UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 30, 2004
TECO ENERGY, INC.
(Exact name of registrant as specified in its charter)
| Florida | 1-8180 | 59-2052286 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 702 North Franklin Street, Tampa Florida | 33602 | |
| (Address of principal executive offices) | (Zip code) |
Registrant’s telephone number, including area code: (813) 228-1111
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 2 – Financial Information
Item 2.01 Completion of Acquisition or Disposition of Assets.
The previously announced sale by TECO Energy’s subsidiaries of their 50-percent interest in Texas Independent Energy, LP (TIE) to an affiliate of Public Service Enterprise Group Incorporated (PSEG) for the negotiated price of $500,000 was completed on Aug. 30, 2004. Prior to the sale, PSEG indirectly held 50-percent of the partnership interests in TIE. As a result of this acquisition, PSEG will indirectly hold 100-percent of the partnership interests in TIE, which owns two 1,000-megawatt gas-fired, combined cycle power stations in Texas, the Odessa and Guadalupe facilities.
Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(b) Pro Forma Financial Information
The following unaudited pro forma consolidated balance sheet reflects the disposition of the equity investment in TIE as if it had occurred on June 30, 2004. The accompanying unaudited pro forma condensed consolidated statement of income for the six months ended June 30, 2004 and the year ended Dec. 31, 2003, reflects the disposition of the TIE investment as if the sale had occurred on Jan. 1, 2003. The pro forma financial information does not purport to represent what TECO Energy, Inc.’s consolidated results would have been if the disposition had in fact occurred on these dates, nor does it purport to indicate the future consolidated financial position or future consolidated results of operations of TECO Energy. The pro forma adjustments are based on the equity earnings and related charges for TIE recorded for the periods.
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TECO Energy, Inc.
Pro Forma Consolidated Balance Sheet
June 30, 2004
(Unaudited)
| $ millions
|
As reported |
TIE (1) Adjustments |
Pro Forma |
|||||||
| Current assets |
||||||||||
| Cash and cash equivalents |
$ | 85.6 | $ | 85.6 | ||||||
| Restricted cash |
49.5 | 49.5 | ||||||||
| Receivables, less allowance for uncollectibles |
331.4 | 331.4 | ||||||||
| Current derivative assets |
15.4 | 15.4 | ||||||||
| Inventories, at average cost |
||||||||||
| Fuel |
75.9 | 75.9 | ||||||||
| Materials and supplies |
80.2 | 80.2 | ||||||||
| Prepayments and other current assets |
119.8 | 119.8 | ||||||||
| Assets held for sale |
117.0 | 117.0 | ||||||||
| Total current assets |
874.8 | 874.8 | ||||||||
| Property, plant and equipment |
||||||||||
| Utility plant in service |
||||||||||
| Electric |
5,085.4 | 5,085.4 | ||||||||
| Gas |
791.4 | 791.4 | ||||||||
| Construction work in progress |
795.4 | 795.4 | ||||||||
| Other property |
881.5 | 881.5 | ||||||||
| Property, plant and equipment, at original cost |
7,553.7 | 7,553.7 | ||||||||
| Accumulated Depreciation |
(2,031.8 | ) | (2,031.8 | ) | ||||||
| Total property, plant and equipment (net) |
5,521.9 | 5,521.9 | ||||||||
| Other assets |
||||||||||
| Deferred income taxes |
1,000.3 | 1,000.3 | ||||||||
| Other investments |
11.5 | 11.5 | ||||||||
| Regulatory assets |
160.3 | 160.3 | ||||||||
| Investment in unconsolidated affiliates |
247.9 | 247.9 | ||||||||
| Goodwill |
71.2 | 71.2 | ||||||||
| Deferred charges and other assets |
143.9 | 143.9 | ||||||||
| Assets held for sale |
2,061.3 | 2,061.3 | ||||||||
| Total other assets |
3,696.4 | 3,696.4 | ||||||||
| Total assets |
$ | 10,093.1 | $ | 10,093.1 | ||||||
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TECO Energy, Inc.
Pro Forma Consolidated Balance Sheet – continued
June 30, 2004
(Unaudited)
| $ millions
|
As reported |
TIE (1) Adjustments |
Pro Forma |
|||||||
| Current liabilities |
||||||||||
| Long-term debt due within one year |
||||||||||
| Recourse |
$ | 5.3 | $ | 5.3 | ||||||
| Non-recourse |
8.6 | 8.6 | ||||||||
| Notes Payable |
30.0 | 30.0 | ||||||||
| Accounts Payable |
299.4 | 299.4 | ||||||||
| Customer deposits |
104.4 | 104.4 | ||||||||
| Current derivative liabilities |
9.2 | 9.2 | ||||||||
| Interest accrued |
61.8 | 61.8 | ||||||||
| Taxes accrued |
165.9 | 165.9 | ||||||||
| Liabilities associated with assets held for sale |
1,570.0 | 1,570.0 | ||||||||
| Total current liabilities |
2,254.6 | 2,254.6 | ||||||||
| Other liabilities |
||||||||||
| Deferred income tax |
418.1 | 418.1 | ||||||||
| Investment tax credits |
21.3 | 21.3 | ||||||||
| Regulatory liabilities |
569.5 | 569.5 | ||||||||
| Deferred credits and other liabilities |
361.7 | 361.7 | ||||||||
| Liabilities associated with assets held for sale |
674.1 | 674.1 | ||||||||
| Long-term debt, less amount due within one year |
||||||||||
| Recourse |
3,591.4 | 3,591.4 | ||||||||
| Non-recourse |
14.8 | 14.8 | ||||||||
| Junior subordinated |
669.3 | 669.3 | ||||||||
| Minority interest |
2.9 | 2.9 | ||||||||
| Total other liabilities |
6,323.1 | 6,323.1 | ||||||||
| Capital |
||||||||||
| Common equity |
188.5 | 188.5 | ||||||||
| Additional paid in capital |
1,226.2 | 1,226.2 | ||||||||
| Retained earnings |
162.4 | 162.4 | ||||||||
| Accumulated other comprehensive income |
(52.4 | ) | (52.4 | ) | ||||||
| Common equity |
1,524.7 | 1,524.7 | ||||||||
| Unearned compensation |
(9.3 | ) | (9.3 | ) | ||||||
| Total capital |
1,515.4 | 1,515.4 | ||||||||
| Total liabilities and capital |
$ | 10,093.1 | $ | 10,093.1 | ||||||
| (1) | The $0.5 million TECO Energy received in cash proceeds approximates the amount expected to be paid for professional fees associated with the sale. Accordingly, the estimated net impact on cash and retained earnings is zero as the investment was previously written down to zero. |
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TECO Energy, Inc.
