<PAGE> 1
UNITED STATES
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, 2000
--------------------------------------------
OR
[X] 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)
702 N. 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 of 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, 2000):
Common Stock, $1 Par Value 125,540,142
Index to Exhibits Appears on Page 22
Page 1 of 38
<PAGE> 2
FORM 10-Q
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS
In the opinion of management, the unaudited condensed consolidated
financial statements include all adjustments which are of a recurring nature
and necessary to present fairly the financial position of TECO Energy, Inc. and
subsidiaries as of June 30, 2000 and 1999, and the results of their operations
and cash flows for the three- and six- month periods ended June 30, 2000 and
1999. The results of operations for the three- and six- month periods ended
June 30, 2000 are not necessarily indicative of the results that can be
expected for the entire fiscal year ending Dec. 31, 2000. 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, 1999 and to the notes on pages 7 through 12 of this report.
2
<PAGE> 3
FORM 10-Q
CONSOLIDATED BALANCE SHEETS
UNAUDITED
(in millions)
JUNE 30, DEC. 31,
2000 1999
-------- --------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 27.7 $ 97.5
Receivables, less allowance for uncollectibles 302.9 261.9
Inventories, at average cost
Fuel 114.4 84.0
Materials and supplies 70.0 69.5
Prepayments 27.9 18.9
-------- --------
542.9 531.8
-------- --------
PROPERTY, PLANT AND EQUIPMENT, AT ORIGINAL COST
Utility plant in service
Electric 4,363.2 4,140.9
Gas 624.8 590.0
Construction work in progress 252.5 291.1
Other property 1,098.8 1,042.4
-------- --------
6,339.3 6,064.4
Accumulated depreciation (2,519.7) (2,436.6)
-------- --------
3,819.6 3,627.8
-------- --------
OTHER ASSETS
Other investments 136.0 117.2
Investment in unconsolidated affiliates 108.3 103.3
Deferred income taxes 111.2 106.8
Deferred charges and other assets 214.9 203.2
-------- --------
570.4 530.5
-------- --------
$4,932.9 $4,690.1
======== ========
LIABILITIES AND CAPITAL
CURRENT LIABILITIES
Long-term debt due within one year $ 27.1 $ 155.8
Notes payable 1,166.4 813.7
Accounts payable 200.8 218.1
Customer deposits 81.4 80.7
Interest accrued 24.7 16.4
Taxes accrued 72.4 36.9
-------- --------
1,572.8 1,321.6
DEFERRED INCOME TAXES 509.9 509.4
INVESTMENT TAX CREDITS 39.3 41.7
REGULATORY LIABILITY-TAX RELATED 10.7 13.3
OTHER DEFERRED CREDITS 159.1 178.5
LONG-TERM DEBT, LESS AMOUNT DUE WITHIN ONE YEAR 1,214.5 1,207.8
COMMON EQUITY
Common equity - 400 million shares authorized,
$1 par value - outstanding 125,503,844 in 2000
(after deducting 7,043,000 shares in Treasury
at a cost of $144.7 million) and 126,655,557
in 1999 (after deducting 5,435,100 shares in
Treasury, at a cost of $114.8 million) 1,480.4 1,472.5
Unearned compensation (53.8) (54.7)
-------- --------
$4,932.9 $4,690.1
======== ========
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE> 4
FORM 10-Q
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
(in millions)
FOR THE THREE MONTHS ENDED JUNE 30, 2000 1999
-------- --------
REVENUES $ 559.5 $ 491.4
-------- --------
EXPENSES
Operation 314.2 263.3
Maintenance 43.7 32.8
Depreciation 64.0 56.9
Taxes, other than income 37.9 37.5
-------- --------
459.8 390.5
-------- --------
INCOME FROM OPERATIONS 99.7 100.9
OTHER INCOME
Other income, net 5.8 1.5
-------- --------
INCOME BEFORE INTEREST AND INCOME TAXES 105.5 102.4
INTEREST EXPENSE 39.3 27.6
-------- --------
INCOME BEFORE PROVISION FOR INCOME TAXES 66.2 74.8
Provision for income taxes 8.7 22.0
-------- --------
NET INCOME FROM CONTINUING OPERATIONS 57.5 52.8
NET LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME
TAX BENEFIT OF $.5 MILLION FOR 1999 -- (0.9)
-------- --------
NET INCOME $ 57.5 $ 51.9
======== ========
Average common shares outstanding - basic 125.3 132.0
======== ========
Average common shares outstanding -diluted 125.4 132.2
======== ========
EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING
From continuing operations
Basic and diluted $ 0.46 $ 0.40
======== ========
Net income
Basic and diluted $ 0.46 $ 0.39
======== ========
DIVIDEND PER COMMON SHARE OUTSTANDING $ 0.335 $ 0.325
======== ========
The accompanying notes are an integral part of the consolidated financial
statements.
4
<PAGE> 5
FORM 10-Q
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
(in millions)
FOR THE SIX MONTHS ENDED JUNE 30, 2000 1999
---------- ----------
REVENUES $ 1,084.0 $ 937.1
---------- ----------
EXPENSES
Operation 593.8 489.6
Maintenance 79.6 60.3
Depreciation 126.0 114.9
Taxes, other than income 76.8 75.3
---------- ----------
876.2 740.1
---------- ----------
INCOME FROM OPERATIONS 207.8 197.0
OTHER INCOME
Other income, net 7.6 2.3
---------- ----------
INCOME BEFORE INTEREST AND INCOME TAXES 215.4 199.3
INTEREST EXPENSE 75.0 53.7
---------- ----------
INCOME BEFORE PROVISION FOR INCOME TAXES 140.4 145.6
Provision for income taxes 29.4 43.3
---------- ----------
NET INCOME FROM CONTINUING OPERATIONS 111.0 102.3
NET LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME
TAX BENEFIT OF $1.0 MILLION FOR 1999 -- (1.8)
GAIN ON DISPOSAL OF DISCONTINUED OPERATIONS, NET OF
INCOME TAX EXPENSE OF $.3 MILLION FOR 1999 -- 0.6
---------- ----------
NET INCOME $ 111.0 $ 101.1
========== ==========
Average common shares outstanding - basic 125.8 132.0
========== ==========
Average common shares outstanding -diluted 125.9 132.3
========== ==========
EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING
From continuing operations
Basic and diluted $ 0.88 $ 0.78
========== ==========
Net income
Basic and diluted $ 0.88 $ 0.77
========== ==========
DIVIDEND PER COMMON SHARE OUTSTANDING $ 0.660 $ 0.635
========== ==========
The accompanying notes are an integral part of the consolidated financial
statements.
