TECO Energy Reports Second Quarter Results
TECO Energy, Inc. (NYSE:TE) today reported second quarter net income of $51.4 million or $0.24 per share, compared to $73.7 million or $0.35 per share in the second quarter of 2007.
Second quarter net income and earnings per share from continuing operations were $51.4 million and $0.24 per share, respectively, compared to $59.4 million and $0.28 per share in the same period in 2007. In 2007, second quarter results included a $14.3 million tax benefit recorded in discontinued operations as a result of reaching a favorable conclusion with taxing authorities related to the 2005 disposition of the Union and Gila River merchant power plants. As a result of the sale of TECO Transport in December 2007 and the conclusion of the program for tax credits from the production of synthetic fuel at the end of 2007, second quarter net income in 2008 included no benefits from the operations of TECO Transport or from the production of synthetic fuel, which contributed $9.6 million and $11.0 million, respectively, or $0.10 per share collectively, in the 2007 period.
Year-to-date net income and earnings per share were $82.2 million or $0.39 per share in 2008, compared to $146.5 million or $0.70 per share in the same period in 2007. Year-to-date net income and earnings per share from continuing operations were $82.2 million or $0.39 per share in 2008, compared to $132.2 million or $0.63 per share in the same period in 2007. TECO Transport and the production of synthetic fuel contributed $16.0 million and $41.7 million, respectively, or $0.28 per share collectively, to year-to-date 2007 net income.
TECO Energy Chairman and CEO Sherrill Hudson said, “Our results this quarter reflect the benefits of the TECO Energy debt retirements, and TECO Guatemala once again produced strong results. Earnings from TECO Coal were lower than we expected due to production cost pressures impacting the entire industry, but we continue to expect that robust coal prices in our new sales contracts will drive significant growth in earnings from the coal business in 2009. Our Florida utilities benefited from better weather than last year, but the continued weak Florida economy and housing market limited customer and energy sales growth. Various forecasts earlier in the year indicated that the housing market was expected to bottom out in 2008, but the credit and housing issues appear to be deeper and more protracted than were forecast even a few months ago.”
Non-GAAP Results
Second quarter 2008 net income was $51.4 million, compared to 2007 second quarter non-GAAP results of $53.1 million, which included $6.0 million net income from TECO Transport but excluded $11.0 million from the production of synthetic fuel and $4.7 million of net charges related to the sale of TECO Transport. Year-to-date 2008 non-GAAP results of $82.8 million excluded a $0.6 million charge for adjustments to previously estimated costs associated with the 2007 sale of TECO Transport, compared to non-GAAP results in the 2007 period of $97.0 million, which included net income of $12.4 million from TECO Transport, but excluded $41.7 million from the production of synthetic fuel and $6.5 million of net charges related to the sale of TECO Transport. (See the Results Reconciliation table later in this release.)
The table below compares the TECO Energy GAAP net income to the non-GAAP measures used in this release. Non-GAAP results exclude the charges and gains described above. Non-GAAP Results Excluding Synthetic Fuel exclude charges and gains and also exclude the earnings benefits associated with the production of synthetic fuel. For a reconciliation to GAAP results and a discussion regarding this presentation of non-GAAP results and management’s use of this information, please see the Non-GAAP Presentation section and Results Reconciliation table later in this release.
Results Comparisons ———————————————————————- 3 months 6 months 12 months ended June 30 ended June 30 ended June 30 ————————– ============= ============== ============== (millions) 2008 2007 2008 2007 2008 2007 ========================== ============= ============== ============== Net income $ 51.4 $73.7 $ 82.2 $146.5 $348.9$ 275.2 ————————– ————- ————– ————– Net income from continuing operations $ 51.4 $59.4 $ 82.2 $132.2 $348.9$ 260.4 ————————– ————- ————– ————– Non-GAAP Results With Synthetic Fuel $ 51.4 $64.1 $ 82.8 $138.7 $220.4$ 262.2 ————————– ————- ————– ————– Non-GAAP Results Excluding Synthetic Fuel $ 51.4 $53.1 $ 82.8 $ 97.0 $209.5$ 197.7 ————————– ============= ============== ==============
Segment Reporting
The table below includes TECO Energy segment information on a GAAP basis, which includes all charges and gains and synthetic fuel-related benefits or costs for the periods shown.
Segment Information 3 months 6 months 12 months ========================== ended June 30 ended June 30 ended June 30 (millions) ————————– ============== ============== ============= Net Income (loss) 2008 2007 2008 2007 2008 2007 ————————– ============== ============== ============= Tampa Electric $ 40.2 $ 34.7 $ 56.1 $ 56.5 $149.8$132.8 ————————– ————– ————– ————- Peoples Gas System 5.3 5.4 15.3 16.4 25.5 27.6 ————————– ————– ————– ————- TECO Coal 4.2 20.8 11.7 63.2 39.4 103.9 ————————– ————– ————– ————- TECO Guatemala 14.9 12.8 25.4 23.1 47.0 43.8 ————————– ————– ————– ————- Parent/other (13.2) (23.9) (26.3) (43.0) 69.2 (74.8) ————————– ————– ————– ————- TECO Transport(1) — 9.6 — 16.0 18.0 27.1 ————————– ============== ============== ============= Net income from continuing operations 51.4 59.4 82.2 132.2 348.9 260.4 ————————– ————– ————– ————- Discontinued operations(2) — 14.3 — 14.3 — 14.8 ————————– ============== ============== ============= Total net income $ 51.4 $ 73.7 $ 82.2 $146.5 $348.9$275.2 ————————– ============== ============== =============
(1) Due to the ongoing contractual relationship for solid fuel waterborne transportation services, TECO Transport was not classified as a discontinued operation and is included in TECO Energy’s historical results.
(2) Net income from discontinued operations in 2007 reflects a favorable conclusion reached with taxing authorities regarding the 2005 disposition of the Union and Gila River power stations.
Operating Company Results:
All amounts included in the operating company and Parent / Other results discussions are after tax, unless otherwise noted.
Tampa Electric
Net income for the second quarter was $40.2 million, compared with $34.7 million for the same period in 2007. Results for the quarter reflect higher retail energy sales due to hotter weather than in 2007, and increased sales to other utilities. Net income included $1.7 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 (NOx) pollution control equipment, compared to $1.1 million included in the 2007 period. Pretax base revenues increased $7.6 million in the quarter due to more favorable weather.
