SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from 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 (IRS Employer
incorporation or organization) Identification No.)
702 North Franklin Street, Tampa, Florida 33602
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (813) 228-4111
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
Number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date (July 31, 1996):
Common Stock, $1 Par Value 117,244,327<PAGE>
FORM 10-Q
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
In the opinion of management, the unaudited consolidated
financial statements include all adjustments (none of which were
other than normal and recurring) necessary to present fairly the
results for the three-month and six-month periods ended June 30,
1996 and 1995. Reference should be made to the explanatory notes
affecting the income and balance sheet accounts contained in TECO
Energy, Inc.'s Annual Report on Form 10-K for the year ended Dec.
31, 1995 and to the notes on page 7 of this report.
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FORM 10-Q
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, Dec. 31,
1996 1995
Assets
Current assets
Cash and cash equivalents $ 9,751 $ 10,259
Short-term investments 33,244 32,176
Receivables, less allowance
for uncollectibles 173,278 163,536
Inventories, at average cost
Fuel 65,117 76,737
Materials and supplies 53,545 48,984
Prepayments 11,128 9,574
346,063 341,266
Property, plant and equipment,
at original cost
Utility plant in service 3,233,395 3,174,526
Construction work in progress 529,843 479,586
Other property 848,249 836,411
4,611,487 4,490,523
Accumulated depreciation (1,685,702) (1,616,231)
2,925,785 2,874,292
Other assets
Other investments 85,131 86,277
Deferred income taxes 73,276 65,906
Deferred charges and other assets 103,965 105,626
262,372 257,809
$3,534,220 $3,473,367
Liabilities and Capital
Current liabilities
Long-term debt due within one year $ 48,721 $ 31,327
Notes payable 421,730 361,340
Accounts payable 146,709 146,313
Customer deposits 52,713 51,273
Interest accrued 15,327 13,297
Taxes accrued 15,208 11,731
700,408 615,281
Deferred income taxes 407,394 396,624
Investment tax credits 58,804 61,347
Regulatory liability-tax related 40,175 47,558
Other deferred credits 150,359 136,092
Long-term debt, less amount due
within one year 952,148 994,856
Preferred stock of Tampa Electric 19,960 54,956
Common equity
Common equity - 400 million shares
authorized, $1 par value - issued and
outstanding 117,223,044 in 1996 and
116,731,681 in 1995 1,278,607 1,240,887
Unearned compensation (73,635) (74,234)
$3,534,220 $3,473,367
The accompanying notes are an integral part of the consolidated financial
statements.
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FORM 10-Q
CONSOLIDATED STATEMENTS OF INCOME
(in thousands)
For the three months ended June 30, 1996 1995
Revenues $361,475 $349,699
Expenses
Operation 182,445 169,618
Maintenance 23,944 25,859
Depreciation 45,435 44,611
Taxes, other than income 29,009 28,876
280,833 268,964
Income from operations 80,642 80,735
Other income
Allowance for other funds used
during construction 5,425 2,521
Other income, net 81 266
Preferred dividend requirements of
Tampa Electric (435) (892)
5,071 1,895
Income before interest and income taxes 85,713 82,630
Interest charges
Interest expense 23,459 22,732
Allowance for borrowed funds used during
construction (2,217) (1,519)
21,242 21,213
Income before provision for income taxes 64,471 61,417
Provision for income taxes 16,168 15,037
Net income $ 48,303 $ 46,380
Average shares outstanding 117,126 116,395
Earnings per average common share
outstanding $ 0.41 $ 0.40
Dividends per common share outstanding $ 0.28 $ 0.265
The accompanying notes are an integral part of the consolidated financial
statements.
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FORM 10-Q
CONSOLIDATED STATEMENTS OF INCOME
(in thousands)
For the six months ended June 30, 1996 1995
Revenues $702,616 $668,833
Expenses
Operation 359,515 325,039
Maintenance 44,847 49,793
Depreciation 90,398 89,208
Taxes, other than income 59,065 58,011
553,825 522,051
Income from operations 148,791 146,782
Other income
Allowance for other funds used
during construction 10,444 4,320
Other income, net 1,491 458
Preferred dividend requirements of
Tampa Electric (1,327) (1,784)
10,608 2,994
Income before interest and income taxes 159,399 149,776
Interest charges
Interest expense 46,129 44,417
Allowance for borrowed funds used during
construction (4,268) (2,603)
41,861 41,814
Income before provision for income taxes 117,538 107,962
Provision for income taxes 27,726 25,078
Net income $ 89,812 $ 82,884
Average shares outstanding 117,012 116,331
Earnings per average common share
outstanding $ 0.77 $ 0.71
Dividends per common share outstanding $ 0.545 $ 0.5175
The accompanying notes are an integral part of the consolidated financial
statements.