5
<PAGE> 6
FORM 10-Q
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
(in millions)
FOR THE SIX MONTHS ENDED JUNE 30, 2000 1999
------ ------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $111.0 $101.1
Adjustments to reconcile net income to net cash
Depreciation 126.0 114.9
Deferred income taxes (6.5) (14.1)
Investment tax credits, net (2.5) (2.5)
Allowance for funds used during construction (1.4) (0.2)
Amortization of unearned compensation 4.8 4.3
Equity in earnings of unconsolidated affiliates (3.9) (2.0)
Deferred revenue -- 3.9
Deferred recovery clause (3.2) (13.8)
Receivables, less allowance for uncollectibles (41.0) (8.3)
Inventories (30.9) (19.0)
Taxes accrued 35.5 63.6
Interest accrued 8.3 5.3
Accounts payable (17.2) (54.9)
Other assets and liabilities 16.0 (0.4)
------ ------
195.0 177.9
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (316.6) (166.9)
Allowance for funds used during construction 1.4 0.2
Purchase of minority interest (52.6) --
Investment in unconsolidated affiliates (1.2) (15.9)
Other non-current investments (18.6) (34.1)
------ ------
(387.6) (216.7)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of Common stock 5.1 0.1
Purchase of treasury stock (29.9) --
Proceeds from issuance of long-term debt 8.7 --
Repayment of long-term debt (130.7) (5.0)
Net increase in short-term debt 352.7 130.1
Payment of Dividends (83.1) (83.9)
------ ------
122.8 41.3
------ ------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (69.8) 2.5
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 97.5 16.9
------ ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 27.7 $ 19.4
====== ======
The accompanying notes are an integral part of the consolidated financial
statements.
6
<PAGE> 7
FORM 10-Q
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. The company has adopted FAS 130, Reporting Comprehensive
Income. This standard requires that comprehensive income, which
includes net income as well as certain changes in assets and
liabilities recorded in common equity, be reported in the financial
statements. There were no components of comprehensive income other
than net income for the six-month periods ended June 30, 2000 and
1999.
Certain prior year amounts have been reclassified to conform
to the current year presentation.
B. As reported in the company's Annual Report on Form 10-K for
the year ended Dec. 31, 1999, the assets of TeCom were sold for $1.0
million in cash in November 1999. The company decided to exit the
automated energy management systems business because it lacked the
distribution channels necessary to effectively reach the markets for
its products. TECO Energy reported a net after-tax loss on disposal of
discontinued operations of $12.9 million in the third quarter of 1999.
As a result of the company's intention to sell this business,
all activities of the subsidiary through Sept. 1, 1999, the
measurement date, were reported as discontinued operations on the
Consolidated Statements of Income. After-tax losses from discontinued
operations were $0.9 million for the three months ended June 30, 1999,
and $1.8 million for the six months ended June 30, 1999.
Total revenues from discontinued operations related to TeCom
were $0.2 million and $0.9 million for the three- and six-month
periods ended June 30, 1999, respectively. There were no revenues
reported in 2000.
C. A $0.6 million after-tax gain on disposal of discontinued
operations was recorded in the first quarter of 1999 relating to the
sale of TECO Oil & Gas Inc.'s offshore assets previously reported in
the company's Annual Reports on Form 10-K for the years ended Dec. 31,
1998 and 1999. There were no significant revenues from the
discontinued oil and gas operations in 2000 or 1999.
D. TECO Energy and its subsidiaries have made certain
commitments in connection with their continuing capital expenditure
program and estimate that capital expenditures for continuing
operations during 2000 will be as follows:
millions
--------
Tampa Electric Company
Tampa Electric division $251
Peoples Gas System division 75
TECO Power Services Corporation 147
TECO Transport Corporation 12
TECO Coal Corporation 50
Other diversified businesses 13
----
$548
TECO Power Services Corporation -
investment in unconsolidated affiliates $ 54
====
Tampa Electric Company is a potentially responsible party
for certain superfund sites, and through its Peoples Gas System
division, for certain manufactured gas plant sites. While the joint
and several liability associated with these sites presents the
potential for significant response costs, Tampa Electric Company
estimates its ultimate financial liability at approximately $20
million over the next 10 years. The environmental remediation costs
associated with these sites are not expected to have a significant
impact on customer prices.
7
<PAGE> 8
FORM 10-Q
E. Revenues in the three- and six-month periods ended
June 30, 1999 reflected the deferral for refund to customers of $2.5
million and $3.9 million, respectively, of electric revenues associated
with 1999 earnings at Tampa Electric. These deferred revenues resulted
from Tampa Electric's regulatory agreement that ended on Dec. 31, 1999.
Tampa Electric expects the Florida Public Service Commission (FPSC)
staff to closely monitor the company's achieved return on equity during
2000, but not to require Tampa Electric to negotiate a new regulatory
plan. On Aug. 1, 2000, the FPSC approved a stipulation entered into by
the Office of Public Counsel, Florida Industrial Power Users Group
(FIPUG), and Tampa Electric settling the deferred revenue refund amount
for 1997 and 1998. From Sept. 1, 2000 through Dec. 31, 2000, Tampa
Electric will refund $13 million to its customers which was the amount
originally approved by the FPSC for the years 1997 and 1998. As a
result, this amount was anticipated and recorded in earnings before the
FIPUG filed its protest in which the stipulation was reached. The exact
amount of the 1999 refund is expected to be settled by year end. Tampa
Electric does not expect these refunds to have a significant impact on
earnings.
