
Outstanding, end of year 171 $17.7188-$23.4063
Exercisable, end of year 149 $17.7188-$19.8125
Available for grant 304
1993
Outstanding, beginning of year 139 $17.7188-$18.5313
Granted 22 $23.4063
Exercised 12 $17.7188-$18.5313
Outstanding, end of year 149 $17.7188-$23.4063
Exercisable, end of year 149 $17.7188-$23.4063
Available for grant 326
1992
Outstanding, beginning of year 110 $17.7188
Granted 32 $18.5313
Exercised 3 $17.7188
Outstanding, end of year 139 $17.7188-$18.5313
Exercisable, end of year 139 $17.7188-$18.5313
Available for grant 348
Common Stock
The company had 400 million shares of $1 par value common stock
authorized in 1994 and 1993 and 200 million authorized in 1992.
On July 20, 1993, the Board of Directors declared a two-for-one stock
split of the corporation's outstanding common stock, effective Aug.
30, 1993, for shareholders of record as of July 30, 1993. All
information related to TECO Energy common stock, including shares
outstanding and per share amounts, has been calculated as if the
stock split had been in effect for all periods presented.
Dividend Reinvestment Plan
In February 1992, TECO Energy implemented a Dividend Reinvestment and
Common Stock Purchase Plan. TECO Energy raised common equity of
$10.6 million, $8.3 million and $6.8 million from this plan in 1994,
1993 and 1992, respectively.
42<PAGE>
Shareholder Rights Plan
In 1989, TECO Energy declared a distribution of Rights to purchase
one additional share of the company's common stock at a price of $40
per share for each share outstanding. The Rights expire in May 1999.
The Rights will become exercisable 10 days after a person acquires 20
percent or more of the company's outstanding common stock or
commences a tender offer that would result in such person owning 30
percent or more of such stock or at the time the Board of Directors
declares a person who acquired 10 percent or more of such stock to be
an "adverse person." If any person acquires 20 percent or more of
the outstanding common stock or the Board declares that a person is
an adverse person, the rights of holders, other than such acquiring
person or adverse person, become rights to buy shares of common stock
of the company (or the acquiring company if the company is involved
in a merger or other business combination and is not the surviving
corporation) having a market value of twice the exercise price of
each right.
The company may redeem the Rights at a price of $.005 per Right until
10 days after a person acquires 20 percent or more of the outstanding
common stock but not after the Board has declared a person to be an
adverse person.
Employee Stock Ownership Plan
Effective as of Jan. 1, 1990, TECO Energy amended the TECO Energy
Group Retirement Savings Plan, a tax-qualified benefit plan available
to substantially all employees, to include an employee stock
ownership plan (ESOP). During 1990, the ESOP purchased 7 million
shares of TECO Energy common stock on the open market for $100
million. The share purchase was financed through a loan from TECO
Energy to the ESOP. This loan is at a fixed interest rate of 9.3%
and will be repaid from dividends on ESOP shares and from TECO
Energy's contributions to the ESOP.
TECO Energy's contributions to the ESOP were $7.6 million, $3.4
million and $5.3 million in 1994, 1993 and 1992, respectively. TECO
Energy's annual contribution equals the interest accrued on the loan
during the year plus additional principal payments needed to meet the
matching allocation requirements under the plan, less dividends
received on the ESOP shares. The components of net ESOP expense
recognized for the past three years are as follows:
(thousands of dollars) 1994 1993 1992
Interest expense $8,816 $8,955 $9,188
Compensation expense 8,719 4,200 4,432
Dividends (6,901) (6,573) (6,235)
Net ESOP expense $7,634 $6,582 $7,385
Compensation expense was determined by the shares allocated method.
43<PAGE>
At Dec. 31, 1994, the ESOP had 1.3 million allocated shares, 0.1
million committed-to-be-released shares, and 5.6 million unallocated
shares. Shares are released to provide employees with the company
match in accordance with the terms of the TECO Energy Group
Retirement Savings Plan and in lieu of dividends on allocated ESOP
shares. The dividends received by the ESOP are used to pay debt
service.
For financial statement purposes, the unallocated shares of TECO
Energy stock are reflected as a reduction of common equity,
classified as unearned compensation related to ESOP. Dividends on all
ESOP shares are recorded as a reduction of retained earnings, as are
dividends on all TECO Energy common stock. The tax benefit related to
the dividends paid to the ESOP for allocated shares is a reduction of
income tax expense and for unallocated shares is an increase in
retained earnings. All ESOP shares are considered outstanding for
earnings per share computations.
C. Preferred Stock
Preferred Stock of TECO Energy - No Par
10 million shares authorized, none outstanding.
Preferred Stock of Tampa Electric - No Par
2.5 million shares authorized, none outstanding.
Preference Stock of Tampa Electric - No Par
2.5 million shares authorized, none outstanding.
Preferred Stock of Tampa Electric - $100 Par Value
1.5 million shares authorized
Outstanding Cash Dividends
Dec.31, 1994 Paid in 1994(1)
Current
Redemption Per
Price SharesAmount(2) Share Amount(2)
4.32% Cumulative,
Series A $103.75 49,600 $ 4,960 $4.32 $ 214
4.16% Cumulative,
Series B $102.875 50,000 5,000 $4.16 208
4.58% Cumulative,
Series D $101.00 100,000 10,000 $4.58 458
8.00% Cumulative,
Series E $102.00 149,960 14,996 $8.00 1,200
7.44% Cumulative,
Series F $101.00 200,000 20,000 $7.44 1,488
549,560 $54,956 $3,568
(1) Quarterly dividends paid on Feb. 15, May 15, Aug. 15 and Nov. 15.
(2) Thousands of dollars.
44<PAGE>
At Dec. 31, 1994, preferred stock had a carrying amount of $55.0
million and an estimated fair market value of $44.3 million. The
estimated fair market value of preferred stock was based on quoted
market prices.
D. Short-term Debt
Notes payable consisted primarily of commercial paper with weighted
average interest rates of 5.68% and 3.31%, respectively, at Dec. 31,
1994 and Dec. 31, 1993. The carrying amount of notes payable
approximated fair market value because of the short maturity of these
instruments. Consolidated unused lines of credit at Dec. 31, 1994
were $288 million. Certain lines of credit require commitment fees
ranging from .05% to .1875% on the unused balances.
45<PAGE>
E. Long-term Debt
Dec. 31,
(thousands of dollars) Due 1994 1993
TECO Energy
Medium-term notes payable: 9.28% for
1994 and 1993(1) 1997-2000$ 100,000 $ 100,000
Tampa Electric
First mortgage bonds (issuable in series)
5 1/2% 1996 25,000 25,000
7 3/4% 2022 75,000 75,000
5 3/4% 2000 80,000 80,000
6 1/8% 2003 75,000 75,000
Installment contracts payable(2)
5 3/4% 2007 24,675 24,920
7 7/8% Refunding bonds(3) 2021 25,000 25,000
8% Refunding bonds(3) 2022 100,000 100,000
9.9%(4) 2011-2014 85,950 85,950
Variable rate: 4.10% for 1994 and
2.12% for 1993(1) 2025 51,605 51,605
Variable rate: 4.02% for 1994 and
2.12% for 1993(1) 2018 54,200 54,200
Variable rate: 4.23% for 1994 and
2.28% for 1993(1)(5) 2020 16,322 15,636
612,752 612,311
Diversified Companies (at subsidiaries)
Secured installment notes payable:
8.42% 1994 -- 11,867
Dock and wharf bonds, variable rate:
3.88% for 1994 and 2.51% for 1993(1)(2) 2007 110,600 110,600
Secured mortgage note payable: 9% 1994 -- 335
Mortgage notes payable: 7.6% 1995-1999 4,102 5,329
Non-recourse secured facility notes,
Series A: 7.8% 1995-2012 157,540 161,570
272,242 289,701
TECO Finance
Medium-term notes payable, various rates:
7.09% for 1994 and 7.14% for 1993(1) 1995-2002 50,950 52,250
Unamortized debt premium (discount), net (4,222) (4,460)
1,031,722 1,049,802
Less amount due within one year(6) 7,841 11,033
Total long-term debt $1,023,881 $1,038,769
Substantially all of the property, plant and equipment of Tampa Electric
is pledged as collateral.
46<PAGE>
Maturities and annual sinking fund requirements of long-term debt for
the years 1996, 1997, 1998 and 1999 are $31.7 million, $76.8 million,
$7.2 million, and $28.6 million, respectively. Of these amounts
$0.8 million per year for 1996 through 1999 may be satisfied by the
substitution of property in lieu of cash payments.
(1) Composite year-end interest rate.
(2) Tax-exempt securities.
(3) Proceeds of these bonds were used to refund bonds with interest
rates of 11 5/8% - 12 5/8%. For accounting purposes, interest
expense has been recorded using blended rates of 8.28%-8.66% on
the original and refunding bonds, consistent with regulatory
treatment.
(4) Under a financing arrangement entered into in July 1993, new
tax-exempt bonds were issued in December 1994, the proceeds of
which were used to refund this outstanding series when they
became eligible for refunding on Feb. 1, 1995. At year-end 1994,
the proceeds of the new bonds were on deposit with the trustee.
The new refunding series bears an interest rate of 6.25%. For
accounting purposes, interest expense has been recorded using a
blended rate of the outstanding and refunding bonds from July
1993 forward, consistent with regulatory treatment.
(5) This amount is recorded net of $3.7 million and $4.4 million at
Dec. 31, 1994 and Dec. 31, 1993, respectively on deposit with
the trustee.
(6) Of the amount due in 1995, $1.0 million may be satisfied by the
substitution of property in lieu of cash payments.
At Dec. 31, 1994, total long-term debt had a carrying amount of
$1,023.9 million and an estimated fair market value of $1,009.0
million. The estimated fair market value of long-term debt was
based on quoted market prices for the same or similar issues, on
the current rates offered for debt of the same remaining
maturities, or for long-term debt issues with variable rates
that approximate market rates, at carrying amounts. The
c a r rying amount of long-term debt due within one year
approximated fair market value because of the short maturity of
these instruments.
Tampa Electric entered into an interest rate exchange agreement
to reduce the cost of $100 million of fixed rate long-term debt.
The debt has been refinanced but the exchange agreement will
remain in effect until January 1996. The benefit derived from
the exchange agreement could range up to $2.3 million depending
on floating rate levels. The benefits of this agreement are at
risk only in the event of nonperformance by the other party to
this agreement or if the floating rate reaches 12.55%. Tampa
Electric does not anticipate nonperformance by the other party.
The benefit of the interest rate exchange is used to reduce
interest expense. The reduction was $2.3 million per year in
1994, 1993 and 1992.
At Dec. 31, 1994, this interest rate exchange agreement had an
estimated fair market value of $2.3 million. Estimated fair
market value was based on the expected realizable value to the
company upon termination of the agreement.
47<PAGE>
F. Retirement Plan
TECO Energy has a non-contributory defined benefit retirement plan
which covers substantially all employees. Benefits are based on
employees' years of service and average final salary.
The company's policy is to fund the plan within the guidelines set by
ERISA for the minimum annual contribution and the maximum allowable
as a tax deduction by the IRS. About 65 percent of plan assets were
invested in common stocks and 35 percent in fixed income investments
at Dec. 31, 1994.
Components of Net Pension Expense
(thousands of dollars)
1994 1993 1992
Service cost
(benefits earned during the period) $ 8,787 $ 7,665 $ 7,347
Interest cost on projected
benefit obligations 15,840 15,052 14,063
Less: Return on plan assets
Actual (3,711) 30,495 25,896
Less net amortization of unrecognized
transition asset and deferred return (25,811) 10,284 7,696
Net return on assets 22,100 20,211 18,200
Net pension expense 2,527 2,506 3,210
Effect of restructuring charge 13,272 -- --
Net pension expense recognized
in the Consolidated Statements
of Income $15,799 $ 2,506 $ 3,210
Reconciliation of the Funded Status of the Retirement Plan and the
Accrued Pension Prepayment/(Liability)
(thousands of dollars)
Dec. 31, Dec. 31,
1994 1993
Fair market value of plan assets $239,179 $254,253
Projected benefit obligation (217,993) (207,282)
Excess of plan assets over projected
benefit obligation 21,186 46,971
Less unrecognized net gain from past
experience different from that assumed 23,792 36,426
Less unrecognized prior service cost (7,649) (8,858)
Less unrecognized net transition asset
(being amortized over 19.5 years) 10,474 11,472
Accrued pension prepayment/(liability) $ (5,431) $ 7,931
Accumulated benefit obligation
(including vested benefits of
$163,801 for 1994 and $151,213 for 1993) $183,432 $169,212
48<PAGE>
Assumptions Used in Determining Actuarial Valuations
1994 1993
Discount rate to determine projected
benefit obligation 8.25% 7.75%
Rates of increase in compensation levels 3.3-5.3% 3.3-5.3%
Plan asset growth rate through time 9% 9%
G. Postretirement Benefit Plan
T E C O Energy and its subsidiaries currently provide certain
postretirement health care benefits for substantially all employees
retiring after age 55 meeting certain service requirements. The
company contribution toward health care coverage for most employees
retiring after Jan. 1, 1990 is limited to a defined dollar benefit
based on years of service. Postretirement benefit levels are
substantially unrelated to salary. The company reserves the right to
terminate or modify the plans in whole or in part at any time.
In 1993, the company adopted FAS 106 that requires postretirement
benefits be recognized as earned by employees rather than recognized
as paid. Prior to 1993, the cost of these benefits was recognized as
benefits were paid and amounted to $3.0 million for eligible retirees
in 1992.
Components of Postretirement Benefit Cost
(thousands of dollars)
1994 1993
Service cost (benefits earned during the period) $ 2,227 $1,759
Interest cost on projected benefit obligations 5,311 4,914
Amortization of transition obligation
(straight line over 20 years) 2,791 2,791
Amortization of actuarial (gain)/loss 203 --
Net periodic postretirement benefit expense 10,532 9,464
Effect of restructuring charge 2,700 --
Net periodic postretirement benefit expense
recognized in the Consolidated Statements
of Income $13,232 $9,464
Reconciliation of the Funded Status of the Postretirement Benefit
Plan and the Accrued Liability (thousands of dollars)
Dec. 31, Dec. 31,
1994 1993
Accumulated postretirement benefit obligation
Active employees eligible to retire $(11,832) $(10,026)
Active employees not eligible to retire (25,929) (23,568)
Retirees and surviving spouses (41,270) (30,815)
(79,031) (64,409)
Less unrecognized net gain/(loss)
from past experience (13,761) (4,794)
Less unrecognized transition obligation (48,960) (53,019)
Liability for accrued postretirement benefit $(16,310) $ (6,596)
49<PAGE>
Assumptions Used in Determining Actuarial Valuations
1994 1993
Discount rate to determine projected
benefit obligation 8.25% 7.75%
The assumed health care cost trend rate for medical costs prior to
age 65, and for certain retirees after age 65, was 11.5% in 1994 and
decreases to 5.5% in 2002 and thereafter. The assumed health care
cost trend rate for medical costs after age 65 was 8.0% in 1994 and
decreases to 5.5% in 2002 and thereafter.
A 1 percent increase in the medical trend rates would produce an 11
percent ($0.8 million) increase in the aggregate service and interest
cost for 1994 and a 7 percent ($5.1 million) increase in the
accumulated postretirement benefit obligation as of Dec. 31, 1994.
H. Restructuring Charge
In 1994, TECO Energy implemented a corporate restructuring program
which resulted in a $25 million charge ($15 million after tax) and
reduced earnings per share by $0.13. The cost of this restructuring
program, which included 241 early retirements, the elimination of
other positions and other cost control initiatives, is expected to be
recovered within the next two years through reduced operating
expenses. Approximately $1.7 million of this charge was paid in 1994.
The impact on pension cost resulting from the restructuring as
d e t ermined under the provisions of FAS 88, "Accounting for
Settlements and Curtailments of Defined Benefit Pension Plans and for
Termination Benefits," was approximately $13.3 million. The impact on
postretirement benefits as determined under FAS 106, "Accounting for
Postretirement Benefits Other Than Pensions," was approximately $2.7
million. These amounts are included as part of the total charge of
$25 million. See Note F and Note G.
50<PAGE>
I. Income Tax Expense
Income tax expense consists of the following components:
(thousands of dollars) Federal State Total
1994
Currently payable $54,699 $10,028 $64,727
Deferred (8,311) (3,830)(12,141)
Investment tax credits (1,271) -- (1,271)
Amortization of investment tax credits (5,510) -- (5,510)
Total income tax expense $39,607 $ 6,198 $45,805
1993
Currently payable $44,607 $ 8,226 $52,833
Deferred 6,523 1,260 7,783
Amortization of investment tax credits (5,568) -- (5,568)
Total income tax expense $45,562 $ 9,486 $55,048
1992
Currently payable $46,769 $ 7,567 $54,336
Deferred 4,453 2,510 6,963
Investment tax credits (2) -- (2)
Amortization of investment tax credits (4,792) -- (4,792)
Total income tax expense $46,428 $10,077 $56,505
TECO Energy adopted FAS 109 as of Jan. 1, 1993 and elected not to
restate prior years' financial statements. Deferred taxes result
from temporary differences in the recognition of certain liabilities
or assets for tax and financial reporting purposes. The principal
components of the company's deferred tax assets and liabilities
recognized in the balance sheet are as follows:
(thousand of dollars) Dec. 31, Dec. 31,
1994 1993
Deferred income tax assets(1)
Property related $ 33,500 $ 27,386
Other 18,799 11,150
Total deferred income tax assets 52,299 38,536
Deferred income tax liabilities(1)
Property related (370,232) (353,274)
Intangible drilling costs (25,714) (24,469)
Other 5,151 (13,444)
Total deferred income
tax liabilities (390,795) (391,187)
Accumulated deferred income taxes $(338,496) $(352,651)
(1) Certain property related assets and liabilities have been netted.
