-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PlP87RjO3pk1FycahoOuBtKVCUmZPZ05wS3/MuKssVdbFJzzhsS5zvTF1lU0TkoM p6Q2i4TRrJIr+OI46hHddA== 0001016843-01-500119.txt : 20010515 0001016843-01-500119.hdr.sgml : 20010515 ACCESSION NUMBER: 0001016843-01-500119 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TAMPA ELECTRIC CO CENTRAL INDEX KEY: 0000096271 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 590475140 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05007 FILM NUMBER: 1632821 BUSINESS ADDRESS: STREET 1: 702 N FRANKLIN ST STREET 2: TECO PLZA CITY: TAMPA STATE: FL ZIP: 33602 BUSINESS PHONE: 8132284111 MAIL ADDRESS: STREET 1: TAMPA ELECTRIC CO STREET 2: TECO PLAZA 702 N FRANKLIN ST CITY: TAMPA STATE: FL ZIP: 33602 10-Q 1 form10-q_29067.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 2001 -------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period _____ to _____ Commission File Number 1-5007 ------ TAMPA ELECTRIC COMPANY ------------------------------------------------------ (Exact name of registrant as specified in its charter) FLORIDA 59-0475140 - ------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 702 N. FRANKLIN STREET, TAMPA, FLORIDA 33602 - ---------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (813) 228-4111 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date (April 30, 2001): Common Stock, Without Par Value 10 The registrant meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format. Index to Exhibits Appears on Page 12 Page 1 of 12 PART I. FINANCIAL INFORMATION Item 1. CONDENSED FINANCIAL STATEMENTS In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments which are of a recurring nature and necessary to present fairly the financial position of Tampa Electric Company as of March 31, 2001 and 2000, and the results of operations and cash flows for the three-month periods ended March 31, 2001 and 2000. The results of operations for the three-month period ended March 31, 2001 are not necessarily indicative of the entire fiscal year ending Dec. 31, 2001. Reference should be made to the explanatory notes affecting the income and balance sheet accounts contained in Tampa Electric Company's Annual Report on Form 10-K for the year ended Dec. 31, 2000 and to the notes on page 6 of this report. 2 CONSOLIDATED BALANCE SHEETS UNAUDITED (in millions)
MARCH 31, DEC. 31, 2001 2000 -------- -------- ASSETS PROPERTY, PLANT AND EQUIPMENT, AT ORIGINAL COST Utility plant in service Electric $ 4,039.0 $ 4,054.1 Gas 639.1 632.1 Construction work in progress 223.7 150.1 ---------- ---------- 4,901.8 4,836.3 Accumulated depreciation (1,934.5) (1,931.3) ---------- ---------- 2,967.3 2,905.0 Other property 8.2 8.3 ---------- ---------- 2,975.5 2,913.3 ---------- ---------- CURRENT ASSETS Cash and cash equivalents 1.1 0.7 Receivables, less allowance for uncollectibles 173.9 180.4 Inventories, at average cost Fuel 66.5 56.8 Materials and supplies 50.8 52.4 Prepayments 1.6 3.3 ---------- ---------- 293.9 293.6 ---------- ---------- DEFERRED DEBITS Unamortized debt expense 12.7 13.2 Deferred income taxes 124.5 124.3 Regulatory asset - tax related 62.1 62.3 Other 155.2 143.1 ---------- ---------- 354.5 342.9 ---------- ---------- $ 3,623.9 $ 3,549.8 ========== ========== LIABILITIES AND CAPITAL CAPITAL Common stock $ 1,158.1 $ 1,148.1 Retained earnings 294.2 299.0 ---------- ---------- 1,452.3 1,447.1 LONG-TERM DEBT, LESS AMOUNT DUE WITHIN ONE YEAR 788.3 789.3 ---------- ---------- 2,240.6 2,236.4 ---------- ---------- CURRENT LIABILITIES Long-term debt due within one year 55.2 55.2 Notes payable 293.2 231.2 Accounts payable 159.0 188.0 Customer deposits 83.4 82.4 Interest accrued 38.2 34.2 Taxes accrued 98.3 71.6 ---------- ---------- 727.3 662.6 ---------- ---------- DEFERRED CREDITS Deferred income taxes 428.4 424.5 Investment tax credits 35.0 36.1 Regulatory liability-tax related 70.7 72.4 Other 121.9 117.8 ---------- ---------- 656.0 650.8 ---------- ---------- $ 3,623.9 $ 3,549.8 ========== ==========