F. 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:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ------------------
(in millions) 2000 1999 2000 1999
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net income from continuing operations $ 57.5 $ 52.8 $111.0 $102.3
Total income tax provision 8.7 22.0 29.4 43.3
------ ------ ------ ------
Income from continuing operations
before income taxes $ 66.2 $ 74.8 $140.4 $145.6
====== ====== ====== ======
Income taxes on above at federal
statutory rate of 35% $ 23.2 $ 26.2 $ 49.2 $ 51.0
Increase (Decrease) due to:
State income tax, net of federal income tax 1.8 2.4 3.9 4.6
Amortization of investment tax credits (1.3) (1.3) (2.5) (2.5)
Non-conventional fuels tax credit (13.2) (4.4) (17.4) (8.5)
Permanent reinvestment for foreign income (2.1) (0.4) (4.8) (0.4)
Other 0.3 (0.5) 1.0 (0.9)
------ ------ ------ ------
Total income tax provision from
continuing operations $ 8.7 $ 22.0 $ 29.4 $ 43.3
====== ====== ====== ======
Provision for income taxes as a percent of
income from continuing operations,
before income taxes 13.2% 29.5% 21.0% 29.7%
====== ====== ====== ======
</TABLE>
8
<PAGE> 9
FORM 10-Q
G. The reconciliation of basic and diluted earnings per share is
shown below:
THREE MONTHS ENDED JUNE 30, 2000 1999
------- -------
(In millions, except per share amounts)
Numerator (Basic and Diluted)
Net income from continuing operations $ 57.5 $ 52.8
Net income $ 57.5 $ 51.9
Denominator
Average number of shares outstanding - basic 125.3 132.0
Plus: incremental shares for assumed
conversions: Stock options at end of period 0.7 2.3
Less: Treasury shares which could be purchased (0.6) (2.1)
------- -------
Average number of shares outstanding - diluted 125.4 132.2
======= =======
EARNINGS PER SHARE FROM CONTINUING OPERATIONS
Basic and Diluted $ 0.46 $ 0.40
EARNINGS PER SHARE
Basic and Diluted $ 0.46 $ 0.39
SIX MONTHS ENDED JUNE 30, 2000 1999
------- -------
(In millions, except per share amounts)
Numerator (Basic and Diluted)
Net income from continuing operations $ 111.0 $ 102.3
Net income $ 111.0 $ 101.1
Denominator
Average number of shares outstanding - basic 125.8 132.0
Plus: incremental shares for assumed
conversions: Stock options at end of period 0.7 2.4
Less: Treasury shares which could be purchased (0.6) (2.1)
------- -------
Average number of shares outstanding - diluted 125.9 132.3
======= =======
EARNINGS PER SHARE FROM CONTINUING OPERATIONS
Basic and Diluted $ 0.88 $ 0.78
EARNINGS PER SHARE
Basic and Diluted $ 0.88 $ 0.77
H. In late September 1999, TECO Energy, Inc. announced a program
to repurchase up to $150 million of its outstanding common stock.
Shares acquired constitute treasury shares. In the six months ended
June 30, 2000, the company acquired 1.6 million shares of its
outstanding common stock at a cost of $29.9 million; the average per
share price was $18.62. Since the program was announced, the company
has acquired 7.0 million shares of its outstanding common stock at a
cost of $144.7 million at an average per share price of $20.55. The
company's share repurchase program favorably impacted earnings per
share in the second quarter of 2000 by approximately $.01 per share
and by approximately $.02 per share for the year-to-date period.
9
<PAGE> 10
FORM 10-Q
I. In February 2000, TECO Energy, Inc. entered into an agreement
to form US Propane, a joint venture, to combine its Peoples Gas Company
(PGC) propane operations with the propane operations of Atmos Energy
Corporation, AGL Resources Inc. and Piedmont Natural Gas Company, Inc.
In June 2000, US Propane announced that it would combine with Heritage
Propane Partners, L.P. to create the fourth largest retail propane
distributor in the United States that will distribute propane to over
480,000 customers in 28 states. Through a series of transactions
completed Aug. 10, 2000, US Propane sold its propane business to
Heritage Propane Partners for approximately $180 million in cash and
other consideration, and purchased all of the outstanding common stock
of Heritage Holdings, Inc., the general partner of Heritage Propane
Partners, for $120 million. US Propane now owns the general partner
interest and 34 percent of the limited partnership interests of
Heritage Propane Partners. TECO Energy, Inc., through its wholly owned
subsidiary TECO Propane Ventures, LLC, will account for its
approximately 38 percent interest in US Propane under the equity method
of accounting.
J. The management of TECO Energy determined its reportable
segments based on each subsidiary's contribution of revenues,
operating income and total assets. All significant intercompany
transactions are eliminated in the consolidated financial statements
of TECO Energy but are included in determining reportable segments.