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FORM 10-Q
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the six months ended June 30, 1996 1995
Cash flows from operating activities
Net income $ 89,812 $ 82,884
Adjustments to reconcile net income
to net cash:
Depreciation 90,398 89,208
Deferred income taxes (3,982) (14,215)
Investment tax credits, net (2,543) (2,649)
Allowance for funds used
during construction (14,712) (6,923)
Amortization of unearned compensation 2,485 2,609
Revenue reduction 29,928 16,822
Deferred recovery clause 1,296 (13,205)
Amortization of coal contract buyout 1,352 676
Receivables, less allowance
for uncollectibles (9,742) (8,363)
Inventories 7,059 13,609
Taxes accrued 3,477 34,012
Interest accrued 2,030 (2,681)
Accounts payable (24,604) (32,324)
Other 8,236 6,471
180,490 165,931
Cash flows from investing activities
Capital expenditures (142,293) (242,066)
Allowance for funds used
during construction 14,712 6,923
Investment in short-term investments (1,068) 69,359
Other non-current investments 2,937 15,286
(125,712) (150,498)
Cash flows from financing activities
Common stock 9,016 5,443
Proceeds from long-term debt 3,058 620
Repayment of long-term debt (28,492) (3,765)
Net increase in short-term debt 60,390 32,455
Redemption of preferred stock,
including premium (35,496) --
Dividends (63,762) (60,178)
(55,286) (25,425)
Net decrease in cash and cash equivalents (508) (9,992)
Cash and cash equivalents
at beginning of period 10,259 35,797
Cash and cash equivalents at end of period $ 9,751 $ 25,805
The accompanying notes are an integral part of the consolidated financial
statements.
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FORM 10-Q
NOTES TO FINANCIAL STATEMENTS
A. TECO Energy, Inc. and its subsidiaries have made certain
commitments in connection with their continuing capital improvement
program and estimate that capital expenditures, excluding allowance
for funds used during construction (AFUDC), during 1996 will be as
follows:
millions
Tampa Electric Company $179
TECO Gas & Oil, Inc. 27
TECO Transport & Trade Corporation 30
Other diversified businesses 9
$245
B. During the first half of 1996, Tampa Electric recognized $30-
million of revenue deferrals and refunds pursuant to a multi-year base
rate freeze, revenue deferral and refund plan (the 1996 Plan) which
the Florida Public Service Commission (FPSC) approved in a final order
on May 20, 1996. Tampa Electric deferred $17 million during the first
six months last year in accordance with another plan (the 1995 Plan)
approved by the FPSC for 1995. A total of $81 million of revenues has
been recorded on the balance sheet under the plans in 1995 and 1996,
of which $56 million is included in other deferred credits. The
remaining $25 million is classified in accounts payable to reflect the
refund to customers beginning Oct. 1, 1996.
C. On April 29, 1996, Tampa Electric retired $35 million aggregate
par value of 8.00% Series E and 7.44% Series F preferred stock at
redemption prices of $102.00 and $101.00 per share, respectively.
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FORM 10-Q
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Three months ended June 30, 1996:
Net income of $48.3 million in the second quarter of 1996 was
$1.9 million or 4 percent higher than in 1995's second quarter due to
higher capitalized financing costs (AFUDC) at Tampa Electric, the
operation of TECO Power Services Alborada Power Station in Guatemala,
higher volumes at TECO Transport & Trade and strong gas prices at TECO
Coalbed Methane.
Consolidated operating income was unchanged from 1995's second
quarter as improved results at TECO Transport & Trade, TECO Coalbed
Methane and TECO Power Services were offset by lower operating income
at TECO Coal and expenses related to the development of TECO Gas & Oil
and TeCom. Second quarter results in 1995 included a $1.3 million
gain on the sale of an apartment complex by TECO Properties.
The following table identifies the unconsolidated revenues and
operating income of TECO Energy s significant operating groups.
Contributions by operating group (unconsolidated)
Revenues
(thousands of dollars) 1996 1995
Tampa Electric $272,418 $279,094
Diversified companies $140,787 $122,193
Operating income
(thousands of dollars) 1996 1995
Tampa Electric $ 59,771 $ 60,439
Diversified companies* $ 22,389 $ 22,322
* Operating income includes items that 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
independent power operations, both of which are included in operating
income for the diversified companies. In the Consolidated Statements
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FORM 10-Q
of Income, the tax credit is part of the provision for income taxes
and the interest is part of interest expense.
Tampa Electric's second-quarter operating income of $59.8 million
was 1 percent lower than in 1995 due to lower revenues. Both the 1996
and 1995 results were net of $9-million of revenue deferrals in
accordance with FPSC-approved plans.
Tampa Electric's revenues for the quarter decreased 2 percent due
to lower fuel charges to the customer and the elimination of the oil
backout recovery clause as part of the 1995 Plan. In the absence of
this elimination, the oil backout recovery clause would have
contributed $3 million in revenues for the quarter.
Retail energy sales were essentially unchanged. Energy sales in
1996 were favorably impacted by customer growth of 2 percent while
warmer weather favorably affected energy sales in 1995.
Tampa Electric's total operating expenses for the second quarter
were 3 percent lower than in 1995. The decrease was primarily due to
lower fuel expense from effective coal contract administration and
lower maintenance expense from continued cost control efforts
throughout the company.
Unconsolidated operating income for TECO Energy's diversified
companies was slightly higher at $22.4 million on revenues of
$140.8 million.
TECO Transport & Trade increased operating income with higher
volumes which more than offset higher fuel costs.
TECO Coal's operating income decreased due to higher deep mine
production costs and lower volumes to Tampa Electric. These results
were partially offset by increased third-party sales at the company s
newer mines.
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FORM 10-Q
Favorable gas prices continued to contribute to increased
operating income at TECO Coalbed Methane.
The Alborada Power Station in Guatemala, which began commercial
operation in the third quarter of 1995, provided improved results at
TECO Power Services.
