TECO Energy reports third quarter earnings up 20 percent
TAMPA, October 19, 2000
TECO Energy, Inc. (NYSE:TE) today reported third quarter earnings of $.65 per share, up 20 percent from $.54 per share from continuing operations in 1999. Year-to-date earnings per share were $1.53, 16 percent higher than $1.32 from continuing operations in 1999. Charges were recorded in 1999 that reduced earnings per share from continuing operations to $.42 and $1.20 for the third quarter and nine-month period of 1999, respectively.
Net income for the quarter was $82.0 million, 14 percent higher than the $72.0 million recorded before charges in the 1999 period. Year-to-date net income was $193.0 million, up 11 percent compared with last year’s $174.3 million from continuing operations, excluding charges.
TECO Energy Chairman and Chief Executive Officer Robert Fagan said, "TECO Energy had another great quarter, and these results confirm that we are delivering the 10 percent core business growth that we committed to for both this year and next. We are executing our three-pronged business strategy and delivering the results that we expected."
"With our Florida companies benefiting from the continued strong customer growth and increased usage in Florida, the steady stream of new domestic power generation projects that TECO Power Services is announcing and developing and the continued good results at TECO Transport, we expect to deliver strong earnings growth through 2001 and beyond," Fagan added.
Chief Financial Officer Gordon Gillette said, "The results this quarter reaffirm the earnings growth guidance we provided in late September."
In the third quarter, an $8.3 million after-tax gain from the US Propane and Heritage Propane transactions was offset by after-tax charges of $5.2 million to adjust the value of leveraged leases and $3.8 million to adjust property values at TECO Properties.
Operating Segment Results:
Results for the quarter relative to last year reflected the continued strong customer growth in the core electric and gas businesses; contributions from TECO Power Services' San José and Hardee expansion projects; good operating conditions and markets at TECO Transport and the addition of synthetic fuel production at TECO Coal.
|Net Income Summary:||2000||1999||2000||1999||2000||1999|
|Net income before charges|
Peoples Gas System
TECO Power Services
Other diversified companies
|Net income before charges||82.0||72.0||193.0||174.3||239.3||221.1|
|Net income from continuing operations||82.0||55.9||193.0||158.2||235.8||200.5|
|Discontinued operations ||-- ||(13.6) ||-- ||(14.8) ||(32.3) |
|Net income ||$ 82.0 ||$ 42.3 ||$193.0 ||$143.4 ||$235.8 ||$168.2 |
|Amounts from 1999 were reclassified to reflect the results of TeCom as discontinued operations. This business was sold in November 1999.|
Tampa Electric’s net income for the third quarter was $54.7 million, compared with $53.0 million, excluding charges, for the same period last year. The company showed improved results from strong customer growth of more than 3 percent for both the quarter and nine-month period, and energy sales growth of 3 percent for the quarter and almost 7 percent year-to-date. Tampa Electric’s year-to-date net income was $118.9 million, compared with $115.1 million, excluding charges, last year. Year-to-date retail sales were 5 percent above 1999 levels driven by customer growth and increased usage by residential and commercial customers.
Expenses for the quarter reflected higher depreciation due to the scrubber addition at Big Bend Station. Higher expenses year-to-date reflected the increased scrubber depreciation and higher maintenance expenses associated with improving summer unit availability. In addition, last year's results reflected U.S. Department of Energy credits associated with Polk Power Station, which expired at the end of 1999. Results for the quarter and year-to-date included the favorable impact of cost recovery from the scrubber investment at Big Bend Station, which was placed into service in December 1999. Also included in Tampa Electric’s results was a $4.5 million after-tax provision for interest associated with deferred taxes.
Peoples Gas System reported net income of $3.3 million for the quarter, compared with $2.5 million last year. Quarterly results reflected strong customer growth of almost 5 percent, along with commercial gas sales to new customers in Southwest Florida and increased volumes for electric power generators. Year-to-date results at Peoples Gas System improved almost 20 percent over last year, with net income increasing to $15.9 million from $13.3 million last year. Year-to-date customer growth of almost 5 percent and normal winter weather contributed to higher retail gas sales.
TECO Transport reported net income of $8.0 million in the third quarter, compared with $6.8 million last year. For the year, net income was $22.3 million, up 12 percent from $19.9 million in 1999. Increased movements for Tampa Electric, strong government grain shipments and higher northbound river volumes were partially offset by higher fuel prices and lower phosphate shipments.
TECO Power Services’ net income for the quarter was $7.0 million, compared with $3.7 million last year; year-to-date, net income was $24.6 million, more than double the results of $10.4 million last year. Improvements for the quarter and year-to-date periods reflected contributions from the new generating projects that entered commercial service this year.
TECO Coal achieved third-quarter net income of $15.7 million, up from $4.2 million last year; year to date, net income was $24.3 million, compared with $11.7 million. These results were driven primarily by the addition of synthetic fuel production facilities this year, which more than offset the impact of the expiration of the Tampa Electric contract at the end of 1999.
TECO Energy’s other diversified companies recorded net income of $10.4 million and $23.1 million for the third quarter and year-to-date, respectively, up from $6.9 million and $18.5 million for the same periods last year. These results include the $8.3 million gain from the US Propane and Heritage Propane transactions and the $3.8 million charge to adjust property values at TECO Properties. TECO Coalbed Methane achieved higher earnings as higher gas prices more than offset normal production declines. Year-to-date realized gas prices were $2.57 per mcf compared to $1.96 last year.
Financing costs were higher for the third quarter and year-to-date, reflecting higher borrowing levels and higher interest rates. The company's share repurchase program favorably impacted earnings per share in the quarter and year-to-date periods by $.02 and $.05 per share, respectively.
Additional financial information related to the company's third quarter and year-to-date results, including unaudited financial statements; segment revenues and operating income; and electric and gas volumes is available in the Investor Relations section of TECO Energy's Web site at www.tecoenergy.com.
Summary information (as of September 30):
|(millions except per share amounts)|
|2000 ||1999 ||2000 ||1999 ||2000 ||1999 |
|Revenues||$614.7 ||$555.9 ||$1,698.7 ||$1,493.0 ||$2,188.8 ||$1,966.9 |
|Net income from|
|$ 82.0||$ 55.9||$ 193.0||$ 158.2||$ 235.8||$ 200.5|
|Net income (loss) from|
|Gain (loss) on disposal of|
|-- ||(12.9) ||-- ||(12.3) ||-- ||(28.4) |
|Net income||$ 82.0 ||$ 42.3 ||$ 193.0 ||$ 143.4 ||$ 235.8 ||$ 168.2 |
|Earnings per share from|
continuing operations -
|Earnings per share from|
continuing operations -
|Earnings per share - basic|
Earnings per share -
|Average common shares|
outstanding - basic
|Average common shares|
outstanding - diluted
TECO Energy is a diversified energy-related holding company headquartered in Tampa. Its principal businesses are Tampa Electric, Peoples Gas System, TECO Power Services, TECO Transport, TECO Coal, TECO Coalbed Methane, TECO Propane Ventures and TECO Solutions.
Note: This press release 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 the margins at TECO Coalbed Methane and TECO Coal; energy price changes affecting TECO Power Services’ merchant plants; 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 December 31, 1999, and reference is made thereto.