CONTRIBUTIONS BY BUSINESS SEGMENT (in millions)
OPERATING NET
REVENUES INCOME INCOME
(1) (1) (1)
------ ------ ------
THREE MONTHS ENDED JUNE 30, 2000
Tampa Electric Company
Tampa Electric division (3) $340.4 $ 69.4 $ 35.6
Peoples Gas System division 71.4 9.7 4.1
------ ------ ------
411.8 79.1 39.7
TECO Transport (4) 67.9 11.6 6.4
TECO Coal (5) (6) 56.2 5.3 7.2
TECO Power Services (6) (7) 46.0 5.8 8.0
Other diversified businesses (6) 35.8 7.0 5.8
------ ------ ------
617.7 108.8 67.1
Other and eliminations (58.2) (9.1) (9.6)
------ ------ ------
TECO Energy consolidated $559.5 $ 99.7 $ 57.5
====== ====== ======
THREE MONTHS ENDED JUNE 30, 1999
Tampa Electric Company
Tampa Electric division (2) (3) $304.4 $ 68.1 $ 34.7
Peoples Gas System division 56.7 8.6 3.4
------ ------ ------
361.1 76.7 38.1
TECO Transport (4) 60.8 12.0 6.9
TECO Coal (5) 59.3 5.0 3.6
TECO Power Services (6) (7) 28.9 3.6 3.5
Other diversified businesses (6) 23.3 5.8 5.4
------ ------ ------
533.4 103.1 57.5
Other and eliminations (42.0) (2.2) (4.7)
------ ------ ------
TECO Energy consolidated $491.4 $100.9 $ 52.8
====== ====== ======
10
<PAGE> 11
FORM 10-Q
OPERATING NET
REVENUES INCOME INCOME
(1) (1) (1)
-------- ------- -------
SIX MONTHS ENDED JUNE 30, 2000
Tampa Electric Company
Tampa Electric division (3) $ 633.0 $ 127.8 $ 64.3
Peoples Gas System division 158.1 26.5 12.5
-------- ------- -------
791.1 154.3 76.8
TECO Transport (4) 134.2 26.0 14.3
TECO Coal (5) (6) 107.1 7.3 8.6
TECO Power Services (6) (7) 87.7 15.3 17.7
Other diversified businesses (6) 71.6 16.1 12.6
-------- ------- -------
1,191.7 219.0 130.0
Other and eliminations (107.7) (11.2) (19.0)
-------- ------- -------
TECO Energy consolidated $1,084.0 $ 207.8 $ 111.0
======== ======= =======
SIX MONTHS ENDED JUNE 30, 1999
Tampa Electric Company
Tampa Electric division (2) (3) $ 565.2 $ 123.3 $ 62.1
Peoples Gas System division 127.9 23.3 10.7
-------- ------- -------
693.1 146.6 72.8
TECO Transport (4) 118.4 23.2 13.1
TECO Coal (5) 112.3 10.2 7.4
TECO Power Services (6) (7) 52.7 8.4 6.8
Other diversified businesses (6) 46.5 13.2 11.6
-------- ------- -------
1,023.0 201.6 111.7
Other and eliminations (85.9) (4.6) (9.4)
-------- ------- -------
TECO Energy consolidated $ 937.1 $ 197.0 $ 102.3
======== ======= =======
---------------
(1) From continuing operations.
(2) The electric division deferred revenues of $2.5 million and $3.9 million,
respectively, for the three and six months ended June 30, 1999 for refund
to customers. See Note E on page 8.
(3) Revenues from sales to affiliates were $8.5 million and $13.9 million
respectively, for the three and six months ended June 30, 2000, and $7.1
million and $11.3 million respectively, for the three and six months ended
June 30, 1999.
(4) Revenues from sales to affiliates were $29.3 million and $64.4 million
respectively, for the three and six months ended June 30, 2000, and $21.6
million and $46.7 million respectively, for the three and six months ended
June 30, 1999.
(5) Revenues from sales to affiliates were $3.0 million for the three and six
months ended June 30, 2000, and $4.1 million and $10.5 million
respectively, for the three and six months ended June 30, 1999.
11
<PAGE> 12
FORM 10-Q
(6) 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 ($4.1 million and
$8.3 million, respectively for the three and six months ended June 30,
2000, and $4.4 million and $8.5 million, respectively, for the three and
six months ended June 30, 1999), non-conventional fuels tax credit related
to synthetic fuel coal production ($9.1 million for the three and six
months ended June 30, 2000), and interest expense on the limited-recourse
debt related to the independent power operations ($4.2 million and $7.8
million respectively, for the three and six months ended June 30, 2000,
and $2.8 million and $5.1 million respectively, for the three and six
months ended June 30, 1999) all of which are included in operating income
for the segments. 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.
(7) Revenues from sales to affiliates were $15.4 million and $24.4 million
respectively, for the three and six months ended June 30, 2000, and $9.1
million and $17.2 million respectively, for the three and six months ended
June 30, 1999.
12
<PAGE> 13
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q contains forward-looking
statements, which are subject to the inherent uncertainties in predicting
future results and conditions. Certain factors that could cause actual results
to differ materially from those projected in these forward-looking statements
include the following: general economic conditions, particularly those in Tampa
Electric's service area affecting energy sales; weather variations affecting
energy sales and operating costs; potential competitive changes in the electric
and gas industries, particularly in the area of retail competition; regulatory
actions affecting Tampa Electric and Peoples Gas System; commodity price
changes affecting the competitive positions of Tampa Electric and the Peoples
Gas companies as well as margins at TECO Coalbed Methane and TECO Coal; changes
in and compliance with environmental regulations that may impose additional
costs or curtail some activities; TECO Power Services' ability to successfully
develop and operate its projects and TECO Coal's ability to successfully
operate its synthetic fuel production facilities in a manner qualifying for
Section 29 Federal Income tax credits. Some of these factors are discussed more
fully under "Investment Considerations" in the company's Annual Report on Form
10-K for the year ended Dec. 31, 1999, and reference is made thereto.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2000:
Net income from continuing operations for the quarter ended June 30,
2000 was $57.5 million, or $.46 per share, up from $52.8 million, or $.40 per
share. for the three-month period ended June 30, 1999. Net income including
discontinued operations for the second quarter of 1999 was $51.9 million, or
$.39 per share. The 9-percent increase over last year's net income from
operations and the 15-percent growth in EPS from 1999's second quarter
reflected the favorable impact of synthetic fuel production at TECO Coal,
higher operating revenues driven by strong customer growth in the core electric
and gas businesses, increased contributions at TECO Power Services from the San
Jose Power Station, and higher gas prices at TECO Coalbed Methane. These were
partially offset by higher costs and expenses.