Pro Forma Condensed Consolidated Statement of Income
For the six months ended June 30, 2004
(Unaudited)
| $ millions, except per share amounts
|
As reported |
TIE (1) Adjustments |
Pro Forma | ||||||||
| Revenues |
$ | 1,355.3 | $ | 1,355.3 | |||||||
| Operating Expenses |
1,222.6 | 1,222.6 | |||||||||
| Income from Operations |
132.7 | 132.7 | |||||||||
| Other Income |
|||||||||||
| AFUDC - Other Funds |
0.7 | 0.7 | |||||||||
| Other Income |
82.7 | 82.7 | |||||||||
| Impairment on TIE Investment |
(151.9 | ) | (151.9 | ) | 0.0 | ||||||
| Earnings from Equity Investments |
5.9 | (9.8 | ) | 15.7 | |||||||
| Other Income |
(62.6 | ) | (161.7 | ) | 99.1 | ||||||
| Interest Charges |
172.6 | 172.6 | |||||||||
| Income Before Income Taxes |
(102.5 | ) | (161.7 | ) | 59.2 | ||||||
| (Benefit)Provision for Income Tax |
(7.1 | ) | (56.6 | ) | 49.5 | ||||||
| Minority Interest |
41.6 | 41.6 | |||||||||
| Net Income from Continuing Operations |
$ | (53.8 | ) | $ | (105.1 | ) | $ | 51.3 | |||
| Average common shares outstanding |
|||||||||||
| Basic |
188.2 | 188.2 | |||||||||
| Diluted |
188.2 | 188.7 | |||||||||
| Earnings per share from continuing operations |
|||||||||||
| Basic |
$ | (0.29 | ) | $ | 0.27 | ||||||
| Diluted |
$ | (0.29 | ) | $ | 0.27 | ||||||
| (1) | Reflects the reversal of the equity losses from TIE and the asset impairment recorded in the second quarter of 2004 to write off the remaining value of the equity investment in TIE and the related tax impacts. No adjustment is recorded for the cash proceeds received, as the amount approximates the professional fees associated with completing the sale. |
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TECO Energy, Inc.
Pro Forma Consolidated Statement of Income
For the year ended Dec. 31, 2003
(Unaudited)
| $ millions, except per share amounts
|
As reported |
TIE (1) Adjustments |
Pro Forma |
|||||||||
| Revenues |
$ | 2,740.0 | $ | 2,740.0 | ||||||||
| Operating Expenses |
2,719.9 | 2,719.9 | ||||||||||
| Income from Operations |
20.1 | 20.1 | ||||||||||
| Other Income |
||||||||||||
| AFUDC - Other Funds |
19.8 | 19.8 | ||||||||||
| Other Income |
114.5 | 2.1 | 112.4 | |||||||||
| TMDP Arbitration Reserve |
(32.0 | ) | (32.0 | ) | ||||||||
| Earnings from Equity Investments |
(0.4 | ) | (8.2 | ) | 7.8 | |||||||
| Other Income |
101.9 | (6.1 | ) | 108.0 | ||||||||
| Interest Charges |
320.7 | 320.7 | ||||||||||
| Income Before Income Taxes |
(198.7 | ) | (6.1 | ) | (192.6 | ) | ||||||
| (Benefit) Provision for Income Tax |
(135.2 | ) | (2.1 | ) | (133.1 | ) | ||||||
| Minority Interest |
48.8 | 48.8 | ||||||||||
| Net Income from Continuing Operations |
$ | (14.7 | ) | $ | (4.0 | ) | $ | (10.7 | ) | |||
| Average common shares outstanding |
||||||||||||
| Basic |
179.9 | 179.9 | ||||||||||
| Diluted |
179.9 | 179.9 | ||||||||||
| Earnings per share from continuing operations |
||||||||||||
| Basic |
$ | (0.08 | ) | $ | (0.06 | ) | ||||||
| Diluted |
$ | (0.08 | ) | $ | (0.06 | ) | ||||||
| (1) | Reflects the reversal of the equity losses and other miscellaneous income from TIE and the related tax impacts. No adjustment is recorded for the cash proceeds received, as the amount approximates the professional fees associated with completing the sale. |
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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 hereunto duly authorized.
| TECO ENERGY, INC. | ||
| (Registrant) | ||
| Date: September 1, 2004 |
||
| /s/ G. L. GILLETTE | ||
| G. L. GILLETTE | ||
| Executive Vice President | ||
| and Chief Financial Officer (Principal Financial Officer) | ||
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