FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
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 1-5007
TAMPA ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
FLORIDA 59-0475140
(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 (April 30, 1995):
Common Stock, Without Par Value 10<PAGE>
FORM 10-Q
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
In the opinion of management, the unaudited financial
statements include all adjustments necessary to present
fairly the results for the three-month periods ended March
31, 1995 and 1994. Reference should be made to the
explanatory notes affecting the income and balance sheet
accounts contained in Tampa Electric Company's Annual Report
on Form 10-K for the year ended Dec. 31, 1994 and to the
notes on page 6 of this report.
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FORM 10-Q
BALANCE SHEETS
(thousands of dollars)
March 31, Dec. 31,
1995 1994
Assets
Property, plant and equipment,
at original cost
Utility plant in service $2,866,045 $2,854,240
Construction work in progress 299,984 246,089
3,166,029 3,100,329
Accumulated depreciation (1,139,055) (1,115,167)
2,026,974 1,985,162
Other property 193 194
2,027,167 1,985,356
Current assets
Cash and cash equivalents 177 7,071
Receivables, less allowance
for uncollectibles 87,883 103,508
Inventories, at average cost
Fuel 98,112 95,831
Materials and supplies 38,844 38,465
Prepayments 1,782 2,675
226,798 247,550
Deferred debits
Unamortized debt expense 19,438 19,782
Deferred income taxes 87,712 86,514
Regulatory asset - tax related 31,336 30,791
Other 48,192 47,828
186,678 184,915
$2,440,643 $2,417,821
Liabilities and Capital
Capital
Common stock $ 800,956 $ 775,956
Retained earnings 173,508 173,299
974,464 949,255
Preferred stock, redemption not required 54,956 54,956
Long-term debt, less amount due
within one year 607,669 607,270
1,637,089 1,611,481
Current liabilities
Long-term debt due within one year 1,280 1,260
Notes payable 95,300 91,800
Accounts payable 79,875 113,759
Customer deposits 50,431 49,457
Interest accrued 13,761 11,166
Taxes accrued 25,588 2,152
266,235 269,594
Deferred credits
Deferred income taxes 326,262 327,646
Investment tax credits 62,073 63,265
Regulatory liability - tax related 87,603 88,291
Other 61,381 57,544
537,319 536,746
$2,440,643 $2,417,821
The accompanying notes are an integral part of the financial statements.
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FORM 10-Q
STATEMENTS OF INCOME
(thousands of dollars)
For the three months ended March 31, 1995 1994
Operating revenues $253,796 $244,629
Operating expenses
Operation
Fuel 90,376 84,677
Purchased power 9,520 7,983
Other 39,331 42,121
Maintenance 16,830 16,836
Depreciation 29,345 28,613
Taxes, federal and state income 11,617 11,108
Taxes, other than income 22,514 21,977
219,533 213,315
Operating income 34,263 31,314
Other income
Allowance for other funds used
during construction 1,799 273
Other income (expense), net (658) (14)
1,141 259
Income before interest charges 35,404 31,573
Interest charges
Interest on long-term debt 9,382 8,944
Other interest 2,227 1,592
Allowance for borrowed funds
used during construction (1,084) (636)
10,525 9,900
Net income 24,879 21,673
Preferred dividend requirements 892 892
Balance applicable to
common stock $ 23,987 $ 20,781
The accompanying notes are an integral part of the financial statements.
