TECO Energy, Inc. (NYSE:TE) today reported second-quarter 2015 net income of $11.8 million, or $0.05 per share, compared with $58.4 million, or $0.27 per share, in the second quarter of 2014. As previously reported on July 30, net income from continuing operations was $61.5 million, or $0.26 per share, in the 2015 second quarter, compared with $57.6 million, or $0.27 per share, for the same period in 2014. The $49.7 million loss in discontinued operations in the second quarter reflects the operating results at TECO Coal of $1.1 million and net impairment charges of $50.8 million associated with the pending sale of TECO Coal (see the Discontinued Operations section below).

Year-to-date net income was $69.8 million, or $0.30 per share, compared with net income of $108.5 million, or $0.50 per share in the 2014 period. Net income from continuing operations was $125.3 million or $0.53 per share, compared with $106.0 million or $0.49 per share in the 2014 period. The $55.5 million loss in discontinued operations in the year-to-date period reflects the $4.7 million operating loss at TECO Coal and net impairment charges referred to above.

The information in this release should be used in conjunction with the information in the TECO Energy press release and Current Report on Form 8-K dated July 30, 2015 for a complete understanding of TECO Energy's second quarter and year-to-date 2015 financial results.

Segment Reporting

The table below includes TECO Energy segment information on a GAAP basis, which includes all charges and gains for the periods shown.

Segment Information
  3 months

ended June 30
  6 months

ended June 30
  12 months

ended June 30
(millions)    
Net Income Summary 2015   2014   2015   2014   2015   2014
Tampa Electric $67.7   $62.2 $115.9   $107.4 $233.1   $215.9
Peoples Gas System 7.6 7.5 22.2 22.1 35.8 35.1
New Mexico Gas Co. (1) (0.1) -- 13.8 -- 24.3 --
Other - net (13.7)   (12.1)   (26.6)   (23.5)   (67.5)   (45.3)
Net income from continuing operations 61.5 57.6 125.3 106.0 225.7 205.7
Discontinued operations (2) (49.7)   0.8   (55.5)   2.5   (134.0)   7.5
Total net income $11.8   $58.4   $69.8   $108.5   $91.7   $ 213.2

(1) The 12-months ended 2015 period reflect New Mexico Gas Co. results after the Sept. 2, 2014 closing of the acquisition.

(2) In the three- and six-months ended 2015 periods, discontinued operations include the operating results at TECO Coal and an impairment charge. In the 12-months ended 2015 period, discontinued operations included the operating results at TECO Coal, net impairment charges, and costs related to TECO Guatemala. In the three-, six- and 12-months ended 2014 periods, discontinued operations included the operating results at TECO Coal. The six- and 12-month ended 2014 periods included a $3.1 million benefit related to the sale of TECO Guatemala in 2012.

Discontinued Operations

The second quarter 2015 loss of $49.7 million recorded in discontinued operations reflects TECO Coal's second quarter operating results of $1.1 million and net impairment charges of $50.8 million associated with the pending sale of TECO Coal. The company continues to be in active discussions with interested parties in an effort to complete the sale. Based on management's assessment of current market conditions and the discussions with interested parties, an additional impairment charge was recorded in the second quarter of 2015, which includes the estimated selling costs associated with this transaction.

The year-to-date loss of $55.5 million in discontinued operations reflects TECO Coal's operating loss of $4.7 million and the net impairment charges recorded in the second quarter.

TECO Energy Inc. (NYSE: TE) is an energy-related holding company with regulated electric and gas utilities in Florida and New Mexico. Tampa Electric serves more than 700,000 customers in West Central Florida; Peoples Gas System serves more than 350,000 customers across Florida; and New Mexico Gas Co. serves more than 510,000 customers across New Mexico. Other TECO Energy subsidiaries include TECO Coal, which owns and operates coal-production facilities in Kentucky, Tennessee and Virginia.