Operations and maintenance expense, excluding all Florida Public Service Commission (FPSC)-approved cost recovery clauses, increased $1.9 million in the second quarter of 2008, primarily reflecting $1.2 million higher spending on planned outage requirements on power generating equipment compared to 2007, and $0.4 million higher bad-debt expense.
Compared to the second quarter of 2007, net income included $1.5 million lower depreciation expense, largely as a result of a depreciation study that reduced depreciation rates approved by the FPSC in the third quarter of 2007 and $0.3 million lower property tax expense as a result of lower property tax rates from legislation passed in Florida in 2007 and adjustments to property valuations previously agreed to with various taxing authorities.
Tampa Electric’s retail energy sales increased 2.7% in the second quarter due to hotter weather and the operation of a large water desalinization facility that was idle in 2007, partially offset by lower sales to industrial customers due to phosphate production facility outages and economic conditions. Total heating and cooling degree-days for the Tampa area in the second quarter were 3% above normal and 8% above actual 2007 levels.
Average customer growth of 0.2% and 0.4% in the 2008 quarter and year-to-date periods, respectively, reflected the weak Florida housing market and the general statewide economic slowdown.
Year-to-date net income was $56.1 million, compared to $56.5 million in the 2007 period, driven primarily by $1.8 million higher earnings on investments in emissions control equipment recovered through the Environmental Cost Recovery Clause, which were offset by higher operations and maintenance expense. These results reflect 0.4% higher retail energy sales and off-system energy sales that were essentially unchanged from the same period last year. Total heating and cooling degree days were 1% below normal due to mild winter weather but 1% above actual 2007 degree days. Year-to-date pretax base revenue growth of $4.3 million was limited by slow customer growth and mild first quarter weather.
Excluding all FPSC-approved cost recovery clause-related expenses, year-to-date net income reflects $6.4 million higher operations and maintenance expense, including $3.7 million higher spending on planned outage requirements on power generating equipment compared to 2007 and $0.9 million higher bad-debt expense. Net income also included $3.0 million of AFUDC – Equity related to the installation of NOx pollution control equipment, compared to $2.8 million included in the 2007 period.
Compared to the 2007 year-to-date period, net income also reflected $2.2 million lower depreciation expense and $0.7 million lower property tax expense for the reasons described above. Interest expense at Tampa Electric increased $1.3 million, due to higher levels of long-term debt outstanding and higher interest on auction-rate bonds for one month in the first quarter of the year. In addition, interest income decreased due to lower cash balances and lower interest earned on under-recovered fuel balances early in the year.
Peoples Gas
Peoples Gas reported net income of $5.3 million for the second quarter, compared to $5.4 million in the same period in 2007. Quarterly results reflect higher off-system sales, higher volumes transported for power generation and industrial customers and average customer growth of 0.3%, which reflects the continued slowdown in the Florida housing market. Higher residential therm sales reflect weather that was cooler than in 2007, and increased therm sales to industrial customers reflect a new customer with significant usage. The effects of these higher volumes were more than offset by higher non-fuel operations and maintenance expense, higher depreciation expense due to routine additions to facilities to serve customers, and increased interest expense due to higher levels of long-term debt outstanding. Volumes for commercial customers in 2008, particularly in the restaurant sector, were lower, reflecting the slowdown in the Florida economy.
Year-to-date net income was $15.3 million, compared to $16.4 million in the 2007 period, driven largely by the same factors as the second quarter. Results also reflect average customer growth of 0.3% and lower sales to weather-sensitive residential customers in the first quarter due to very mild winter weather.
TECO Coal
TECO Coal achieved second quarter net income of $4.2 million, compared to $20.8 million in the same period in 2007. In 2007, TECO Coal’s Non-GAAP Results Excluding Synthetic Fuel, which excluded the $11.0 million benefit related to synthetic fuel production, were $9.8 million. (See the Results Reconciliation table.)
Second quarter total sales were 2.4 million tons, compared to 2.2 million tons in the second quarter of 2007, which included 1.5 million tons of synthetic fuel. TECO Coal experienced slightly lower than expected production due to difficult mining conditions in an underground mine, which temporarily reduced production from that mine in the first two months of the second quarter. Compared to the second quarter in 2007, results reflect an average per-ton selling price almost 10% higher across all products, excluding transportation allowances. In the second quarter of 2008, the cash cost of production per ton increased almost 20% over 2007′s level, driven by diesel oil prices that were more than double 2007 prices; the per-ton costs for steel products used in underground mining, such as roof bolts, that were more than double 2007 levels; and costs for explosives used in surface mining operations that were 42% higher than in 2007.
TECO Coal recorded year-to-date net income of $11.7 million in 2008, compared to $63.2 million in the 2007 period. TECO Coal’s 2007 year-to-date Non-GAAP Results Excluding Synthetic Fuel, which excluded the $41.7 million benefit associated with the production of synthetic fuel, were $21.5 million. (See the Results Reconciliation table.)
Year-to-date 2008 total sales were 4.9 million tons, compared to 4.3 million tons in the 2007 period, which included 2.8 million tons of synthetic fuel. Results in 2008 reflect an average net per-ton selling price across all products, excluding transportation allowances, that was more than 5% higher than 2007. In 2008, the cash cost of production for the year-to-date period was approximately 13% higher than 2007, driven by the same factors as in the second quarter. Results also reflect a $0.6 million benefit in the first quarter of 2008 from the true-up of the 2007 synthetic fuel tax credit rate, compared to a $1.6 million benefit included in the first quarter of 2007.
TECO Guatemala
TECO Guatemala reported second quarter net income of $14.9 million in 2008, compared to $12.8 million in the 2007 period. Year-to-date 2008 net income was $25.4 million, compared to $23.1 million in the 2007 period. Proceeds from spot energy sales at the San Jose Power Station significantly improved due to higher spot market prices. Earnings under the power sales contract were down slightly due to the timing of a scheduled maintenance outage. Interest expense for both the Alborada and San Jose power stations decreased in both periods due to lower interest rates and lower project-debt balances. At EEGSA, the distribution utility, 2008 second quarter and year-to-date results reflect customer growth and higher energy sales, which resulted in higher net income. The earnings from the unregulated EEGSA-affiliated companies (DECA II), which provide, among other things, electricity transmission services, telecommunication carrier service, wholesale power sales to unregulated electric customers and engineering services, increased in both periods from fundamental growth in the businesses. Results for EEGSA and affiliated companies also include a $3.1 million benefit related to an adjustment to previously estimated 2007 income and year-end equity balances, compared to a similar $1.9 million benefit in 2007.