51<PAGE>
The total income tax provisions differ from amounts computed by
applying the federal statutory tax rate to income before income taxes
for the following reasons:
(thousands of dollars) 1994 1993 1992
Net income $153,177 $150,308 $149,028
Total income tax provision 45,805 55,048 56,505
Preferred dividend requirements 3,568 3,568 3,567
Income before income taxes and
preferred dividend requirements $202,550 $208,924 $209,100
Income taxes on above at federal
statutory rate (35% for 1994 and
1993 and 34% for 1992) $ 70,893 $ 73,130 $ 71,093
Increase (Decrease) due to:
State income tax, net of
federal income tax 4,006 6,658 6,894
Amortization of investment
tax credits (5,510) (5,566) (4,792)
Non-conventional fuels tax credit (19,626) (16,611) (11,997)
Other (3,958) (2,563) (4,693)
Total income tax provision $ 45,805 $ 55,048 $ 56,505
Provision for income taxes
as a percent of income before
income taxes 22.6% 26.3% 27.0%
52<PAGE>
J. Segment Information
TECO Energy's principal business segment is Energy Services. This
segment has been separated into two components: Regulated Electric
Utility Services and Other Energy Services which includes the
transportation, coal mining, coalbed methane gas production and
independent power generation subsidiaries. All other activities of
TECO Energy have been included in Other.
Identifiable assets are those assets used directly in a segment's
operations and are presented net of depreciation.
<TABLE>
Income Identifiable Capital
<CAPTION>
From Assets Expenditures
(thousands of dollars) Revenues Operations Depreciation at Dec. 31, for the Year
<S> <C> <C> <C> <C> <C>
1994
Regulated electric
utility services $1,094,865 $204,530 $115,111 $2,348,741 $230,777
Other energy services 465,762 67,272 (1) 58,586 803,221 78,063
Eliminations (214,539) (6,942)(1) -- (19,826) --
Energy services segment 1,346,088 264,860 173,697 3,132,136 308,840
Other and eliminations 4,765 4,951 290 180,026 259
TECO Energy
consolidated $1,350,853 $269,811 (2) $173,987 $3,312,162 $309,099
1993
Regulated electric
utility services $1,041,304 $214,616 $111,866 $2,199,568 $205,642
Other energy services 470,452 75,220 (1) 53,213 788,994 66,169
Eliminations (231,369) (3,928)(1) -- (18,978) --
Energy services segment 1,280,387 285,908 165,079 2,969,584 271,811
Other and eliminations 3,549 4,543 269 158,205 (1,241)
TECO Energy
consolidated $1,283,936 $290,451 $165,348 $3,127,789 $270,570
1992
Regulated electric
utility services $1,005,782 $215,045 $102,081 $2,108,274 $156,307
Other energy services 370,268 60,289 (1) 40,114 770,045 98,847
Eliminations (198,085) (11,997)(1) -- (20,137) --
Energy services segment 1,177,965 263,337 142,195 2,858,182 255,154
Other and eliminations 5,185 5,687 285 166,074 36
TECO Energy
consolidated $1,183,150 $269,024 $142,480 $3,024,256 $255,190
(1) Income from operations includes non-conventional fuels tax credit of
$19.6 million, $16.6 million and $12.0 million in 1994, 1993 and
1992, respectively, and interest cost on the non-recourse debt
related to independent power operations of $12.7 million in 1994 and
1993. In the Consolidated Statements of Income, the tax credit is
53<PAGE>
part of the provision for income taxes and the interest is part of
interest expense.
(2) Income from operations includes the effect of a one-time corporate
restructuring charge of $25 million. See Note H.
</TABLE>
54<PAGE>
K. Commitments and Contingencies
TECO Energy has made certain commitments in connection with its
continuing capital improvements program. TECO Energy estimates that
capital expenditures for ongoing businesses during 1995 will be about
$420 million and approximately $670 million for the years 1996
through 1999, excluding AFUDC.
Tampa Electric's capital expenditures are estimated to be $320
million for 1995 and $570 million for 1996 through 1999 for equipment
and facilities to meet customer growth and for construction of
additional generating capacity to be placed in service in 1996.
Tampa Electric is building a 250-megawatt coal-gasification plant
(Polk Unit One) with a capital cost of about $450 million, net of
$110 million in construction funding from the Department of Energy
under its Clean Coal Technology Program. Tampa Electric spent $97
million on this project in 1994 and expects to spend $205 million in
1995, and $60 million in 1996. At the end of 1994, Tampa Electric
had outstanding commitments of approximately $175 million for the
construction of Polk Unit One. At the diversified companies, future
capital expenditures are estimated at $100 million for 1995 and $100
m i llion for the years 1996 through 1999, primarily for the
construction of the 78-megawatt Guatemalan power station and for
asset replacement and refurbishment at TECO Transport & Trade and
TECO Coal. This includes commitments of about $21 million at the end
of 1994.
55<PAGE>
L. Quarterly Data (unaudited)
Financial data by quarter is as follows:
Quarter ended
March 31 June 30 Sept. 30 Dec. 31
1994
Revenues(1) $306,622 $353,319 $366,593 $324,319
Income from operations(1) $ 59,897 $ 75,773 $ 94,672 $ 39,469(2)
Net income(1) $ 33,602 $ 41,860 $ 54,567 $ 23,148(2)
Earnings per average
common share outstanding $ .29 $ .36 $ .47 $ .20(2)
Dividends paid per common
share outstanding $ .24 $ .2525 $ .2525 $ .2525
Stock price per common
share(3)
High $22 3/8 $20 7/8 $20 3/4 $20 3/4
Low $19 1/2 $18 3/4 $18 3/8 $18 3/4
Close $19 1/2 $19 1/8 $19 1/4 $20 1/4
1993
Revenues(1) $ 282,301 $ 314,605 $ 364,706 $322,324
Income from operations(1) $ 60,451 $ 71,027 $ 96,334 $ 62,639
Income before cumulative
effect of change in
accounting principle(1) $ 24,817 $ 38,208 $ 51,834 $ 35,449
Cumulative effect of
change in accounting
principle(1) 11,228 -- -- --
Net income(1) $ 36,045 $ 38,208 $ 51,834 $ 35,449
Earnings per average
common share outstanding
before cumulative effect
of change in accounting
principle(4) $ .21 $ .33 $ .45 $ .31
Cumulative effect per
average common share
outstanding of change in
accounting principle(4) .10 -- -- --
Earnings per average
common share outstanding(4) $ .31 $ .33 $ .45 $ .31
Dividends paid per
common share outstanding(4) $ .2275 $ .24 $ .24 $ .24
Stock price per common
share(3)(4)
High $23 $23 13/16 $25 7/8 $25 5/8
Low $20 5/16 $22 3/16 $23 11/16 $22 3/8
Close $23 $23 5/8 $25 1/2 $22 5/8
(1) Thousands of dollars.
(2) Includes the effect of a one-time corporate restructuring charge
which reduced operating income by $25 million, net income by $15
million and earnings per share by $0.13. See Note H.
(3) Trading prices for common shares of TECO Energy, Inc.
(4) Restated to reflect a two-for-one stock split on Aug. 30, 1993.
56<PAGE>
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
During the period Jan. 1, 1993 to the date of this report, TECO
Energy has not had and has not filed with the Commission a report as
to any changes in or disagreements with accountants on accounting
principles or practices, financial statement disclosure, or auditing
scope or procedure.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) The information required by Item 10 with respect to the directors
of the registrant is included under the caption "Election of
Directors" on pages 1 through 4 of TECO Energy's definitive proxy
statement, dated March 3, 1995, (Proxy Statement) for its Annual
Meeting of Shareholders to be held on April 19, 1995, and is
incorporated herein by reference.
(b) The information required by Item 10 concerning executive officers
of the registrant is included under the caption "Executive Officers
of the Registrant" on page 15 of this report.
(c) The information concerning disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is included under the caption
"Compliance with Section 16(a) of the Securities Exchange Act" on
page 13 of the Proxy Statement and is incorporated herein by
reference.
Item 11. EXECUTIVE COMPENSATION.
The information required by Item 11 is included in the Proxy
Statement (i) beginning with the caption "Compensation Committee
Interlocks and Insider Participation" on page 8 and ending just
before the caption "Information Concerning Auditors and Audit
Committee" on page 12 (ii) and under the caption "Election of
Directors-Compensation of Directors" on page 4, and such information
is incorporated herein by reference.
Item 12. S E CURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The information required by Item 12 is included under the
caption "Share Ownership" on pages 4 through 5 of the Proxy Statement
and is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by Item 13 is included under the caption
"Election of Directors" on page 3 of the Proxy Statement and is
incorporated herein by reference.
57<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K.
(a) 1. Financial Statements - See index on page 31.
2. Financial Statement Schedules - See index on page 31.
3. Exhibits
*3.1 Articles of Incorporation, as amended on April 20,
1993 (Exhibit 3, Form 10-Q for the quarter ended
March 31, 1993 of TECO Energy, Inc.).
*3.2 Bylaws of the Company, as amended on Oct. 19, 1993
(Exhibit 3, Form 10-Q for the quarter ended Sept. 30,
1993 of TECO Energy, Inc.).
*4.1 Indenture of Mortgage among Tampa Electric Company,
State Street Trust Company and First Savings & Trust
Company of Tampa, dated as of Aug. 1, 1946 (Exhibit
7-A to Registration Statement No. 2-6693).
*4.2 Ninth Supplemental Indenture, dated as of April 1,
1966, to Exhibit 4.1 (Exhibit 4-k, Registration
Statement No. 2-28417).
*4.3 Thirteenth Supplemental Indenture dated as of Jan. 1,
1974, to Exhibit 4.1 (Exhibit 2-g-1, Registration
Statement No. 2-51204).
*4.4 Sixteenth Supplemental Indenture, dated as of Oct.
30, 1992, to Exhibit 4.1 (Exhibit 4.1, Form 10-Q for
the quarter ended Sept. 30, 1992 of TECO Energy,
Inc.).
*4.5 Eighteenth Supplemental Indenture, dated as of May 1,
1993, to Exhibit 4.1 (Exhibit 4.1, Form 10-Q for the
quarter ended June 30, 1993 of TECO Energy, Inc.).
*4.6 Installment Purchase and Security Contract between
t h e Hillsborough County Industrial Development
Authority and Tampa Electric Company, dated as of
March 1, 1972 (Exhibit 4.9, Form 10-K for 1986 of
TECO Energy, Inc.).
*4.7 First Supplemental Installment Purchase and Security
Contract, dated as of Dec. 1, 1974 (Exhibit 4.10,
Form 10-K for 1986 of TECO Energy, Inc.).
*4.8 Third Supplemental Installment Purchase Contract,
dated as of May 1, 1976 (Exhibit 4.12, Form 10-K for
1986 of TECO Energy, Inc.).
*4.9 Installment Purchase Contract between the
Hillsborough County Industrial Development Authority
and Tampa Electric Company, dated as of Aug. 1, 1981
(Exhibit 4.13, Form 10-K for 1986 of TECO Energy,
Inc.).
*4.10 Amendment to Exhibit A of Installment Purchase
Contract, dated April 7, 1983 (Exhibit 4.14, Form
10-K for 1989 of TECO Energy, Inc.).
4.11 Second Supplemental Installment Purchase Contract,
dated as of June 1, 1983.
*4.12 Third Supplemental Installment Purchase Contract,
dated as of Aug. 1, 1989 (Exhibit 4.16, Form 10-K for
1989 of TECO Energy, Inc.).
58<PAGE>
*4.13 Installment Purchase Contract between the
Hillsborough County Industrial Development Authority
and Tampa Electric Company, dated as of Jan. 31, 1984
(Exhibit 4.13, Form 10-K for 1993 of TECO Energy,
Inc.).
4.14 First Supplemental Installment Purchase Contract,
dated as of Aug. 2, 1984.
*4.15 Second Supplemental Installment Purchase Contract,
dated as of July 1, 1993 (Exhibit 4.3, Form 10-Q for
the quarter ended June 30, 1993 of TECO Energy,
Inc.).
*4.16 Loan and Trust Agreement among the Hillsborough
C o u nty Industrial Development Authority, Tampa
Electric Company and NCNB National Bank of Florida,
as trustee, dated as of Sept. 24, 1990 (Exhibit 4.1,
Form 10-Q for the quarter ended Sept. 30, 1990 for
TECO Energy, Inc.).
*4.17 Loan and Trust Agreement, dated as of Oct. 26, 1992
among the Hillsborough County Industrial Development
Authority, Tampa Electric Company and NationsBank of
Florida, N.A., as trustee (Exhibit 4.2, Form 10-Q for
the quarter ended Sept. 30, 1992 of TECO Energy,
Inc.).
*4.18 Loan and Trust Agreement, dated as of June 23, 1993,
among the Hillsborough County Industrial Development
Authority, Tampa Electric Company and NationsBank of
Florida, N.A., as trustee (Exhibit 4.2, Form 10-Q for
the quarter ended June 30, 1993 of TECO Energy,
Inc.).
*4.19 Installment Sales Agreement between the Plaquemines
Port, Harbor and Terminal District (Louisiana) and
Electro-Coal Transfer Corporation, dated as of Sept.
1, 1985 (Exhibit 4.19, Form 10-K for 1986 of TECO
Energy, Inc.).
*4.20 Reimbursement Agreement between TECO Energy, Inc. and
Electro-Coal Transfer Corporation, dated as of March
22, 1989 (Exhibit 4.19, Form 10-K for 1988 of TECO
Energy, Inc.).
*4.21 Rights Agreement between TECO Energy, Inc. and The
First National Bank of Boston, as Rights Agent, dated
as of April 27, 1989 (Exhibit 4, Form 8-K, dated as
of May 2, 1989 of TECO Energy, Inc.).
*4.22 Amendment No. 1 to Rights Agreement dated as of July
20, 1993 between TECO Energy, Inc. and The First
National Bank of Boston, as Rights Agent (Exhibit
1.2, Form 8-A/A, dated as of July 27, 1993 of TECO
Energy, Inc.).
*10.1 1980 Stock Option and Appreciation Rights Plan, as
amended on July 18, 1989 (Exhibit 28.1, Form 10-Q for
quarter ended June 30, 1989 of TECO Energy, Inc.).
*10.2 Directors' Retirement Plan, dated as of Jan. 24, 1985
(Exhibit 10.24, Form 10-K for 1986 of TECO Energy,
Inc.).
59<PAGE>
*10.3 Supplemental Executive Retirement Plan for H.L.
Culbreath, as amended on April 27, 1989 (Exhibit
10.14, Form 10-K for 1989 of TECO Energy, Inc.).
10.4 Supplemental Executive Retirement Plan for T.L.
Guzzle, as amended on July 20, 1993 (Exhibit *10.1,
Form 10-Q for the quarter ended Sept. 30, 1993 of
TECO Energy, Inc.), as further amended by the First
Amendment to TECO Energy Group Supplemental Executive
Retirement Plan for T.L. Guzzle, effective as of Oct.
1, 1994.
10.5 Supplemental Executive Retirement Plan for R.H.
Kessel, dated as of Dec. 4, 1989 (Exhibit *10.16,
Form 10-K for 1989 of TECO Energy, Inc.), as amended
b y the First Amendment to TECO Energy Group
Supplemental Executive Retirement Plan for R.H.
Kessel, effective as of Oct. 1, 1994.
10.6 Supplemental Executive Retirement Plan, as amended
on July 18, 1989 (Exhibit *10.17, Form 10-K for 1989
of TECO Energy, Inc.), as further amended by the
First Amendment to TECO Energy Group Supplemental
Executive Retirement Plan, effective as of Oct. 1,
1994.
*10.7 TECO Energy, Inc. Group Supplemental Retirement
Benefits Trust Agreement Amendment and Restatement,
dated as of April 27, 1989 (Exhibit 10.18, Form 10-K
for 1989 of TECO Energy, Inc.) with Exhibit A as
amended Dec. 1, 1989 (Exhibit 10.2, Form 10-Q for the
quarter ended March 31, 1990 of TECO Energy, Inc.),
as further amended by First Amendment to 1989
Restatement dated as of July 20, 1993 (Exhibit 10.7,
Form 10-Q for the quarter ended Sept. 30, 1993 of
TECO Energy, Inc.).
*10.8 Terms of R. H. Kessel's Employment, dated as of Dec.
1, 1989 (Exhibit 10.20, Form 10-K for 1989 of TECO
Energy, Inc.).