Diversified results in 1996 also included expenses related to the
continued development of TECO Gas & Oil and TeCom. TECO Gas & Oil
participates through joint ventures in the exploration and production
of conventional gas and oil in the shallow waters of the Gulf of
Mexico. TeCom is marketing an advanced energy management and
communications system for residential and commercial applications.
Consolidated interest expense before the allowance for borrowed
funds used during construction was up 3 percent due to higher levels
of short-term debt at Tampa Electric, interest accrued on the revenue
deferrals and the effect of the expiration of an interest rate swap
agreement.
Total AFUDC increased in 1996 to $8 million from $4 million in
1995 with additional investment in Tampa Electric s Polk Power Station
which is scheduled for commercial operation in the fourth quarter of
1996.
The effective income tax rate for the second quarter was slightly
higher, 24.9 percent compared to 24.1 percent for the same period last
year primarily due to lower section 29 tax credits at TECO Coalbed
Methane.
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FORM 10-Q
Six months ended June 30, 1995:
Net income of $89.8 million in the first half of 1996 was
$6.9 million or 8 percent higher than in 1995's first half. Tampa
Electric contributed to net income with higher AFUDC, increased energy
sales and lower operating expenses. TECO Power Services, TECO
Transport & Trade and TECO Coalbed Methane also had improved operating
results.
Consolidated operating income was up from 1995's first half due
to strong performances by TECO Transport & Trade, TECO Coalbed Methane
and TECO Power Services, partially offset by lower operating income at
Tampa Electric and TECO Coal. The first half of 1996 also included
expenses related to the development of TECO Gas & Oil and TeCom, and
1995's first half results included a $1.3 million gain on the sale of
an apartment complex by TECO Properties.
The following table identifies the unconsolidated revenues and
operating income of TECO Energy s significant operating groups.
Contributions by operating group (unconsolidated)
Revenues
(thousands of dollars) 1996 1995
Tampa Electric $527,165 $532,890
Diversified companies $273,320 $236,796
Operating income
(thousands of dollars) 1996 1995
Tampa Electric $103,239 $106,319
Diversified companies* $ 49,400 $ 43,921
* O perating income includes items that 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
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.
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FORM 10-Q
Tampa Electric's first-half operating income of $103.2 million
was 3 percent lower than in 1995. The 1996 results were net of $30-
million of revenue deferrals and refunds in accordance with the 1996
Plan. Operating income last year was net of a $17-million revenue
deferral in accordance with the 1995 Plan.
Tampa Electric's revenues in the first half decreased from 1995
because the 1996 revenue deferrals and refunds were higher than the
1995 revenue deferrals. Increased base revenues from 4 percent higher
retail energy sales reflecting favorable weather, customer growth of
more than 2 percent and a strong local economy were offset by lower
fuel charges to the customer and the elimination of the oil backout
recovery clause. In the absence of this elimination, the oil backout
clause would have contributed $6 million in revenues for the first
half of 1996.
Tampa Electric's total operating expenses for the first half of
1996 were essentially unchanged from 1995. Non-fuel operations and
maintenance expenses, down 3 percent as a result of continued cost
control efforts throughout the company, were offset by higher combined
fuel and purchased power expenses from increased energy sales.
Unconsolidated operating income for TECO Energy's diversified
companies increased 12 percent to $49.4 million on revenues of
$273.3 million.
At TECO Transport & Trade, operating income increased due to
higher volumes, more than offsetting higher fuel prices and the
effects of adverse winter weather.
TECO Coal s continued growth in third-party revenues from newer
mines was more than offset by lower volumes to Tampa Electric and
higher deep-mine production costs.
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FORM 10-Q
Favorable gas prices increased TECO Coalbed Methane s operating
income over 1995, despite a $4.4-million pretax gain from a gas
contract termination settlement included in last year s results.
TECO Properties results declined primarily because 1995's first
half operating income included a $1.3 million gain on the sale of an
apartment complex.
The Alborada Power Station in Guatemala, which began commercial
operation in the third quarter of 1995, provided improved results at
TECO Power Services.
Diversified results in 1996 also included expenses related to the
continued development of TECO Gas & Oil and TeCom.
Consolidated interest expense before the allowance for borrowed
funds used during construction was up 4 percent due to higher levels of
short-term debt at Tampa Electric, interest accrued on the revenue
deferrals and refunds and the effect of the expiration of an interest
rate swap agreement.
Total AFUDC increased in 1996 to $15 million from $7 million in
1995 with additional investment in Tampa Electric s Polk Power Station
which is scheduled for commercial operation in the fourth quarter of
1996.
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FORM 10-Q
Liquidity, Capital Resources and Changes in Financial Condition
The FPSC issued a final order approving a multi-year base rate
freeze, revenue deferral and refund plan on May 20, 1996. The plan is
set forth in an agreement among Tampa Electric, the Office of Public
Counsel and the Florida Industrial Power Users Group covering the
years 1996 through 1998. A more complete description of the plan is
contained in TECO Energy s Annual Report on Form 10-K for the year
ended Dec. 31, 1995.
As contemplated by the 1996 Plan, the FPSC hearings concerning
the regulatory treatment of the investment and expenses associated
with Tampa Electric s Polk Power Station were held on July 17 and 18.
The FPSC staff recommendation on the issues is due September 19 and a
FPSC decision is expected October 1.