The accompanying notes are an integral part of the consolidated financial statements. 3 CONSOLIDATED STATEMENTS OF INCOME UNAUDITED (in millions) FOR THE THREE MONTHS ENDED MARCH 31, 2001 2000 --------- --------- REVENUES Electric $ 335.8 $ 292.4 Gas 134.1 86.6 --------- --------- 469.9 379.0 --------- --------- OPERATING EXPENSES Operation Fuel 76.3 79.5 Purchased power 54.6 25.8 Natural gas sold 82.0 40.7 Other 62.7 55.3 Maintenance 27.3 26.7 Depreciation 49.1 45.1 Taxes-Federal and state income 23.0 21.2 Taxes-Other than income 35.6 30.8 --------- --------- 410.6 325.1 --------- --------- OPERATING INCOME 59.3 53.9 OTHER INCOME 2.5 0.4 --------- --------- INCOME BEFORE INTEREST CHARGES 61.8 54.3 --------- --------- INTEREST CHARGES Interest on long-term debt 13.9 12.9 Other interest 6.9 4.3 --------- --------- 20.8 17.2 --------- --------- NET INCOME $ 41.0 $ 37.1 ========= ========= The accompanying notes are an integral part of the consolidated financial statements. 4 FORM 10-Q CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED (in millions)
FOR THE THREE MONTHS ENDED MARCH 31, 2001 2000 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 41.0 $ 37.1 Adjustments to reconcile net income to net cash Depreciation 49.1 45.1 Deferred income taxes 3.4 (2.0) Investment tax credits, net (1.1) (1.1) Allowance for funds used during construction (1.1) (0.5) Deferred recovery clause (7.7) 3.5 Receivables, less allowance for uncollectibles 6.6 7.7 Inventories (8.0) (18.2) Taxes accrued 26.7 34.1 Interest accrued 4.0 14.1 Accounts payable (29.1) (17.3) Other 1.6 13.2 --------- --------- 85.4 115.7 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (111.9) (88.2) Allowance for funds used during construction 1.1 0.5 --------- --------- (110.8) (87.7) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from contributed capital from parent 10.0 83.0 Repayment of long-term debt (0.4) -- Net increase (decrease) in short-term debt 62.0 (107.0) Payment of dividends (45.8) (29.8) --------- --------- 25.8 (53.8) --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 0.4 (25.8) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 0.7 26.1 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1.1 $ 0.3 ========= =========
The accompanying notes are an integral part of the consolidated financial statements. 5 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A. Tampa Electric Company (the company) is a wholly owned subsidiary of TECO Energy, Inc. B. The company has made certain commitments in connection with its continuing construction program. Total construction expenditures during 2001 are estimated to be $373 million for its electric division (referred to as Tampa Electric) and $74 million for its natural gas division (referred to as Peoples Gas System). Tampa Electric Company is a potentially responsible party for certain superfund sites and, through its Peoples Gas System division, for certain former manufactured gas plant sites. While the joint and several liability associated with these sites presents the potential for significant response costs, the company estimates its ultimate financial liability at approximately $22 million over the next 10 years. The environmental remediation costs associated with these sites have been recorded on the accompanying consolidated balance sheet, and are not expected to have a significant impact on customer prices. C. CONTRIBUTION BY OPERATING DIVISION (in millions) NET REVENUES INCOME -------- ------- THREE MONTHS ENDED MARCH 31, 2001 Electric division $ 336.0 $ 30.5 Peoples Gas System 134.1 10.5 -------- ------- 470.1 41.0 Other and eliminations (0.2) -- -------- ------- Tampa Electric Company $ 469.9 $ 41.0 ======== ======= THREE MONTHS ENDED MARCH 31, 2000 Electric division $ 292.6 $ 28.6 Peoples Gas System 86.6 8.5 -------- ------- 379.2 37.1 Other and eliminations (0.2) -- -------- ------- Tampa Electric Company $ 379.0 $ 37.1 ======== ======= D. The company adopted FAS 133, Accounting for Derivative Instruments and Hedging, effective Jan. 1, 2001. The standard requires the company to recognize derivatives as either assets or liabilities in the financial statements, to measure those instruments at fair value, and to reflect the changes in fair value of those instruments as either components of comprehensive income or in net income, depending on the types of those instruments. The company has completed the review and documentation of its derivative contracts, and found such activity has been minimal and relatively short-term in duration. Based on policies and procedures approved by the