Note: This press release may be deemed to contain forward-looking statements, which are subject to the inherent uncertainties in predicting future results and conditions. Actual results may differ materially from those forecasted. The forecasted results are based on the company's current expectations and assumptions, and the company does not undertake to update that information or any other information contained in this press release, except as may be required by law. Factors that could impact actual results include: regulatory actions by federal, state or local authorities; the ability to successfully implement the integration plans for NMGC and generate the financial results to make the acquisition accretive; unexpected capital needs or unanticipated reductions in cash flow that affect liquidity; the ability to access the capital and credit markets when required; general economic conditions affecting customer growth and energy sales at the utility companies; economic conditions affecting the Florida and New Mexico economies; weather variations and customer energy usage patterns affecting sales and operating costs at the utilities and the effect of weather conditions on energy consumption; the effect of extreme weather conditions or hurricanes; general operating conditions; input commodity prices affecting cost at all of the operating companies; natural gas demand at the utilities; and the ability of TECO Energy's subsidiaries to operate equipment without undue accidents, breakdowns or failures; and the ability of TECO Energy to successfully close the sale of TECO Coal on reasonable terms, or otherwise exit the coal business. Additional information is contained under "Risk Factors" in TECO Energy, Inc.'s Annual Report on Form 10-K for the period ended Dec. 31, 2014.

Summary Information (as of June 30, 2015)
(millions except per share amounts)   Three Months   Six Months   Twelve Months
Ended   Ended   Ended
2015   2014   2015   2014   2015   2014
Revenues $680.6   $605.7   $1,373.6   $1,183.7   $2,756.3   $2,388.1
Net income from continuing operations

$61.5
 

$57.6

$125.3
 

$106.0

$225.7
 

$205.7
Net income from discontinued operations

(49.7)
 

0.8
 

(55.5)
 

2.5
 

(134.0)
 

7.5
Net income $11.8   $58.4   $69.8   $108.5   $91.7   $213.2
 
Earnings per share from continuing operations- basic

$0.26

$0.27

$0.53

$0.49

$0.97

$0.96
Earnings per share from discontinued operations - basic (0.21)  

--
 

(0.23)
 

0.01
 

(0.58)
 

0.03
Total earnings per share - basic $0.05   $0.27   $0.30   $0.50   $0.39   $0.99
 
Total earnings per share - diluted

$0.05

$0.27

$0.30

$0.50

$0.39

$0.99
Average common shares outstanding - basic

233.0

215.4

232.9

215.3

231.3

215.2
Average common shares outstanding - diluted

233.6

215.9

233.5

215.8

231.9

215.7

JUNE 2015

Figures appearing in these statements are presented as general information and not in connection with any sale or offer to sell or solicitation of an offer to buy any securities, nor are they intended as a representation by the company of the value of its securities. All figures reported are subject to adjustments as the annual audit by independent accountants may determine to be necessary and to the explanatory notes affecting income and balance sheet accounts contained in the company's Annual Report on Form 10-K. Reference should also be made to information contained in that and other reports filed by TECO Energy, Inc. and Tampa Electric Company with the Securities and Exchange Commission.
TECO ENERGY, Inc.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(All significant intercompany transactions have been eliminated in the consolidated financial statements.)
                                 
  Three Months Ended   Six Months Ended   Twelve Months Ended
Jun. 30,   Jun. 30,   Jun. 30,
(millions except share data)   2015   2014       2015   2014       2015   2014
     