Fuel inventory declined from Dec. 31, 1995 due to increased
energy sales at Tampa Electric and effective management of coal
contracts and inventory levels.
The increase in other deferred credits primarily reflected the
revenue deferrals at Tampa Electric related to the 1996 Plan and 1995
Plan.
Accounts payable as of June 30, 1996 includes a $25-million
refund to Tampa Electric customers to be made over the 12-month period
beginning Oct. 1, 1996 under the 1996 Plan and consists of $15 million
from 1996's revenues and $10 million of revenues deferred in 1995.
The increase in notes payable was related to the Polk Unit One
construction program as well as funding of the retirement of $25
million of long-term debt that matured at Tampa Electric.
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FORM 10-Q
The decrease in preferred stock reflected Tampa Electric s
redemption of $35 million aggregate par value of preferred stock in
1996. (See Note C on page 7)
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FORM 10-Q
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Form of Nonstatutory Stock Option under the TECO Energy, Inc.
1996 Equity Incentive Plan.
10.2 Form of Restricted Stock Agreement between TECO Energy, Inc.
and certain senior executives under the TECO Energy, Inc. 1996
Equity Incentive Plan.
10.3 Form of Restricted Stock Agreement between TECO Energy, Inc.
and G.F. Anderson under the TECO Energy, Inc. 1996 Equity
Incentive Plan.
11. Computation of earnings per common share.
27. Financial data schedule. (EDGAR filing only)
(b) Reports on Form 8-K
The registrant filed a Current Report on Form 8-K dated May 20,
1996 reporting under "Item 5. Other Events" on the FPSC order
approving the agreement among Tampa Electric, the Office of
Public Counsel and the Florida Industrial Power Users Group
providing for a multi-year base rate freeze, revenue deferral
and refund plan for Tampa Electric.
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FORM 10-Q
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
TECO ENERGY, INC.
(Registrant)
Date: August 13, 1996 By: /s/ A. D. Oak
A. D. Oak
Senior Vice President - Finance,
and Chief Financial Officer
(Principal Financial Officer)
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FORM 10-Q
INDEX TO EXHIBITS
Exhibit No. Description of Exhibits Page No.
10.1 Form of Nonstatutory Stock Option under the
TECO Energy, Inc. 1996 Equity Incentive Plan 19
10.2 Form of Restricted Stock Agreement between
TECO Energy, Inc. and certain senior executives under
the TECO Energy, Inc. 1996 Equity Incentive Plan 24
10.3 Form of Restricted Stock Agreement between
TECO Energy, Inc. and G.F. Anderson under the
TECO Energy, Inc. 1996 Equity Incentive Plan 28
11. Computation of earnings per common share 32
27. Financial data schedule (EDGAR filing only) --
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Exhibit 10.1
TECO ENERGY, INC.
1996 EQUITY INCENTIVE PLAN
Nonstatutory Stock Option
TECO Energy, Inc. (the "Company") grants to ___________________________
(the "Optionee") a nonstatutory stock option and limited stock appreciation
rights (the "Option") dated __________________, 199___ under the Company's
1996 Equity Incentive Plan (the "Plan"). Capitalized terms not otherwise
defined herein have the meanings given to them in the Plan.
1. Grant of Stock Option. Pursuant to the Plan and subject to the
terms and conditions set forth in this Option, the Company hereby grants to
the Optionee the right and option to purchase from the Company ________ shares
of Common Stock at a price of $_____ per share. This Option may be exercised
in whole or in part with respect to a number of whole shares, at any time and
from time to time after the date hereof and prior to the expiration of ten
years from the date hereof (the "Expiration Date"), except as otherwise
provided herein.
This Option will not be treated as an incentive stock option under
Section 422 of the Internal Revenue Code of 1986, as amended.
2. Exercise and Payment. To exercise this Option, the Optionee will
deliver written notice to the Secretary of the Company specifying the date of
this Option, the number of shares as to which this Option is being exercised,
and a date not later than thirty days after the date of delivery of the notice
when the Optionee will take up and pay for such shares. On the date specified
in such notice, the Company will deliver to the Optionee one or more
certificates for the number of shares purchased against payment therefor in
cash or by certified check or in such other form as the Committee may approve.
3. Limited Stock Appreciation Rights. The Company grants to the Op-
tionee a limited stock appreciation right (a "Limited Right") with respect to
each share subject to an option to purchase hereunder (the "Related Option").
Upon exercise of a Limited Right, the Related Option will terminate, and upon
exercise of a Related Option, the corresponding Limited Right will terminate.
Limited Rights will be exercisable to the same extent and upon the same terms
as the Related Options, except that a Limited Right may be exercised only
during a 90-day period beginning on the first day following a Change in
Control, as defined below, and if the Optionee is a Reporting Person, no
Limited Right may be exercised within six months after the date hereof.
Upon exercise of a Limited Right, the Optionee will be entitled to
receive a cash payment equal to the excess of (i) the highest per share price
paid for shares of Common Stock in the transaction constituting a Change in
Control as described in subsections (a), (c) or (d) below, or in the case of a
Change in Control described in subsection (b) below which does not occur in
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Exhibit 10.1
connection with such a transaction, the average trading price of shares of
Common Stock on the New York Stock Exchange, such other national securities
exchange on which such shares are admitted to trade or the National Associa-
tion of Securities Dealers Automated Quotation System, during the thirty-day
period ending on the date immediately preceding the Change of Control over
(ii) the exercise price per share of the Related Option.