*10.9 Annual Incentive Compensation Plan for TECO Energy
and subsidiaries, as revised January 1993 (Exhibit
10.2, Form 10-Q for quarter ended March 31, 1994 of
TECO Energy, Inc.).
*10.10 TECO Energy, Inc. Group Supplemental Disability
Income Plan, dated as of March 20, 1989 (Exhibit
10.22, Form 10-K for 1988 of TECO Energy, Inc.).
*10.11 Forms of Severance Agreement between TECO Energy,
Inc. and certain senior executives, dated as of
various dates in 1989 (Exhibit 10.23, Form 10-K for
1989 of TECO Energy, Inc.).
*10.12 Severance Agreement between TECO Energy, Inc. and H.
L. Culbreath, dated as of April 28, 1989 (Exhibit
10.24, Form 10-K for 1989 of TECO Energy, Inc.).
*10.13 Loan and Stock Purchase Agreement between TECO
Energy, Inc. and Barnett Banks Trust Company, N.A.,
as trustee of the TECO Energy Group Savings Plan
Trust Agreement (Exhibit 10.3, Form 10-Q for the
quarter ended March 31, 1990 for TECO Energy, Inc.).
*10.14 TECO Energy, Inc. 1990 Equity Incentive Plan (Exhibit
10.1, Form 10-Q for the quarter ended March 31, 1990
of TECO Energy, Inc.).
60<PAGE>
*10.15 TECO Energy, Inc. 1991 Director Stock Option Plan as
amended on Jan. 21, 1992 (Exhibit 10.26, Form 10-K
for 1991 of TECO Energy, Inc.).
10.16 Supplemental Executive Retirement Plan for A.D. Oak,
as amended on July 20, 1993 (Exhibit *10.2, Form 10-Q
for the quarter ended Sept. 30, 1993 of TECO Energy,
Inc.), as further amended by the First Amendment to
TECO Energy Group Supplemental Executive Retirement
Plan for A. D. Oak, effective as of Oct. 1, 1994.
10.17 Supplemental Executive Retirement Plan for K.S.
Surgenor, as amended on July 20, 1993 (Exhibit *10.3,
Form 10-Q for the quarter ended Sept. 30, 1993 of
TECO Energy, Inc.), as further amended by the First
Amendment to TECO Energy Group Supplemental Executive
Retirement Plan for K.S. Surgenor, effective as of
Oct. 1, 1994.
*10.18 Terms of T.L. Guzzle's employment, dated as of July
20, 1993 (Exhibit 10, Form 10-Q for the quarter ended
June 30, 1993 of TECO Energy, Inc.).
10.19 Supplemental Executive Retirement Plan for G.F.
Anderson (Exhibit *10.4, Form 10-Q for the quarter
ended Sept. 30, 1993 of TECO Energy, Inc.), as
amended by the First Amendment to TECO Energy Group
Supplemental Executive Retirement Plan for G.F.
Anderson, effective as of Oct. 1, 1994.
*10.20 TECO Energy Directors' Deferred Compensation Plan, as
amended and restated effective April 1, 1994 (Exhibit
10.1, Form 10-Q for the quarter ended March 31, 1994
for TECO Energy, Inc.).
10.21 TECO Energy Group Retirement Savings Excess Benefit
Plan, as amended and restated effective Aug. 1, 1994.
11. Computation of earnings per common share.
21. Subsidiaries of the Registrant.
23. Consent of Independent Accountants.
24.1 Power of Attorney.
24.2 Certified copy of resolution authorizing Power of
Attorney.
27. Financial Data Schedule (EDGAR filing only)
* Indicates exhibit previously filed with the Securities and
Exchange Commission and incorporated herein by reference. Exhibits
filed with periodic reports of TECO Energy, Inc. were filed under
Commission File No. 1-8180.
61<PAGE>
Executive Compensation Plans and Arrangements
Exhibits 10.1 through 10.12 and 10.14 through 10.21 above are
management contracts or compensatory plans or arrangements in which
executive officers or directors of TECO Energy, Inc. participate.
Certain instruments defining the rights of holders of long-term
d e bt of TECO Energy, Inc. and its consolidated subsidiaries
authorizing in each case a total amount of securities not exceeding
10 percent of total assets on a consolidated basis are not filed
herewith. TECO Energy, Inc. will furnish copies of such instruments
to the Securities and Exchange Commission upon request.
(b) TECO Energy, Inc. filed no reports on Form 8-K during the last
quarter of 1994.
62<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on the 29th day of March 1995.
TECO ENERGY, INC.
By T. L. GUZZLE*
T. L. GUZZLE, Chairman of the Board,
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on behalf
of the registrant and in the capacities indicated on March 29, 1995:
Signature Title
T. L. GUZZLE* Chairman of the Board,
T. L. GUZZLE Director and Chief Executive
Officer
(Principal Executive Officer)
/s/ A. D. OAK Senior Vice President-
A. D. OAK Finance and Treasurer
(Principal Financial
and Accounting Officer)
G. F. ANDERSON* President, Director
G. F. ANDERSON and Chief Operating
Officer
C. D. AUSLEY* Director
C. D. AUSLEY
S. L. BALDWIN* Director
S. L. BALDWIN
H. L. CULBREATH* Director
H. L. CULBREATH
J. L. FERMAN, JR.* Director
J. L. FERMAN, JR.
E. L. FLOM* Director
E. L. FLOM
H. R. GUILD, JR.* Director
H. R. GUILD, JR.
63<PAGE>
R. L. RYAN* Director
R. L. RYAN
J. T. TOUCHTON* Director
J. T. TOUCHTON
J. A. URQUHART* Director
J. A. URQUHART
J. O. WELCH, JR.* Director
J. O. WELCH, JR.
*By: /s/ A. D. OAK
A. D. OAK, Attorney-in-fact
64<PAGE>
INDEX TO EXHIBITS
Exhibit Page
No. Description No.
3.1 Articles of Incorporation, as amended on *
April 20, 1993 (Exhibit 3, Form 10-Q for the
quarter ended March 31, 1993 of TECO Energy,
Inc.).
3.2 Bylaws of the Company, as amended on *
Oct. 19, 1993 (Exhibit 3, Form 10-Q for the
quarter ended Sept. 30, 1993 of TECO Energy, Inc.).
4.1 Indenture of Mortgage among Tampa Electric *
Company, State Street Trust Company and First
Savings & Trust Company of Tampa, dated as of
Aug. 1, 1946 (Exhibit 7-A to Registration
Statement No. 2-6693).
4.2 Ninth Supplemental Indenture, dated as of *
April 1, 1966, to Exhibit 4.1 (Exhibit 4-k,
Registration Statement No. 2-28417).
4.3 Thirteenth Supplemental Indenture dated as *
of Jan. 1, 1974, to Exhibit 4.1 (Exhibit 2-g-1,
Registration Statement No. 2-51204).
4.4 Sixteenth Supplemental Indenture, dated as *
of Oct. 30, 1992, to Exhibit 4.1 (Exhibit 4.1,
Form 10-Q for the quarter ended Sept. 30, 1992 of
TECO Energy, Inc.).
4.5 Eighteenth Supplemental Indenture, dated as *
of May 1, 1993, to Exhibit 4.1 (Exhibit 4.1, Form
10-Q for the quarter ended June 30, 1993 of TECO
Energy, Inc.).
4.6 Installment Purchase and Security Contract *
between the Hillsborough County Industrial
Development Authority and Tampa Electric Company,
dated as of March 1, 1972 (Exhibit 4.9, Form 10-K
for 1986 of TECO Energy, Inc.).
4.7 First Supplemental Installment Purchase and *
Security Contract, dated as of Dec. 1, 1974
(Exhibit 4.10, Form 10-K for 1986 of TECO Energy,
Inc.).
4.8 Third Supplemental Installment Purchase *
Contract, dated as of May 1, 1976 (Exhibit 4.12,
Form 10-K for 1986 of TECO Energy, Inc.).
4.9 Installment Purchase Contract between the *
Hillsborough County Industrial Development
Authority and Tampa Electric Company, dated as of
Aug. 1, 1981 (Exhibit 4.13, Form 10-K for 1986 of
TECO Energy, Inc.).
65<PAGE>
4.10 Amendment to Exhibit A of Installment *
Purchase Contract, dated April 7, 1983 (Exhibit
4.14, Form 10-K for 1989 of TECO Energy, Inc.).
4.11 Second Supplemental Installment Purchase 69
Contract, dated as of June 1, 1983.
4.12 Third Supplemental Installment Purchase *
Contract, dated as of Aug. 1, 1989 (Exhibit 4.16,
Form 10-K for 1989 of TECO Energy, Inc.).
4.13 Installment Purchase Contract between the *
Hillsborough County Industrial Development
Authority and Tampa Electric Company, dated as of
Jan. 31, 1984 (Exhibit 4.13, Form 10-K for 1993
of TECO Energy, Inc.).
4.14 First Supplemental Installment Purchase 93
Contract, dated as of Aug. 2, 1984.
4.15 Second Supplemental Installment Purchase Contract, *
dated as of July 1, 1993 (Exhibit 4.3, Form 10-Q
for the quarter ended June 30, 1993 of TECO
Energy, Inc.).
4.16 Loan and Trust Agreement among the Hillsborough *
County Industrial Development Authority, Tampa
Electric Company and NCNB National Bank of
Florida, as trustee, dated as of Sept. 24, 1990
(Exhibit 4.1, Form 10-Q for the quarter ended
Sept. 30, 1990 for TECO Energy, Inc.).
4.17 Loan and Trust Agreement, dated as of Oct. 26, *
1992 among the Hillsborough County Industrial
Development Authority, Tampa Electric Company and
NationsBank of Florida, N.A., as trustee (Exhibit
4.2, Form 10-Q for the quarter ended Sept. 30,
1992 of TECO Energy, Inc.).
4.18 Loan and Trust Agreement, dated as of *
June 23, 1993, among the Hillsborough County
Industrial Development Authority, Tampa Electric
Company and NationsBank of Florida, N.A., as
trustee (Exhibit 4.2, Form 10-Q for the quarter
ended June 30, 1993 of TECO Energy, Inc.).
4.19 Installment Sales Agreement between the *
Plaquemines Port, Harbor and Terminal District
(Louisiana) and Electro-Coal Transfer
Corporation, dated as of Sept. 1, 1985 (Exhibit
4.19, Form 10-K for 1986 of TECO Energy, Inc.).
66<PAGE>
4.20 Reimbursement Agreement between TECO Energy, *
Inc. and Electro-Coal Transfer Corporation, dated
as of March 22, 1989 (Exhibit 4.19, Form 10-K for
1988 of TECO Energy, Inc.).
4.21 Rights Agreement between TECO Energy, Inc. *
and The First National Bank of Boston, as Rights
Agent, dated as of April 27, 1989 (Exhibit 4,
Form 8-K, dated as of May 2, 1989 of TECO Energy,
Inc.).
4.22 Amendment No. 1 to Rights Agreement dated as *
of July 20, 1993 between TECO Energy, Inc. and
The First National Bank of Boston, as Rights
Agent (Exhibit 1.2, Form 8-A/A, dated as of July
27, 1993 of TECO Energy, Inc.).
10.1 1980 Stock Option and Appreciation Rights *
Plan, as amended on July 18, 1989 (Exhibit 28.1,
Form 10-Q for quarter ended June 30, 1989 of TECO
Energy, Inc.).
10.2 Directors' Retirement Plan, dated as of *
Jan. 24, 1985 (Exhibit 10.24, Form 10-K for 1986
of TECO Energy, Inc.).
10.3 Supplemental Executive Retirement Plan for *
H. L. Culbreath, as amended on April 27, 1989
(Exhibit 10.14, Form 10-K for 1989 of TECO
Energy, Inc.).
10.4 Supplemental Executive Retirement Plan 112
for T. L. Guzzle, as amended on July 20, 1993
(Exhibit *10.1, Form 10-Q for the quarter ended
Sept. 30, 1993 of TECO Energy, Inc.), as further
amended by the First Amendment to TECO Energy
Group Supplemental Executive Retirement Plan for
T.L. Guzzle, effective as of Oct. 1, 1994.
10.5 Supplemental Executive Retirement Plan for 113
R. H. Kessel, dated as of Dec. 4, 1989 (Exhibit
*10.16, Form 10-K for 1989 of TECO Energy, Inc.),
as amended by the First Amendment to TECO Energy
Group Supplemental Executive Retirement Plan for
R.H. Kessel, effective as of Oct. 1, 1994.
10.6 Supplemental Executive Retirement Plan, as 114
amended on July 18, 1989 (Exhibit *10.17, Form
10-K for 1989 of TECO Energy, Inc.), as further
amended by the First Amendment to TECO Energy
Group Supplemental Executive Retirement Plan,
effective as of Oct. 1, 1994.
67<PAGE>
10.7 TECO Energy, Inc. Group Supplemental *
Retirement Benefits Trust Agreement Amendment and
Restatement, dated as of April 27, 1989 (Exhibit
10.18, Form 10-K for 1989 of TECO Energy, Inc.)
with Exhibit A as amended Dec. 1, 1989 (Exhibit
10.2, Form 10-Q for the quarter ended March 31,
1990 of TECO Energy, Inc.), as further amended by
First Amendment to 1989 Restatement dated as of
July 20, 1993 (Exhibit 10.7, Form 10-Q for the
quarter ended Sept. 30, 1993 of TECO Energy,
Inc.).
10.8 Terms of R. H. Kessel's Employment, dated *
as of Dec. 1, 1989 (Exhibit 10.20, Form 10-K for
1989 of TECO Energy, Inc.).
10.9 Annual Incentive Compensation Plan for *
TECO Energy and subsidiaries, as revised January
1993 (Exhibit 10.2, Form 10-Q for quarter ended
March 31, 1994 of TECO Energy, Inc.).
10.10 TECO Energy, Inc. Group Supplemental Disability *
Income Plan, dated as of March 20, 1989 (Exhibit
10.22, Form 10-K for 1988 of TECO Energy, Inc.).
10.11 Forms of Severance Agreement between TECO *
Energy, Inc. and certain senior executives, dated
as of various dates in 1989 (Exhibit 10.23, Form
10-K for 1989 of TECO Energy, Inc.).
10.12 Severance Agreement between TECO Energy, Inc. *
and H.L. Culbreath, dated as of April 28, 1989
(Exhibit 10.24, Form 10-K for 1989 of TECO
Energy, Inc.).
10.13 Loan and Stock Purchase Agreement between *
TECO Energy, Inc. and Barnett Banks Trust
Company, N.A., as trustee of the TECO Energy
Group Savings Plan Trust Agreement (Exhibit 10.3,
Form 10-Q for the quarter ended March 31, 1990
for TECO Energy, Inc.).
10.14 TECO Energy, Inc. 1990 Equity Incentive *
Plan (Exhibit 10.1, Form 10-Q for the quarter
ended March 31, 1990 of TECO Energy, Inc.)
10.15 TECO Energy, Inc. 1991 Director Stock *
Option Plan as amended on Jan. 21, 1992 (Exhibit
10.26, Form 10-K for 1991 of TECO Energy, Inc.).
10.16 Supplemental Executive Retirement Plan 115
for A.D. Oak, as amended on July 20, 1993
(Exhibit *10.2, Form 10-Q for the quarter ended
Sept. 30, 1993 of TECO Energy, Inc.), as further
amended by the First Amendment to TECO Energy
Group Supplemental Executive Retirement Plan for
A. D. Oak, effective as of Oct. 1, 1994.
68<PAGE>
10.17 Supplemental Executive Retirement Plan 116
for K.S. Surgenor, as amended on July 20, 1993
(Exhibit *10.3, Form 10-Q for the quarter ended
Sept. 30, 1993 of TECO Energy, Inc.), as further
amended by the First Amendment to TECO Energy
Group Supplemental Executive Retirement Plan for
K.S. Surgenor, effective as of Oct. 1, 1994.
10.18 Terms of T.L. Guzzle's employment, dated *
as of July 20, 1993 (Exhibit 10, Form 10-Q for
the quarter ended June 30, 1993 of TECO Energy,
Inc.).
10.19 Supplemental Executive Retirement Plan 117
for G.F. Anderson (Exhibit 10.4, Form 10-Q for
the quarter ended Sept. 30, 1993 of TECO Energy,
Inc.), as amended by the First Amendment to TECO
Energy Group Supplemental Executive Retirement
Plan for G.F. Anderson, effective as of Oct. 1,
1994.
10.20 TECO Energy Directors' Deferred Compensation Plan, *
as amended and restated effective April 1, 1994
(Exhibit 10.1, Form 10-Q for the quarter ended
March 31, 1994 for TECO Energy, Inc.).
10.21 TECO Energy Group Retirement Savings Excess Benefit 118
Plan, as amended and restated effective Aug. 1, 1994.
11. Computation of earnings per common share. 125
21. Subsidiaries of the Registrant. 126
23. Consent of Independent Accountants. 127
24.1 Power of Attorney. 128
24.2 Certified copy of resolution authorizing Power of
Attorney. 130
27 Financial Data Schedule (EDGAR filing only)
_____________
* Indicates exhibit previously filed with the Securities and Exchange
Commission and incorporated herein by reference. Exhibits filed with
periodic reports of TECO Energy, Inc. were filed under Commission
File No. 1-8180.