Revenues
Regulated electric and gas $678.2 $603.6 $1,368.1 $1,179.3 $2,746.1 $2,378.8
Unregulated   2.4   2.1       5.5   4.4       10.2   9.3
Total revenues   680.6   605.7       1,373.6   1,183.7       2,756.3   2,388.1
Expenses
Regulated operations & maintenance
Fuel 171.8 169.7 315.9 319.3 689.0 685.0
Purchased power 19.6 19.9 36.7 38.1 69.9 67.7
Cost of natural gas sold 49.1 29.1 152.1 76.2 285.6 128.1
Other 155.4 126.8 299.1 247.4 599.4 521.4
Operations & maintenance other expense 1.1 4.6 2.7 7.8 24.5 15.7
Depreciation and amortization 87.0 75.5 172.5 151.4 336.4 296.5
Taxes, other than income   53.3   48.1       105.1   95.9       204.2   189.4
Total expenses   537.3   473.7       1,084.1   936.1       2,209.0   1,903.8
Income from operations   143.3   132.0       289.5   247.6       547.3   484.3
Other income (expense)
Allowance for other funds used during construction 3.7 2.0 7.5 4.4 13.6 8.2
Other income   1.4   (0.5)       3.0   (1.4)       5.0   (2.5)
Total other income   5.1   1.5       10.5   3.0       18.6   5.7
Interest charges
Interest expense 48.2 41.4 98.0 82.4 192.0 164.2
Allowance for borrowed funds used during construction   (1.8)   (0.7)       (3.7)   (2.1)       (6.8)   (4.3)
Total interest charges   46.4   40.7       94.3   80.3       185.2   159.9
Income before provision for income taxes 102.0 92.8 205.7 170.3 380.7 330.1
Provision for income taxes   40.5   35.2       80.4   64.3       155.0   124.4
Income from continuing operations 61.5 57.6 125.3 106.0 225.7 205.7
Discontinued operations
Income (loss) from discontinued operations (78.1) 0.0 (87.7) 1.2 (214.3) 3.4
Provision for income taxes   (28.4)   (0.8)       (32.2)   (1.3)       (80.3)   (4.1)
Income (loss) from discontinued operations, net   (49.7)   0.8       (55.5)   2.5       (134.0)   7.5
Net income   $11.8   $58.4       $69.8   $108.5       $91.7   $213.2
 
 
Average common shares outstanding - basic (millions) 233.0 215.4 232.9 215.3 231.3 215.2
Average common shares outstanding - diluted (millions) 233.6 215.9 233.5 215.8 231.9 215.7
 
Earnings per average common share outstanding:
Earnings per share from continuing operations -- basic $0.26 $0.27 $0.53 $0.49 $0.97 $0.96
Earnings per share from continuing operations -- diluted $0.26 $0.27 $0.53 $0.49 $0.97 $0.96
 
Earnings per share from discontinued operations -- basic ($0.21) $0.00 ($0.23) $0.01 ($0.58) $0.03
Earnings per share from discontinued operations -- diluted ($0.21) $0.00 ($0.23) $0.01 ($0.58) $0.03
 
Earnings per share attributable to TECO Energy -- basic $0.05 $0.27 $0.30 $0.50 $0.39 $0.99
Earnings per share attributable to TECO Energy -- diluted $0.05 $0.27 $0.30 $0.50 $0.39 $0.99
TECO ENERGY, Inc.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(All significant intercompany transactions have been eliminated in the consolidated financial statements.)
         
  Jun. 30,   Dec. 31,
(millions)   2015   2014
 
Assets
Current assets
Cash and cash equivalents $56.0 $25.4
Receivables 273.3 299.8
Inventories at average cost
Fuel 132.7 96.4
Materials and supplies 75.8 75.4
Derivative assets 0.6 0.0
Deferred income taxes 73.4 72.8
Prepayments and other current assets 31.5 22.6
Regulatory assets 39.4 53.6
Assets held for sale   96.5   109.6
Total current assets   779.2   755.6
Property, plant and equipment
Utility plant in service
Electric 7,217.1 7,094.8
Gas 2,055.2 1,984.6
Construction work in progress 648.0 640.0
Other property   14.8   14.5
Property plant and equipment at original cost 9,935.1 9,733.9
Accumulated depreciation   (2,693.4)   (2,645.7)
Total property, plant and equipment, net   7,241.7   7,088.2
Other assets
Regulatory assets 343.3 348.5
Goodwill 408.4 408.3
Deferred charges and other assets 65.8 65.8
Assets held for sale   0.0   59.8
Total other assets   817.5   882.4
Total assets   $8,838.4   $8,726.2
 
