TECO Energy provides updated cash flow information
TAMPA, April 5, 2004
TECO Energy, Inc. (NYSE:TE) today announced that it has posted updated cash flow information to its web site www.tecoenergy.com on the Investor Relations page, under Financial Reports. This information is provided in conjunction with the release of this updated information at a meeting with the banks participating in TECO Energy’s and Tampa Electric’s credit facilities.
The updated cash flow information reflects recent developments in TECO Coal’s previously announced efforts to sell an additional 40 percent interest in its synfuel production facilities. TECO Coal sold a 49 percent interest in its facilities in 2003. TECO Coal has entered into an exclusive memorandum of understanding to sell an additional 40 percent interest in its synthetic fuel production facilities. The sale, subject to the negotiation of a final purchase and sale agreement and customary final due diligence, is expected to be concluded this quarter.
Assuming a successful completion of the proposed transaction, TECO Coal will have achieved its announced goal of selling 90 percent of its interests in its synfuel production facilities for 2004 and future years.
Chairman and CEO Bob Fagan said, “This is an important step in meeting the targets we laid out over a year ago to continue to improve our liquidity position. The combined sales will provide significant cash benefit for the balance of 2004 through 2007. Conclusion of TECO Energy’s general tax audit for 2000, the first year of synfuel production, was a major factor in moving the planned sale forward.”
Senior Vice President Finance, Energy Management and CFO Gordon Gillette said, “With these updated cash flow projections, we are affirming our previous statements regarding expected free cash flow being about $100 million annually for the 2004 through 2007 period. This cash can be used to efficiently pay down debt in advance of the maturities scheduled for 2007.”
TECO Energy plans to Webcast a more complete update on its 2004 financial outlook during its presentation at the American Gas Association Financial Forum at 10:00 AM on Tuesday May 4, 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.
Note: This press release contains forward-looking statements and projections relating to the company’s expected cash flow, which are subject to the inherent uncertainties in predicting future results and conditions. These statements and projections are based on the assumption that TECO Coal will successfully complete the contemplated second sale of its synthetic fuel facilities, (which will require completing a definitive agreement and satisfying all closing conditions); TECO Coal will successfully operate its synthetic fuel production facilities in a manner qualifying for Section 29 federal income tax credits (which could be impacted by changes in law, regulation or administration); and Tampa Electric will successfully recover all its fuel transportation costs. The company’s cash flow forecast assumes that the remarketing of the Trust Preferred debt securities issued by TECO Capital Trust II is neutral to cash flow. Other factors that could cause actual results to differ materially from those projected in these forward-looking statements and projections 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; commodity price changes affecting the competitive positions of Tampa Electric and Peoples Gas System, as will as margins at TECO Wholesale Generation and TECO Coal; energy prices and other factors affecting TECO Wholesale Generation’s investments in merchant power plants; regulatory actions affecting Tampa Electric, Peoples Gas System or TECO Wholesale Generation; changes in and compliance with environmental regulations that may impose additional costs or curtail some activities; TECO Wholesale Generation’s ability to successfully operate its projects and complete the contemplated transfer of the Union and Gila River facilities; the ability of TECO Energy’s subsidiaries to operate equipment without undue accidents, breakdowns or failures; and interest rates, credit ratings and other factors that could impact TECO Energy’s ability to obtain access to sufficient capital on satisfactory terms. Some of these factors and others are discussed more fully under “Investment Considerations” in the company’s Annual Report on Form 10-K for the period ended December 31, 2003.