69<PAGE>
Exhibit 4.11
______________________________________________________________________
HILLSBOROUGH COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
and
TAMPA ELECTRIC COMPANY
______________________________________________________________________
SECOND SUPPLEMENTAL INSTALLMENT PURCHASE CONTRACT
______________________________________________________________________
Dated as of June 1, 1983
______________________________________________________________________
Relating to
Pollution Control Revenue Bonds
(Tampa Electric Company Project)
55<PAGE>
Exhibit 4.11
SECOND SUPPLEMENTAL INSTALLMENT PURCHASE CONTRACT
This SECOND SUPPLEMENTAL INSTALLMENT PURCHASE CONTRACT, dated as
o f June 1, 1983 (the "Second Supplemental Contract") to the
INSTALLMENT PURCHASE CONTRACT, dated as of August 1, 1981 (the
"Original Contract"), as supplemented and amended by the First
Supplemental Installment Purchase Contract, dated as of May 1, 1982,
(the "First Supplemental Contract") and an Amendment to Exhibit A of
the Installment Purchase Contract (the "Amendment to Exhibit A"),
dated April 7, 1983 (said Original Contract as so amended, together
with this Second Supplemental Contract, being herein called the
"Contract"), by and between the HILLSBOROUGH COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY, a public body corporate and politic the State
of Florida (the "issuer"), and TAMPA ELECTRIC COMPANY, a corporation
organized and existing under the laws of the State of Florida:
W I T N E S S E T H:
In consideration of the respective representations and agreements
hereinafter contained, the parties hereto agree as follows (provided
that in the performance of the agreements of the Issuer herein
contained, any obligation it may thereby incur for the payment of
money shall not be a debt, liability or obligation of any authority or
county or of the State of Florida or any political subdivision
thereof, except to the extent that the Bonds hereinafter mentioned
shall be limited obligations of the Issuer, payable solely out of
moneys derived from the Contract and the Bonds referred to therein):
56<PAGE>
Exhibit 4.11
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions. (a) All words and terms defined in
Section 1.1 of the Original Contract and in Section 1.1 of the First
Supplemental Contract shall have the same meanings in this Second
Supplemental Contract unless otherwise specifically defined herein.
(b) In addition to words and terms elsewhere defined in this
Second Supplemental Contract, the following words and terms shall have
the following meanings:
"Amendment to Exhibit A" means the Amendment to Exhibit A of the
Installment Purchase Contract, dated April 7, 1983, by and between the
H i llsborough County Industrial Development Authority and Tampa
Electric Company.
"Collateral" means, collectively, the pollution control
facilities described in Exhibit A to the Contract a copy of the
current form of which Exhibit A is attached hereto and each component
thereof which has been or will be acquired by the Company from the
Issuer.
"Contract" means the Original Contract, as amended by the First
Supplemental Contract and the Amendment to Exhibit A, together with
this Second Supplement Contract and any other supplements and
amendments thereto permitted by the Indenture.
"First Mortgage" means the Indenture of Mortgage, dated as of
August 1, 1946, as supplemented, from the Company to State Street Bank
and Trust Company, (formerly State Street Trust Company) and Flagship
Bank of Tampa (formerly First Savings & Trust Company of Tampa),
trustees.
"First Supplemental Contract" means the First Supplemental
Installment Purchase Contract, dated as of May 1, 1982, by and between
the Hillsborough County Industrial Development Authority and Tampa
Electric Company.
"First Supplemental Indenture" means the First Supplemental Trust
Indenture, dated, as of May 1, 1983, by and between the Hillsborough
County Industrial Development Authority and Exchange Bank and Trust
Company of Florida (now NCNB National Bank of Florida).
" I ndenture" means the Original Indenture, as amended and
supplemented by the First Supplemental Indenture, together with the
Second supplemental Indenture, pursuant to which (i) the Bonds are
authorized to be issued and (ii) the Issuer's rights under the
Contract (except the Issuer's rights under Sections 5.1 (c) and 9.4
hereof to payment of certain costs and expenses and under Section 7.4
hereof to indemnification), including the subordinated security
interest in the Collateral and the Purchase Price Installments and
57<PAGE>
Exhibit 4.11
other revenues and proceeds receivable by the Issuer from the sale of
the Project, are pledged and assigned as security for the payment of
principal of and premium, if any, and interest on the Bonds, as
amended or supplemented by any amendments or supplements permitted
thereby.
"Original Contract" means the Installment Purchase Contract,
dated as of August 1, 1981, by and between the Hillsborough County
Industrial Development Authority and Tampa Electric Company.
"Original Indenture" means the Trust Indenture, dated as of
August 1, 1981, by and between the Hillsborough County Industrial
Development Authority and Exchange Bank and Trust Company of Florida,
Tampa, Florida (now NCNB National Bank of Florida).
"Second Supplemental Contract" means this Second Supplemental
Installment Purchase Contract, as amended and supplemented by any
amendments and supplements hereto permitted by the Indenture.
"Second Supplemental Indenture" means the Second Supplemental
Trust Indenture, dated as of June 1, 1983, by and between the
Hillsborough County Industrial Development Authority and NCNB National
Bank of Florida (formerly, Exchange Bank and Trust Company of
F l orida), Tampa, Florida, as amended and supplemented by any
amendments and supplements thereto permitted by the Indenture.
"Subordinated Security Interest" means the subordinated security
interest in the Collateral created by Section 5.3 hereof.
Section 1.2. Rules of Construction. The rules of construction
set forth in Section 1.2 of the Original Contract shall be applicable
to this Second Supplemental Contract.
58<PAGE>
Exhibit 4.11
ARTICLE II
REPRESENTATIONS
Section 2.1 Representations by the Issuer. The Issuer makes the
following representations, as of the date of delivery of this Second
Supplemental Contract:
(a) The Issuer is duly authorized under the provisions of
t h e Act to enter into, execute and deliver this Second
Supplemental Contract, to undertake the transactions contemplated
by this Second Supplemental Contract and to carry out its
obligations hereunder, and the Issuer has duly authorized the
execution and delivery of this Second Supplemental Contract; and
(b) The Issuer has heretofore agreed to cause the
completion of the acquisition, construction and installation of
the Project, pursuant to the terms and conditions expressed in
the Contract, all for the purpose of promoting effective and
efficient pollution control throughout the State of Florida.
Section 2.2 Representations by the Company. The Company makes
the following representations, as of the date of delivery of this
Second Supplemental Contract:
(a) The Company is a corporation organized and existing
under the laws of the State of Florida and has power to enter
into this Second Supplemental Contract;
(b) By proper corporate action, the officers executing and
attesting this Second Supplemental Contract have been duly
authorized to execute and deliver this Second Supplemental
Contract;
(c) Neither the execution or delivery of this Second
Supplemental Contract nor the consummation of the transactions
contemplated herein, nor the fulfillment of or compliance with
the terms hereof will conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under, the
Company's Restated Articles of Incorporation, its by-laws, or any
indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is now a party or by which it is
bound;
59<PAGE>
Exhibit 4.11
(d) All necessary authorizations, approvals, consents and
other orders of any governmental authority or agency for the
execution and delivery by the Company of this Second Supplemental
Contract have been obtained and are in full force and effect.
60<PAGE>
Exhibit 4.11
ARTICLE III
AMENDMENT AND SUPPLEMENT
Section 3.1 Creation of Subordinated Security Interest. Article
V of the Original Contract as is hereby amended by adding at the end
thereof a new Section 5.3 as follows:
"Section 5.3. Creation of Subordinated Security Interest. As
security for the performance by the Company of its obligations under
Section 5.1(a) hereof, the Company hereby grants to the Issuer a
subordinated security interest in the Collateral and in each component
thereof which has been or will be acquired hereunder by the Company
from the Issuer. It is agreed that the security interest hereby
granted (including the Issuer's rights of possession or repossession
of the Collateral or any rights conferred upon the Issuer under the
Uniform Commercial Code of the State of Florida or otherwise) is
hereby made, and shall at all times be, subject to (i) the rights of
the holders of the First Mortgage Bonds (as defined in the First
Mortgage) of the Company issued ad outstanding or to be issued under,
and the lien of the First Mortgage and (ii) any future security
interest or lien created to secure any indebtedness or other
obligations of the Company now existing or hereinafter issued or
incurred under any indenture or other instrument which expressly
provides that any such security interest or lien securing such
indebtedness or obligations shall be superior to the security interest
hereby granted; provided that nothing in said First Mortgage or in
such other instrument or indenture or in this Section 5.3 shall affect
or diminish the obligations of the Company under Section 5.1 (a)
hereof. Such security interest shall remain in effect until the
Company shall have satisfied its obligations under Section 5.1(a)
hereof at which time the Issuer shall cause the execution and delivery
to the Company of such documents as shall be necessary to effect or
evidence the termination of such security interest."
S e c t ion 3.2. Execution of Counterparts. This Second
S u pplemental Installment Purchase Contract maybe simultaneously
executed in several counterparts, each of which shall be an original
and all of which shall constitute but one and the same instrument.
61<PAGE>
Exhibit 4.11
IN WITNESS WHEREOF, the Issuer and the Company have caused this
Second Supplemental Contract to be executed in their respective names
by their duly authorized officers and their respective seals to be
hereunto affixed and attested by their duly authorized officers for
and on their behalves and the Trustee has consented to this Second
Supplemental Contract all as of the date first above written.
HILLSBOROUGH COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY
By ____________________________
Chairman of the Hillsborough
County Industrial Development
Authority
OFFICIAL SEAL
Attest:
______________________________
Asst. Secretary
Approved by General Counsel to
the Hillsborough Industrial
Development Authority as to
form and legal sufficiency
By ____________________________
Warren M. Cason, Esq.
62<PAGE>
Exhibit 4.11
TAMPA ELECTRIC COMPANY
By _____________________________
Senior Vice President-Finance
CORPORATE SEAL
Attest:
____________________________
Secretary
CONSENT:
NCNB NATIONAL BANK OF FLORIDA
Trustee
By___________________________
Vice President
63<PAGE>
Exhibit 4.11
STATE OF FLORIDA )
) ss.:
COUNTY OF HILLSBOROUGH )
The foregoing instrument was acknowledged before me this 22 day
of June, 1983, by SAMUEL I. LATIMER, the Chairman of the Hillsborough
County Industrial Development Authority, the public body corporate and
politic and public instrumentality described in and which executed the
above instrument.
________________________________
Notary Public
(NOTARIAL SEAL) My commission expires:
STATE OF FLORIDA )
) ss.:
COUNTY OF HILLSBOROUGH )
The foregoing instrument was acknowledged before me this 22 day
of June, 1983, by Ellswotth G. Simmons, Asst. Secretary of the
Hillsborough County Industrial Development Authority, the public body
corporate ad politic and public instrumentality described in and which
executed the above instrument.
________________________________
Notary Public
(NOTARIAL SEAL) My commission expires:
64<PAGE>
Exhibit 4.11
STATE OF FLORIDA )
) ss.:
COUNTY OF HILLSBOROUGH )
The foregoing instrument was acknowledged before me this 23 day
of June, 1983, by J.K. TAGGART, a Senior Vice President of Tampa
Electric Company, on behalf of said corporation.
________________________________
Notary Public
(NOTARIAL SEAL) My commission expires:
STATE OF FLORIDA )
) ss.:
COUNTY OF HILLSBOROUGH )
The foregoing instrument was acknowledged before me this 23 day
of June, 1983, by J.E. SPROULL, the Secretary of Tampa Electric
Company, on behalf of said corporation.
________________________________
Notary Public
(NOTARIAL SEAL) My commission expires:
65<PAGE>
Exhibit 4.11
EXHIBIT A
DESCRIPTION OF THE PROJECT
The Project referred to in the Installment Purchase Contract to
which this Exhibit A is attached consists of certain pollution control
facilities to be acquired, constructed and installed at Unit No. 4 of
the Big Bend Station of Tampa Electric Company in Hillsborough County,
Florida, more particularly described as follows:
BIG BEND UNIT NO. 4
A. Electrostatic Precipitator
Particulate control for Big Bend Unit No. 4 will be
a c c omplished by the use of a rigid frame electrostatic
precipitator. The precipitator is designed for a 99.7+%
p a rticulate removal efficiency and includes the following
associated equipment: ductwork and breaching, structural steel,
foundations, pilings, hoppers/hopper heat tracing and electrical
power and control devices.
1. Precipatator Flyash Storage Silo
This silo is a cylindrical tank supported by structural
steel columns. The associated equipment includes bag
filter, vent controls, weigh scale, pumps, supporting
structural steel, foundations and piling.
2. Storage Ponds
Earthen storage ponds with dikes to a maximum elevation
of 35 feet will be provided for the storage of flyash in the
event flyash cannot be marketed. These ponds will be lined
to protect the ground water systems from leachate.
3. Piping
This item consists of the necessary piping, pumps and
c o ntrols to convey the precipitator flyash from the
precipitator hoppers by way of a dry vacuum system to the
flyash silo. From dry flyash silo, flyash is transported
wet by way of piping to the above noted flyash storage
ponds.
66<PAGE>
Exhibit 4.11
B. Bottom Ash Removal
1. Hoppers
Steel hoppers collect ash which falls out the bottom of
the pulverized fuel furnace. Included with the bottom ash
h o p per are the necessary structural steel supports,
foundations, pilings, and associated electrical controls.
2. Ponds
Bottom ash storage ponds are provided for storage of
the collected bottom ash. The initial or primary settling
pond receives the water from the ash hoppers. This water is
then decanted and recycled to the plant for reuse. After
the primary ponds are filled, they will be hydraulically
dredged to a more permanent long term storage pond. The
primary decanting or settling receiving ponds will be lined;
the larger more permanent bottom ash storage pond will be
unlined.
3. Piping
This item includes the necessary piping to sluice the
bottom ash slurry from the hoppers to the bottom ash
receiving ponds. Also included are the piping and pumps
required to return the water to the plant for reuse in this
ash system.
C. Flue Gas Desulfurization System (FGD System)
1. Description of System
The type of FGD System selected for Big Bend Unit No. 4
is a two stage forced oxidation limestone regenerable system
designed to have an efficiency between eighty-five to ninety
percent (85%-90%). The FGD System consists of three (3)
modules with one (1) spare. The modules will consist of
booster fans, quenchers, absorbers, absorber feed tank,
associated piping and pumps. Reheat fans and a reheater are
provided to reheat the exiting gas flow from the FGD System
to provide the necessary buoyancy and drying requirements
for the exiting stack gas.
2. Limestone Preparation
Included with the FGD System are the raw limestone
facilities required for receiving, unloading, grinding,
preparation, and transfer of limestone to the FGD System
proper. The limestone unloading and handling system
i n cludes all necessary controls, structural supports,
foundations and piling required.
3. FGD Waste Handling
67<PAGE>
Exhibit 4.11
Another major portion of the FGD System is the waste
handling facility. This system includes a building which
houses the necessary dewatering, separation, treatment
equipment and is for processing the gypsum waste from the
FGD System, plus transfer facilities for moving the gypsum
from the waste handling building to the on-site storage
area. This area includes a stacking system and the
necessary ponding and containment ditches for the gypsum
pile runoff.
D. Liquid Waste Treatment
The waste treatment system for Big Bend Unit no. 4 will be
an extension of the existing waste treatment systems for Big Bend
Units No. 1, 2 and 3. The floor drains are collected and
transferred to a common reinforced concrete transfer sump with
all necessary pumping and piping and then transported to an
existing settling pond before return to the plant for use as
recycle water for equipment wash down.
E. Fine Mesh Screens
Fine mesh traveling water screens and associated equipment
will be installed in the circulating water system to remove small
marine organisms from the circulating water system. The caught
organisms will be collected with a low pressure screenwash and
returned via a flume to Tampa Bay.
F. Sanitary Waste Streams
A d ditional sanitary water treatment capacity will be
installed with Unit No. 4. The discharge from this system will
be piped to the waste water transfer sump described above.
68<PAGE>
Exhibit 4.11
BIG BEND UNIT NO. 4 COAL HANDLING AND BLENDING SYSTEM
A. Coal Pile Runoff System Modifications
The existing coal pile runoff collection system
will be modified so as to collect the runoff from the
extended and modified coal handling and blending
system. The collected runoff water will be monitored
prior to returning this water to the bay.
B. Dust Suppression Equipment
Dust suppression equipment will be provided at all
major transfer points in the newly installed coal
h a ndling and blending system. This suppression
equipment will consist of either water sprays and/or
vacuum type bag filters. A dust suppression system
will also be included in the tripper room over the top
of the blending bins.