For purposes of this Option, a "Change in Control" means a change in
control of the Company 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 the Company is in fact required to comply therewith; provided, that,
without limitation, such a Change in Control shall be deemed to have occurred
if:
(a) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
a corporation owned directly or indirectly by the shareholders of the Company
in substantially the same proportions as their ownership of stock of the
Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act) directly or indirectly of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities;
(b) during any period of twenty-four (24) consecutive months
(not including any period prior to the date of this Option), individuals who
at the beginning of such period constitute the Board of Directors of the
Company and any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction
described in subsections (a), (c) or (d) of this Section 3) whose election by
the Board of Directors of the Company or nomination for election by the
shareholders of the Company 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 such period or whose election or nomination for election was
previously so approved cease for any reason to constitute a majority thereof;
(c) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation other than (i) a
merger or consolidation which would result in the voting securities of the
Company 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 the
Company or such surviving entity outstanding immediately after such merger or
consolidation or (ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no "person"
(as defined above) acquires 30% or more of the combined voting power of the
Company's then outstanding securities; or
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Exhibit 10.1
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
4. Termination of Employment. If the Optionee's employment with the
Company or any business entity in which the Company owns directly or
indirectly 50% or more of the total voting power or has a significant
financial interest as determined by the Committee (an "Affiliate") terminates
for any reason (a "Termination of Employment"), this Option will be
exercisable for the longest applicable period provided below. This Option
will terminate, and no rights will be exercisable hereunder, after the
expiration of the applicable exercise period.
(a) The Optionee may exercise the rights available under this
Option at the time of Termination of Employment for a period of three months
thereafter, but in no event after the Expiration Date.
(b) If Termination of Employment occurs because of disability,
the Optionee or the Optionee's guardian or legal representative may exercise
the rights available under this Option at the time of Termination of
Employment at any time on or before the later of (i) twelve months after the
Termination of Employment or (ii) the Expiration Date. The Committee will
determine whether and when Termination of Employment because of disability has
occurred for purposes of this Option.
(c) If Termination of Employment occurs for any reason on or
after the age at which benefits are payable to the Optionee without reduction
for commencement of such benefits before normal retirement age under the TECO
Energy Group Retirement Plan (or any successor thereto), or any earlier age
that the Committee determines will constitute a normal retirement for purposes
o f this Option, the Optionee (or the Optionee's guardian or legal
representative or, after death, the Optionee's Designated Beneficiary under
the Plan or, if none has been designated, those entitled to do so by the
Optionee's will or the laws of descent and distribution) may exercise the
rights available under this Option at the time of Termination of Employment at
any time on or before the Expiration Date.
(d) Upon the death of the Optionee at any time while this Option
is exercisable, the Optionee's Designated Beneficiary under the Plan or, if
none has been designated, those entitled to do so by the Optionee's will or
the laws of descent and distribution, may exercise the rights available under
this Option at the time of death for a period of twelve months thereafter or,
if Termination of Employment occurs because of death, at any time on or before
the later of (i) twelve months after the date of death or (ii) the Expiration
Date.
The Committee will determine whether an authorized leave of absence
constitutes Termination of Employment for purposes of this Option.
- 21 -<PAGE>
Exhibit 10.1
5. Adjustment of Terms. In the event of corporate transactions
affecting the Company's outstanding Common Stock, the Committee will equitably
adjust the number and kind of shares subject to this Option and the exercise
price hereunder to the extent provided by the Plan.
6. No Transfer. This Option will not be transferable other than by
will or the laws of descent and distribution and will be exercisable during
the Optionee's lifetime only by the Optionee or the Optionee's guardian or
legal representative.
7. Securities Laws. The purchase of any shares by the Optionee upon
exercise of this Option will be subject to the conditions that (i) the Company
may in its discretion require that a registration statement under the
Securities Act of 1933 with respect to the sale of such shares to the Optionee
will be in effect, and such shares will be duly listed, subject to notice of
issuance, on any securities exchange on which the Common Stock may then be
listed, (ii) all such other action as the Company considers necessary to
comply with any law, rule or regulation applicable to the sale of such shares
to the Optionee will have been taken and (iii) the Optionee will have made
such representations and agreements as the Company may require to comply with
applicable law.
8. Withholding Taxes. The Optionee will pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required by
law to be withheld in respect of the exercise of the Option or Limited Right
no later than the date of the event creating the tax liability. In the
Committee's discretion, such tax obligations may be paid in whole or in part
in shares of Common Stock, including shares retained from the exercise of this
Option, valued at fair market value on the date of delivery. The Company and
its Affiliates may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to the Optionee.
9. The Committee. Any determination by the Committee under, or
interpretation of the terms of, this Option or the Plan will be final and
binding on the Optionee.
10. Limitation of Rights. The Optionee will have no rights as a
shareholder with respect to any shares subject to this Option until such
shares are issued and delivered against payment therefor. The Optionee will
have no right to continued employment by virtue of this Option.
11. Amendment. The Company may amend, modify or terminate this
Option, including substituting another Award of the same or a different type
and changing the date of realization, provided that the Grantee's consent to
such action will be required unless the action, taking into account any
related action, would not adversely affect the Grantee.
