TECO Energy Inc. (TE, Financial) filed Quarterly Report for the period ended 2009-03-31.
TECO Energy Inc. is a diversified energy-related holding company. Its principal businesses are Tampa Electric Peoples Gas Florida's largest natural gas distributor; TECO Power Services an independent power company; TECO Transport a river and ocean transportation company; TECO Coal producer of coal and synthetic fuel; and TECO Solutions an energy services/engineering company. (Company Press Release) TECO Energy Inc. has a market cap of $2.25 billion; its shares were traded at around $10.59 with a P/E ratio of 12.2 and P/S ratio of 0.7. The dividend yield of TECO Energy Inc. stocks is 7.6%.
Tampa Electric reported net income for the first quarter of $18.3 million, compared with $15.9 million for the same period in 2008. Results for the quarter reflected slightly higher retail energy sales, a 0.2% lower average number of customers, and higher operations and maintenance expenses. Net income included $3.3 million of Allowance for Funds Used During Construction (AFUDC) - equity, which represents allowed equity cost capitalized to construction costs, related to the installation of nitrogen oxide pollution control equipment and combustion turbines for peak loads, compared with $1.3 million in the 2008 period. Sales to other utilities declined 23% from the 2008 period, reflecting lower demand and lower natural gas prices.
Operations and maintenance expense, excluding all FPSC-approved cost recovery clauses, increased $2.9 million. The increase included $0.8 million related to maintenance on power generating equipment, $0.3 million higher bad-debt expense, $1.0 million of higher employee benefit related costs, primarily pension, and $0.6 million higher distribution system maintenance expense.
On Mar. 17, 2009 the FPSC made a final determination of the revenue requirements in Tampa Electrics base revenue increase filing. The total annual revenue increase in 2010 is approximately $138 million, consisting of two components. The first component is the 2009 annual base revenue increase of approximately $104 million, with new rates effective May 7, 2009. Tampa Electric will benefit from almost eight months of the new base rates in 2009, with a full-year benefit in 2010. The second component is a step increase effective in January 2010 of approximately $34 million to reflect the revenue requirements associated with combustion turbines to serve peak load requirements and rail unloading facilities to provide bimodal fuel delivery capability that are currently under construction and expected to be in service by year-end 2009. This second step increase is subject to two conditions: 1) the facilities being in service by year-end 2009, and 2) a prudence review as to whether the combustion turbines are required to serve customer load.
TECO Guatemala reported first-quarter net income of $13.2 million in 2009, compared to $10.5 million in the 2008 period. TECO Guatemalas first quarter net income included the $8.7 million gain on the sale of Navega. The 2009 results reflect $2.0 million of lower net income from the distribution utility, Empresa Eléctrica de Guatemala (EEGSA), as a result of the reduction in the value added distribution tariff (VAD) in August 2008, which was partially offset by customer and energy sales growth. The 2009 results also reflect significantly lower contract and spot energy sales by the San Jose Power Station due to unplanned outages for most of the first quarter as a result of turbine and generator problems.
The cost for Parent/other in the first quarter was $16.0 million compared to a cost of $13.1 million in the 2008 period. Included in first quarter 2009 Parent/other cost was the $3.6 million valuation adjustment on student-loan securities held at TECO Energy parent. In 2008, the cost for Parent/other in the first quarter included the $0.6 million of after-tax adjustment to previously estimated transaction costs related to the sale of TECO Transport.
Read the The complete ReportTE is in the portfolios of David Dreman of Dreman Value Management, Brian Rogers of T Rowe Price Equity Income Fund, Brian Rogers of T Rowe Price Equity Income Fund.
TECO Energy Inc. is a diversified energy-related holding company. Its principal businesses are Tampa Electric Peoples Gas Florida's largest natural gas distributor; TECO Power Services an independent power company; TECO Transport a river and ocean transportation company; TECO Coal producer of coal and synthetic fuel; and TECO Solutions an energy services/engineering company. (Company Press Release) TECO Energy Inc. has a market cap of $2.25 billion; its shares were traded at around $10.59 with a P/E ratio of 12.2 and P/S ratio of 0.7. The dividend yield of TECO Energy Inc. stocks is 7.6%.
Highlight of Business Operations:
TECO Energy, Inc. reported first-quarter net income of $34.7 million or $0.16 per share, compared to $30.8 million, or $0.15 per share, in the first quarter of 2008. First-quarter 2009 net income included an $8.7 million net gain on the sale of TECO Guatemalas 16.5% interest in the Central American fiber optic telecommunications provider Navega, and a $3.6 million valuation adjustment to student loan securities held at TECO Energy parent. First-quarter 2008 net income included a $0.6 million charge for adjustments to previously estimated costs associated with the sale of TECO Transport.Tampa Electric reported net income for the first quarter of $18.3 million, compared with $15.9 million for the same period in 2008. Results for the quarter reflected slightly higher retail energy sales, a 0.2% lower average number of customers, and higher operations and maintenance expenses. Net income included $3.3 million of Allowance for Funds Used During Construction (AFUDC) - equity, which represents allowed equity cost capitalized to construction costs, related to the installation of nitrogen oxide pollution control equipment and combustion turbines for peak loads, compared with $1.3 million in the 2008 period. Sales to other utilities declined 23% from the 2008 period, reflecting lower demand and lower natural gas prices.
Operations and maintenance expense, excluding all FPSC-approved cost recovery clauses, increased $2.9 million. The increase included $0.8 million related to maintenance on power generating equipment, $0.3 million higher bad-debt expense, $1.0 million of higher employee benefit related costs, primarily pension, and $0.6 million higher distribution system maintenance expense.
On Mar. 17, 2009 the FPSC made a final determination of the revenue requirements in Tampa Electrics base revenue increase filing. The total annual revenue increase in 2010 is approximately $138 million, consisting of two components. The first component is the 2009 annual base revenue increase of approximately $104 million, with new rates effective May 7, 2009. Tampa Electric will benefit from almost eight months of the new base rates in 2009, with a full-year benefit in 2010. The second component is a step increase effective in January 2010 of approximately $34 million to reflect the revenue requirements associated with combustion turbines to serve peak load requirements and rail unloading facilities to provide bimodal fuel delivery capability that are currently under construction and expected to be in service by year-end 2009. This second step increase is subject to two conditions: 1) the facilities being in service by year-end 2009, and 2) a prudence review as to whether the combustion turbines are required to serve customer load.
TECO Guatemala reported first-quarter net income of $13.2 million in 2009, compared to $10.5 million in the 2008 period. TECO Guatemalas first quarter net income included the $8.7 million gain on the sale of Navega. The 2009 results reflect $2.0 million of lower net income from the distribution utility, Empresa Eléctrica de Guatemala (EEGSA), as a result of the reduction in the value added distribution tariff (VAD) in August 2008, which was partially offset by customer and energy sales growth. The 2009 results also reflect significantly lower contract and spot energy sales by the San Jose Power Station due to unplanned outages for most of the first quarter as a result of turbine and generator problems.
The cost for Parent/other in the first quarter was $16.0 million compared to a cost of $13.1 million in the 2008 period. Included in first quarter 2009 Parent/other cost was the $3.6 million valuation adjustment on student-loan securities held at TECO Energy parent. In 2008, the cost for Parent/other in the first quarter included the $0.6 million of after-tax adjustment to previously estimated transaction costs related to the sale of TECO Transport.
Read the The complete ReportTE is in the portfolios of David Dreman of Dreman Value Management, Brian Rogers of T Rowe Price Equity Income Fund, Brian Rogers of T Rowe Price Equity Income Fund.