69<PAGE>
Exhibit 4.11
________________________________________________________________________
HILLSBOROUGH COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
and
NCNB NATIONAL BANK OF FLORIDA,
Trustee
___________________________________
SECOND SUPPLEMENTAL TRUST INDENTURE
Dated as of June 1, 1983
_________________
Relating to
Pollution Control Revenue Bonds
(Tampa Electric Company Project)
70<PAGE>
Exhibit 4.11
SECOND SUPPLEMENTAL TRUST INDENTURE
THIS SECOND SUPPLEMENTAL TRUST INDENTURE, dated as of June 1, 1983
(herein called the "Second Supplemental Indenture") to the TRUST INDENTURE,
dated as of August 1, 1981 (herein called the "Original Indenture"), as
supplemented and amended by the First Supplemental Trust Indenture (herein
called the "First Supplemental Indenture"), dated as of May 1, 1982 (said
trust indenture as so amended and, together with this Second Supplemental
Indenture and any supplements and amendments thereafter, being herein
called the "Indenture"), by and between the HILLSBOROUGH COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY, a public body corporate and politic and a public
instrumentality created pursuant to the laws of the State of Florida
(herein called the "Issuer"), and NCNB NATIONAL BANK OF FLORIDA (formerly,
Exchange Bank and Trust Company of Florida) a national banking association
duly organized and existing under the laws of the United States of America
and having its principal office in the City of Tampa, Florida, which is
authorized under such laws to exercise corporate trust powers and is
subject to examination by federal authorities (said banking association and
any bank or trust company becoming successor trustee under the Indenture,
being herein called the "Trustee").
W I T N E S S E T H:
WHEREAS, the Issuer is authorized by Part III of Chapter 159, Florida
Statutes, as amended (herein called the "ACT"), to finance and refinance
c a pital projects including industrial and manufacturing plants and
pollution control facilities with appurtenant facilities for the purpose of
promoting effective and efficient pollution control throughout the State of
Florida and including pollution control facilities or devices incorporated
as a part of any project and to issue revenue bonds payable solely from
revenues derived from the sale, operation or leasing of such capital
projects; and
WHEREAS, the Issuer has heretofore made the necessary arrangements
with Tampa Electric Company (herein called the "Company"), a corporation
duly organized and existing under the laws of the State of Florida, for the
acquisition, construction and installation by the Issuer of the "Project",
as described in Exhibit A to the Contract (hereinafter mentioned), which
Project is of the character of projects permitted by, and will accomplish
the purposes of, the Act; and
71<PAGE>
Exhibit 4.11
WHEREAS, the Issuer has entered into an Installment Purchase Contract,
dated as of August 1, 1981, (herein called the "Original Contract"), as
amended and supplemented by a First Supplemental Installment Purchase
Contract, dated as of May 1, 1982, and an Amendment to Exhibit A of the
Installment Purchase Contract (herein called the "Amendment to Exhibit A"),
dated April 7, 1983 (said Original Contract, as so amended and as
supplemented by the Second Supplemental Installment Purchase Contract
hereinafter mentioned and any other amendments or supplements thereto
permitted by the Indenture, being herein called the "Contract"), with the
Company, pursuant to which the Issuer has sold to the Company, and the
Company has purchased from the Issuer, all the Issuer's rights, title and
interest in the Project at a purchase price which, together with the
interest thereon, is payable in installments (herein called the "Purchase
Price Installments") in amounts sufficient to pay the principal of and
premiums, if any, and interest on the Bonds issued to pay a portion of the
Cost (as defined in the Contract) of the Project; and
WHEREAS, for the purpose of providing funds to pay a portion of the
Cost of the Project, the Issuer heretofore authorized, pursuant to a
resolution duly adopted on May 11, 1981, the issuance of not exceeding
$ 2 50,000,000 aggregate principal amount of its Hillsborough County
Industrial Development Authority Pollution Control Revenue Bonds (Tampa
Electric Company Project; and
WHEREAS, pursuant to resolutions duly passed and adopted by the Issuer
on May 11, 1981 and August 5, 1981, the Issuer determined to issue and
sell, pursuant to Section 208 of the Indenture, a series of said revenue
bonds, designated "Pollution Control Revenue Bonds (Tampa Electric Company
Project), Series "A", dated as of August 1, 1981 (said bonds being herein
called the "Series A Bonds"), in the aggregate principal amount of
$25,000,000 and to reserve the remaining $225,000,000 of said revenue bonds
for future issuance; and
WHEREAS, pursuant to a resolution duly passed and adopted on April 28,
1982, the Issuer determined to issue and sell, pursuant to Section 209 of
the Indenture, a series of revenue bonds, designated "Pollution Control
Revenue Bonds (Tampa Electric Company Project), Series "B", dated as of May
1, 1982, in the aggregate principal amount of $100,000,000 and to reserve
the remaining $125,000,000 of said revenue bonds for future issuance; and
72<PAGE>
Exhibit 4.11
WHEREAS, the Issuer will enter into a Second Supplemental Installment
Purchase Contract, dated as of June 1, 1983 (herein called the "Second
Supplemental Contract") with the Company, pursuant to which the Company
will grant to the Issuer to the extent described in the Second Supplemental
Contract a subordinated security interest in the Collateral as defined in
the Second Supplemental Contract (herein called the "Subordinated Security
Interest"); and
WHEREAS, the execution and delivery of this Second Supplemental
Indenture and the Second Supplemental Contract have been duly authorized by
a resolution of the Issuer, as permitted by Articles XI and XII of the
Indenture; and
WHEREAS, all acts, conditions and things required by the Constitution
and laws of the State of Florida to happen, exist and be performed
precedent to and in the execution and delivery of this Second Supplemental
Indenture and the Second Supplemental Contract have happened, exist and
have been performed as so required in order to make the Original Indenture,
as amended by the First Supplemental Indenture and this Second Supplemental
Indenture, a valid and binding trust indenture for the security of the
Bonds in accordance with its terms and in order to make the Original
Contract, as amended by the First Supplemental Contract, the Amendment to
Exhibit A and the Second Supplemental Contract, a valid and binding
installment purchase contract in accordance with its terms; and
WHEREAS, the Trustee has accepted the trusts created by this Second
Supplemental Indenture and in evidence thereof has joined in the execution
hereof;
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL TRUST INDENTURE WITNESSETH,
that in consideration of the premises, of the acceptance by the Trustee of
the trusts hereby created, and also for and in consideration of the sum of
One Dollar ($1.00) to the Issuer in hand paid by the Trustee at or before
the execution and delivery of this Second Supplemental Indenture, the
receipt of which is hereby acknowledged, and in order further to secure the
payment of the principal of all the Bonds at any time issued and
outstanding hereunder and the premium, if any, and the interest thereon
according to their tenor, purport and effect, and in order further to
secure the performance and observance of all the covenants, agreements and
conditions therein and herein contained, the Issuer has executed and
delivered this Second Supplemental Indenture and has pledged and assigned
and does hereby pledge and assign to the Trustee its Subordinated Security
Interest in the Collateral, all as security for the payment of the Bonds
and the premium, if any, and interest thereon and as security for the
satisfaction of any other obligation assumed by it in connection with such
Bonds, and it is so mutually agreed and covenanted by and between the
parties hereto, for the equal and proportionate benefit and security,
except as otherwise hereinafter expressly provided, of al and singular the
present and future holders of the Bonds and the coupons appertaining
thereto issued and to be issued under this Indenture, without preference,
priority or distinction as to lien or otherwise, except as otherwise
hereinafter expressly provided, of any one Bond over any other Bond, by
reason of priority in the issue, sale or negotiation thereof or otherwise;
PROVIDED, HOWEVER, that if, after the rights, title and interest of
the Trustee in and to the estate pledged and assigned to it under the
73<PAGE>
Exhibit 4.11
Indenture and this Supplemental Indenture shall have ceased, terminated and
become void in accordance with Article XIII of the Indenture, and the
principal of and premium, if any, and interest on all of the Bonds shall
have been paid to the Bondholders and the bearers of interest coupons or
shall have been paid to the Company pursuant to Section 505 of the
Indenture, then the Indenture and all covenants, agreements and other
obligations of the Issuer thereunder and hereunder shall cease, determine
and be void, and thereupon the Trustee shall cancel and Issuer and the
Company such instruments in writing as shall be required to evidence the
discharge thereof; otherwise the Indenture is to be and shall remain in
full force and effect.
THIS SECOND SUPPLEMENTAL TRUST INDENTURE FURTHER WITNESSETH, and it is
expressly declared that all Bonds issued and secured under the Indenture
are to be issued, authenticated and delivered and all said Purchase Price
Installments, revenues and other income and moneys hereby pledged and
assigned, are to be dealt with and disposed of under, upon and subject to
the terms, conditions, stipulations, covenants, agreements, trusts, users
and purposes as hereinafter expressed, and the Issuer has agreed and
covenanted, and does hereby agree and covenant, with the Trustee and with
the respective holders and owners, from time to time, of the Bonds or
coupons, or any part thereof, as follows, that is to say:
74<PAGE>
Exhibit 4.11
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 101. Definitions. All words and terms defined in Section 1.1
of the Original Contract, as amended by the First Supplemental Contract,
the Amendment to Exhibit A and the Second Supplemental Contract, and in the
Original Indenture, as amended by the First Supplemental Indenture shall
have the same meanings in this Second Supplemental Indenture, unless
otherwise specifically defined herein. All terms used herein which are
defined in the recitals hereto shall have the meanings there given to them
unless the context otherwise requires.
Section 102. Rules of Construction. The rules of construction set
forth in Section 102 of the Original Indenture shall be applicable to this
Second Supplemental Indenture.
ARTICLE II
SUPPLEMENT
Section 201. Subordinated Security Interest. Article V of the
Indenture is hereby amended by adding at the end thereof a new Section 507
as follows:
"Section 507. Termination of Subordinated Security interest. Upon
satisfaction by the Company of its obligations under Section 5.1 (a) of the
Contract, the Trustee shall cause the execution and delivery to the Company
of such documents as shall be necessary to effect or to evidence the
termination of the Subordinated Security Interest."
75<PAGE>
Exhibit 4.11
Section 202. Counterparts. This Second Supplemental Indenture may be
executed in multiple counterparts, each of which shall be regarded for all
purposes as an original, and such counterparts shall constitute but one and
the same instrument.
I N WITNESS WHEREOF, HILLSBOROUGH COUNTY INDUSTRIAL DEVELOPMENT
AUTHORITY has caused this Second Supplemental Indenture to be executed by
its Chairman and its official seal to be impressed thereon and attested by
its Secretary, and NCNB NATIONAL BANK OF FLORIDA (formerly, Exchange Bank
and Trust Company of Florida) has caused this Second Supplemental Indenture
to be executed by a Vice President and its corporate seal to be impressed
thereon and attested by an Corporate Trust Officer for and on its behalf,
all as of the date first above written.
HILLSBOROUGH COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY
(Seal) By______________________________
Chairman
Approved by General Counsel
to the Hillsborough County
Industrial Development
___________________________ Authority
Asst. Secretary
By______________________________
Warren M. Cason, Esq.
NCNB NATIONAL BANK OF FLORIDA
By______________________________
(Seal)
Attest:
___________________________
Corporate Trust Officer
76<PAGE>
Exhibit 4.11
STATE OF FLORIDA )
) ss.:
COUNTY OF HILLSBOROUGH )
The foregoing instrument was acknowledged before me this 22 day of
June, 1983, by SAMUEL I. LATIMER, the Chairman of the Hillsborough County
Industrial Development Authority, the public body corporate and politic and
p u b lic instrumentality described in and which executed the above
instrument.
________________________________
Notary Public
(NOTARIAL SEAL) My commission expires:
STATE OF FLORIDA )
) ss.:
COUNTY OF HILLSBOROUGH )
The foregoing instrument was acknowledged before me this 22 day of
June, 1983, by Ellsworth G. Simmons, Asst. Secretary of Hillsborough County
Industrial Development Authority, the public body corporate and politic and
p u b lic instrumentality described in and which executed the above
instrument.
________________________________
Notary Public
(NOTARIAL SEAL) My commission expires:
77<PAGE>
Exhibit 4.11
STATE OF FLORIDA )
) ss.:
COUNTY OF HILLSBOROUGH )
The foregoing instrument was acknowledged before me this June 23,
1983, by EDGAR L. TROCKE a Vice President of NCNB NATIONAL BANK OF FLORIDA,
the national banking association described in and which executed the above
instrument on behalf of said national banking association.
________________________________
Notary Public
My commission expires:
(NOTARIAL SEAL)
STATE OF FLORIDA )
) ss.:
COUNTY OF HILLSBOROUGH )
The foregoing instrument was acknowledged before me this June 23,
1983, by RENEE COCHELL, a Corporate Trust Officer of NCNB NATIONAL BANK OF
FLORIDA, the national banking association described in and which executed
the above instrument on behalf of said national banking association.
________________________________
Notary Public
My commission expires:
(NOTARIAL SEAL)
78<PAGE>
Exhibit 4.14
_________________________________________________________________
HILLSBOROUGH COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
and
TAMPA ELECTRIC COMPANY
_________________________________________________________________
FIRST SUPPLEMENTAL INSTALLMENT PURCHASE CONTRACT
_________________________________________________________________
Dated as of August 2, 1984
_________________________________________________________________
Relating to
$3,950,000 Hillsborough County Industrial
Development Authority Pollution
Control Revenue Bonds (Tampa
Electric Company Project),
Series 1984A
93<PAGE>
Exhibit 4.14
FIRST SUPPLEMENTAL INSTALLMENT PURCHASE CONTRACT
This FIRST SUPPLEMENTAL INSTALLMENT PURCHASE CONTRACT, dated as of the
2nd day of August, 1984 (the "First Supplemental Contract") to the
INSTALLMENT PURCHASE CONTRACT made and entered into as of the 31st day of
January, 1984 (the "Original Contract"), by and between the HILLSBOROUGH
COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, a public body corporate and
politic and a public instrumentality created pursuant to the laws of the
State of Florida (the "Issuer"), and TAMPA ELECTRIC COMPANY, a corporation
organized and existing under the laws of the State of Florida (the
"Company"):
W I T N E S S E T H:
In consideration of the respective representations and agreements
hereinafter contained, the parties hereto agree as follows (provided that
in the performance of the agreements of the Issuer herein contained, any
obligation it may thereby incur for the payment of money shall not be a
debt, liability or obligation of any authority or county or of the State of
Florida or any political subdivision thereof, except to the extent that the
Bonds hereinafter mentioned shall be a limited obligation of the Issuer,
payable solely out of the moneys derived from the Original Contract and
this First Supplemental Contract (collectively, together with any other
supplements and amendments permitted by the Indenture, as defined in the
Original Contract, the "Contract", the sale of the Bonds referred to in
Section 4.2 of the Contract and in Article III hereof and the First
Mortgage Bonds, if any, referred to in Section 5.3 of the Contract):
94<PAGE>
Exhibit 4.14
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions. (a) All words and terms defined in
Section 1.1 of the Original Contract shall have the same meanings in this
First Supplemental Contract.
(b) In addition to words and terms elsewhere defined in this First
Supplemental Contract, the following words and terms shall have the
following meanings:
"Adjustable Rate Index" for the Series 1984A Bonds means for each
Interest Rate Period, the interest rate determined by the Indexing Agent as
of December 26 of the preceding Interest Rate Period, to be the average
yield of not less than 20 twelve-month securities selected by the Indexing
Agent and evaluated at par, the interest on each of which securities is
exempt from federal income taxation and the issuer of each of which has
long-term securities rated by Moody's Investors Service, Inc. and/or
Standard & Poor's Corporation in the same long-term debt category as the
rating of the Series 1984A Bonds (without regard to any rating refinement
or graduation by a numerical modifier or otherwise); provided, however,
that in the event the Series 1984A Bonds are no longer rated by Moody's
Investors Service, Inc. or by Standard & Poor's Corporation or that the
Indexing Agent no longer determines or fails to determine the Adjustable
Rate Index, the Adjustable Rate Index for such Interest Rate Period will be
determined by the Remarketing Agent and will be 1/4 of 1% over the average
twelve-month yield of project notes guaranteed by the U.S. Department of
Housing and Urban Development, evaluated at par, or if no such project
notes are outstanding, 65% of the average twelve-month yield of U.S.
Treasury Bonds, evaluated at par. The Adjustable Rate Index for each
Interest Rate Period shall be set forth in a written certificate of the
Indexing Agent (or the Remarketing Agent if appropriate delivered to the
Company, the Remarketing Agent and the Trustee on December 26 of each year.
"Barnett Prime Rate" means in respect of the Series 1984A Bonds, the
prime commercial lending rate announced by Barnett Bank of Tampa, N.A., as
in effect from time to time at its principal office in Tampa, Florida.
"Contract" means the Original Contract, together with this First
Supplemental Contract and any other supplements and amendments permitted by
the Indenture.
" F i r s t Supplemental Contract" means this First Supplemental
I n stallment Purchase Contract, as amended and supplemented by any
amendments and supplements hereto permitted by the Indenture.
95<PAGE>
Exhibit 4.14
"First Supplemental Indenture" means the First Supplemental Trust
Indenture, dated as of August 2, 1984, by and between the Hillsborough
County Industrial Development Authority and NCNB National Bank of Florida,
as trustee, as amended and supplemented by any amendments and supplements
thereto permitted by the Indenture.
"Fixed Rate Date" means for the Series 1984A Bonds, the date as of
which all of the Series 1984A Bonds then outstanding shall have been
converted to bear interest at a rate determined on the basis of the Fixed
Rate Index, in accordance with the Indenture, which shall be on the first
day of any month if the Series 1984A Bonds are converted on or before
January 1, 1985, or on January 31, 1985, or on February 1 if the Series
1984A Bonds are converted in 1986 or thereafter.