TAMPA ELECTRIC COMPANY - ELECTRIC DIVISION (TAMPA ELECTRIC)
Tampa Electric's net income for the quarter increased approximately 3
percent, driven primarily by improved retail energy sales volumes, which were 6
percent higher for the quarter, partially offset by higher costs. Growth in
retail customers was 3 percent. Expenses for the quarter increased, reflecting
higher depreciation and accelerated maintenance expenses to enhance summer unit
availability. Prior year results were favorably impacted by U.S. Department of
Energy credits associated with the Polk Power Station, which expired at the end
of 1999. Results for the current quarter include the favorable impact of cost
recovery from the scrubber investment at Big Bend Station, which was placed
into service in December 1999. A summary of the operating statistics for the
three months ended June 30, 2000 and 1999 is below:
<TABLE>
<CAPTION>
(in millions, except average customers) OPERATING REVENUES KILOWATT-HOUR SALES
--------------------------------- --------------------------------
THREE MONTHS ENDED JUNE 30, 2000 1999 CHANGE 2000 1999 CHANGE
-------- -------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Residential $ 149.7 $ 135.5 10.5% 1,818.0 1,690.8 7.5%
Commercial 94.5 86.4 9.4% 1,412.6 1,332.5 6.0%
Industrial - Phosphate 15.8 13.8 14.8% 340.3 317.3 7.2%
Industrial - Other 16.0 13.9 15.2% 280.6 257.2 9.1%
Other sales of electricity 24.2 21.5 12.6% 343.8 313.8 9.5%
Deferred and other revenues 5.8 5.7 2.2% -- -- --
-------- -------- ------- -------
306.0 276.8 10.6% 4,195.3 3,911.6 7.3%
Sales for resale 26.9 21.0 28.5% 631.2 522.2 20.9%
Other operating revenue 7.5 6.6 12.7% -- -- --
-------- -------- ------- -------
$ 340.4 $ 304.4 11.9% 4,826.5 4,433.8 8.9%
======== ======== ======= =======
Average customers 557.6 540.9 3.1%
======== ========
System Net Input 4,565.2 4,308.2 6.0%
======= =======
</TABLE>
13
<PAGE> 14
FORM 10-Q
A generator failure caused an unplanned outage at Tampa Electric's
385-megawatt Gannon Station Unit 6 on July 18, 2000. The unit is currently being
repaired and is expected to be back in service by the end of 2000. Tampa
Electric has been purchasing and expects to continue to purchase replacement
power to meet peak loads until the unit returns to service. The estimated
replacement power costs of approximately $20 million is expected to be fully
recovered through the fuel adjustment cost recovery clause. It is expected that
most of these repair costs will be covered by insurance and the remaining amount
will be capitalized. As a result, the outage is not expected to have a
significant impact on Tampa Electric's operating income.
TAMPA ELECTRIC COMPANY - NATURAL GAS DIVISION (PEOPLES GAS SYSTEM)
Net income at Peoples Gas System (PGS) increased 19 percent to $4.1
million for the quarter ended June 30, 2000, compared with $3.4 million for the
same period last year. The increase was primarily driven by customer growth of
4 percent and corresponding higher volumes. Commercial volumes were up
5-percent, while residential volumes were down slightly. Lower margin sales to
interruptible wholesale and electric power generation customers were up 23-
percent. Depreciation was higher reflecting the company's continuing expansion
efforts, while operation and maintenance expenses were essentially even with
last year. A summary of the operating statistics for the three months ended
June 30, 2000 and 1999 is below:
<TABLE>
<CAPTION>
(in millions, except average customers) OPERATING REVENUES THERMS
---------------------------------- ----------------------------------
THREE MONTHS ENDED JUNE 30, 2000 1999 CHANGE 2000 1999 CHANGE
------------------------ ----- ----- ------ ----- ----- ------
<S> <C> <C> <C> <C> <C> <C>
BY CUSTOMER SEGMENT:
Residential $13.5 $12.1 12.3% 9.8 10.3 -4.3%
Commercial 32.8 29.6 10.8% 67.5 64.4 4.7%
Industrial 3.6 3.0 20.2% 72.3 66.6 8.5%
Off system sales 11.2 3.4 -- 29.3 13.7 --
Power generation 3.0 2.3 29.0% 109.3 90.5 20.7%
Other revenues 7.3 6.3 16.0% -- -- --
----- ----- ----- -----
$71.4 $56.7 26.0% 288.2 245.5 17.4%
===== ===== ===== =====
BY SALES TYPE:
System supply $52.6 $42.5 23.6% 79.4 73.2 8.3%
Transportation 11.5 7.9 46.9% 208.8 172.3 21.2%
Other revenues 7.3 6.3 16.0% -- -- --
----- ----- ----- -----
$71.4 $56.7 26.0% 288.2 245.5 17.4%
===== ===== ===== =====
Average customers 258.7 247.3 4.6%
===== =====
</TABLE>
The franchise agreement between the City of Lakeland and PGS expired on
March 12, 2000. The City has suspended negotiations for a renewed agreement;
however, normal operations in Lakeland have continued under the terms of the
expired agreement. Lakeland provided approximately $2 million of PGS' annual
operating revenues in 1999.
DIVERSIFIED COMPANIES - OPERATING RESULTS
TECO POWER SERVICES (TPS) recorded significantly higher net income of
$8.0 million for the three months ended June 30, 2000 compared to $3.5 million
for the same period last year. The increase primarily reflects commencement of
operation of the 120-megawatt San Jose Power Station in Guatemala in January
and of the Hardee Power Station expansion in May of this year.
TECO TRANSPORT recorded second quarter net income of $6.4 million,
down slightly from $6.9 million last year. Results for the quarter reflected
lower phosphate movements and significantly higher fuel costs, partially offset
by higher
14
<PAGE> 15
FORM 10-Q
revenues from strong Tampa Electric and export grain tonnages, and increased
northbound movements on the river systems.
TECO COAL reported net income of $7.2 million in the second quarter,
an increase of $3.6 million over the same period last year, reflecting the
addition of the synthetic fuel facilities in the second quarter of 2000. TECO
Coal's results for the second quarter of 2000 included $9.1 million of Federal
Income Tax credits on the coal produced and sold from these synthetic fuel
facilities. TECO Coal's results also reflected the expiration of the Tampa
Electric contract at the end of 1999, which partially offset the increase from
the operation of the synthetic fuel facilities.
TECO Energy's other diversified companies recorded net income of $5.8
million for the quarter ended June 30, 2000, an increase of over 7% from $5.4
million for the same period last year. The increase was driven primarily by
improved results at TECO Coalbed Methane due to higher gas prices.
OTHER
Allowance for other funds used during construction (AFUDC) was $0.7
million for the three months ended June 30, 2000 up from $0.2 million for the
same period last year. AFUDC is expected to increase over the next several
years reflecting Tampa Electric's generation expansion activities.
Interest charges were $39.3 million for the three months ended June
30, 2000 compared to $27.6 million for the same period in 1999. Financing costs
were higher for the second quarter reflecting higher borrowing levels and
higher interest rates.