- 22 -<PAGE>
Exhibit 10.1
11. Governing Law. This Option will be governed by and interpreted in
accordance with the laws of Florida.
TECO ENERGY, INC.
By ______________________
Title
- 23 -<PAGE>
Exhibit 10.2
TECO ENERGY, INC.
1996 EQUITY INCENTIVE PLAN
Restricted Stock Agreement
TECO Energy, Inc. (the "Company") and Restricted Optionee
(the "Grantee") have entered into this Restricted Stock Agreement (the
"Agreement") dated April 18, 1996 under the Company's 1996 Equity Incentive
Plan (the "Plan"). Capitalized terms not otherwise defined herein have the
meanings given to them in the Plan.
1. Grant of Restricted Stock. Pursuant to the Plan and subject to
the terms and conditions set forth in this Agreement, the Company hereby
grants, issues and delivers to the Grantee Number of
Restricted Shares shares of its Common Stock (the "Restricted Stock").
2. Restrictions on Stock. Until the restrictions terminate under
Section 3, unless otherwise determined by the Committee:
(a) the Restricted Stock may not be sold, assigned, pledged or
transferred by the Grantee; and
(b) all shares of Restricted Stock will be forfeited and
returned to the Company if the Grantee ceases to be an employee of the Company
or any business entity in which the Company owns directly or indirectly 50% or
more of the total voting power or has a significant financial interest as
determined by the Committee (an "Affiliate").
3. Termination of Restrictions. The restrictions on all shares of
Restricted Stock will terminate on the earliest to occur of the following
events:
(a) the Grantee's death;
(b) the termination of Grantee's employment with the Company or
any Affiliate because of a disability that would entitle the Grantee to
benefits under the long-term disability benefits program of the Company for
which the Grantee is eligible, as determined by the Committee;
(c) the termination by the Company or any Affiliate of Grantee's
employment other than for Cause as determined by the Committee. "Cause" means
(i) willful and continued failure of the Grantee to substantially perform his
duties with the Company or such Affiliate (other than by reason of physical or
mental illness) after written demand specifically identifying such failure is
given to the Grantee by the Company, or (ii) willful conduct by the Grantee
that is demonstrably and materially injurious to the Company. For purposes of
- 24 -<PAGE>
Exhibit 10.2
this subsection, "willful" conduct requires an act, or failure to act, that is
not in good faith and that is without reasonable belief that the action or
omission was in the best interest of the Company or the Affiliate;
(d) the Grantee's attainment of the age at which benefits are
payable under the TECO Energy Group Retirement Plan or any successor thereto
without reduction for commencement of benefits before normal retirement age,
or any earlier date that the Committee determines will constitute a normal
retirement for purposes of this Agreement; or
(e) upon a Change in Control. For purposes of this Agreement, a
"Change in Control" means a change in control of the Company 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 the Company is in fact required
to comply therewith; provided, that, without limitation, such a Change in
Control shall be deemed to have occurred if:
(1) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities;
(2) during any period of twenty-four (24) consecutive
months (not including any period prior to the date of this Agreement),
individuals who at the beginning of such period constitute the Board of
Directors of the Company and any new director (other than a director
designated by a person who has entered into an agreement with the
Company to effect a transaction described in subsections (1), (3) or (4)
of this Section 3(e)) whose election by the Board of Directors of the
Company or nomination for election by the shareholders of the Company
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 such
period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof;
(3) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (i)
a merger or consolidation which would result in the voting securities of
t h e Company 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 the Company or such surviving entity outstanding
immediately after such merger or consolidation or (ii) a merger or
consolidation effected to implement a recapitalization of the Company
- 25 -<PAGE>
Exhibit 10.2
(or similar transaction) in which no "person" (as defined above)
acquires 30% or more of the combined voting power of the Company's then
outstanding securities; or
(4) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets.
4. Rights as Shareholder. Subject to the restrictions and other
limitations and conditions provided in this Agreement, the Grantee as owner of
the Restricted Stock will have all the rights of a shareholder, including but
not limited to the right to receive all dividends paid on, and the right to
vote, such Restricted Stock.
5. Stock Certificates. Each certificate issued for shares of
Restricted Stock will be registered in the name of the Grantee and deposited
by the Grantee, together with a stock power endorsed in blank, with the
Company and will bear a legend in substantially the following form:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE TERMS, CONDITIONS AND
RESTRICTIONS (INCLUDING RESTRICTIONS ON TRANSFER AND FORFEITURE
PROVISIONS) CONTAINED IN AN AGREEMENT BETWEEN THE REGISTERED OWNER
AND TECO ENERGY, INC. A COPY OF SUCH AGREEMENT WILL BE FURNISHED
TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST AND WITHOUT
CHARGE.
Upon the termination of the restrictions imposed under this Agreement as
to any shares of Restricted Stock deposited with the Company hereunder, the
Company will return to the Grantee (or to such Grantee's legal representative,
beneficiary or heir) certificates, without such legend, for such shares.
6. Notice of Election Under Section 83(b). If the Grantee makes an
election under Section 83(b) of the Internal Revenue Code of 1986, as amended,
he will provide a copy thereof to the Company within thirty days of the filing
of such election with the Internal Revenue Service.