Parent / Other
The cost for “Parent/other” in the second quarter of 2008 was $13.2 million, compared to a cost of $23.9 million in the same period in 2007. The 2007 non-GAAP cost for “Parent/other” in the second quarter was $15.6 million, which excluded the $8.3 million of charges related to the sale of TECO Transport, driven by lower interest expense partially offset by lower investment income due to lower cash balances. (See the Results Reconciliation table.) Total parent/TECO Finance interest expense declined by $4.9 million in the second quarter of 2007, reflecting parent debt retirements.
The year-to-date “Parent/other” cost was $26.3 million in 2008, compared to $43.0 million in the 2007 period. The 2008 year-to-date non-GAAP cost was $25.7 million, which excludes $0.6 million of costs related to previously estimated transaction costs associated with the sale of TECO Transport, compared to the 2007 non-GAAP year-to-date cost of $32.9 million, which excluded $10.1 million of charges related to the sale of TECO Transport. Year-to-date 2008 total parent/TECO Finance interest expense declined by $11.3 million, due to parent debt retirements.
Cash and Liquidity
The table below sets forth the Jun. 30, 2008 consolidated liquidity and cash balances, the cash balances at the operating companies and TECO Energy parent, and amounts available under the TECO Energy/Finance and Tampa Electric Company credit facilities.
Balances as of Jun. 30, 2008 ———————————————————————- Tampa (millions) Consolidated Electric Other Parent ———— ———- ——– ——- Credit facilities $ 675.0 $ 475.0 $ — $ 200.0 Drawn amounts/LCs 10.9 1.4 — 9.5 ———— ———- ——– ——- Available credit facilities 664.1 473.6 — 190.5 Cash and short-term investments 174.2 60.1 60.4 53.7 ———— ———- ——– ——- Total liquidity $ 838.3 $ 533.7 $ 60.4 $ 244.2 ============ ========== ======== =======
Consolidated other cash and short-term investments includes $10.3 million of cash at the unregulated operating companies for normal operations and $50.0 million of consolidated cash and short-term investments at TECO Guatemala held offshore due to the tax deferral strategy associated with EEGSA. In addition to consolidated cash, as of Jun. 30, 2008, unconsolidated affiliates owned by TECO Guatemala, CGESJ (San Jose) and TCAE (Alborada), had unrestricted cash and short-term investment balances of $18.1 million, which is not included in the table above. The table above also excludes consolidated restricted cash of $7.5 million, primarily at TECO Energy parent.
Tampa Electric’s liquidity position reflects its current 2008 $72 million under-recovery in its fuel and purchased power clause, which is projected to increase to approximately $209 million by year-end. Tampa Electric will seek to recover under-recovered 2008 fuel costs through the 2009 fuel adjustment process.
Outlook
TECO Energy indicated in February an outlook for 2008 results from continuing operations within a range of $0.95 and $1.10 per share, excluding any charges or gains. Based on the year-to-date performance and expectations of continued production cost pressures at TECO Coal and a continuation of the effects of a slow Florida economy on customer growth and energy sales for the remainder of 2008, TECO Energy now expects 2008 earnings to be in a range between $0.80 and $0.90 per share, excluding any charges or gains. This range assumes a continued weak Florida economy and housing market; includes the effects of a very rainy July, which reduced energy sales at Tampa Electric, but assumes normal weather for the remainder of the year; and assumes continued high production costs at TECO Coal.
Year-to-date, Tampa Electric has experienced total degree days 1% below normal, lower residential per-customer usage due to mild weather, voluntary conservation, and customer growth indicative of a continued weak housing market and economic slowdown. At Peoples Gas, mild winter weather has reduced year-to-date sales, and customer growth has slowed due to the housing market slowdown. At TECO Coal, sales in 2008 are now expected to be about 10 million tons, compared to the 10.5 million tons previously forecast, due to the second quarter production issues discussed above and the availability of contract miners. TECO Coal’s selling prices for over 90% of this year’s production reflect contracts signed in 2006 and 2007 or before, prior to the run up in coal prices, and the remaining 10% of the current year contracts were signed early in 2008. At the same time, the cost of production reflects the current prices for diesel oil, steel and petroleum-related products, all of which are substantially higher than at the time the outlook was provided in February 2008. TECO Guatemala had previously indicated that earnings for 2008 would be lower than 2007 levels; however, 2008 net income from TECO Guatemala is now expected to be at about 2007 levels, given the strong year-to-date performance. As indicated in February, costs at the TECO Energy parent level are expected to decline due to debt retirement actions in 2007 partially offset by lower investment income due to lower cash balances.
The preliminary outlook for 2009 includes: a strong outlook for TECO Coal with production in a range between 10.5 and 11.0 million tons at much improved prices but continued upward production cost pressure; strong operational performance at TECO Guatemala partially offset by a scheduled major maintenance outage on the San Jose Power Station; appropriate base rate relief at the regulated Florida utilities; and a slow economic recovery in Florida.
Non-GAAP Presentation
The “Results Reconciliation” table below presents non-GAAP financial results after elimination of the effects of certain identified gains and charges and earnings from the production of synthetic fuel in the 2008 and 2007 quarterly and 12-months ended periods. The company provides both measures to allow comparison of results both with and without synthetic fuel. This provides investors additional information to compare 2008 results, which include no synthetic fuel production, to 2007 results, which included synthetic fuel production.
Management believes it is helpful to present a non-GAAP measure of performance that clearly reflects the ongoing operations of TECO Energy’s businesses and which allows investors to better understand and evaluate the business as it is expected to operate in future periods.
Management and the Board of Directors use non-GAAP measures as a yardstick for measuring the company’s performance, in making decisions that are dependent upon the profitability of the company’s various operating units, and in determining levels of incentive compensation.
The non-GAAP measures of financial performance used by the company are not measures of performance under accounting principles generally accepted in the United States and should not be considered an alternative to net income or other GAAP figures as an indicator of the company’s financial performance or liquidity. TECO Energy’s non-GAAP presentation of net income may not be comparable to similarly titled measures used by other companies.