Board of Directors, from time to time, the company enters into futures, swaps and options contracts to limit exposure to gas price increases at the Peoples Gas System. The company did not have any open derivatives or hedges at March 31, 2001, or at adoption of the standard that were subject to FAS 133 accounting. Management will continue to document all current, new and possible uses of derivatives, and develop procedures and methods for measuring them. 6 ITEM 2. MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS This Quarterly Report on Form 10-Q 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: interest rates and other factors that could impact Tampa Electric Company's ability to obtain access to sufficient capital on satisfactory terms; 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 Peoples Gas System; and changes in and compliance with environmental regulations that may impose additional costs or curtail some activities. Some of these factors are discussed more fully under "Investment Considerations" in TECO Energy's Annual Report on Form 10-K for the year ended Dec. 31, 2000, and reference is made thereto. RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2001: Tampa Electric Company's net income for the quarter ended March 31, 2001 was $41.0 million, up from $37.1 million recorded for the three-month period ended March 31, 2000. The 11-percent increase for the quarter relative to last year reflected the continued strong customer growth and favorable weather. ELECTRIC DIVISION (TAMPA ELECTRIC) Tampa Electric's net income for the first quarter was $30.5 million, compared with $28.6 million for the same period in 2000. The company showed improved results from retail energy sales growth of 11 percent driven by continued customer growth of almost 3 percent and favorable winter weather. Base revenues increased by $10.5 million as a result of favorable weather. The increased revenues were somewhat offset by higher operation and maintenance expense due to increased spending on generation assets and an increase in reliability reserve requirements, and higher depreciation due to normal plant growth. A summary of the operating statistics for the three months ended March 31, 2001 and 2000 is below:
(in millions, except average customers) OPERATING REVENUES KILOWATT-HOUR SALES -------------------------------- --------------------------------- THREE MONTHS ENDED MARCH 31, 2001 2000 CHANGE 2001 2000 CHANGE ------- ------- ------ -------- -------- ------ Residential $158.6 $131.8 20.3% 1,878.8 1,592.3 18.0% Commercial 91.8 82.7 11.0% 1,304.4 1,225.4 6.4% Industrial - Phosphate 16.3 14.2 15.0% 343.1 334.8 2.5% Industrial - Other 15.6 14.4 8.3% 271.1 258.9 4.7% Other sales of electricity 23.2 21.4 8.4% 313.9 302.3 3.8% Deferred and other revenues (6.9) (2.0) -- -- -- -- ------ ------ ------- ------- 298.6 262.5 13.7% 4,111.3 3,713.7 10.7% Sales for resale 27.5 22.1 24.4% 629.1 514.8 22.2% Other operating revenue 9.9 8.0 24.0% -- -- -- ------ ------ ------- ------- $336.0 $292.6 14.8% 4,740.4 4,228.5 12.1% ====== ====== ======= ======= Average customers (Thousands) 572.1 556.3 2.8% ====== ====== System Net Input (Kilowatt hours) 4,114.1 3,855.2 6.7% ======= =======
7 NATURAL GAS DIVISION (PEOPLES GAS SYSTEM) Peoples Gas System (PGS) reported net income for the quarter of $10.5 million, compared with $8.5 million for the same period last year. Quarterly results reflected strong customer growth of more than 4 percent and higher residential and commercial sales as a result of favorable winter weather this year, which increased net revenue by $1.5 million. Decreased volumes for low-margin, transportation gas for electric power generators, interruptible customers and off-system sales reflected the higher cost of gas for these customers who have the ability to switch to alternate fuels or alter consumption patterns. Operating expenses were level with last year, while depreciation increased slightly due to normal plant growth. A summary of the operating statistics for the three months ended March 31, 2001 and 2000 is below:
(in millions, except average customers) OPERATING REVENUES THERMS ---------------------------------- ------------------------------- THREE MONTHS ENDED MARCH 31, 2001 2000 CHANGE 2001 2000 CHANGE ----- ----- ------ ----- ----- ------ BY CUSTOMER SEGMENT: Residential $ 41.8 $ 25.4 64.4% 27.5 23.9 15.1% Commercial 67.5 38.4 76.0% 90.8 84.4 7.7% Industrial 3.9 3.5 12.0% 62.0 80.1 -22.5% Off system sales 4.4 9.2 -52.2% 6.6 30.2 -78.1% Power generation 2.9 2.5 16.0% 78.0 102.4 -23.8% Other revenues 13.6 7.6 78.9% -- -- -- ------- ------- ----- ----- $ 134.1 $ 86.6 54.9% 264.9 321.0 -17.4% ======= ======= ===== ===== BY SALES TYPE: System supply $ 105.0 $ 66.1 59.0% 82.0 103.9 -21.0% Transportation 15.5 12.9 20.2% 182.9 217.1 -15.7% Other revenues 13.6 7.6 78.9% -- -- -- ------- ------- ----- ----- $ 134.1 $ 86.6 54.9% 264.9 321.0 -17.4% ======= ======= ===== ===== Average customers (Thousands) 266.3 255.6 4.2% ======= =======
OTHER Allowance for funds used during construction (AFUDC) was $1.1 million and $0.5 million for the three months ended March 31, 2001 and 2000, respectively. AFUDC is expected to increase over the next several years reflecting Tampa Electric's generation expansion activities. Total interest charges were $20.8 million for the three months ended March 31, 2001 compared to $17.2 million for the same period in 2000. Increased financing costs for the first quarter of 2001 reflected primarily higher borrowing levels. RECENT DEVELOPMENTS Fitch, Inc. and Standard & Poor's in July 2000 and October 2000, respectively, lowered the ratings of Tampa Electric Company. Each rating agency indicated that the rating outlook remained negative. On March 27, 2001, Moody's Investor Services, Inc. lowered the long-term ratings on the debt securities at Tampa Electric. The ratings actions were attributable to the required capital outlays of Tampa Electric and the uncertainties related to industry restructuring. These downgrades and any further downgrades may affect the company's ability to borrow and increase its financing costs which may decrease earnings. The resulting ratings are as follows: MOODY'S STANDARD & POOR'S FITCH ------- ----------------- ----- Senior Secured Aa3 A AA Senior Unsecured A1 A AA- 8 As previously disclosed, Tampa Electric, Florida Power and Light, and Florida Power Corporation (collectively "Applicants"), in compliance with the Federal Energy Regulatory Commission's (FERC) Order No. 2000, submitted to the FERC an application to form a regional transmission organization ("RTO") to be known as GridFlorida. On March 28, 2001, FERC issued a comprehensive order provisionally approving the GridFlorida proposal, subject to certain compliance items that Applicants will address in a May 14, 2001 status report, and in a May 29, 2001 compliance filing. The Applicants expect to make additional filings later in 2001 in order to fully implement their proposal on transmission pricing and market design. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING The company adopted FAS 133, Accounting for Derivative Instruments and Hedging, effective Jan. 1, 2001. The standard requires the company to recognize derivatives as either assets or liabilities in the financial statements, to measure those instruments at fair value, and to reflect the changes in fair value of those instruments as either components of comprehensive income or in net income, depending on the types of those instruments. The company did not have any open derivatives or hedges at March 31, 2001, or at adoption of the standard that were subject to FAS 133 accounting. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK INTEREST RATE RISK Tampa Electric Company is exposed to changes in interest rates primarily as a result of its borrowing activities. A hypothetical 10-percent increase in Tampa Electric Company's weighted average interest rate on its variable rate debt would have an estimated $2 million impact on Tampa Electric Company's pretax earnings over the next fiscal year. A hypothetical 10-percent decrease in interest rates would not have a significant impact on the estimated fair value of Tampa Electric Company's long-term debt at March 31, 2001. Based on policies and procedures approved by the Board of Directors, from time to time Tampa Electric Company may enter into futures, swaps and option contracts to moderate exposure to interest rate changes. COMMODITY PRICE RISK Currently, at Tampa Electric and Peoples Gas System, commodity price increases due to changes in market conditions for fuel, purchased power and natural gas are recovered through cost recovery clauses, with no effect on earnings. From time to time, Peoples Gas System may enter into futures, swaps and options contracts to limit the effect of natural gas price increases on the prices it charges customers. Tampa Electric Company does not use derivatives or other financial products for speculative purposes. 