The effective income tax rate on net income from continuing operations
for the three-month period ended June 30, 2000 was 13.2 percent compared to 29.5
percent last year. This decrease primarily reflects the substantial increase in
non-conventional fuels tax credits related to the recently acquired synthetic
fuel facilities at TECO Coal. For the three months ended June 30, 2000, these
tax credits totaled $9.1 million and $4.1 million, respectively at TECO Coal and
TECO Coalbed Methane, compared to $4.4 million at TECO Coalbed Methane for the
same quarter last year. The decrease also reflects the tax impact for increased
foreign operations versus the same period last year. (See Note F on page 8.)
SIX MONTHS ENDED JUNE 30, 2000:
Year-to-date net income from continuing operations for the six months
ended June 30, 2000 was $111.0 million, or $.88 per share, up from $102.3
million, or $.78 per share, for the same period last year. Net income including
discontinued operations was $101.1, or $.77 per share, for the six-months ended
June 30, 1999. The 9-percent increase over last year's net income from
operations and the 13-percent EPS growth from 1999's year-to-date results, as
previously noted in the quarterly discussion, reflected the favorable impact of
the commercial operation of TECO Coal's new synthetic fuel facilities, higher
revenues driven by customer growth in the core electric and gas businesses,
earnings growth at TECO Power Services driven by new projects including the San
Jose Power Station, and higher gas prices for TECO Coalbed Methane. These were
partially offset by higher costs and expenses.
TAMPA ELECTRIC COMPANY - ELECTRIC DIVISION (TAMPA ELECTRIC)
Tampa Electric's year-to-date net income increased to $64.3 million
compared to $62.1 million for the same period last year. The approximate
4-percent increase was driven primarily by improved retail energy sales
volumes, which were 7-percent higher year-to-date. Growth in retail customers
was 3-percent. Year-to-date expenses increased over last year reflecting higher
depreciation and accelerated maintenance expenses to enhance summer unit
availability. Prior year results reflected U.S. Department of Energy credits
associated with the Polk Power Station, which expired at the end of 1999. A
summary of the operating statistics for the six months ended June 30, 2000 and
1999 is below:
15
<PAGE> 16
FORM 10-Q
<TABLE>
<CAPTION>
(in millions, except average customers) OPERATING REVENUES KILOWATT-HOUR SALES
--------------------------------- --------------------------------
SIX MONTHS ENDED JUNE 30, 2000 1999 CHANGE 2000 1999 CHANGE
-------- -------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Residential $ 281.5 $ 255.8 10.0% 3,410.3 3,164.9 7.8%
Commercial 177.2 164.3 7.8% 2,637.9 2,522.0 4.6%
Industrial - Phosphate 30.0 24.9 20.8% 675.2 609.8 10.7%
Industrial - Other 30.4 27.1 12.0% 539.5 503.1 7.2%
Other sales of electricity 45.7 41.7 9.6% 646.1 606.2 6.6%
Deferred and other revenues 3.8 1.1 -- -- -- --
-------- -------- ------- -------
568.6 514.9 10.4% 7,909.0 7,406.0 6.8%
Sales for resale 49.0 36.7 33.4% 1,146.0 872.1 31.4%
Other operating revenue 15.4 13.6 13.8% -- -- --
-------- -------- ------- -------
$ 633.0 $ 565.2 12.0% 9,055.0 8,278.1 9.4%
======== ======== ======= =======
Average customers 556.9 540.9 3.0%
======== ========
System Net Input 8,420.4 7,898.0 6.6%
======= =======
</TABLE>
TAMPA ELECTRIC COMPANY - NATURAL GAS DIVISION (PEOPLES GAS SYSTEM)
Net income at Peoples Gas System (PGS) increased 17 percent to $12.5
million for the six months ended June 30, 2000, compared with $10.7 million for
the same period last year. The increase was primarily driven by customer growth
and corresponding higher volumes. Commercial volumes and residential volumes
were up 9-percent and 11- percent, respectively, for the year. Lower margin
sales to interruptible wholesale and electric power generation customers were
up 26 percent year-to-date. Depreciation was higher reflecting the company's
continuing expansion efforts while operation and maintenance expenses were
slightly higher. A summary of the operating statistics for the six months ended
June 30, 2000 and 1999 is below:
<TABLE>
<CAPTION>
(in millions, except average customers) OPERATING REVENUES THERMS
--------------------------------- --------------------------------
SIX MONTHS ENDED JUNE 30, 2000 1999 CHANGE 2000 1999 CHANGE
-------- -------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
BY CUSTOMER SEGMENT:
Residential $ 39.0 $ 31.1 25.2% 33.7 30.3 11.3%
Commercial 71.1 66.5 7.1% 151.8 138.8 9.3%
Industrial 7.1 7.0 1.6% 152.4 143.6 6.1%
Off system sales 20.4 3.9 -- 59.5 15.9 --
Power generation 5.5 4.8 14.5% 211.7 177.0 19.6%
Other revenues 15.0 14.6 2.5% -- -- --
------ ------ ----- ------
$158.1 $127.9 23.6% 609.1 505.6 20.5%
====== ====== ===== =====
BY SALES TYPE:
System supply $118.6 $ 97.4 21.8% 183.3 159.5 14.9%
Transportation 24.5 15.9 54.2% 425.8 346.1 23.0%
Other revenues 15.0 14.6 2.5% -- -- --
------ ------ ----- -----
$158.1 $127.9 23.6% 609.1 505.6 20.5%
====== ====== ===== =====
Average customers 258.6 247.5 4.5%
====== ======
</TABLE>
DIVERSIFIED COMPANIES - OPERATING RESULTS
TECO POWER SERVICES recorded year-to-date net income of $17.7 million
compared to $6.8 million for the same period last year. The $10.9 million
increase primarily reflects commencement of operation of the 120-megawatt San
Jose Power Station in Guatemala in January and the commercial operation of the
Hardee Power Station expansion in May of this year. Higher business development
expenses partially offset the increases.
16
<PAGE> 17
FORM 10-Q
TECO TRANSPORT'S year-to-date net income was $14.3 million, an
increase of over 9 percent compared to last year's $13.1 million. This increase
was driven by higher revenues from strong Tampa Electric, export grain and
northbound river tonnages offsetting higher fuel costs and lower phosphate
movements, and higher gains on asset dispositions in 2000 versus 1999. .