Results Reconciliation 3 months 6 months 12 months (millions) ended ended ended June 30 June 30 June 30 ========================== ————- ————- ————— 2008 2007 2008 2007 2008 2007 ————————– ===== ======= ===== ======= ======= ======= GAAP net income $51.4 $ 73.7 $82.2 $146.5 $ 348.9 $275.2 ————————– ===== ======= ===== ======= ======= ======= Exclude discontinued operations — 14.3 — 14.3 — 14.8 ————————– ===== ======= ===== ======= ======= ======= GAAP net income from continuing operations $51.4 $ 59.4 $82.2 $132.2 $ 348.9 $260.4 ————————– ===== ======= ===== ======= ======= ======= Add TECO Transport transaction costs — 8.3 0.6 10.1 6.8 10.1 ————————– —– ——- —– ——- ——- ——- Add TECO Transport depreciation — (3.6) — (3.6) (6.1) (3.6) ————————– —– ——- —– ——- ——- ——- Exclude gain on TECO Transport sale — — — — (149.4) — ————————– —– ——- —– ——- ——- ——- Add parent debt extinguishment — — — — 20.2 — ————————– —– ——- —– ——- ——- ——- Exclude gain on steam turbine sale — — — — — (5.7) ————————– —– ——- —– ——- ——- ——- Add TECO Transport hurricane cost — — — — — 1.0 ————————– ===== ======= ===== ======= ======= ======= Total charges and gains — 4.7 0.6 6.5 (128.5) 1.8 ————————– ===== ======= ===== ======= ======= ======= Non-GAAP results from continuing operations (1) $51.4 $ 64.1 $82.8 $138.7 $ 220.4 $262.2 ————————– ===== ======= ===== ======= ======= ======= Synthetic fuel cost / (benefit) — (11.0) — (41.7) (10.9) (64.5) ————————– ===== ======= ===== ======= ======= ======= Non-GAAP results excluding synthetic fuel $51.4 $ 53.1 $82.8 $ 97.0 $ 209.5 $197.7 ————————– ===== ======= ===== ======= ======= =======
(1) A non-GAAP financial measure is a numerical measure that includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable GAAP measure.
Webcast
As previously announced, TECO Energy will host a Webcast with the investment community on its second quarter results at 11:00 AM Eastern time, Thursday, July 31, 2008. The Webcast will be accessible through the link on TECO Energy’s Website: www.tecoenergy.com. The Webcast and accompanying slides will be available for replay for 30 days through the Web site, beginning approximately two hours after the conclusion of the live event.
TECO Energy, Inc. (NYSE: TE) is an energy-related holding company. Its principal subsidiary, Tampa Electric Company, is a regulated utility in Florida with both electric and gas divisions (Tampa Electric and Peoples Gas System). Other subsidiaries include TECO Coal, which owns and operates coal production facilities in Kentucky and Virginia, and TECO Guatemala, which is engaged in electric power generation and distribution and energy-related businesses in Guatemala.
Note: This press release contains forward-looking statements, which are subject to the inherent uncertainties in predicting future results and conditions. Actual results may differ materially from those forecasted. The forecasted results are based on the company’s current expectations and assumptions, and the company does not undertake to update that information or any other information contained in this press release, except as may be required by law. Factors that could impact actual results include: regulatory actions by federal, state or local authorities; unexpected capital needs or unanticipated reductions in cash flow that affect liquidity; the availability of adequate rail transportation capacity for the shipment of TECO Coal’s production; general economic conditions affecting energy sales at the utility companies; economic conditions, both national and international, affecting the Florida economy and demand for TECO Coal’s production; weather variations and changes in customer energy usage patterns affecting sales and operating costs at Tampa Electric and Peoples Gas and the effect of extreme weather conditions or hurricanes, which are common during the summer months; operating conditions, commodity price and operating cost changes affecting the production levels and margins at TECO Coal, fuel cost recoveries and cash at Tampa Electric or natural gas demand at Peoples Gas; the ability of TECO Energy’s subsidiaries to operate equipment without undue accidents, breakdowns or failures; and changes in electric tariffs or contract terms affecting TECO Guatemala’s operations. Additional information is contained under “Risk Factors” in TECO Energy, Inc.’s Annual Report on Form 10-K for the period ended Dec. 31, 2007, as updated by the information contained in Item 1A of Part II of the Quarterly Report on Form 10-Q for the period ended Jun. 30, 2008.
Summary Information as of June 30, 2008 ———————————————————————- 3 months 6 months 12 months ended ended ended ——————– ————- —————– —————– (millions except per share amounts) ——————– —— —— ——– ——– ——– ——– 2008 2007 2008 2007 2008 2007 ——————– ====== ====== ======== ======== ======== ======== Revenues $887.2 $866.5 $1,678.9 $1,687.8 $3,527.3 $3,437.0 ——————– ====== ====== ======== ======== ======== ======== Net income from continuing operations $ 51.4 $ 59.4 $ 82.2 $ 132.2 $ 348.9 $ 260.4 ——————– —— —— ——– ——– ——– ——– Net income from discontinued operations — 14.3 — 14.3 — 14.8 ——————– ====== ====== ======== ======== ======== ======== Net income $ 51.4 $ 73.7 $ 82.2 $ 146.5 $ 348.9 $ 275.2 ——————– ====== ====== ======== ======== ======== ======== Earnings (loss) per share from continuing operations – basic $ 0.24 $ 0.28 $ 0.39 $ 0.63 $ 1.66 $ 1.25 ——————– —— —— ——– ——– ——– ——– Earnings (loss) per share from discontinued operations – basic — 0.07 — 0.07 — 0.07 ——————– ====== ====== ======== ======== ======== ======== Earnings (loss) per share – basic $ 0.24 $ 0.35 $ 0.39 $ 0.70 $ 1.66 $ 1.32 ——————– ====== ====== ======== ======== ======== ======== ——————– —— —— ——– ——– ——– ——– ——————– —— —— ——– ——– ——– ——– Earnings (loss) per share – diluted $ 0.24 $ 0.35 $ 0.39 $ 0.70 $ 1.65 $ 1.32 ——————– —— —— ——– ——– ——– ——– Average common shares outstanding – basic 210.4 208.9 210.1 208.8 209.7 208.4 ——————– —— —— ——– ——– ——– ——– Average common shares outstanding – diluted 212.1 210.0 211.6 209.7 211.1 209.2 ——————– —— —— ——– ——– ——– ——–
JUNE 2008 Figures appearing in these statements are presented as general information and not in connection with any sale or offer to sell or solicitation of an offer to buy any securities, nor are they intended as a representation by the company of the value of its securities. All figures reported are subject to adjustments as the annual audit by independent accountants may determine to be necessary and to the explanatory notes affecting income and balance sheet accounts contained in the company’s Annual Report on Form 10-K. Reference should also be made to information contained in that and other reports filed by TECO Energy, Inc. and Tampa Electric Company with the Securities and Exchange Commission.