Liabilities and capital
Current liabilities
Long-term debt due within one year $333.3 $274.5
Notes payable 85.5 139.0
Accounts payable 258.2 288.6
Other current liabilities 16.7 16.8
Customer deposits 179.5 176.2
Derivative liabilities 24.4 36.6
Interest accrued 38.1 39.9
Taxes accrued 46.0 29.9
Regulatory liabilities 49.9 57.0
Liabilities associated with assets held for sale   30.2   39.4
Total current liabilities   1,061.8   1,097.9
Other liabilities
Deferred income taxes 573.1 519.2
Investment tax credits 8.8 9.0
Regulatory liabilities 713.2 729.0
Derivative liabilities 1.9 6.1
Deferred credits and other liabilities 341.5 370.9
Liabilities associated with assets held for sale 66.3 65.4
Long-term debt, less amount due within one year   3,518.5   3,354.0
Total other liabilities   5,223.3   5,053.6
Total liabilities 6,285.1 6,151.5
Capital
Common equity 235.1 234.9
Additional paid in capital 1,885.7 1,875.9
Retained earnings 443.5 479.6
Accumulated other comprehensive loss   (11.0)   (15.7)
Total capital   2,553.3   2,574.7
Total liabilities and capital   $8,838.4   $8,726.2
 
Book Value Per Share $10.86 $10.96
TECO ENERGY, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(All significant intercompany transactions have been eliminated in the consolidated financial statements.)
                   
Three Months Ended Six Months Ended Twelve Months Ended
Jun. 30, Jun. 30, Jun. 30,
(millions)   2015   2014       2015   2014       2015   2014
 
Cash flows from operating activities
Net income $11.8 $58.4 $69.8 $108.5 $91.7 $213.2
 
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization 87.4 84.2 173.3 169.1 346.0 332.7
Deferred income taxes & Investment tax credits 10.9 33.0 46.9 61.8 74.6 120.1
Allowance for other funds used during construction (3.7) (2.0) (7.5) (4.4) (13.6) (8.2)
Non-cash stock compensation 3.0 3.4 6.9 7.1 12.6 13.7
Gain on sales of business / assets, pretax 0.0 0.0 0.0 (0.1) (0.1) (1.5)
Deferred recovery clause 1.6 (17.0) (4.1) (14.4) (5.0) (14.6)
Asset impairment, pretax 78.6 0.0 78.6 0.0 194.5 0.0
Receivables, less allowance for uncollectibles (11.2) (54.7) 39.8 (36.6) 39.9 (2.7)
Inventories (21.5) (16.6) (37.2) (16.2) (8.2) 4.6
Prepayments and other current assets (1.3) (1.9) (12.2) (2.1) (7.2) 0.0
Taxes accrued 17.3 18.8 19.0 34.3 (14.1) 7.5
Interest accrued (19.6) (20.4) (1.8) 2.5 3.0 (0.8)
Accounts payable 5.2 (10.8) (58.3) (36.0) 1.1 (13.0)
Other   (8.7)   (0.3)       (16.4)   (12.5)       (14.5)   (19.1)
    149.8   74.1       296.8   261.0       700.7   631.9
 
Cash flows from investing activities
Capital expenditures (183.2) (184.0) (343.2) (320.3) (737.3) (603.1)
Allowance for other funds used during construction 3.7 2.0 7.5 4.4 13.6 8.2
Purchase of a business, net of cash acquired 0.0 0.0 0.0 0.0 (751.5) 0.0
Net proceeds from sale of business / assets 0.1 0.1 0.0 0.3 0.0 4.2
Other investments   0.0   0.0       (0.1)   0.0       (8.1)   0.0
    (179.4)   (181.9)       (335.8)   (315.6)       (1,483.3)   (590.7)
 
Cash flows from financing activities
Dividends paid (52.9) (47.9) (105.9) (95.9) (209.2) (191.5)
Proceeds from sale of common stock 0.7 1.4 3.5 3.0 302.9 2.3
Proceeds from long-term debt 500.0 296.6 500.0 296.6 766.9 296.6
Repayment of long-term debt / Purchase in lieu of redemption (274.5) (83.3) (274.5) (83.3) (274.5) (134.9)
Net (decrease) increase in short-term debt   (120.5)   (29.0)       (53.5)   (84.0)       85.5   0.0
    52.8   137.8       69.6   36.4       671.6   (27.5)
 