TECO COAL reported net income year-to-date of $8.6 million, an
increase of $1.2 million over last year reflecting the addition of the
synthetic fuel facilities in the second quarter of 2000. TECO Coal's six-month
results included $9.1 million of Federal Income Tax credits on the coal
produced and sold from the synthetic fuel facilities. TECO Coal's results also
reflect the expiration of the Tampa Electric contract at the end of 1999, which
partially offset the increase from the operation of the synthetic fuel
facilities.
TECO Energy's other diversified companies recorded net income of $12.6
million for the six months ended June 30, 2000, an increase of over 8 percent
from net income of $11.6 million for the same period last year. The increase
was driven primarily by improved results at TECO Coalbed Methane due to higher
gas prices.
OTHER Year-to-date allowance for other funds used during construction
(AFUDC) was $1.0 million compared to $0.2 million for the same period last
year. AFUDC is expected to increase over the next several years reflecting
Tampa Electric's generation expansion activities.
Interest charges were $75.0 million for the year-to-date period ended
June 30, 2000 compared to $53.7 million for the same period in 1999. This
increase is a result of higher borrowing levels and higher interest rates.
The effective income tax rate on net income from continuing operations
for the six-month period ended June 30, 2000 was 21.0 percent compared to 29.7
percent last year. This decrease primarily reflects the substantial increase in
non-conventional fuels tax credits related to the recently acquired synthetic
fuel facilities at TECO Coal. For the six months ended June 30, 2000, these tax
credits totaled $9.1 million and $8.3 million, respectively at TECO Coal and
TECO Coalbed Methane, compared to $8.5 million at TECO Coalbed Methane for the
same period last year. The decrease also reflects the tax impact for increased
foreign operations versus the same period last year. (See Note F on page 8.)
DISCONTINUED OPERATIONS
In November 1999, TECO Energy's automated energy management system
subsidiary, TeCom, sold its assets for $1.0 million in cash. The after-tax loss
from discontinued operations for the three-and six-months ended June 30, 1999
were $0.9 million and $1.8 million, respectively. (See Note B on page 7.)
In March, 1999, TECO Oil & Gas sold its subordinated note from
American Resources Offshore, Inc. (ARO) to a third party for $500,000 in cash.
In a separate transaction, ARO agreed to assume disputed joint billing payments
of approximately $425,000. The net gain of $0.6 million recorded in 1999's
first quarter related to these two transactions. (See Note C on page 7.)
LIQUIDITY, CAPITAL RESOURCES AND CHANGES IN FINANCIAL CONDITION
TECO Energy anticipates that internally generated funds will meet most
of its capital requirements for ongoing operations and commitments. However, the
company expects that some part of its capital requirements, as well as any
significant new investments, will be funded with external capital, which may
include debt of various maturities, preferred stock or common stock.
Construction work in progress decreased by $39 million since Dec. 31, 1999, due
to placing the San Jose plant in service partially offset by additional
expenditures related to equipment startup and commissioning activities for the
Hamakua Power Station project and ongoing construction activities for the
Commonwealth Chesapeake Power Station facility as discussed below. Notes payable
increased $353 million since Dec. 31, 1999, reflecting the additions of the San
Jose plant, expenditures for the Commonwealth Chesapeake Power Station, purchase
of synthetic fuel facilities and the acquisition of an additional interest in
the ECK Generating Project. Each of these matters is described below. TECO
Energy expects to replace a portion of its short-term debt with longer term
borrowings during the second half of 2000.
In September 1999, TECO Energy announced a program for the repurchase
of up to $150 million of its outstanding common stock. To date, the company has
acquired 7.0 million shares of its outstanding common stock at a cost of $144.7
million. (See Note H on page 9.)
17
<PAGE> 18
FORM 10-Q
In November 1999, TM Power Ventures L.L.C. (TMPV), a joint venture
between TECO Power Services and Mosbacher Power Partners L.P., executed an
agreement with NCP of Virginia, L.L.C. to build, own and operate a 312-megawatt
electric generating facility on the Delmarva Peninsula in Virginia. This
generating facility, the Commonwealth Chesapeake Power Station, is scheduled to
be on-line in two phases with 135 megawatts expected to be in service in August
2000 and the remaining capacity expected to be in service by June 2001. The
estimated $175 million project cost is expected to be financed with non-recourse
debt and equity from the partners. Plans for the financing of the project are
proceeding, and based upon the projected timing for permit receipts and project
completion, the expected funding date is early September 2000.
Also in November 1999, TPS announced its 50-percent participation in a
60-megawatt facility under construction in Hamakua, Hawaii. The project
continues to make draws under a lease financing arrangement, which is supported
by guarantees from the project sponsors. Commercial operation of the facility
is scheduled for late November 2000.
In January 2000, TMPV acquired an additional 13.35-percent ownership
interest in the ECK Generating Project, increasing TPS' investment in the Czech
project by $19.5 million. TMPV is continuing its efforts to seek a qualified
buyer for TMPV's entire interest in the project.
As previously discussed in Form 10-Q for the quarter ended March 31,
2000, TPS became the 100-percent owner of the San Jose Power Station in
February 2000. Conversion of the construction loan to permanent non-recourse
financing was delayed, and closing on the financing is now scheduled to occur
in August 2000.
In January 2000, TECO Coal purchased two existing synthetic fuel
production facilities which qualify for Section 29 tax credits through 2007.
Commercial operation began well ahead of schedule during the second quarter of
2000.
RECENT DEVELOPMENTS
On May 3, 2000, the governor of Florida by executive order created a
commission charged with proposing a comprehensive energy plan and strategy for
the state. The 17 member Energy 2020 Study Commission will address issues
including the current and future reliability of electric and natural gas supply,
emerging energy supply and delivery options, electrical industry competition,
environmental impacts of energy supply, energy conservation, and fiscal impacts
of energy supply options on taxpayers and energy providers. The Commission will
convene its first meeting in September 2000, and will provide a written report
containing specific recommendations, including legislature recommendations, by
December 1, 2001.