9 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) EXHIBITS 10.1 TECO Energy, Inc. 1996 Equity Incentive Plan, as amended April 18, 2001. 12 Ratio of earnings to fixed charges (B) REPORTS ON FORM 8-K The registrant did not file any Current Reports on Form 8-K for the quarter ended March 31, 2001. 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TAMPA ELECTRIC COMPANY -------------------------------------- (Registrant) Date: May 14, 2001 *By: /s/ G. L. GILLETTE ------------------------- G. L. GILLETTE Senior Vice President - Finance and Chief Financial Officer (Principal Financial Officer) 11 INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION OF EXHIBITS 10.1 TECO Energy, Inc. 1996 Equity Incentive Plan, as amended April 18, 2001. 12 Ratio of earnings to fixed charges 12 EX-10.1 2 ex10-1_29067.txt EXHIBIT 10.1 AMENDED AND RESTATED TECO ENERGY, INC. 1996 EQUITY INCENTIVE PLAN 1. PURPOSE. The purpose of the TECO Energy, Inc. 1996 Equity Incentive Plan (the "PLAN") is to attract and retain key employees of TECO Energy, Inc. (the "COMPANY") and its affiliates, to provide an incentive for them to achieve long-range performance goals, and to enable them to participate in the long-term growth of the Company by the granting of awards ("AWARDS") of, or based on, the Company's common stock, $1.00 par value (the "COMMON STOCK"). The Plan is an amendment and restatement of the Company's 1990 Equity Incentive Plan (the "1990 PLAN"). No provision of the Plan will affect the rights and privileges of holders of outstanding options under the 1990 Plan. 2. ADMINISTRATION. The Plan will be administered by a committee of not less than three members of the Board of Directors of the Company appointed by the Board to administer the Plan (the "COMMITTEE"). Each member of the Committee will be a "disinterested person" or the equivalent within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended from time to time (the "EXCHANGE ACT"), and an "outside director" within the meaning of Section 162 of the Internal Revenue Code of 1986, as amended from time to time (the "CODE"). The Committee will select those persons to receive Awards under the Plan ("PARTICIPANTS") and will determine the terms and conditions of all Awards. The Committee will have authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the operation of the Plan as it from time to time considers advisable, and to interpret the provisions of the Plan. The Committee's decisions will be final and binding. To the extent permitted by applicable law, the Committee may delegate to one or more executive officers of the Company the power to make Awards to Participants who are not subject to Section 16 of the Exchange Act and all determinations under the Plan with respect thereto, provided that the Committee will fix the maximum amount of such Awards for all such Participants and a maximum for any one Participant. 3. ELIGIBILITY. All employees of the Company (or any business entity in which the Company owns directly or indirectly 50% or more of the total voting power or has a significant financial interest as determined by the Committee) capable of contributing significantly to the successful performance of the Company, other than an employee who has irrevocably elected not to be eligible, are eligible to be Participants in the Plan. 4. STOCK AVAILABLE FOR AWARDS. (a) AMOUNT. Subject to adjustment under subsection (b), Awards may be made under the Plan for up to 10,050,000 shares of Common Stock, together with all shares of Common Stock available for issue under the 1990 Plan on the effective date of the Plan. If any Award (including any Award under the 1990 Plan) expires or is terminated unexercised or is forfeited or settled in a manner that results in fewer shares outstanding than were awarded, the shares subject to such Award, to the extent of such expiration, termination, forfeiture or decrease, will again be available for award under the Plan. Common Stock issued through the assumption or substitution of outstanding grants from an acquired company will not reduce the shares available for Awards under the Plan. Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares. (b) ADJUSTMENT. In the event that the Committee determines that any stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares or other change affects the Common Stock such that an adjustment is required in order to preserve the benefits intended to be provided by the Plan, then the Committee (subject in the case of incentive stock options to any limitation required under the Code) will equitably adjust any or all of (i) the number and kind of shares for which Awards may be made under the Plan, (ii) the number and kind of shares subject to outstanding Awards and (iii) the exercise price with respect to any of the foregoing. In making such adjustments, the Committee may ignore fractional shares so that the number of shares subject to any Award will be a whole number. If considered appropriate, the Committee may make provision for a cash payment with respect to all or part of an outstanding Award instead of or in addition to any such adjustment. (c) LIMIT ON INDIVIDUAL GRANTS. The maximum number of shares of Common Stock subject to Stock Options and SARs that may be granted to any Participant in the aggregate in any calendar year will not exceed 1,000,000 shares, subject to adjustment under subsection (b). 5. TYPES OF AWARDS. (a) STOCK GRANTS. The Committee may make awards of shares of Common Stock ("STOCK GRANTS") upon such terms and conditions as the Committee determines. Stock Grants may include without limitation restricted stock, performance shares, performance-accelerated restricted stock and bonus stock. Stock Grants may be issued for no cash consideration, such minimum consideration as may be required by applicable law or such other consideration as the Committee may determine. (b) STOCK OPTIONS. The Committee may grant options ("STOCK OPTIONS") to purchase shares of Common Stock at an exercise price determined by the Committee of not less than 100% of the fair market value of the Common Stock on the date of grant and upon such terms and conditions as the Committee determines. Stock Options may include without limitation incentive stock options, nonstatutory stock options, indexed stock options, performance-vested stock options, performance-accelerated stock options and reload options. No incentive stock option may be granted -2- under the Plan more than ten years after the effective date of this restatement of the Plan. Payment of the exercise price may be made in cash or, to the extent permitted by the Committee at or after the grant of the Stock Option, in whole or in part by delivery of a promissory note or shares of Common Stock owned by the optionee, including Stock Grants, or by retaining shares otherwise issuable pursuant to the Stock Option, in each case valued at fair market value on the date of delivery or retention, or such other lawful consideration as the Committee may determine. (c) STOCK EQUIVALENTS. The Committee may grant rights to receive payment from the Company based in whole or in part on the value of the Common Stock ("STOCK EQUIVALENTS") upon such terms and conditions as the Committee determines. Stock Equivalents may include without limitation phantom stock, performance units, dividend equivalents and stock appreciation rights ("SARS"). SARs granted in tandem with a Stock Option will terminate to the extent that the related Stock Option is exercised, and the related Stock Option will terminate to the extent that the tandem SARs are exercised. An SAR will have an exercise price determined by the Committee of not less than 100% of the fair market value of the Common Stock on the date of grant, or of not less than the exercise price of the related Stock Option in the case of an SAR granted in tandem with a Stock Option. The Committee will determine at the time of grant or thereafter whether Stock Equivalents are to be settled in cash, Common Stock or other securities of the Company, other Awards or other property. 