TECO ENERGY, Inc. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (All significant intercompany transactions have been eliminated in the consolidated financial statements.) ———————————————————————- Three Months Six Months Twelve Months Ended Ended Ended June 30, June 30, June 30, (millions except share data) 2008 2007 2008 2007 2008 2007 ———————————————————————- Revenues Regulated electric and gas $730.0 $687.5 $1,370.2 $1,328.1 $2,828.4 $2,676.0 Unregulated 157.2 179.0 308.7 359.7 698.9 761.0 ———————————————————————- Total revenues 887.2 866.5 1,678.9 1,687.8 3,527.3 3,437.0 ———————————————————————- Expenses Regulated operations Fuel 176.2 207.3 339.8 396.4 798.1 816.4 Purchased power 115.9 69.5 197.8 123.1 346.6 254.0 Cost of natural gas sold 133.8 92.5 252.8 200.2 442.6 354.6 Other 71.9 68.4 143.2 126.0 297.6 277.2 Operation other expense Mining related costs 116.8 100.0 224.0 194.5 464.9 424.8 Waterborne transp- ortation costs 0.0 54.3 0.0 109.0 97.4 221.7 Other 5.6 4.1 9.9 7.6 18.9 16.6 Maintenance 45.6 47.4 91.6 96.4 178.7 184.9 Depreciation and amortization 64.9 66.8 129.9 138.4 255.2 279.6 Gain on sale, net of transaction related costs 0.0 13.5 0.9 16.3 (236.7) 16.3 Sale of previously impaired assets / Asset impairments 0.0 0.0 0.0 0.0 0.0 (10.0) Taxes, other than income 54.1 55.0 109.0 113.8 213.5 221.1 ———————————————————————- Total expenses 784.8 778.8 1,498.9 1,521.7 2,876.8 3,057.2 ———————————————————————- Income from operations 102.4 87.7 180.0 166.1 650.5 379.8 ———————————————————————- Other income (expense) Allowance for other funds used during construction 1.7 1.1 3.0 2.8 4.7 4.9 Other income 4.0 22.6 9.3 74.5 46.8 138.3 Loss on debt exchange / extinguishment 0.0 0.0 0.0 0.0 (32.9) (2.5) Income from equity investments 21.6 18.7 39.0 34.9 72.6 65.3 ———————————————————————- Total other income 27.3 42.4 51.3 112.2 91.2 206.0 ———————————————————————- Interest charges Interest expense 56.6 66.1 114.8 133.9 240.4 274.0 Allowance for borrowed funds used during construction (0.7) (0.4) (1.2) (1.1) (1.8) (1.9) ———————————————————————- Total interest charges 55.9 65.7 113.6 132.8 238.6 272.1 ———————————————————————- Income before provision for income taxes 73.8 64.4 117.7 145.5 503.1 313.7 Provision for income taxes 22.4 25.3 35.5 57.1 192.6 125.8 ———————————————————————- Income from Continuing Operations before minority interest 51.4 39.1 82.2 88.4 310.5 187.9 Minority Interest 0.0 20.3 0.0 43.8 38.4 72.5 ———————————————————————- Income from Continuing Operations 51.4 59.4 82.2 132.2 348.9 260.4 Discontinued operations Income from discontinued operations 0.0 0.0 0.0 0.0 0.0 0.0 Income tax provision (benefit) 0.0 (14.3) 0.0 (14.3) 0.0 (14.8) ———————————————————————- Total discontinued operations 0.0 14.3 0.0 14.3 0.0 14.8 ———————————————————————- Net income $ 51.4 $ 73.7 $ 82.2 $ 146.5 $ 348.9 $ 275.2 ====================================================================== Average common shares outstanding – basic (millions) 210.4 208.9 210.1 208.8 209.7 208.5 Average common shares outstanding – diluted (millions) 212.1 210.0 211.6 209.7 211.1 209.2 Earnings per average common share outstanding: Earnings per share from continuing operations — basic 0.24 0.28 0.39 0.63 1.66 1.25 Earnings per share from continuing operations — diluted 0.24 0.28 0.39 0.63 1.65 1.25 Earnings per share — basic 0.24 0.35 0.39 0.70 1.66 1.32 Earnings per share — diluted 0.24 0.35 0.39 0.70 1.65 1.32
TECO ENERGY, Inc. CONSOLIDATED BALANCE SHEETS (Unaudited) (All significant intercompany transactions have been eliminated in the consolidated financial statements.) ———————————————————————- (millions) Jun-30-2008 Dec-31-2007 ———————————————————————- Assets Current assets Cash and cash equivalents $ 171.8 $ 162.6 Restricted cash 7.5 7.4 Short-term investments 2.4 0.0 Receivables 330.8 295.9 Crude oil options receivable, net 0.0 78.5 Inventories at average cost Fuel 92.6 85.8 Materials and supplies 69.3 68.2 Current derivative assets 142.8 0.3 Income tax receivables 0.2 0.7 Prepayments and other current assets 25.1 23.0 Current regulatory assets 138.5 67.4 ———————————————————————- Total current assets 981.0 789.8 ———————————————————————- Property, plant and equipment Utility plant in service Electric 5,388.4 5,275.2 Gas 935.0 917.4 Construction work in progress 365.9 364.8 Other property 348.6 336.4 ———————————————————————- Property plant and equipment at original cost 7,037.9 6,893.8 Accumulated depreciation (2,028.6) (2,005.6) ———————————————————————- Total property, plant and equipment, net 5,009.3 4,888.2 ———————————————————————- Other assets Deferred income taxes 384.8 424.9 Other investments 22.0 22.9 Long-term regulatory assets 184.5 186.8 Investment in unconsolidated affiliates 269.2 275.5 Goodwill 59.4 59.4 Long-term derivative assets 24.8 1.9 Deferred charges and other assets 118.6 115.8 ———————————————————————- Total other assets 1,063.3 1,087.2 ———————————————————————- Total assets $ 7,053.6 $ 6,765.2 ====================================================================== Liabilities and capital Current liabilities Long-term debt due within one year Recourse $ 5.7 $ 5.7 Non-recourse 1.4 1.4 Notes payable 0.0 25.0 Accounts payable 356.6 302.1 Other current liabilities 15.3 18.0 Customer deposits 142.9 138.1 Current derivative liabilities 0.0 26.0 Interest