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News Release

TECO Energy changes Hardee sale accounting treatment

TAMPA, March 3, 2004

Change results in no impact on 2003 total results

TECO Energy, Inc. (NYSE:TE) today issued revised 2003 results to reflect the treatment of the sale of Hardee Power Partners as a component of continuing, rather than discontinued, operations and to reflect the 2003 sale of Hardee in the fourth quarter, rather than the third quarter. Hardee Power Partners (HPP), which owns the 370-megawatt combined cycle Hardee Power Station, was sold by TECO Energy to a privately held third party in the fall of 2003. Total net income (loss), cash flows, and non-GAAP results from continuing operations for 2003 remain unchanged by the revised accounting treatment. The company and its independent auditors, in connection with the annual audit of the company’s financial results, reevaluated the technical accounting rules originally applied in the third quarter As a result, TECO Energy has revised its 2003 results to reflect the $34.6 million after-tax gain on the sale of Hardee in continuing operations for the fourth quarter and to keep the Hardee net income of $9.0 million through September 30 in full-year continuing operations.

The accounting change moves $43.6 million for the year from discontinued operations to continuing operations. After the change, t he overall TECO Energy year-to-date loss remains unchanged at $909.4 million. The loss on a per-share basis remained $5.05. The year-to-date loss from continuing operations is now $14.7 million compared with the previously reported loss of $58.3 million. The loss from continuing operations on a per-share basis was $0.08, compared to the previously reported loss of $0.32 per share. Discontinued operations, (which previously included the Union and Gila River power stations, TECO Coalbed Methane, Prior Energy, TECO Gas Services and HPP) now report a loss for the year of $890.4 million, excluding HPP, compared to the previously reported loss of $846.8 million, or a loss of $4.95 on a per-share basis compared to the previously reported $4.71 per share. The table below compares the previously reported results to the current accounting treatment.

Results from Hardee Power Partners included in continuing operations in the third quarter consist of net income of $2.9 million from operations. Results in the fourth quarter include the $34.6 million after-tax gain on the sale. Full-year results include the gain and net income of $9.0 million from operations in the first nine months.


Three months ended

Sept. 30

Three months ended

Dec. 31

Twelve months ended

Dec. 31

($ million)

Current

Previous

Current

Previous

Current

Previous

Net income (loss)

($19.5)

$15.0

($790.7)

($825.2)

($909.4)

($909.4)

Net income (loss) discontinued operations

--

$37.4

($786.7)

($786.6)

($890.4)

($846.8)

Cumulative effect of change in accounting principle

$3.2

$3.2

--

--

$4.3

$4.3

Net income (loss) continuing operations

($16.3)

($19.2)

($4.0)

($38.6)

($14.7)

($58.3)

(Per share data)

Earnings (loss) per share

($0.11)

($0.11)

($4.21)

($4.39)

($5.05)

($5.05)

Earnings (loss) per share discontinued operations

--

$0.21

($4.19)

($4.19)

($4.95)

($4.71)

Cumulative affect of change in accounting principle

($0.02)

($0.02)

--

--

($0.02)

($0.02)

Earnings (loss) per share continuing operations

($0.09)

($0.08)

($0.02)

($0.20)

($0.08)

($0.32)

TECO Energy’s non-GAAP adjusted earnings are presented below. Results from Tampa Electric, Peoples Gas, TECO Transport and TECO Coal are not impacted by these accounting changes and remain unchanged from previous reporting. The impact of these changes is limited to the “Other Unregulated Companies” segment and discontinued operations.

Non-GAAP Earnings

Non-GAAP net income from continuing operations is unchanged from the February 9, 2004 earnings release for the fourth quarter and full year 2003. Fourth-quarter net income from continuing operations, excluding the charges identified in the following table, and the gain on sale and the operating results of Hardee was $26.3 million, compared to $59.9 million for the 2002 period. In 2003, net income from continuing operations, excluding these items, was $164.8 million, compared with $305.8 million for 2002.

The table below reconciles quarterly and year-to-date net income after elimination of the specified charges, and the gain on the sale and the operating results of Hardee. Management believes that this non-GAAP presentation provides useful supplemental information by providing a measure that is more closely related to the company’s ongoing operations.




Net Income Reconciliation:

($ millions)

Three months ended

Dec. 31

Twelve months ended

Dec. 31

2003

2002

2003

2002

GAAP net income (loss)

($790.7)

$50.1

($909.4)

$330.1

Add change in accounting

--

--

4.3

--

Exclude discontinued operations

786.7

21.6

890.4

52.9

GAAP net income (loss) from continuing operations

($4.0)

$28.5

($14.7)

$277.2

Add unutilized tax credits

9.7

--

9.7

--

Add TWG cancelled project write-offs

9.0

--

9.0

--

Add TECO Solutions valuation

7.9

--

7.9

--

Add corporate restructuring costs

8.3

7.0

15.2

10.9

Add TMDP arbitration reserve

0.8

--

26.7

--

Add 2002 debt extinguishment costs

--

20.9

--

20.9

Add Hamakua FIN 46 accounting

3.2

--

3.2

--

Add 2002 ECKG valuation adjustment

--

5.8

--

5.8

Add FAS 142 adjustments

12.8

--

74.0

--

Add turbine write-offs

13.2

--

77.4

--

Subtract Hardee gain on sale

(34.6)

--

(34.6)

--

Subtract Hardee operating results

--

(2.3)

(9.0)

(9.0)

Non-GAAP net income from continuing operations (1)( 2)

$26.3

$59.9

$164.8

$305.8

(1) Excludes adoption of FAS 143, FAS 142 adjustments and items noted in table above.

(2) A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flow that includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure GAAP so calculated and presented.

Included with this release are revised financial statements for the three months ended September 30 and December 31, 2003 and for the twelve months ended December 31, 2003. TECO Energy will reflect these changes in its Annual Report on Form 10-K, which will be filed on or before March 15, 2004.

TECO Energy’s independent power subsidiary, formerly known as TECO Power Services, is now known as TECO Wholesale Generation. TECO Energy’s other principal businesses are Tampa Electric, Peoples Gas System, TECO Transport, TECO Coal and TECO Solutions.

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