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FORM 10-Q
STATEMENTS OF CASH FLOWS
(thousands of dollars)
For the three months ended March 31, 1995 1994
Cash flows from operating activities
Net income $ 24,879 $ 21,673
Adjustments to reconcile net income
to net cash
Depreciation 29,345 28,613
Deferred income taxes (3,815) (4,040)
Investment tax credits, net (1,191) (1,216)
Allowance for funds used
during construction (2,883) (909)
Deferred revenue 7,421 --
Deferred recovery clause (5,857) 5,272
Refund to customers -- (2,306)
Receivables, less allowance
for uncollectibles 15,625 9,135
Inventories (2,660) (4,683)
Taxes accrued 23,436 21,624
Accounts payable (33,884) (15,757)
Other 7,346 10,618
57,762 68,024
Cash flows from investing activities
Capital expenditures (71,729) (39,560)
Allowance for funds used
during construction 2,883 909
Short-term investments -- (29)
(68,846) (38,680)
Cash flows from financing activities
Proceeds from contributed capital
from parent 25,000 40,000
Proceeds from long-term debt 620 --
Repayment of long-term debt (260) (245)
Net increase (decrease) in
short-term debt 3,500 (40,300)
Dividends (24,670) (30,114)
4,190 (30,659)
Net decrease in cash and
cash equivalents (6,894) (1,315)
Cash and cash equivalents
at beginning of period 7,071 4,499
Cash and cash equivalents
at end of period $ 177 $ 3,184
The accompanying notes are an integral part of the financial statements.
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FORM 10-Q
NOTES TO FINANCIAL STATEMENTS
A. T a m pa Electric Company is a wholly owned subsidiary of
TECO Energy, Inc.
B. The company has made certain commitments in connection with its
continuing construction program. Total construction expenditures are
estimated to be $320 million for 1995, excluding allowance for funds
used during construction.
C. On May 2, 1995, the Florida Public Service Commission (FPSC), in
a proposed agency action, voted to approve a plan submitted by the
company to increase the authorized rate of return on average common
equity (ROE) to 11.75 percent with a range of 10.75 percent to 12.75
percent and to defer $15 million of revenues for 1995 and additional
amounts related to levels of earned ROE. The company would be limited
to a maximum of 12.75 percent regulatory ROE for 1995. Also as part
of its proposed agency action, the FPSC voted to eliminate the
company's oil backout tariff effective Jan. 1, 1996. See additional
discussion on page 9.
D. Certain 1994 amounts on the statements of cash flows have been
restated to comply with the current year presentation.
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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 March 31, 1995:
Net income of $24.9 million for 1995's first quarter was
$3 million higher than the year-earlier quarter primarily due to
higher energy sales. These results were net of $7.4 million of
deferred revenues, as discussed on page 9. Operating income for 1995's
first quarter was 9 percent higher than in 1994, as higher revenues
and l ower operations-other expense more than offset higher
depreciation expense, and property and payroll taxes.
Revenues increased $9 million in the first quarter of 1995,
reflecting an almost 3-percent increase in retail energy sales
because of more normal weather in the current quarter and a continuing
strong local economy. Customer growth of 1.8 percent, slightly higher
than in 1994's first quarter, also contributed to higher revenues.
Energy sales to other utilities more than doubled from 1994's first
quarter as a result of normal weather and more competitive coal
prices. Non-fuel revenues from energy sales to other utilities were
$8.4 million, $.7 million higher than in 1994's period.
Combined fuel and purchased power expense increased $7.2 million
from the prior year's first quarter reflecting higher total energy
sales which more than offset the effects of lower fuel costs per unit.
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FORM 10-Q
Operation-other expense decreased $2.8 million, or 7 percent,
mainly because of self-insurance liability accruals required in the
first quarter of 1994 and the impact in 1995 of reduced costs as a
result of the 1994 corporate restructuring program.
The increase in depreciation expense of $.7 million was due to
normal plant additions.
Income tax expense increased $.5 million or 5 percent from the
prior year's first quarter, reflecting higher pretax income.
Interest expense, excluding allowance for borrowed funds used
during construction, was 10 percent higher than in 1994's first
quarter, primarily due to higher rates on short-term and variable-rate
debt.
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FORM 10-Q
Capital Resources and Changes in Financial Condition
On May 2, 1995 the FPSC in a proposed agency action voted to
approve a plan submitted by the company to increase its allowed ROE to
11.75 percent with a range of 10.75 percent to 12.75 percent and to
defer revenues under certain financial circumstances related to these
returns. For 1995, a minimum of $15-million of revenues will be
deferred as well as 50 percent of any actual revenues contributing to
an ROE in excess of 11.75 percent up to a net earned ROE of 12.75
percent and all actual revenues contributing to an ROE exceeding 12.75
percent. The deferred revenues, which would accrue interest at the 30-
day commercial paper rate specified in the Florida Administrative
Code, would be credited against the company's revenue requirements to
be determined in a future regulatory proceeding. As of March 31, 1995,
the company had deferred $7.4 million in revenues.