accrued 47.7 32.7 Taxes accrued 48.4 33.2 Current regulatory liabilities 174.8 35.4 ———————————————————————- Total current liabilities 792.8 617.6 ———————————————————————- Other liabilities Investment tax credits 11.2 12.2 Long-term regulatory liabilities 611.1 582.7 Long-term derivative liabilities 0.4 0.1 Deferred credits and other liabilities 398.3 377.2 Long-term debt, less amount due within one year Recourse 3,204.4 3,149.4 Non-recourse 7.7 9.0 ———————————————————————- Total other liabilities 4,233.1 4,130.6 ———————————————————————- Total Liabilities 5,025.9 4,748.2 Capital Common equity 212.7 210.9 Additional paid in capital 1,512.9 1,489.2 Retained earnings 332.9 334.1 Accumulated other comprehensive loss (30.8) (17.2) ———————————————————————- Total capital 2,027.7 2,017.0 ———————————————————————- Total liabilities and capital $ 7,053.6 $ 6,765.2 ====================================================================== Book Value Per Share $ 9.53 $ 9.57
TECO ENERGY, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (All significant intercompany transactions have been eliminated in the consolidated financial statements.) Three Months Six Months Twelve Months Ended Ended Ended June 30, June 30, June 30, (millions) 2008 2007 2008 2007 2008 2007 ———————————————————————- Cash flows from operating activities Net income $ 51.4 $ 73.7 $ 82.2 $ 146.5 $ 348.9 $ 275.2 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 64.9 66.8 129.9 138.4 255.2 279.6 Deferred income taxes 24.2 8.3 39.7 37.6 186.9 101.8 Investment tax credits, net (0.3) (0.7) (1.0) (1.3) (2.2) (2.6) Allowance for other funds used during construction (1.7) (1.1) (3.0) (2.8) (4.7) (4.9) Non-cash stock compensation 3.7 4.9 6.1 7.4 10.2 11.9 Gain on sales of business / assets, pretax (0.1) (20.2) (1.1) (44.5) (202.7) (84.8) Noncash debt extinguishment / exchange, pretax 0.0 0.0 0.0 0.0 2.6 2.5 Equity in earnings of unconsolidated affiliates, net of cash distributions on earnings (21.6) (18.7) (6.8) (13.9) (10.8) (13.7) Minority interest 0.0 (20.3) 0.0 (43.8) (38.4) (72.5) Derivatives marked to market 0.0 6.5 0.0 (12.3) (70.4) (2.6) Deferred recovery clause (81.0) 13.9 (92.4) 26.7 4.6 12.5 Receivables, less allowance for uncollectibles (20.9) (8.6) (34.0) 7.1 10.0 (5.5) Inventories (15.1) (24.5) (7.9) (66.7) 49.2 (62.2) Prepayments and other current assets (3.1) (4.2) (2.1) (2.4) 3.5 (1.5) Taxes accrued 14.4 16.3 15.7 45.7 (3.4) 5.5 Interest accrued (17.7) (35.0) 15.0 0.8 (3.6) (3.5) Accounts payable 82.5 15.0 76.9 (21.4) 26.4 11.1 Other 5.9 2.7 21.3 32.6 (2.4) 76.3 ———————————————————————- 85.5 74.8 238.5 233.7 558.9 522.6 ———————————————————————- Cash flows from investing activities Capital expenditures (128.8) (137.6) (265.7) (272.1) (488.1) (548.6) Allowance for other funds used during construction 1.7 1.1 3.0 2.8 4.7 4.9 Net proceeds from sale of business / assets 0.0 37.6 (7.3) 45.5 352.5 117.9 Restricted cash 0.0 (0.1) 0.0 (0.1) 29.9 (0.1) Distributions from unconsolidated affiliates 0.0 0.0 13.2 14.0 26.7 21.3 Other investments (0.1) (2.3) 76.2 (46.1) 121.9 (53.9) ———————————————————————- (127.2) (101.3) (180.6) (256.0) 47.6 (458.5) ———————————————————————- Cash flows from financing activities Dividends (42.4) (41.0) (83.5) (80.8) (165.6) (160.3) Proceeds from sale of common stock 18.7 4.8 20.0 8.4 25.5 17.3 Proceeds from long- term debt 137.1 321.0 327.9 321.0 451.1 320.8 Repayment of long- term debt / Purchase in lieu of redemption 0.0 (375.0) (288.1) (447.8) (977.8) (559.9) Debt exchange premiums 0.0 0.0 0.0 0.0 (21.2) 0.0 Minority interest 0.0 26.0 0.0 47.8 33.4 70.5 Net decrease in short-term debt (18.0) (51.0) (25.0) (48.0) 0.0 0.0 ———————————————————————- 95.4 (115.2) (48.7) (199.4) (654.6) (311.6) ———————————————————————- Net increase (decrease) in cash and cash equivalents 53.7 (141.7) 9.2 (221.7) (48.1) (247.5) Cash and cash equivalents at beginning of period 118.1 361.6 162.6 441.6 219.9 467.4 ———————————————————————- Cash and cash equivalents at end of period $ 171.8 $ 219.9 $ 171.8 $ 219.9 $ 171.8 $ 219.9 ======================================================================
TECO ENERGY, Inc. SEGMENT INFORMATION (Unaudited) ———————————————————————- (millions) Tampa Peoples TECO TECO Electric Gas Coal Guatemala ———————————————————————- Three months ended Jun. 30, 2008 Revenues – outsiders $ 545.7 $184.3 $155.2 $ 2.0 Sales to affiliates 0.4 – – – —————————————————————- Total revenues 546.1 184.3 155.2 2.0 Equity Earnings in Unconsolidated Affiliates – – – 21.6 Depreciation 45.0 10.3 9.3 0.2 Total interest charges (1) 27.9 4.5 2.0 3.7 Allocated interest expense (1) – – 1.5 3.6 Provision (Benefit) for income taxes 23.6 3.4 0.2 2.1 Net income (loss) from continuing operations $ 40.2 $ 5.3 $ 4.2 $14.9 ———————————————————————- 2007 Revenues – outsiders $ 544.3 $143.2 $127.1 $ 2.1 Sales to affiliates 0.4 – – – —————————————————————- Total revenues 544.7 143.2 127.1 2.1 Equity Earnings in Unconsolidated Affiliates – – – 18.7 Depreciation 47.3 10.0 9.1 0.2 Total interest charges (1) 28.5 4.3 3.3 3.7 Allocated interest expense (1) – – 3.1 3.6 Provision (Benefit) for income taxes 19.4 3.4 7.7 2.1 Net income (loss) from continuing operations $ 34.7 $ 5.4 $ 20.8 $12.8 ====================================================================== Six months ended Jun. 30, 2008 Revenues – outsiders $1,006.9 $363.3 $304.3 $ 4.3 Sales to affiliates 0.7 – – – —————————————————————- Total revenues 1,007.6 363.3 304.3 4.3 Equity Earnings in Unconsolidated Affiliates – – – 39.0 Depreciation 90.2 20.6 18.5 0.4 Total interest charges (1) 57.3 8.7 4.5 7.5 Allocated interest expense (1) – – 3.8 7.4 Provision (Benefit) for income taxes 32.1 9.8 2.1 4.0 Net income (loss) from continuing operations $ 56.1 $ 15.3 $ 11.7 $25.4 ———————————————————————- 2007 Revenues – outsiders $1,015.7 $312.4 $254.6 $ 4.0 Sales to affiliates 0.9 – – – —————————————————————- Total revenues 1,016.6 312.4 254.6 4.0 Equity Earnings in Unconsolidated Affiliates – – – 34.8 Depreciation 93.7 19.8 18.6 0.4 Total interest charges (1) 55.3 8.4 6.1 7.5 Allocated interest expense (1) – – 5.7 7.3 Provision (Benefit) for income taxes 30.4 10.3 27.7 3.4 Net income (loss) from continuing operations 56.5 16.4 63.2 23.1 ====================================================================== Twelve months ended Jun. 30, 2008 Revenues – outsiders $2,177.7 $650.6 $594.1 $ 8.3 Sales to affiliates 1.6 – – – —————————————————————- Total revenues 2,179.3 650.6 594.1 8.3 Equity Earnings in Unconsolidated Affiliates – – – 72.8 Depreciation 175.0 41.0 38.3 0.5 Total interest charges (1) 114.2 17.4 10.8 15.2 Allocated interest expense (1) – – 9.7 14.9 Provision (Benefit) for income taxes 86.8 15.9 20.7 8.5 Net income (loss) from continuing operations $ 149.8 $ 25.5 $ 39.4 $47.0 ———————————————————————- 2007 Revenues – outsiders $2,109.7 $566.3 $544.7 $ 7.8 Sales to affiliates 1.9 – – – —————————————————————- Total revenues 2,111.6 566.3 544.7 7.8 Equity Earnings in Unconsolidated Affiliates – – – 65.2 Depreciation 187.0 38.1 36.8 0.6 Total interest charges (1) 109.4 16.3 11.8 15.1 Allocated interest expense (1) – – 10.8 14.7 Provision (Benefit) for income taxes 75.8 17.5 50.3 6.0 Net income (loss) from continuing operations $ 132.8 $ 27.6 $103.9 $43.8(4) ====================================================================== ———————————————————————- (millions) TECO Other & TECO Transport Eliminations Energy (8) ———————————————————————- Three months ended Jun. 30, 2008 Revenues – outsiders $ – $ – $ 887.2 Sales to affiliates – (0.4) – —————————————————————- Total revenues – (0.4) 887.2 Equity Earnings in Unconsolidated Affiliates – – 21.6 Depreciation – 0.1 64.9 Total interest charges (1) – 17.8 55.9 Allocated interest expense (1) – (5.1) – Provision (Benefit) for income taxes – (6.9) 22.4 Net income (loss) from continuing operations $ – $ (13.2) $ 51.4 ———————————————————————- 2007 Revenues – outsiders $ 49.6 $ 0.2 $ 866.5 Sales to affiliates 28.3 (28.7) – —————————————————————- Total revenues 77.9 (28.5) 866.5 Equity Earnings in Unconsolidated Affiliates – – 18.7 Depreciation – 0.2 66.8 Total interest charges (1) 1.2 24.7 65.7 Allocated interest expense (1) (0.2) (6.5) – Provision (Benefit) for income taxes 4.7 (12.0) 25.3 Net income (loss) from continuing operations $ 9.6 $ (23.9) $ 59.4 ====================================================================== Six months ended Jun. 30, 2008 Revenues – outsiders $ – 0.1 $1,678.9 Sales to affiliates – (0.7) – —————————————————————- Total revenues – (0.6) 1,678.9 Equity Earnings in Unconsolidated Affiliates – – 39.0 Depreciation – 0.2 129.9 Total interest charges (1) – 35.6 113.6 Allocated interest expense (1) – (11.2) – Provision (Benefit) for income taxes – (12.5) 35.5 Net income (loss) from continuing operations $ – $ (26.3) $ 82.2 ———————————————————————- 2007 Revenues – outsiders $ 100.9 $ 0.2 $1,687.8 Sales to affiliates 52.3 (53.2) – —————————————————————- Total revenues 153.2 (53.0) 1,687.8 Equity Earnings in Unconsolidated Affiliates 0.1 – 34.9 Depreciation 5.6 0.3 138.4 Total interest charges (1) 2.6 52.9 132.8 Allocated interest expense (1) (0.4) (12.6) – Provision (Benefit) for income taxes 6.2 (20.9) 57.1 Net income (loss) from continuing operations 16.0 (43.0) $ 132.2 ====================================================================== Twelve months ended Jun. 30, 2008 Revenues – outsiders $ 96.3 $ 0.3 $3,527.3 Sales to affiliates 40.9 (42.5) – —————————————————————- Total revenues 137.2 (42.2) 3,527.3 Equity Earnings in Unconsolidated Affiliates (0.2) – 72.6 Depreciation – (3) 0.4 255.2 Total interest charges (1) 2.2 78.8 238.6 Allocated interest expense (1) 1.2 (25.8) – Provision (Benefit) for income taxes 7.3 53.4 192.6 Net income (loss) from continuing operations $ 18.0 $ 69.2 (5)(7)$ 348.9 ———————————————————————- 2007 Revenues – outsiders $ 208.2 $ 0.3 $3,437.0 Sales to affiliates 101.1 (103.0) – —————————————————————- Total revenues 309.3 (102.7) 3,437.0 Equity Earnings in Unconsolidated Affiliates (0.3) 0.4 65.3 Depreciation 16.7 (3) 0.4 279.6 Total interest charges (1) 4.6 114.9 272.1 Allocated interest expense (1) (1.3) (24.2) – Provision (Benefit) for income taxes 12.4 (36.2) 125.8 Net income (loss) from continuing operations $ 27.1 (2) $ (74.8)(4)(6)$ 260.4 ====================================================================== (1) Segment net income is reported on a basis that includes internally allocated financing costs. Allocated interest is included in “Total interest charges”. (2) TECO Transport’s results include net storm costs of $0.9 million for the 12 months ended Jun. 30, 2007. (3) Beginning Apr. 1, 