TECO Coal has 90% of its expected sales of between 5.2 and 5.7 million tons contracted for 2013. The product mix is expected to be about 50% specialty coals, which include stoker, metallurgical and PCI coals, and the remainder utility steam coal. The average selling price across all products is expected to be more than $86 per ton. All of the 2.7 million tons of steam coal sales planned for 2013 are committed and priced. The all-in total cost of production is expected to be below 2012 levels in a range between $81 and $85 per ton due to actions taken in 2012 to reduce mining costs, and lower royalty payments and severance taxes, which are a function of selling price. TECO Coal’s effective income tax rate in 2013 is expected to be 25%.As engineering has progressed on the Polk Power Station Units 2 – 5 conversion to combined-cycle operation, the timing of expected capital expenditures has been refined. The largest capital spending for that project is now expected to occur in 2014 and 2015. TECO Energy now plans to utilize the majority of proceeds from the sale of the TECO Guatemala assets to invest in Tampa Electric’s rate base growth in the form of equity contributions. Over the next several years, after maintaining Tampa Electric’s capital structure, additional cash used to repurchase shares as market opportunities allow, and to offset dilution from shares issued as compensation could be as much as $50 million.
TECO Energy Reports Fourth-Quarter Results
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