6. GENERAL PROVISIONS APPLICABLE TO AWARDS. (a) FAIR MARKET VALUE. The fair market value of the Common Stock or any other property will be the fair market value of such property as determined by the Committee in good faith or in the manner established by the Committee from time to time. (b) REPORTING PERSON LIMITATIONS. Notwithstanding any other provision of the Plan, to the extent required to qualify for the exemption provided by Rule 16b-3 under the Exchange Act, Awards made to a person subject to Section 16 of the Exchange Act will not be transferable by such person other than by will or the laws of descent and distribution and are exercisable during such person's lifetime only by such person or by such person's guardian or legal representative. If then permitted by Rule 16b-3, such Awards will also be transferable pursuant to a qualified domestic relations order as defined in the Code or Title I of the Employee Retirement Income Security Act or the rules thereunder. (c) DOCUMENTATION. Each Award under the Plan will be evidenced by a writing delivered to the Participant specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with the provisions of the Plan as the Committee considers necessary or advisable to achieve the purposes of the Plan. These terms and conditions may include without limitation performance criteria, vesting requirements, restrictions on transfer and payment rules. The Committee may establish the terms and conditions at the time the Award is granted or may provide that such terms and conditions will be determined at any time thereafter. -3- (d) COMMITTEE DISCRETION. Each type of Award may be made alone, in addition to or in relation to any other Award. The terms of each type of Award need not be identical, and the Committee need not treat Participants uniformly. Except as otherwise provided by the Plan or a particular Award, any determination with respect to an Award may be made by the Committee at the time of grant or at any time thereafter. (e) DIVIDENDS AND CASH AWARDS. In the discretion of the Committee, any Award under the Plan may provide the Participant with (i) dividends or dividend equivalents payable currently or deferred with or without interest and (ii) cash payments in lieu of or in addition to an Award. (f) TERMINATION OF EMPLOYMENT. The Committee will determine the effect on an Award of the disability, death, retirement or other termination of employment of a Participant and the extent to which, and the period during which, the Participant's legal representative, guardian or beneficiary may receive payment of an Award or exercise rights thereunder. A Participant may designate a beneficiary in a manner determined by the Committee. In the absence of an effective designation, a Participant's beneficiary will be the Participant's estate. (g) CHANGE IN CONTROL. In order to preserve a Participant's rights under an Award in the event of a change in control of the Company, the Committee in its discretion may, at the time an Award is made or at any time thereafter, take one or more of the following actions: (i) provide for the acceleration of any time period relating to the exercise or payment of the Award, (ii) provide for payment to the Participant of cash or other property with a fair market value equal to the amount that would have been received upon the exercise or payment of the Award had the Award been exercised or paid upon the change in control, (iii) adjust the terms of the Award in a manner determined by the Committee to reflect the change in control, (iv) cause the Award to be assumed, or new rights substituted therefor, by another entity, or (v) make such other provision as the Committee may consider equitable to the Participant and in the best interests of the Company. (h) LOANS. The Committee may authorize the making of loans or cash payments to Participants in connection with the grant or exercise of any Award under the Plan, which loans may be secured by any security, including Common Stock, underlying such Award, and which may be forgiven upon such terms and conditions as the Committee may establish at the time of such loan or at any time thereafter. (i) WITHHOLDING TAXES. The Participant will pay to the Company, or make provision satisfactory to the Committee for payment of, any taxes required by law to be withheld in respect of Awards under the Plan no later than the date of the