7. Withholding Taxes. The Grantee will pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required by
law to be withheld in respect of the Restricted Stock no later than the date
of the event creating the tax liability. In the Committee's discretion, such
tax obligations may be paid in whole or in part in shares of Common Stock,
including the Restricted Stock, valued at fair market value on the date of
delivery. The Company and its Affiliates may, to the extent permitted by law,
deduct any such tax obligations from any payment of any kind otherwise due to
the Grantee.
- 26 -<PAGE>
Exhibit 10.2
8. The Committee. Any determination by the Committee under, or
interpretation of the terms of, this Agreement or the Plan will be final and
binding on the Grantee.
9. Limitation of Rights. The Grantee will have no right to continued
employment by virtue of this grant of Restricted Stock.
10. Amendment. The Company may amend, modify or terminate this
Agreement, including substituting another Award of the same or a different
type and changing the date of realization, provided that the Grantee's consent
to such action will be required unless the action, taking into account any
related action, would not adversely affect the Grantee.
11. Governing Law. This Agreement will be governed by and interpreted
in accordance with the laws of Florida.
TECO ENERGY, INC.
By: ______________________
Title:
_________________________
Signature of Grantee
- 27 -<PAGE>
Exhibit 10.3
TECO ENERGY, INC.
1996 EQUITY INCENTIVE PLAN
Restricted Stock Agreement
TECO Energy, Inc. (the "Company") and _______________________ (the
"Grantee") have entered into this Restricted Stock Agreement (the "Agreement")
dated April 17, 1996 under the Company's 1996 Equity Incentive Plan (the
"Plan"). Capitalized terms not otherwise defined herein have the meanings
given to them in the Plan.
1. Grant of Restricted Stock. Pursuant to the Plan and subject to
the terms and conditions set forth in this Agreement, the Company hereby
grants, issues and delivers to the Grantee _________ shares of its Common
Stock (the "Restricted Stock").
2. Restrictions on Stock. Until the restrictions terminate under
Section 3, unless otherwise determined by the Committee:
(a) the Restricted Stock may not be sold, assigned, pledged or
transferred by the Grantee; and
(b) all shares of Restricted Stock will be forfeited and
returned to the Company if the Grantee ceases to be an employee of the Company
or any business entity in which the Company owns directly or indirectly 50% or
more of the total voting power or has a significant financial interest as
determined by the Committee (an "Affiliate").
3. Termination of Restrictions. The restrictions on all shares of
Restricted Stock will terminate on the earliest to occur of the following
events:
(a) the Grantee's death;
(b) the termination of Grantee's employment with the Company or
any Affiliate because of a disability that would entitle the Grantee to
benefits under the long-term disability benefits program of the Company for
which the Grantee is eligible, as determined by the Committee;
(c) the termination by the Company or any Affiliate of Grantee's
employment other than for Cause as determined by the Committee. "Cause" means
(i) willful and continued failure of the Grantee to substantially perform his
duties with the Company or such Affiliate (other than by reason of physical or
mental illness) after written demand specifically identifying such failure is
given to the Grantee by the Company, or (ii) willful conduct by the Grantee
that is demonstrably and materially injurious to the Company. For purposes of
- 28 -<PAGE>
Exhibit 10.3
this subsection, "willful" conduct requires an act, or failure to act, that is
not in good faith and that is without reasonable belief that the action or
omission was in the best interest of the Company or the Affiliate;
(d) the Grantee's attainment of the age of 65; or
(e) upon a Change in Control. For purposes of this Agreement, a
"Change in Control" means a change in control of the Company 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 the Company is in fact required
to comply therewith; provided, that, without limitation, such a Change in
Control shall be deemed to have occurred if:
(1) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities;
(2) during any period of twenty-four (24) consecutive
months (not including any period prior to the date of this Agreement),
individuals who at the beginning of such period constitute the Board of
Directors of the Company and any new director (other than a director
designated by a person who has entered into an agreement with the
Company to effect a transaction described in subsections (1), (3) or (4)
of this Section 3(e)) whose election by the Board of Directors of the
Company or nomination for election by the shareholders of the Company
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 such
period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof;
(3) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (i)
a merger or consolidation which would result in the voting securities of
t h e Company 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 the Company or such surviving entity outstanding
immediately after such merger or consolidation or (ii) a merger or
consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no "person" (as defined above)
acquires 30% or more of the combined voting power of the Company's then
outstanding securities; or
- 29 -<PAGE>
Exhibit 10.3
(4) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets.
4. Rights as Shareholder. Subject to the restrictions and other
limitations and conditions provided in this Agreement, the Grantee as owner of
the Restricted Stock will have all the rights of a shareholder, including but
not limited to the right to receive all dividends paid on, and the right to
vote, such Restricted Stock.
5. Stock Certificates. Each certificate issued for shares of
Restricted Stock will be registered in the name of the Grantee and deposited
by the Grantee, together with a stock power endorsed in blank, with the
Company and will bear a legend in substantially the following form:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE TERMS, CONDITIONS AND
RESTRICTIONS (INCLUDING RESTRICTIONS ON TRANSFER AND FORFEITURE
PROVISIONS) CONTAINED IN AN AGREEMENT BETWEEN THE REGISTERED OWNER
AND TECO ENERGY, INC. A COPY OF SUCH AGREEMENT WILL BE FURNISHED
TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST AND WITHOUT
CHARGE.