ACCOUNTING STANDARDS
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
In 1998, the FASB issued FAS 133, Accounting for Derivative
Instruments and Hedging. This standard is effective for fiscal years beginning
after June 15, 2000. The new standard, as amended, requires an entity to
recognize derivatives as either assets or liabilities in the financial
statements, to measure those instruments at fair value and to reflect the
changes in fair value of those instruments as either components of
comprehensive income or in net income, depending on the types of those
instruments.
In preparation for adoption of this Statement effective Jan. 1, 2001,
the company has completed an analysis of the information required by FAS 133,
and is continuing to evaluate and document all derivatives and hedging
relationships. From time to time, TECO Energy has entered into futures, swaps
and options contracts to hedge the selling price for its physical production at
TECO Coalbed Methane, to limit exposure to gas price increases at both the
regulated natural gas utility and unregulated propane business, and to limit
exposure to fuel price increases at TECO Transport. TECO Energy has not used
derivatives or other financial products for speculative purposes. The company
does not anticipate that the adoption of FAS 133 will significantly impact its
financial statements since activity in derivatives has been relatively minimal
and short-term in duration. Management will continue to evaluate all current
and possible future uses of derivatives, including their effectiveness for
hedging, and to apply appropriate procedures and methods for valuing them.
ACCOUNTING FOR REPAIR AND MAINTENANCE COSTS FOR PLANNED MAJOR MAINTENANCE
ACTIVITIES
TECO Energy and its subsidiaries charge the cost of repairs and
maintenance to expense as incurred. One exception to this is at TPS' Alborada
Power Station in Guatemala (TCAE). For this facility, revenue deferrals are
recorded to recognize the portion of billings that reflect payments for major
maintenance and overhaul expenses that will take place in the future. This
liability is included on the balance sheet in Other deferred credits. Amounts
deferred are not significant.
18
<PAGE> 19
FORM 10-Q
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
TECO Energy is exposed to changes in interest rates primarily as a
result of its borrowing activities. A hypothetical 10-percent increase in TECO
Energy's weighted average interest rate on its variable rate debt would not
have a significant impact on TECO Energy's pretax earnings over the next fiscal
year.
A hypothetical 10-percent decrease in interest rates would not have a
significant impact on the estimated fair value of TECO Energy's long-term debt
at June 30, 2000.
Based on policies and procedures approved by the Board of Directors,
from time to time TECO Energy or its affiliates may enter into futures, swaps
and option contracts to moderate exposure to interest rate changes.
Commodity Price Risk
Currently, at Tampa Electric and Peoples Gas System, commodity price
increases due to changes in market conditions for fuel, purchased power and
natural gas are recovered through cost recovery clauses, with no effect on
earnings.
TECO Coalbed Methane is exposed to commodity price risk through the
sale of natural gas, and TECO Coal is exposed to commodity price risk through
coal sales.
As TECO Power Services develops the Commonwealth Chesapeake Power
Station, and other similar projects, the company may utilize futures, swaps and
option contracts in connection with the marketing of power in order to reduce
the variability of electricity selling prices.
From time to time, TECO Energy or its affiliates may enter into
futures, swaps and options contracts to hedge the selling price for physical
production at TECO Coalbed Methane, to limit exposure to gas price increases at
both the regulated natural gas utility and unregulated propane business, or to
limit exposure to fuel price increases at TECO Transport.
TECO Energy and its affiliates do not use derivatives or other
financial products for speculative purposes.
19
<PAGE> 20
FORM 10-Q
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As previously reported, Gatliff Coal Company, a subsidiary of
TECO Coal, has been the subject of a federal investigation arising from
the discharge of waste water from an orphan mine pit that allegedly was
not in compliance with discharge restrictions in applicable permits. In
July 2000, in order to resolve this matter, Gatliff entered a guilty
plea to a misdemeanor violation of the Rivers and Harbors Act for
negligent discharge of waste, and agreed to pay a fine of $20,000 and
contribute $180,000 to environmental protection projects in the region.
Sentencing is scheduled for sometime in September 2000. Gatliff's plea
is conditioned on the finalization of a compliance agreement with the
Environmental Protection Agency providing that neither Gatliff nor its
affiliates will be subject to debarment or suspension with respect to
governmental contracts as a result of this plea. If such compliance
agreement is not completed prior to sentencing, Gatliff may withdraw
its plea.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
10.1 Form of Replacement Performance Shares Agreement between TECO
Energy, Inc. and certain officers under the TECO Energy, Inc.
1996 Equity Incentive Plan.
10.2 Form of Performance Shares Agreement between TECO Energy,
Inc. and certain officers under the TECO Energy, Inc. 1996
Equity Incentive Plan.
10.3 Form of Performance Shares Agreement between TECO Energy,
Inc. and certain TECO Power Services Corporation officers
under the TECO Energy, Inc. 1996 Equity Incentive Plan.
12 Ratio of earnings to fixed charges
27 Financial data schedule - six months ended June 30, 2000
(EDGAR filing only)
(b) REPORTS ON FORM 8-K
The registrant did not file any Current Reports on Form 8-K
during the quarter ended June 30, 2000.
The registrant filed a Current Report on Form 8-K dated July
20, 2000, reporting under "Item 5. Other Events" TECO Energy,
Inc.'s financial results and its outlook and corresponding
guidance for earnings per share growth.
20
<PAGE> 21
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: Aug. 11, 2000 *By: /s/ G. L. GILLETTE
-------------------------------------
G. L. GILLETTE
Vice President - Finance
and Chief Financial Officer
(Principal Financial Officer)
21
<PAGE> 22
FORM 10-Q
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBITS PAGE NO.
10.1 Form of Replacement Performance Shares Agreement 23
between TECO Energy, Inc. and certain officers
under the TECO Energy, Inc. 1996 Equity Incentive
Plan.
10.2 Form of Performance Shares Agreement between TECO 28
Energy, Inc. and certain officers under the TECO
Energy, Inc. 1996 Equity Incentive Plan.
10.3 Form of Performance Shares Agreement between TECO 33
Energy, Inc. and certain TECO Power Services
Corporation officers under the TECO Energy, Inc.
1996 Equity Incentive Plan.
12 Ratio of earnings to fixed charges 38
27 Financial data schedule - six months ended --
June 30, 2000. (EDGAR filing only)
22