Also as part of its proposed agency action, the FPSC voted to
eliminate the company's oil backout tariff effective Jan. 1, 1996.
This tariff currently results in about $12 million of revenues
annually.
The FPSC issued its order on May 10, 1995. The order will become
effective on June 1, 1995, 21 days after issuance, unless an affected
party intervenes.
As described in the company's Current Report on Form 8-K, dated
April 25, 1995, Moody's Investor's Service lowered the senior and
subordinate debt ratings of the company one level to Aa2 and Aa3 from
Aa1 and Aa2, respectively. Moody's also changed its ratings outlook to
"stable" from "negative."
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FORM 10-Q
Moody's P-1 short-term debt rating for the commercial paper
program of the company was unchanged.
In March 1995, Duff & Phelps Credit Rating Co. upgraded the
company's first mortgage bond rating to AA+ from AA and the
subordinate debt rating to AA from AA-.
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FORM 10-Q
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Pursuant to a written consent in lieu of annual meeting of
shareholders dated April 19, 1995, TECO Energy, Inc., the holder
of all of the outstanding common stock of the registrant, elected
the following directors:
Girard F. Anderson
DuBose Ausley
Sara L. Baldwin
Hugh L. Culbreath
James L. Ferman, Jr.
Edward L. Flom
Henry R. Guild, Jr.
Timothy L. Guzzle
Robert L. Ryan
J. Thomas Touchton
John A. Urquhart
James O. Welch, Jr.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
12. Ratio of earnings to fixed charges.
27. Financial data schedule (EDGAR filing only)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
to which this report relates.
The registrant filed a Current Report on Form 8-K dated
April 20, 1995 reporting under "Item 5. Other Events" on
recommendations by the Staff of the Florida Public Service
Commission.
The registrant filed a Current Report on Form 8-K dated
April 25, 1995 reporting under "Item 5. Other Events" on
changes in debt ratings.
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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.
TAMPA ELECTRIC COMPANY
(Registrant)
Dated: May 12, 1995 By: /s/ L. L. Lefler
L. L. Lefler
Vice President -- Controller
(Chief Accounting Officer)
- 12 -<PAGE>
FORM 10-Q
Exhibit 12
INDEX TO EXHIBITS
Exhibit No. Description of Exhibits Page No.
12. Ratio of earnings to fixed charges. 14
27. Financial data schedule (EDGAR filing only) --
- 13 -<PAGE>
Exhibit 12
TAMPA ELECTRIC COMPANY
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the company's ratio of earnings to
fixed charges for the periods indicated.
Three Months Twelve Months
Ended Ended Year Ended December 31,
March 31, 1995 March 31, 1995(1) 1994(1) 1993(2) 1992 1991 1990
3.64x 4.18x 4.11x 3.98x 4.16x 3.66x 3.64x
For the purposes of calculating this ratio, earnings consist of income
before income taxes and fixed charges. Fixed charges consist of interest on
indebtedness, amortization of debt premium, the interest component of
rentals and preferred stock dividend requirements.
(1) Includes the effect of restructuring charge of $21.3 million pretax.
The effect of this charge was to reduce the ratio of earnings to fixed
charges. Had this non-recurring charge been excluded from the
calculation, the ratio of earnings to fixed charges would have been
4.52x for the period ended Dec. 31, 1994 and 4.58x for the twelve
months ended March 31, 1995.
(2) Includes the effect of the non-recurring $10 million pretax charge
associated with a coal pricing settlement. The effect of this charge
was to reduce the ratio of earnings to fixed charges. Had this non-
recurring charge been excluded from the calculation, the ratio of
earnings to fixed charges would have been 4.17x for the year ended
Dec. 31, 1993.
14<PAGE>
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THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE TAMPA ELECTRIC COMPANY BALANCE SHEETS, STATEMENTS OF INCOME AND
STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
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<NAME> Tampa Electric Company
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