Upon the termination of the restrictions imposed under this Agreement as
to any shares of Restricted Stock deposited with the Company hereunder, the
Company will return to the Grantee (or to such Grantee's legal representative,
beneficiary or heir) certificates, without such legend, for such shares.
6. Notice of Election Under Section 83(b). If the Grantee makes an
election under Section 83(b) of the Internal Revenue Code of 1986, as amended,
he will provide a copy thereof to the Company within thirty days of the filing
of such election with the Internal Revenue Service.
7. Withholding Taxes. The Grantee will pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required by
law to be withheld in respect of the Restricted Stock no later than the date
of the event creating the tax liability. In the Committee's discretion, such
tax obligations may be paid in whole or in part in shares of Common Stock,
including the Restricted Stock, valued at fair market value on the date of
delivery. The Company and its Affiliates may, to the extent permitted by law,
deduct any such tax obligations from any payment of any kind otherwise due to
the Grantee.
8. The Committee. Any determination by the Committee under, or
interpretation of the terms of, this Agreement or the Plan will be final and
binding on the Grantee.
9. Limitation of Rights. The Grantee will have no right to continued
employment by virtue of this grant of Restricted Stock.
- 30 -<PAGE>
Exhibit 10.3
10. Amendment. The Company may amend, modify or terminate this
Agreement, including substituting another Award of the same or a different
type and changing the date of realization, provided that the Grantee's consent
to such action will be required unless the action, taking into account any
related action, would not adversely affect the Grantee.
11. Governing Law. This Agreement will be governed by and interpreted
in accordance with the laws of Florida.
TECO ENERGY, INC.
By: ______________________
Title:
_________________________
Signature of Grantee
- 31 -<PAGE>
Exhibit 11
TECO ENERGY, INC.
COMPUTATIONS OF EARNINGS PER COMMON SHARE
Three months ended June 30, 1996 1995
Primary Fully Diluted Primary Fully Diluted
Earnings Earnings Earnings Earnings
Net income (000) $ 48,303 $ 48,303 $ 46,380 $ 46,380
Common shares outstanding
at beginning of period 116,975,525 116,975,525 116,332,208 116,332,208
Dividend reinvestment and
common stock purchase plan:
Shares issued 52,000 52,000 54,946 54,946
Restricted stock granted 59,700 59,700 -- --
Stock option plans:
Options exercised 38,912 38,912 7,900 7,900
Shares under option at
end of period -- 2,532,872 -- 2,505,772
Treasury shares which could
be purchased -- (1,983,163) -- (2,153,981)
Avg. shares outstanding 117,126,137 117,675,846 116,395,054 116,746,845
Earnings per share $ 0.41 $ 0.41 $ 0.40 $ 0.40
Six months ended June 30, 1996 1995
Primary Fully Diluted Primary Fully Diluted
Earnings Earnings Earnings Earnings
Net income (000) $ 89,812 $ 89,812 $ 82,884 $ 82,884
Common shares outstanding
at beginning of period 116,731,681 116,731,681 116,199,423 116,199,423
Dividend reinvestment and
common stock purchase plan:
Shares issued 94,409 94,409 113,155 113,155
Restricted stock granted 34,117 34,117 -- --
Stock option plans:
Options exercised 151,806 151,806 17,939 17,939
Shares under option at
end of period -- 2,532,872 -- 2,505,772
Treasury shares which could
be purchased -- (1,983,163) -- (2,153,981)
Avg. shares outstanding 117,012,013 117,561,722 116,330,517 116,682,308
Earnings per share $ 0.77 $ 0.76 $ 0.71 $ 0.71
- 32 -<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-31-1995
<PERIOD-START> JAN-1-1996
<PERIOD-END> JUN-30-1996
<PERIOD-TYPE> 6-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,964,950
<OTHER-PROPERTY-AND-INVEST> 960,835
<TOTAL-CURRENT-ASSETS> 346,063
<TOTAL-DEFERRED-CHARGES> 177,241
<OTHER-ASSETS> 85,131
<TOTAL-ASSETS> 3,534,220
<COMMON> 117,223
<CAPITAL-SURPLUS-PAID-IN> 352,741
<RETAINED-EARNINGS> 808,643
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,278,607
0
19,960
<LONG-TERM-DEBT-NET> 952,148
<SHORT-TERM-NOTES> 2,530
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 419,200
<LONG-TERM-DEBT-CURRENT-PORT> 48,721
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 813,054
<TOT-CAPITALIZATION-AND-LIAB> 3,534,220
<GROSS-OPERATING-REVENUE> 702,616
<INCOME-TAX-EXPENSE> 27,726
<OTHER-OPERATING-EXPENSES> 553,825
<TOTAL-OPERATING-EXPENSES> 553,825
<OPERATING-INCOME-LOSS> 148,791
<OTHER-INCOME-NET> 11,935
<INCOME-BEFORE-INTEREST-EXPEN> 159,399
<TOTAL-INTEREST-EXPENSE> 41,861
<NET-INCOME> 91,139
1,327
<EARNINGS-AVAILABLE-FOR-COMM> 89,812
<COMMON-STOCK-DIVIDENDS> 63,762
<TOTAL-INTEREST-ON-BONDS> 21,653
<CASH-FLOW-OPERATIONS> 180,490
<EPS-PRIMARY> 0.77
<EPS-DILUTED> 0.76
</TABLE>
/TEXT
<PAGE>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