"Fixed Rate Index" for the Series 1984A Bonds means for each Interest
Rate Period, the interest rate determined by the Indexing Agent on December
26 of the preceding Interest Rate Period until the Fixed Rate Date and, at
the request of the Company, on the 26th day of each month during 1984, to
be the average yield of not less than 20 securities selected by the
Indexing Agent and evaluated at par, the term of each of which securities
is substantially equal to the remaining term of the Series 1984A Bonds, the
interest on each of which is exempt from federal income taxation and each
of which is rated by Moody's Investors Service, Inc. and/or Standard &
Poor's Corporation in the same category as the rating of the Series 1984A
Bonds (without regard to any rating refinement or graduation by numerical
modifier or otherwise); provided, however, that in the event the Series
1984A Bonds are no longer rated by Moody's Investors Service, Inc. or
Standard & Poor's Corporation or that the Indexing Agent no longer
determines or fails to determine a Fixed Rate Index, the Fixed Rate Index
for such Interest Rate Period shall be based on a percentage of the most
recently published "Bond Buyer Revenue Bond Index" and on the remaining
term of the Series 1984A Bonds as follows:
Percentage of the Bond Remaining Term of the
Buyer Revenue Bond Index Series 1984A Bonds
100% 26 to 21 years
97 20 to 18 years
95 17 to 15 years
90 14 to 12 years
88 11 to 9 years
80 8 to 6 years
70 Less than 6 years
96<PAGE>
Exhibit 4.14
In the event the "Bond Buyer Revenue Bond index" is no longer published by
The Bond Buyer, the Fixed Rate Index for such Interest Rate Period shall be
85% of the annual interest rate determined by the Remarketing Agent to be
the annual yield on U.S. Treasury Bonds, evaluated at par and maturing in
the same year as the Series 1984A Bonds. The Fixed Rate Index for each
Interest Rate Period shall be set forth in a written certificate of the
Indexing Agent (or the Remarketing Agent if appropriate) delivered to the
Company, the Remarketing Agent and the Trustee on December 26 of each year,
and a preliminary Fixed Rate Index shall be set forth in a written
certificate delivered on November 26 of each year until the Fixed Rate Date
and, at the request of the Company, on the 26th day of each month during
1984.
"Indenture" means the Original Indenture, together with the First
Supplemental Indenture and any other supplements and amendments permitted
thereby.
"Interest Rate Period" shall mean, for the Series 1984A Bonds, the
period from August 2, 1984 to and including the earlier of January 30, 1985
or the day before the Fixed Rate Date, and thereafter from the day after
the last day of the first Interest Period until January 31, 1986, and for
each twelve-month period thereafter, the period from February 1 to and
including January 31 of the next calendar year.
"1974 Contract" means the Installment Purchase and Security Contract,
dated as of March 1, 1972, as amended and supplemented by a First
Supplemental Installment Purchase and Security Contract, dated as of
December 1, 1974, a Second Supplemental Installment Purchase and Security
Contract, dated as of December 1, 1974 and a Third Supplemental Installment
Purchase and Security Contract, dated as of May 1, 1976, by and between the
Issuer and the Company, and any further amendments and supplements thereto
permitted by the 1974 Indenture.
"1974 Improvements" means the pollution control facilities located at
the 1974 Units, including any structures, machinery, fixtures, improvements
and equipment, all as described in Exhibits A-1 and B-2 attached to the
1974 Contract, as such facilities may at any time exist.
97<PAGE>
Exhibit 4.14
"1974 Indenture" means the Trust Indenture, dated as of March 1, 1972,
as amended and supplemented by a First Supplemental Trust Indenture, dated
as of November 1, 1974 and a Second Supplemental Trust Indenture, dated as
of December 1, 1974, from the Hillsborough County Industrial Development
Authority to New England Merchants National Bank (now, Bank of New England,
N.A.), as trustee and The Florida National Bank at Lakeland, as co-trustee.
"1974 Units" means, collectively, Units Nos. 1, 2 and 3 of the Big
Bend Station, the Gannon Station and the Hooker's Point Station, and
related support facilities, as they may at any time exist.
"Original Contract" means the Installment Purchase Contract, dated as
of January 31, 1984, by and between the Hillsborough County Industrial
Development Authority and Tampa Electric Company.
"Original Indenture" means the Trust Indenture, dated as of January
31, 1984, by and between the Hillsborough County Industrial Development
Authority and NCNB National Bank of Florida, as Trustee.
"Outstanding Obligations" means $4,000,000 aggregate principal amount
of the Hillsborough County Industrial Development Authority Pollution
Control Revenue Bonds (Tampa Electric Company Project), Series 1974A, dated
as of December 1, 1974, and stated to mature in the aggregate principal
amount of $4,000,000 on December 1, 1984, issued under Section 209 of the
1974 Indenture to pay a portion of the cost of the 1974 Improvements.
" O r iginal Project" means, collectively, the pollution control
facilities described in Exhibit A to the Original Contract.
"Project" means the 1974 Improvements, together with the Original
Project.
"Series 1984A Bonds" means the Additional Bonds authorized to be
issued under Section 201 of the First Supplemental Indenture and pursuant
to Section 209 of the Indenture, for the purpose of providing funds for
paying or providing for the payment of the principal of the Outstanding
Obligations, heretofore issued under the Act for the purpose of paying a
portion of the cost of the 1974 Improvements.
98<PAGE>
Exhibit 4.14
"2011 Series First Mortgage Bonds" means the First Mortgage Bonds to
be created by the 2011 Series Supplemental Indenture and, at the option of
the Company, delivered to the Trustee as security for the Company's
obligation to pay the Purchase Price Installments relating to the Series
1984A Bonds, pursuant to Section 5.3 of the contract.
"2011 Series Supplemental Indenture" means the Supplemental Indenture
of Mortgage, to be dated as of the date of the 2011 Series First Mortgage
Bonds, if any, by and between the Company and State Street Bank and Trust
Company and Barnett Banks Trust Company, N.A. (successor trustee to Sun
Bank of Tampa Bay), as trustees under the First Mortgage.
"Units" means, collectively, the Unit and the 1974 Units.
Section 1.2. Rules of Construction. The rules of construction set
forth in Section 1.2 of the Original Contract shall be applicable to this
First Supplemental contract.
99<PAGE>
Exhibit 4.14
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations by the Issuer. The Issuer makes the
following representations, as of the date of delivery of this First
Supplemental Contract:
(a) The Issuer is duly authorized under the provisions of the
Act to enter into, execute and deliver this First Supplemental
Contract, to undertake the transactions contemplated by this First
Supplemental Contract and by the Original Contract and to carry out
its obligations hereunder and thereunder, and the Issuer has duly
authorized the execution and delivery of the First Supplemental
Contract;
(b) The Issuer proposes to cause the provision for payment of
the principal of the Outstanding Obligations pursuant to the terms and
conditions expressed herein, all for the purpose of promoting
effective and efficient pollution control throughout the State of
Florida;
(c) The Issuer proposes to issue under Section 201 of the First
Supplemental Indenture and pursuant to Section 209 of the Indenture
$3,950,000 aggregate principal amount of its Series 1984A Bonds for
the purpose of providing funds for providing for the payment of the
principal of the Outstanding Obligations and for paying the cost of
issuing the Series 1984A Bonds; and
(d) By proper action of the Issuer, the officers of the Issuer
executing and attesting this First Supplemental Contract have been
duly authorized to execute and deliver this First Supplemental
Contract.
Section 2.2. Representations by the Company. The Company makes the
following representations, as of the date of delivery of this First
Supplemental Contract:
(a) The Company is a corporation organized and existing under the
laws of the State of Florida and has power to enter into this First
Supplemental Contract;
(b) By proper corporate action, the officers executing and attesting
this First Supplemental Contract have been duly authorized to execute and
deliver this First Supplemental Contract;
(c) Neither the execution or delivery of this First Supplemental
Contract nor the consummation of the transactions contemplated herein, nor
the fulfillment of or compliance with the terms hereof will conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under, the Company's Restated Articles of Incorporation, its by-
laws, or any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is now a party or by which it is bound;
(d) The facilities comprising the Original Project and the 1974
Improvements constitute a "project" within the meaning of Section 159.44
100<PAGE>
Exhibit 4.14
(2) of the Act;
(e) (i) All of the proceeds (exclusive of accrued interest) of the
Outstanding Obligations have been used for payment of a portion of the
"cost" (within the meaning of the Act) of the 1974 Improvements, except as
provided under Article IV of the 1974 Indenture or under Article IV of the
Indenture and (ii) all of the proceeds (exclusive of accrued interest) of
the Series 1984A Bonds will be used for the provision for payment of the
principal of the Outstanding Obligations or for payment of the "cost"
(within the meaning of the Act) of issuing the Series 1984A Bonds, except
as provided in Article IV of the Indenture;
(f) Not less than substantially all of the proceeds of the
Outstanding Obligations have been used to provide "sewage or solid waste
disposal facilities" or "air or water pollution control facilities" within
the meaning of Sections 103(b)(4)(E) and (F), respectively, of the Code;
and
(g) All necessary authorizations, approvals, consents and other
orders of any governmental authority or agency for the execution and
delivery by the Company of this First Supplemental Contract have been
obtained and are in full force and effect.
101<PAGE>
Exhibit 4.14
ARTICLE III
ISSUANCE OF THE SERIES 1984A BONDS
Section 3.1. Agreement of the Issuer to Issue Series 1984A Bonds;
Application of Series 1984A Bond Proceeds. The Issuer agrees that it will,
as promptly as possible, issue, sell and cause to be delivered to the
purchasers thereof $3,950,000 aggregate principal amount of Series 1984A
Bonds for the purpose of providing funds for providing for the payment of
the principal of the Outstanding Obligations and for paying the cost of
issuing the Series 1984A Bonds. Upon receipt of, and from, the proceeds
from the sale of the Series 1984A Bonds, the Issuer will cause the Trustee
(i) to pay or deliver to the trustee under the 1974 Indenture the amounts
or securities required to provide for the payment of the principal of the
Outstanding Obligations and (ii) to deposit in a special account within the
Construction Fund the balance of the proceeds received from the sale of the
Series 1984A Bonds for application to the payment of the cost of issuing
the Series 1984A Bonds.
Section 3.2. Agreement of the Company to Provide for the Payment of
Interest on the Outstanding Obligations and of Expenses. The Company
agrees that simultaneously with the delivery of the Series 1984A Bonds, it
will pay or deliver to the trustee under the 1974 Indenture (a) for deposit
to the Bond Service Account, the amount or securities required to provide
for the payment of interest on the Outstanding Obligations and (b) the
amount required to provide for the payment of the fees and expenses
relating to the Outstanding Obligations of the trustee and of the paying
agent under the 1974 Indenture.
102<PAGE>
Exhibit 4.14
ARTICLE IV
CONVEYANCE CLAUSE
Section 4.1. Sale of 1974 Improvements and Confirmation of Sale of
1974 Improvements; and Confirmation of Subordinated Security Interest. (a)
The Issuer hereby grants, bargains and sells to the Company, and the
Company hereby purchases from the Issuer all of the Issuer's rights, title
and interest in the 1974 Improvements and each and every component thereof,
in accordance with the provisions of the Contract. The Issuer hereby
confirms its grant, bargaining and sale to the Company, and the Company
hereby confirms its purchase from the Issuer, pursuant to and in accordance
with the provisions of the 1974 Contract, all of the Issuer's rights, title
and interest in the 1974 Improvements and each and every component thereof.
The Issuer agrees to execute and deliver to the Company such further
conveyances or other evidences of title to the 1974 Improvements and to
each and every component thereof as the Company may from time to time
reasonably require.
(b) As security for the performance by the Company of its obligations
under Section 5.1(a) of the Contract, the Company hereby grants to the
Issuer a subordinated security interest in the portion of the Collateral
relating to the 1974 Improvements and in each component thereof that has
been acquired by the Company from the Issuer. It is agreed that the
security interest hereby granted (including the Issuer's rights of
possession or repossession of such portion of the Collateral or any rights
conferred upon the Issuer under the Uniform Commercial Code of the State of
Florida or otherwise) is hereby made, and shall at all times be, subject to
(i) the rights of the holders of the first mortgage bonds of the Company,
including the First Mortgage Bonds, issued and outstanding or to be issued
under, the lien of the First Mortgage, (ii) the security interest granted
to the Issuer pursuant to the 1974 Contract and (iii) any future security
interest or lien created to secure any indebtedness or other obligations of
the Company now existing or hereinafter issued or incurred under any
indenture or other instrument that expressly provides that any such
security interest or lien securing such indebtedness or obligations shall
be superior to the security interest hereby granted; provided that nothing
in said First Mortgage, the 1974 Contract or in such other instrument or
indenture or in this Section 4.1 shall affect or diminish the obligations
of the Company under Section 5.1(a) of the Contract. Such security
interest shall remain in effect until the Company shall have satisfied its
obligations under Section 5.1(a) of the Contract at which time the Issuer
shall cause the execution and delivery to the Company of such documents as
shall be necessary to effect or evidence the termination of such security
interest.
103<PAGE>
Exhibit 4.14
Section 4.2. Addition to Exhibit A; 1974 Improvements Part of the
Project. Exhibit A of the Original Contract is hereby amended by adding
Exhibit A-1 attached hereto, and particularly for purposes of Article V of
the Contract, the word "Project" shall be deemed to include the 1974
Improvements as well as the Original Project.
ARTICLE V
SUPPLEMENTS AND AMENDMENTS TO THE ORIGINAL CONTRACT
Section 5.1. Right to Prepay Purchase Price of Project. Section 10.1
of the Original Contract is hereby amended by relettering the existing
subsection 10.1(b) as 10.1(c) and by adding a new subsection 10.1(b) as
follows:
(b) The Company shall have, and is hereby granted, the option to
prepay so much of the unpaid balance of the purchase price of the
Project, together with interest thereon, as may be required to redeem,
pursuant to Section 301(f) of the Indenture, all Series 1984A Bonds
then outstanding, if:
( i ) in the opinion of the Company, the continued
construction or operation by the Company of the 1974 Units is
impracticable, uneconomical or undesirable due to (A) the
imposition of taxes or other liabilities or burdens not being
imposed as of the date of the issuance of the Series 1984A Bonds,
(B) changes in technology or in the economic availability of raw
materials or operating supplies or equipment or (C) destruction
of or damage to all or a substantial portion of the 1974 Units;
or
(ii) all or substantially all of the 1974 Units shall have
been condemned or taken by eminent domain; or
(iii) the construction or operation by the Company of the
1974 Units shall have been enjoined; or
104<PAGE>
Exhibit 4.14
(iv) in the event the Series 2011 First Mortgage Bonds have been
issued, all or substantially all the mortgaged and pledged property
constituting bondable property which at the time shall be subject to the
lien of the First Mortgage as a first lien shall be released from the lien
of the First Mortgage pursuant to the provisions thereof, and available
moneys in the hands of the trustee or trustees at the time serving as such
under the First Mortgage, including any moneys deposited by the Company
available for the purpose, are sufficient to redeem all the first mortgage
bonds of all series at the redemption prices (together with accrued
interest to the date of redemption) specified therein applicable to the
redemption thereof upon the happening of such event.
For the purposes of this subsection (b) of Section 10.1, the
"opinion of the Company" shall be expressed to the Issuer and the
Trustee by delivery of a certified copy of a resolution of the Board
of Directors of the Company or the Executive Committee thereof stating
that it is the opinion of said Board of Directors or Executive
Committee that the circumstances, situations or conditions described
in subclause (A), (B) or (C) of clause (i) of said subsection (b)
exist to the extent required for the Company to exercise the option
provided.
Section 5.2. Special Mandatory Prepayment of Purchase Price. Section
10.3 of the Original Contract is hereby amended by adding at the end
thereof, a new subsection 10.3(c) as follows:
(c) Special Mandatory Prepayment of Purchase price (Series 1984A
Bonds). If, as a result of the failure of the Company to observe any
covenant, agreement or representation in the Contract, a court of
competent jurisdiction or an administrative agency finally determines
(such determination not to be considered final unless the Company has
been given written notice and, if it so desires, has been afforded an
opportunity, at the Company's expense, to contest, either directly or
in the name of any holder of a Series 1984A Bond, any such
determination or until conclusion of any appellate review if sought by
the Company) that the interest payable on any Series 1984A Bond is
includible for federal income tax purposes in the gross income, as
defined in Section 61 of the Code, of any holder of a Series 1984A
Bond (other than a "substantial user" of the Project or a "related
person" as defined in the Code), the Company shall, within 180 days of
the time of such final determination, prepay so much of the unpaid
balance of the purchase price of the Project as shall be sufficient to
provide for the redemption of all or any portion of the Series 1984A
Bonds in accordance with the provisions of Section 301(h) of the
Indenture on the date selected for redemption at a redemption price of
100% of the principal amount thereof, plus interest accrued to the
redemption date, but without premium. The Company will give notice to
the Issuer and the Trustee in writing of the date selected for
redemption not later than 90 days after the date of such final
determination, such redemption date to be not more than 90 days after
the date of such written notice.