2007, no depreciation expense was recognized for TECO Transport as a result of the assets being classified as “held for sale”. Depreciation expense for the second, third and fourth quarters of 2007 would have been $3.6, $3.6 and $2.5 million, respectively. (4) Results for the 12 months ended Jun. 30, 2007 include a $3.1 million gain on the sale of a steam turbine originally reported in TECO Guatemala in the fourth quarter of 2006 and a $2.6 million gain on the sale of another steam turbine originally reported in TECO Guatemala in the third quarter of 2006. (5) Results for the 12 months ended Jun. 30, 2008 include $7.0 million in after-tax transaction costs related to the sale of TECO Transport ($3.0 in the third quarter of 2007, $3.3 in the fourth quarter of 2007, and $0.7 in the first quarter of 2008). (6) Results for the 12 months ended Jun. 30, 2007 include $10.1 million in after-tax transaction costs related to the sale of TECO Transport ($1.8 in the first quarter of 2007 and $8.3 in the second quarter of 2007). (7) Results for the 12 months ended Jun. 30, 2008 include the $149.6 million gain on the sale of TECO Transport and $20.2 million of debt extinguishment costs. (8) As a result of the sale, TECO Transport’s results are through Dec. 3, 2007.
TAMPA ELECTRIC COMPANY ELECTRIC OPERATING STATISTICS (Unaudited) ———————————————————————- Operating Revenues Sales — Kilowatt- (A) hours (A) Three Months Ended June 30, Pct Pct 2008 2007 Change 2008 2007 Change ———————————————————————- Residential $ 247,254 $ 238,401 3.7 2,153,445 2,068,268 4.1 Commercial 161,872 160,256 1.0 1,621,521 1,598,169 1.5 Industrial — Phosphate 16,468 17,389 (5.3) 240,165 249,113 (3.6) Industrial — Other 30,353 30,113 0.8 324,242 334,919 (3.2) Other sales of electricity 46,811 43,443 7.8 463,998 425,180 9.1 ———————————————————————- 502,758 489,602 2.7 4,803,371 4,675,649 2.7 Deferred and other revenues 13,027 10,926 19.2 — — — Sales for resale 19,144 17,571 9.0 230,654 223,118 3.4 Other operating revenue 10,100 9,032 11.8 — — — SO2 Allowance Sales 999 17,636 (94.3) — — — ———————————————————————- $ 546,028 $ 544,767 0.2 5,034,025 4,898,767 2.8 ====================================================================== Average customers 667,617 666,011 0.2 — — — ====================================================================== Retail Net Energy For Load 5,277,996 5,168,563 2.1 ====================================================================== Total Degree Days 1,216 1,130 7.6 ====================================================================== ———————————————————————- Operating Revenues (A) Sales — Kilowatt- hours (A) Six Months Ended June 30, Pct Pct 2008 2007 Change 2008 2007 Change ———————————————————————- Residential $ 454,250 $ 454,664 (0.1) 3,931,532 3,930,887 0.0 Commercial 309,345 306,863 0.8 3,089,536 3,057,005 1.1 Industrial — Phosphate 33,090 36,162 (8.5) 484,801 520,476 (6.9) Industrial — Other 57,672 58,773 (1.9) 630,073 654,609 (3.7) Other sales of electricity 89,417 83,900 6.6 882,583 817,179 8.0 ———————————————————————- 943,774 940,362 0.4 9,018,525 8,980,156 0.4 Deferred and other revenues 5,771 7,353 (21.5) — — — Sales for resale 35,181 33,138 6.2 419,800 421,190 (0.3) Other operating revenue 20,892 18,192 14.8 — — — SO2 Allowance Sales 1,962 17,636 (88.9) — — — ———————————————————————- $1,007,580 $1,016,681 (0.9) 9,438,325 9,401,346 0.4 ====================================================================== Average customers 668,280 665,376 0.4 — — — ====================================================================== Retail Net Energy For Load 9,635,662 9,580,886 0.6 ====================================================================== Total Degree Days 1,736 1,714 1.3 ====================================================================== ———————————————————————- Operating Revenues (A) Sales — Kilowatt- hours (A) Twelve Months Ended June 30, Pct Pct 2008 2007 Change 2008 2007 Change ———————————————————————- Residential $1,017,527 $ 971,935 4.7 8,871,862 8,669,515 2.3 Commercial 656,108 624,114 5.1 6,574,056 6,418,229 2.4 Industrial — Phosphate 69,911 68,732 1.7 1,014,195 1,018,931 (0.5) Industrial — Other 117,081 116,295 0.7 1,291,105 1,335,851 (3.3) Other sales of electricity 183,871 168,975 8.8 1,819,904 1,699,378 7.1 ———————————————————————- 2,044,498 1,950,051 4.8 19,571,122 19,141,904 2.2 Deferred and other revenues (53,318) 37,101 — — — — Sales for resale 71,035 65,887 7.8 903,746 812,984 11.2 Other operating revenue 41,692 38,103 9.4 — — — SO2 Allowance Sales 75,424 20,500 — — — — ———————————————————————- $2,179,331 $2,111,642 3.2 20,474,868 19,954,888 2.6 ====================================================================== Average customers 667,805 661,254 1.0 — — — ====================================================================== Retail Net Energy For Load 20,503,219 20,067,273 2.2 ====================================================================== Total Degree Days 4,276 4,100 4.3 ====================================================================== (A) in thousands
PEOPLES GAS SYSTEM GAS OPERATING STATISTICS (Unaudited) ———————————————————————- Operating Revenues (A) Therms (A) Three Months Ended June 30, Pct Pct 2008 2007 Change 2008 2007 Change ———————————————————————- By Customer Segment: Residential $32,182 $31,038 3