Net increase (decrease) in cash and cash equivalents 23.2 30.0 30.6 (18.2) (111.0) 13.7
Cash and cash equivalents at beginning of period   32.8   137.0       25.4   185.2       167.0   153.3
Cash and cash equivalents at end of period   $56.0   $167.0       $56.0   $167.0       $56.0   $167.0
 
 
Supplemental disclosure of non-cash activities
Debt assumed in NMGI acquisition $0.0 $0.0 $0.0 $0.0 $200.0 0.0
Change in accrued capital expenditures - excluded above ($9.9) ($6.1) $1.6 $8.6 $6.5 $16.3
TECO ENERGY, Inc.
SEGMENT INFORMATION (Unaudited)
                                     
                                                               
(millions) Tampa Peoples TECO TECO
        Electric       Gas       Coal (3)     NMGC     Other (3)   Eliminations     Energy
Three months ended Jun. 30,
2015 Revenues - outsiders $ 531.6 $ 92.2 $ -- $ 54.0 $ 2.8 $ -- $ 680.6
Sales to affiliates     0.8         1.3         --           --           0.1         (2.2 )         --  
Total revenues 532.4 93.5 -- 54.0 2.9 (2.2 ) 680.6
Depreciation and amortization 64.0 14.0 -- 8.4 0.6 -- 87.0
Total interest charges (2) 23.6 3.6 -- 3.3 16.3 (0.4 ) 46.4
Allocated interest expense (2) -- -- -- -- 0.4 (0.4 ) --
Provision (Benefit) for income taxes 38.9 4.8 -- -- (3.2 ) -- 40.5
Net income (loss) from continuing operations 67.7 7.6 -- (0.1 ) (13.7 ) -- 61.5
Income (loss) from discontinued operations, net of tax -- -- (51.5 ) -- 1.8 -- (49.7 )
    Net income (loss) (1)   $ 67.7       $ 7.6       $ (51.5 )       $ (0.1 )       $ (11.9 )       $ --     $ 11.8  
2014 Revenues - outsiders $ 512.5 $ 90.7 $ -- $ -- $ 2.5 $ -- $ 605.7
Sales to affiliates     0.2         0.4         --           --           0.1         (0.7 )         --  
Total revenues 512.7 91.1 -- -- 2.6 (0.7 ) 605.7
Depreciation and amortization 61.7 13.4 -- -- 0.4 -- 75.5
Total interest charges (2) 23.3 3.4 -- -- 15.9 (1.9 ) 40.7
Allocated interest expense (2) -- -- -- -- 1.9 (1.9 ) --
Provision (Benefit) for income taxes 37.1 4.8 -- -- (6.7 ) -- 35.2
Net income (loss) from continuing operations 62.2 7.5 -- -- (12.1 ) -- 57.6
Income (loss) from discontinued operations, net of tax -- -- 0.8 -- -- -- 0.8
    Net income (loss) (1)   $ 62.2       $ 7.5       $ 0.8         $ --     $ (12.1 )       $ --     $ 58.4  
Six months ended Jun. 30,
2015 Revenues - outsiders $ 981.4 $ 213.9 $ -- $ 173.0 $ 5.3 $ -- $ 1,373.6
Sales to affiliates     1.6         2.5         --           --           0.1         (4.2 )         --  
Total revenues 983.0 216.4 -- 173.0 5.4 (4.2 ) 1,373.6
Depreciation and amortization 126.9 27.9 -- 16.8 0.9 -- 172.5
Total interest charges (2) 47.1 7.1 -- 6.6 34.2 (0.7 ) 94.3
Allocated interest expense (2) -- -- -- -- 0.7 (0.7 ) --
Provision (Benefit) for income taxes 66.3 14.0 -- 9.0 (8.9 ) -- 80.4
Income from continuing operations 115.9 22.2 -- 13.8 (26.6 ) -- 125.3
Income (loss) from discontinued operations, net of tax -- -- (57.5 ) -- 2.0 -- (55.5 )