event creating the tax liability. In the Committee's discretion, such tax obligations may be paid in whole or in part in shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at fair market value on the date of delivery or retention. The Company and its affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Participant. -4- (j) FOREIGN NATIONALS. Awards may be made to Participants who are foreign nationals or employed outside the United States on such terms and conditions different from those specified in the Plan as the Committee considers necessary or advisable to achieve the purposes of the Plan or to comply with applicable laws. (k) AMENDMENT OF AWARD. The Committee may amend, modify or terminate any outstanding Award, including substituting therefor another Award of the same or a different type and changing the date of exercise or realization, provided that the Participant's consent to such action will be required unless the action, taking into account any related action, would not adversely affect the Participant. 7. MISCELLANEOUS. (a) NO RIGHT TO EMPLOYMENT. No person will have any claim or right to be granted an Award. Neither the Plan nor any Award hereunder will be deemed to give any employee the right to continued employment or to limit the right of the Company to discharge any employee at any time. (b) NO RIGHTS AS SHAREHOLDER. Subject to the provisions of the applicable Award, no Participant or beneficiary will have any rights as a shareholder with respect to any shares of Common Stock to be distributed under the Plan until he or she becomes the holder thereof. A Participant to whom Common Stock is awarded will be considered the holder of such Common Stock at the time of the Award except as otherwise provided in the applicable Award. (c) EFFECTIVE DATE. The Plan will be effective on April 17, 1996. (d) AMENDMENT OF PLAN. The Board of Directors of the Company may amend, suspend or terminate the Plan or any portion thereof at any time, subject to any shareholder approval that the Board determines to be necessary or advisable, provided that the Participant's consent will be required for any amendment, suspension or termination that would adversely affect the rights of the Participant under any outstanding Award. (e) GOVERNING LAW. The provisions of the Plan will be governed by and interpreted in accordance with the laws of Florida. -5- EX-12 3 ex12_29067.txt EXHIBIT 12 TAMPA ELECTRIC COMPANY RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the company's ratio of earnings to fixed charges for the periods indicated.
THREE MONTHS TWELVE MONTHS YEAR ENDED DECEMBER 31, ENDED ENDED ----------------------------------------------------------- MARCH 31, 2001 MARCH 31, 2001 2000 1999 1998 1996 1996(3) -------------- -------------- ---- ----- -------- ----- ----- 3.92x 4.07x 4.14x 3.82x(1) 4.51x(2) 4.38x 4.40x
For the purposes of calculating these ratios, earnings consist of income before income taxes and fixed charges. Fixed charges consist of interest on indebtedness, amortization of debt premium, the interest component of rentals and preferred stock dividend requirements. - ----------------- (1) Includes the effect of one-time, pretax charges totaling $18.3 million recorded in the third and fourth quarters of 1999. Charges consisted of the following: $10.5 million recorded based on FPSC audits of its 1997 and 1998 earnings which limited its equity ratio to 58.7 percent; $3.5 million to resolve litigation filed by the U.S. Environmental Protection Agency; and $4.3 million for corporate income tax settlements related to prior years' tax returns. The effect of these charges was to reduce the ratio of earnings to fixed charges. Had these charges been excluded from the calculation, the ratio of earnings to fixed charges would have been 4.61x for the year ended Dec. 31, 1999. (2) Includes the effect of one-time, pretax charges totaling $16.9 million. The effect of these charges was to reduce the ratio of earnings to fixed charges. Had these charges been excluded from the calculation, the ratio of earnings to fixed charges would have been 4.66x for the year ended Dec. 31, 1998. (3) Amounts have been restated to reflect the merger of Peoples Gas System, Inc., with and into Tampa Electric Company. -----END PRIVACY-ENHANCED MESSAGE-----