105<PAGE>
Exhibit 4.14
Section 5.3. Purchase of Bonds. The second paragraph of Section 10.5
of the Original Contract is hereby amended by adding at the end thereof the
following sentence:
S e ries 1984A Bonds purchased by the Company from moneys
transferred to the Bond Fund from the Construction Fund pursuant to
Section 406 of the Indenture shall be delivered to the Trustee for
cancellation in accordance with the Indenture.
Section 5.4. Mandatory Purchase by the Company of the Series
1984A Bonds at the Election of the Registered Owners. Article X of the
Original Contract is hereby amended by adding at the end thereof a new
Section 10.9 as follows:
Section 10.9. Mandatory Purchase By the Company of the
Series 1984A Bonds.
(a) Except as provided in Section 10.10 hereof, the Company
hereby agrees to purchase on the first day of each Interest Rate
Period (except the first Interest Rate Period) all of the Series 1984A
Bonds or portions thereof properly tendered to the Tender Agent for
purchase in accordance with Section 307 of the Indenture, at a price
equal to 100% of the principal amount thereof; provided, however, that
if and to the extent the Remarketing Agent sells all or a portion of
the Series 1984A Bonds so tendered for purchase, the Company shall be
deemed to have satisfied its obligation to purchase the Series 1984A
Bonds so tendered for purchase and resold as described in this
subsection 10.9(a).
(b) To comply with the requirements of subsection (a) of this
Section 10.9, the Company shall deposit with the Tender Agent in
immediately available funds an amount that, together with the proceeds
received by the Remarketing Agent from the sale of all or a portion of
the Series 1984A Bonds tendered for purchase, will be sufficient to
cause the Tender Agent to purchase on behalf of the Company all of the
Series 1984A Bonds tendered for purchase.
(c) On or before the date on which the Series 1984A Bonds are to
be purchased pursuant to tenders made in accordance with Section 307
of the Indenture the Company shall obtain from the Remarketing Agent
and deliver to the Tender Agent a certificate setting forth the
numbers and principal amounts of all Series 1984A Bonds sold by the
Remarketing Agent and the price or prices at which such Series 1984A
Bonds were sold.
106<PAGE>
Exhibit 4.14
Section 5.5. Option to Terminate the Company's Obligation to Purchase
the Series 1984A Bonds; Automatic Termination of the Company's Obligation
to Purchase the Series 1984A Bonds. Article X of the Original Contract is
hereby amended by adding at the end thereof a new Section 10.10 as follows:
Section 10.10. Option to Terminate the Company's Obligation to
Purchase the Series 1984A Bonds; Automatic Termination of the
Company's Obligation to Purchase The Series 1984A Bonds.
(a) The Company may elect to terminate its obligation under
Section 10.9 hereof to purchase all of the Series 1984A Bonds tendered
for purchase by delivering to the Trustee, the Issuer, the Tender
Agent and the Remarketing Agent on or before December 26 if the Fixed
Rate Date is to be after January 1, 1985 and on or before the 26th day
of the second month preceding the Fixed Rate Date if the Fixed Rate
Date is to be on or before January 1, 1985, written notice of its
intention so to do, together with a written opinion of Bond Counsel to
the effect that the termination of such obligation will not cause the
interest on the Series 1984A Bonds or any thereof to become subject to
federal income tax. Upon receipt by the Trustee of notice from the
Company of its election to terminate its obligation to purchase such
Series 1984A Bonds, the Trustee will give notice on January 1 (or on
the first day of the month immediately preceding the Fixed Rate Date
if the Fixed Rate Date is to be on or before January 1, 1985) to the
registered owners of Series 1984A Bonds that beginning in the next
Interest Rate Period and for each Interest Rate Period thereafter,
such Series 1984A Bonds will bear interest at the rate determined in
a c c ordance with Section 201(c)(ii) of the First Supplemental
Indenture. After the Fixed Rate Date, the Series 1984A Bonds shall
bear interest at such rate and the Company shall no longer have any
obligation to purchase Series 1984A Bonds tendered for purchase.
(b) In the event that prior to the Fixed Rate Date, the Fixed
Rate Index on November 26 and December 26 in 1985 or any year
thereafter is 5% or lower, the obligation of the Company to purchase
all of the Series 1984A Bonds tendered for purchase on February 1 of
any year after the year in which the Fixed Rate Index reached 5% or
lower shall terminate.
107<PAGE>
Exhibit 4.14
IN WITNESS WHEREOF, the Issuer and the Company have caused this First
Supplemental Contract to be executed in their respective names by their
duly authorized officers and their respective seals to be hereunto affixed
and attested by their duly authorized officers for and on their behalves,
all as of the date first above written.
HILLSBOROUGH COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY
By______________________________
Vice Chairman
ATTEST:
___________________________
Secretary
Approved as to form and legal
sufficiency
________________________________
General Counsel to the
Hillsborough County Industrial
Development Authority
TAMPA ELECTRIC COMPANY
By______________________________
Treasurer
ATTEST:
__________________________
Secretary
108<PAGE>
Exhibit 4.14
STATE OF FLORIDA )
) ss.:
COUNTY OF HILLSBOROUGH )
The foregoing instrument was acknowledged before me this 2 day of
August, 1984, by E.G. SIMMONS, Vice Chairman of the Hillsborough County
Industrial Development Authority.
________________________________
Notary Public
My commission expires:
(Notarial Seal)
STATE OF FLORIDA )
) ss.:
COUNTY OF HILLSBOROUGH )
The foregoing instrument was acknowledged before me this 2 day of
August, 1984, by HILMAN F. BOWDEN, Secretary of the Hillsborough County
Industrial Development Authority.
________________________________
Notary Public
My commission expires:
(Notarial Seal)
109<PAGE>
Exhibit 4.14
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 2nd day of August, 1984, before me personally came A.D. OAK, to
me know, who, being by me duly sworn, did depose and say that he resides at
715 South Edison Avenue, Tampa, Florida; that he is the Treasurer of Tampa
Electric Company, the corporation described in and which executed the above
instrument; that he knows the seal thereof; that the seal affixed to said
instrument is the corporate seal of said corporation; that it was so
affixed by authority of said corporation; and that he signed his name
thereto by authority of said corporation.
___________________________
Notary Public
My commission expires:
(Notarial Seal)
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 2nd day of August, 1984, before me personally came J.E.
SPROULL, to me known, who, being by me duly sworn, did depose and say that
he resides at 2413 Bayshore Boulevard, Tampa, Florida; that he is the
Secretary of Tampa Electric Company, the corporation described in and which
executed the above instrument; that he knows the seal thereof; that the
seal affixed to said instrument is the corporate seal of said corporation;
that it was so affixed by authority of said corporation; and that he signed
his name thereto by authority of said corporation.
___________________________
Notary Public
My commission expires:
(Notarial Seal)
110<PAGE>
Exhibit 4.14
Exhibit A-1
The 1974 Improvements
Properties of the Company
in or on which Component is
Project Components Located
1. Upgrading Electrostatic Precipitator,
Unit No. 1....................................Big Bend Station
2. Upgrading Electrostatic Precipitator,
Units Nos. 5 and 6............................Gannon Station
3. Electrostatic Precipitator,
Unit Nos. 2 and 3.............................Big Bend Station
4. Ash Reinjection Equipment,
United No. 3..................................Big Bend Station
5. Ash Silos and Associated Ash Handling
Equipment, Units Nos. 1, 2 and 3..............Big Bend Station
6. Sanitary System (extended aeration
package treatment plant), Units
Nos. 1, 2 and 3...............................Big Bend Station
7. Circulating Cooling Water Dilution
Systems, Units Nos. 1 and 2...................Big Bend Station
8. Once-Through Cooling Water Dilution
System, Unit No. 3............................Big Bend Station
9. Waste Treatment and Collection
Equipment (excluding Waste
Neutralization System), Units
Nos. 1, 2 and 3...............................Big Bend Station
10. Waste Treatment and Collection
Equipment.....................................Gannon Station
11. Waste Treatment and Collection
Equipment.....................................Hooker's Point
Station
12. Waste Neutralization System (treatment
of excess acid and base), Unit No. 3..........Big Bend Station
111<PAGE>
Exhibit 10.4
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR TIMOTHY L. GUZZLE
First Amendment
The TECO Energy Group Supplemental Executive Retirement Plan for
Timothy L. Guzzle, is hereby amended as follows effective as of October 1,
1994:
1. Section 2.1 is amended in its entirety to read as follows:
2.1 Annual earnings will have the same meaning as in the
retirement plan, except that the same will be determined without
regard to (a) any dollar limitation on such annual earnings that may
be imposed under the retirement plan or (b) any reduction in taxable
income as a result of voluntary salary reduction deferrals under the
TECO Energy Group Retirement Savings Excess Benefit Plan.
EXECUTED as of the date set forth above.
TECO ENERGY, INC.
By: /s/ G. F. Anderson
112<PAGE>
Exhibit 10.5
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR ROGER H. KESSEL
First Amendment
The TECO Energy Group Supplemental Executive Retirement Plan for Roger
H. Kessel, is hereby amended as follows effective as of October 1, 1994:
1. Section 2.1 is amended in its entirety to read as follows:
2.1 Annual earnings will have the same meaning as in the
retirement plan, except that the same will be determined without
regard to (a) any dollar limitation on such annual earnings that may
be imposed under the retirement plan or (b) any reduction in taxable
income as a result of voluntary salary reduction deferrals under the
TECO Energy Group Retirement Savings Excess Benefit Plan.
EXECUTED as of the date set forth above.
TECO ENERGY, INC.
By: /s/ T. L. Guzzle
113<PAGE>
Exhibit 10.6
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
First Amendment
The TECO Energy Group Supplemental Executive Retirement Plan is hereby
amended as follows effective as of October 1, 1994:
1. Section 2.1 is amended in its entirety to read as follows:
2.1 Annual earnings will have the same meaning as in the
retirement plan, except that the same will be determined without
regard to (a) any dollar limitation on such annual earnings that may
be imposed under the retirement plan or (b) any reduction in taxable
income as a result of voluntary salary reduction deferrals under the
TECO Energy Group Retirement Savings Excess Benefit Plan.
EXECUTED as of the date set forth above.
TECO ENERGY, INC.
By: /s/ T. L. Guzzle
114<PAGE>
Exhibit 10.16
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR ALAN D. OAK
First Amendment
The TECO Energy Group Supplemental Executive Retirement Plan for Alan
D. Oak, is hereby amended as follows effective as of October 1, 1994:
1. Section 2.1 is amended in its entirety to read as follows:
2.1 Annual earnings will have the same meaning as in the
retirement plan, except that the same will be determined without
regard to (a) any dollar limitation on such annual earnings that may
be imposed under the retirement plan or (b) any reduction in taxable
income as a result of voluntary salary reduction deferrals under the
TECO Energy Group Retirement Savings Excess Benefit Plan.
EXECUTED as of the date set forth above.
TECO ENERGY, INC.
By: /s/ T. L. Guzzle
115<PAGE>
Exhibit 10.17
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR KEITH S. SURGENOR
First Amendment
The TECO Energy Group Supplemental Executive Retirement Plan for Keith
S. Surgenor, is hereby amended as follows effective as of October 1, 1994:
1. Section 2.1 is amended in its entirety to read as follows:
2.1 Annual earnings will have the same meaning as in the
retirement plan, except that the same will be determined without
regard to (a) any dollar limitation on such annual earnings that may
be imposed under the retirement plan or (b) any reduction in taxable
income as a result of voluntary salary reduction deferrals under the
TECO Energy Group Retirement Savings Excess Benefit Plan.
EXECUTED as of the date set forth above.
TECO ENERGY, INC.
By: /s/ T. L. Guzzle
116<PAGE>
Exhibit 10.19
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR GIRARD F. ANDERSON
First Amendment
The TECO Energy Group Supplemental Executive Retirement Plan for
Girard F. Anderson, is hereby amended as follows effective as of October 1,
1994:
1. Section 2.1 is amended in its entirety to read as follows:
2.1 Annual earnings will have the same meaning as in the
retirement plan, except that the same will be determined without
regard to (a) any dollar limitation on such annual earnings that may
be imposed under the retirement plan or (b) any reduction in taxable
income as a result of voluntary salary reduction deferrals under the
TECO Energy Group Retirement Savings Excess Benefit Plan.
EXECUTED as of the date set forth above.
TECO ENERGY, INC.
By: /s/ T. L. Guzzle
117<PAGE>
Exhibit 10.21
TECO ENERGY GROUP
RETIREMENT SAVINGS EXCESS BENEFIT PLAN
ARTICLE I
GENERAL
1.1 Introduction. This Retirement Savings Excess Benefit Plan (the
"excess plan") is an amendment and restatement of the TECO Energy Group
Savings Excess Benefit Plan which was originally established in 1984 and
has been amended from time to time as set forth in Schedule A. The plan is
designed to provide eligible officers who are members and beneficiaries of
the TECO Energy Group Retirement Savings Plan (the "savings plan") a
benefit corresponding to the savings deposits, matching employer
contributions and cancelled vacation contributions that would have been
allocated to the member's accounts under the savings plan but for legal
limitations on the benefits that may be provided under the savings plan.
This excess plan also allows eligible officers to defer compensation under
a voluntary salary reduction agreement.
1.2 Definitions. Unless otherwise defined, all terms used in this
excess plan shall have the same meaning as those terms used in the savings
plan.
1.3 No Right to Corporate Assets. This excess plan is unfunded, and
the employers will not be required to set aside, segregate, or deposit any
funds or assets of any kind to meet their obligations hereunder. Nothing
in this excess plan will give a member, a member's beneficiary or any other
person any equity or other interest in the assets of the employers, or
create a trust or a fiduciary relationship of any kind between the
employers and any such person. Any rights that a member, beneficiary or
other person may have under this excess plan will be solely those of a
general unsecured creditor of the employers. Notwithstanding the
foregoing, TECO Energy may establish a grantor trust of which it is treated
as the owner under Section 671 of the Internal Revenue Code to provide for
the payment of benefits hereunder.
1.4 Nonalienation of Benefits. The rights and benefits of a member
of this excess plan are personal to the member. No interest, right or
claim under this excess plan and no distribution therefrom will be
assignable, transferable or subject to sale, mortgage, pledge,
hypothecation, anticipation, garnishment, attachment, execution or levy,
except by designation of beneficiary.
1.5 Binding Effect of Plan. This excess plan will be binding upon
and inure to the benefit of members and designated beneficiaries and their
heirs, executors and administrators, and to the benefit of the employers
and their assigns and successors in interest.
118 <PAGE>
Exhibit 10.21
1.6 Administration. This excess plan will be administered by the
Retirement Savings Plan Committee of the savings plan (the "committee") who
will have sole responsibility for its interpretation.
1.7 Interpretation. The portion of this excess plan that provides
benefits in excess of the restrictions on annual additions under Section
6.11 of the savings plan is intended to be an "excess benefit plan" as
defined in Section 3(36) of ERISA. The portion of the plan that provides
all other benefits is intended to be a deferred compensation plan for a
select group of management or highly compensated employees as provided in
Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. The plan will be
interpreted in a manner that comports with the foregoing intentions. To
the extent not governed by federal law, this excess plan will be construed,
enforced and administered according to the laws of the State of Florida.
ARTICLE II
EXCESS PLAN BENEFITS
2.1 Excess Savings Deposits. A member's enrollment in the savings
plan will constitute an agreement to reduce his salary and defer
compensation under this excess plan in the amount of savings deposits that
he is prevented from contributing to the savings plan because of (a) the
limitations of Article VI of the savings plan, (b) the limit on applicable
compensation under Section 2.1 of the savings plan or (c) a reduction in
the member's applicable compensation attributable to voluntary salary
reduction deferrals under this excess plan. The member's enrollment also
constitutes his agreement that his employer may retain any savings deposits
that would otherwise be returned to him pursuant to the provisions of the
savings plan.
2.2 Excess Matching Contributions.
(a) Quarterly Match. Each member will be entitled to the amount
of the fixed quarterly match that would have been made for such member
under Section 5.1(a) of the savings plan for the quarter on savings
deposits that are credited under this excess plan during such quarter.
(b) Annual Match. Each member who was employed on the last day
of the plan year or whose employment ended during the plan year
because of death, disability or retirement will be entitled to the
amount of the variable annual match that would have been made for such
member under Section 5.1(b) of the savings plan on savings deposits
that are credited under this excess plan during such year.
119 <PAGE>
Exhibit 10.21
2.3 Excess Cancelled Vacation Contributions. Each member will be
entitled to any cancelled vacation contributions that his employer is
prevented from contributing on behalf of the member because of the
restrictions on annual additions under Article VI of the savings plan or
the nondiscrimination requirements of Section 401(a)(4) of the Code.
ARTICLE III
SALARY REDUCTION DEFERRALS
3.1 Eligibility. The Chief Executive Officer of TECO Energy will
from time to time designate those officers of TECO Energy and its
subsidiaries who are eligible to make salary reduction deferrals under the
salary reduction feature of the plan.
3.2 Voluntary Deferrals. An eligible officer may elect to contribute
amounts under this plan on a voluntary salary reduction basis, not to
exceed 50% of the officer's base salary and 100% of the officer's incentive
award for the year.