    Net income (loss) (1)   $ 115.9       $ 22.2       $ (57.5 )       $ 13.8         $ (24.6 )       $ --     $ 69.8  
2014 Revenues - outsiders $ 965.4 $ 213.1 $ -- $ -- $ 5.2 $ -- $ 1,183.7
Sales to affiliates     0.5         0.6         --           --           0.1         (1.2 )         --  
Total revenues 965.9 213.7 -- -- 5.3 (1.2 ) 1,183.7
Depreciation and amortization 123.8 26.7 -- -- 0.9 -- 151.4
Total interest charges (2) 45.3 6.8 -- -- 31.9 (3.7 ) 80.3
Allocated interest expense (2) -- -- -- -- 3.7 (3.7 ) --
Provision (Benefit) for income taxes 63.7 14.0 -- -- (13.4 ) -- 64.3
Income from continuing operations 107.4 22.1 -- -- (23.5 ) -- 106.0
Income (loss) from discontinued operations, net of tax -- -- (0.8 ) -- 3.3 -- 2.5
    Net income (loss) (1)   $ 107.4       $ 22.1       $ (0.8 )       $ --     $ (20.2 )       $ --     $ 108.5  
Twelve months ended Jun. 30,
2015 Revenues - outsiders $ 2,036.0 $ 399.3 $ -- $ 310.6 $ 10.4 $ -- $ 2,756.3
Sales to affiliates     2.1         3.0         --           --           0.3         (5.4 )         --  
Total revenues 2,038.1 402.3 -- 310.6 10.7 (5.4 ) 2,756.3
Depreciation and amortization 251.7 55.2 -- 27.8 1.7 -- 336.4
Total interest charges (2) 94.6 14.1 -- 10.8 68.4 (2.7 ) 185.2
Allocated interest expense (2) -- -- -- -- 1.3 (1.3 ) --
Provision (Benefit) for income taxes 135.8 22.7 -- 16.0 (19.5 ) -- 155.0
Net income (loss) from continuing operations 233.1 35.8 -- 24.3 (67.5 ) -- 225.7
Income (loss) from discontinued operations, net of tax -- -- (138.7 ) -- 4.7 -- (134.0 )
    Net income (loss) (1)   $ 233.1       $ 35.8       $ (138.7 )       $ 24.3         $ (62.8 )       $ --     $ 91.7  
2014 Revenues - outsiders $ 1,994.5 $ 382.6 $ -- $ -- $ 11.0 $ -- $ 2,388.1
Sales to affiliates     1.0         0.9         --           --           0.2         (2.1 )         --  
Total revenues 1,995.5 383.5 -- -- 11.2 (2.1 ) 2,388.1
Depreciation and amortization 242.9 52.0 -- -- 1.6 -- 296.5
Total interest charges (2) 90.4 13.6 -- -- 63.4 (7.5 ) 159.9
Allocated interest expense (2) -- -- -- -- 7.5 (7.5 ) --
Provision (Benefit) for income taxes 129.4 22.2 -- -- (27.2 ) -- 124.4
Net income (loss) from continuing operations 215.9 35.1 -- -- (45.3 ) -- 205.7
Income (loss) from discontinued operations, net of tax -- -- 4.5 -- 3.0 -- 7.5
    Net income (loss) (1)   $ 215.9       $ 35.1       $ 4.5         $ --     $ (42.3 )       $ --     $ 213.2  
 

(1)

 
Results are based on GAAP net income. For a complete reconciliation between GAAP and non-GAAP items, see Results Reconciliation in Earnings Release.

(2)

 
Segment net income is reported on a basis that includes internally allocated financing costs. Internally allocated costs were at pretax rates of 6.00% for July 2013 through June 2015.

(3)

 
All periods have been adjusted to reflect the reclassification of results from operations to discontinued operations for TECO Guatemala, TECO Coal, and certain charges at Parent that directly relate to TECO Guatemala or TECO Coal.

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