3.3 Salary Reduction Elections. A voluntary salary reduction
election must be made in writing on or before the December 31 preceding the
year during which the compensation is to be earned, except that (a)
elections for 1994 must be made on or before October 31, 1994 and (b)
elections for the first year of eligibility of newly eligible officers must
be made within 30 days of the date of initial eligibility. All elections
must be in writing and are irrevocable after the effective date of the
election. An election is effective only with respect to compensation
earned after the election and is effective through December 31 of the year
to which it applies.
ARTICLE IV
ACCOUNTS AND CREDITS
4.1 Establishment of Accounts. For recordkeeping purposes only, the
committee will establish and maintain for each member such of the following
accounts as are appropriate:
(a) an excess savings contribution account;
(b) an excess matching contributions account;
(c) an excess cancelled vacation contributions account; and
(d) a salary reduction contributions account.
Credits and charges to such accounts will be made as provided in the plan.
120 <PAGE>
Exhibit 10.21
4.2 Credits to Excess Accounts. Excess savings deposits, excess
quarterly and annual matching contributions and excess cancelled vacation
contributions will be credited to the appropriate account as of the date
the amount would otherwise have been credited to the corresponding account
under the savings plan.
4.3 Credits to Salary Reduction Contributions Account. Salary
reduction contributions will be credited to a member's salary reduction
contributions account as of the date the amount would otherwise have been
paid to the member. The amount credited to a member's salary reduction
contributions account may be reduced to reflect the amount needed to
satisfy any tax withholding obligations attributable to the contribution.
4.4 Crediting Earnings. The committee will credit earnings to each
member's accounts in accordance with the method of determining earnings
established from time to time by the Compensation Committee of the Board of
Directors of TECO Energy. In the event of a change in control of TECO
Energy, the method of determining earnings with respect to amounts credited
to the plan for any year up to and including the year of the change in
control may not result in an earnings rate that is less favorable than the
rate that would apply under the method as in effect immediately before the
change in control. For purposes of this section, a "change in control of
TECO Energy" shall mean a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") whether or not TECO Energy is in fact required
to comply therewith; provided, that, without limitation, such change in
control shall be deemed to have occurred if:
(e) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than TECO Energy, any Trustee or
other fiduciary holding securities under an employee benefit plan of
TECO Energy or a corporation owned, directly or indirectly, by the
stockholders of TECO Energy in substantially the same proportions as
their ownership of stock of TECO Energy, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of TECO Energy representing 30% or more of
the combined voting power of TECO Energy's then outstanding
securities;
(f) during any period of 24 consecutive months (not including
any period prior to the effective date of this agreement), individuals
who at the beginning of such period constitute the board of directors
of TECO Energy (the "board") and any new director (other than a
director designated by a person who has entered into an agreement with
TECO Energy to effect a transaction described in paragraphs (a), (c)
or (d) of this Section 4.4) whose election by the board or nomination
for election by the stockholders of TECO Energy was approved by a vote
of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election
or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof;
121 <PAGE>
Exhibit 10.21
(g) the stockholders of TECO Energy approve a merger or
consolidation of TECO Energy with any other corporation, other than
(i) a merger or consolidation which would result in the voting
securities of TECO Energy outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 50%
of the combined voting securities of TECO Energy or such surviving
entity outstanding immediately after such merger or consolidation or
(ii) a merger or consolidation effected to implement a
recapitalization of TECO Energy (or similar transaction) in which no
"person" (as hereinabove defined) acquires 30% or more of the combined
voting power of TECO Energy's then outstanding securities; or
(h) the stockholders of TECO Energy approve a plan of complete
liquidation of TECO Energy or an agreement for the sale or disposition
by TECO Energy of all or substantially all of TECO Energy's assets.
ARTICLE V
DISTRIBUTIONS
5.1 Distributions. Distributions to a member upon retirement, death
or other termination of employment will be made at the same time and in the
same form as distributions to the member under Section 10.4 of the savings
plan. For forms of distribution other than a lump sum or installments for
a fixed period of years, the committee will distribute benefits at a time
and in a form that most closely approximates the form and time of
distributions to the member under the savings plan.
5.2 Designation of Beneficiary. A member may designate one or more
beneficiaries to receive any portion of the amount remaining in his
accounts as of the date of death and may revoke or change such a
designation at any time. If the member names two or more beneficiaries,
distribution to them will be in such proportions as the member designates
or, if the member does not so designate, in equal shares. Any designation
of beneficiary will be in writing on such form as the committee may
prescribe and will be effective upon filing with the committee. Any
portion of a distribution payable upon the death of a member which is not
disposed of by a designation of beneficiary, for any reason whatsoever,
will be paid to the member's spouse if living at his death, otherwise
equally to the member's natural and adopted children (and the issue of a
deceased child by right of representation), otherwise to the member's
estate.
5.3 Hardship Distributions from Accounts. The committee may, in its
discretion, distribute a portion or all of the member's accounts in case of
the member's financial hardship. The committee will determine the date of
payment of the distribution.
122 <PAGE>
Exhibit 10.21
5.4 No Withdrawals. Except as provided in Section 5.3, a member may
not withdraw amounts credited to his accounts.
ARTICLE VI
AMENDMENT AND TERMINATION
6.1 Amendment. TECO Energy may, without the consent of any member,
beneficiary or other person, amend this excess plan at any time and from
time to time; provided, however, that no amendment will reduce the amount
then credited to the excess account of any member.
6.2 Termination. TECO Energy may terminate this excess plan at any
time. Upon termination of the plan, payments from a member's excess
account will be made in the manner and at the time prescribed in Section
5.1, provided that TECO Energy may, in its discretion, distribute a
member's account in a lump sum as soon as practicable after the date the
excess plan is terminated.
EXECUTED as of the effective dates set forth in Schedule A.
TECO ENERGY, INC.
By: /s/ T. L. Guzzle
123 <PAGE>
Exhibit 10.21
Schedule A
Plan Amendments
1. The plan was established as an excess plan effective as of
January 1, 1984.
2. The plan was amended and restated effective as of January 1, 1990
(a) to expand eligibility for the plan to all employees of employers in the
TECO Energy Group, (b) to add provisions to provide for benefits lost under
the savings plan as a result of the compensation limit under the savings
plan, and (c) to conform the plan to changes in the savings plan, including
the addition of the ESOP feature to the savings plan.
3. The plan was amended and restated (a) to change the method of
determining the return to be earned on plan accounts effective as of
January 1, 1994 and (b) to add the voluntary salary reduction feature and
to make certain other compliance changes effective as of October 1, 1994.
124 <PAGE>
<TABLE>
TECO ENERGY, INC. EXHIBIT 11
COMPUTATIONS OF EARNINGS PER COMMON SHARE
Year ended Dec. 31, 1994 1993 1992
<CAPTION>
Fully Fully Fully
Primary Diluted Primary Diluted Primary Diluted
Earnings Earnings Earnings Earnings Earnings Earnings
<S> <C> <C> <C> <C> <C>
Income before
cumulative effect of
change in accounting
principle (1) $ 153,177 $ 153,177 $ 150,308 $ 150,308 $ 149,028$ 149,028
Cumulative effect of
change in accounting
principle (1) -- -- 11,228 11,228 -- --
Net income (1) $ 153,177 $ 153,177 $ 161,536 $ 161,536 $ 149,028$ 149,028
Common shares
outstanding at
beginning of year(2) 115,621,008 115,621,008 114,965,602 114,965,602 114,219,144114,219,144
Dividend reinvestment
and common stock
purchase plan:
Shares issued(2) 266,955 266,955 173,524 173,524 170,642 170,642
Stock option plans:
Options exercised(2) 34,686 34,686 200,494 200,494 221,002 221,002
Shares under option
at end of year(2) -- 2,084,172 -- 1,716,672 -- 1,601,872
Treasury shares which
could be purchased(2) -- (1,905,138) -- (1,341,523) -- (1,226,215)
Average number of
shares outstanding(2) 115,922,649 116,101,683 115,339,620 115,714,769 114,610,788 114,986,445
Earnings per average
common share outstanding:
Before cumulative
effect of change in
accounting principle $ 1.32 $ 1.32 $ 1.30 $ 1.30 $ 1.30 $ 1.30
Cumulative effect of
change in accounting
principle -- -- .10 .10 -- --
Earnings per average
common share
outstanding $ 1.32 $ 1.32 $ 1.40 $ 1.40 $ 1.30 $ 1.30
(1) Thousands of dollars.
(2) Restated to reflect a two-for-one stock split on Aug. 30, 1993.
</TABLE>
125<PAGE>
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
TECO Energy, Inc. owns, directly or indirectly, all the common stock of
or the partnership interests in 35 subsidiaries, except as indicated below.
All of the companies are organized under the laws of Florida except as
indicated.
Tampa Electric Company
TERMCO, Inc.
TECO Diversified, Inc.
TECO Transport & Trade Corporation
Electro-Coal Transfer Corporation (a Louisiana corporation)
G C Service Company, Inc.
Gulfcoast Transit Company
Mid-South Towing Company
TECO Towing Company
TECO Coal Corporation
Gatliff Coal Company (a Kentucky corporation)
Rich Mountain Coal Company (a Tennessee corporation)
Clintwood Elkhorn Mining Company (a Kentucky corporation)
Pike-Letcher Land Company (a Kentucky corporation)
Premier Elkhorn Coal Company (a Kentucky corporation)
TECO Properties Corporation
CPSC, Inc.
City Plaza Partners, Ltd.
30th Street R & D Park, Inc.
TECO Coalbed Methane, Inc. (an Alabama corporation)
TECO Power Services Corporation
Hardee Power I, Inc.
Hardee Power II, Inc.
Hardee Power Partners Limited
TPS Operations Company
TPS Clean Coal, Inc.
Clean Power, Inc. (a Delaware corporation)
Clean Power Cogeneration, Inc. (a Delaware corporation)
Lake County Power Resources, Inc.
TPS Honduras One, Inc.
TPS Guatemala One, Inc.
Tampa Centro Americana de Electricidad, Limitada*
(a Guatemalan Limited Liability Company)
TECO Energy Management Services Corporation
TECO Investments, Inc.
TECO Finance, Inc.
* TPS Guatemala One, Inc. had a 50-percent partnership interest at
Dec. 31, 1994. This interest will increase to 87.5 percent.
126<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statements of TECO Energy, Inc. on Form S-3 (File No. 33-43512) and Form
S-8 (File Nos. 33-35927, 33-40076, 33-5465 and 2-71457) of our report dated
Jan. 16, 1995, on our audits of the consolidated financial statements of
TECO Energy, Inc. and subsidiaries as of Dec. 31, 1994 and 1993 and for the
years ended Dec. 31, 1994, 1993 and 1992, which report is included in this
Annual Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS
Tampa, Florida
March 29, 1995
127<PAGE>
TECO ENERGY, INC. Exhibit 24.1
POWER OF ATTORNEY
WHEREAS, the Board of Directors of TECO Energy, Inc., a Florida
corporation, at a meeting held on January 17, 1995, authorized the officers
and directors of the Corporation to execute an Annual Report on Form 10-K
and authorized the officers of the Corporation to file said Annual Report
with the Securities and Exchange Commission under the Securities Act of
1934, as amended.
NOW, THEREFORE, each of the undersigned in his capacity as a director
or officer or both, as the case may be, of said Corporation, does hereby
appoint R. H. Kessel, A. D. Oak and D. R. Pokross, Jr., and each of them,
severally, his true and lawful attorneys or attorney to execute in his
name, place and stead, in his capacity as director or officer or both, as
the case may be, of said Corporation, said Annual Report and any and all
amendments thereto and all instruments necessary or incidental in
connection therewith, and to file the same with the Securities and Exchange
Commission. Each of said attorneys has the power to act hereunder with or
without the other of said attorneys and shall have full power of
substitution and resubstitution. Each of said attorneys shall have full
power and authority to do and perform in the name and on behalf of each of
the undersigned, in any and all capacities, every act whatsoever requisite
or necessary to be done in the premises, as fully and to all intents and
purposes as each of the undersigned might or could do in person, and each
of the undersigned hereby ratifies and approves the acts of said attorneys
and each of them.
IN TESTIMONY WHEREOF, the undersigned have executed this instrument on
the dates set forth below.
/s/ T. L. Guzzle January 17, 1995
T. L. Guzzle, Chairman of the Board
(Principal Executive Officer) and Director
/s/ A. D. Oak January 17, 1995
A. D. Oak, Senior Vice President-Finance
(Principal Financial and Accounting Officer)
/s/ G. F. Anderson January 17, 1995
G. F. Anderson, Director
/s/ C. D. Ausley January 17, 1995
C. D. Ausley, Director
/s/ S. L. Baldwin January 17, 1995
S. L. Baldwin, Director<PAGE>
/s/ H. L. Culbreath January 17, 1995
H. L. Culbreath, Director
/s/ J. L. Ferman, Jr. January 17, 1995
J. L. Ferman, Jr., Director
/s/ E. L. Flom January 17, 1995
E. L. Flom, Director
/s/ H. R. Guild, Jr. January 17, 1995
H. R. Guild, Jr., Director
/s/ R. L. Ryan January 17, 1995
R. L. Ryan, Director
/s/ J. T. Touchton January 17, 1995
J. T. Touchton, Director
/s/ J. A. Urquhart January 17, 1995
J. A. Urquhart, Director
/s/ J. O. Welch, Jr. January 17, 1995
J. O. Welch, Jr., Director
TECO ENERGY, INC. Exhibit 24.2
Transcript from Records of Board of Directors
January 17, 1995
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R E S OLVED, that the preparation and filing with the
Securities and Exchange Commission of an Annual Report on Form
10-K pursuant to the Securities Exchange Act of 1934, as amended,
including any required exhibits thereto and containing the
information required by such form and any additional information
as the officers of the Corporation, with the advice of counsel,
deem necessary, advisable or appropriate are hereby authorized
and approved; that the Chairman of the Board, President, any Vice
President and the Treasurer of the Corporation be, and each of
them acting singly hereby is, authorized for and in the name and
on behalf of the Corporation to execute said Annual Report and
cause it to be filed with the Securities and Exchange Commission;
and that the execution thereof by the directors and certain
officers of the Corporation as required by the Securities
Exchange Act of 1934, as amended, be and is hereby authorized;
provided, however, that the officers referred to above and the
directors of the Corporation be, and each of them hereby is,
authorized to execute said Annual Report through or by A. D. Oak,
D. R. Pokross, Jr. or R. H. Kessel, or any of them, as duly
authorized attorneys pursuant to a Power of Attorney in such form
as shall be approved by the Corporation's general counsel.
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***
I, R. H. KESSEL, hereby certify that I am Secretary of TECO Energy,
Inc. (the "Corporation"), a Florida corporation, and there is above set
forth a true, correct and complete copy of a certain resolution duly
adopted by the Board of Directors of said Corporation at a Regular Meeting
of said Board convened and held on January 17, 1995 at which meeting a
quorum for the transaction of business was present and acting throughout.
I further certify that said resolution has not been altered, amended
or rescinded and that the same is now in full force and effect.
WITNESS my hand and the seal of the Corporation this 22nd day of
January, 1995.
/s/ R. H. Kessel
Secretary
TECO ENERGY, INC.
(CORPORATE SEAL)
130<PAGE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE TECO
ENERGY, INC. CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF INCOME
AND CONSOLIDATED STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000350563
<NAME> TECO Energy, Inc.
<MULTIPLIER> 1000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<PERIOD-TYPE> YEAR
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,933,063
<OTHER-PROPERTY-AND-INVEST> 687,225
<TOTAL-CURRENT-ASSETS> 441,049
<TOTAL-DEFERRED-CHARGES> 143,832
<OTHER-ASSETS> 106,993
<TOTAL-ASSETS> 3,312,162
<COMMON> 116,199
<CAPITAL-SURPLUS-PAID-IN> 331,505
<RETAINED-EARNINGS> 715,667
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,163,371
0
54,956
<LONG-TERM-DEBT-NET> 1,023,881
<SHORT-TERM-NOTES> 1,800
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 348,100
<LONG-TERM-DEBT-CURRENT-PORT> 7,841
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 712,213
<TOT-CAPITALIZATION-AND-LIAB> 3,312,162
<GROSS-OPERATING-REVENUE> 1,350,853
<INCOME-TAX-EXPENSE> 45,805
<OTHER-OPERATING-EXPENSES> 1,081,042
<TOTAL-OPERATING-EXPENSES> 1,126,847 <F1>
<OPERATING-INCOME-LOSS> 224,006 <F1>
<OTHER-INCOME-NET> 9,876
<INCOME-BEFORE-INTEREST-EXPEN> 233,882 <F2>
<TOTAL-INTEREST-EXPENSE> 77,137
<NET-INCOME> 156,745 <F2>
3,568
<EARNINGS-AVAILABLE-FOR-COMM> 153,177 <F2>
<COMMON-STOCK-DIVIDENDS> 115,593
<TOTAL-INTEREST-ON-BONDS> 40,962
<CASH-FLOW-OPERATIONS> 338,226
<EPS-PRIMARY> 1.32 <F3>
<EPS-DILUTED> 1.32 <F3>
<FN>
<F1> Includes the effect of a one-time corporate restructuring charge of
$25 million, pretax.
<F2> Includes the effect of a one-time corporate restructuring charge of $15 million, after tax.
<F3> Includes the effect of a one-time corporate restructuring charge of 13
cents per share.
</TABLE>
