Discontinued Operations, Assets Held for Sale and Asset Impairments

3 Months Ended

Mar. 31, 2015

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations, Assets Held for Sale and Asset Impairments

15. Discontinued Operations, Assets Held for Sale and Asset Impairments

TECO Coal

In September 2014, the Board of Directors of TECO Energy authorized management to enter into negotiations for the sale of TECO Coal. As a result of this and other factors, the TECO Coal segment was accounted for as an asset held for sale and reported as a discontinued operation beginning in the third quarter of 2014.

On Oct. 17, 2014, TECO Diversified entered into an SPA to sell all of its ownership interest in TECO Coal to Cambrian Coal Corporation (“Cambrian”). On Feb. 5, 2015, the SPA was amended to extend the closing date to Mar. 13, 2015 and modify the purchase price to $80 million, subject to working capital adjustments, plus contingent payments of up to $60 million that may be paid between 2015 and 2019 depending on specified coal benchmark prices. As a result, in 2014 the company recorded impairment charges totaling $115.9 million pretax to write down the held-for-sale TECO Coal assets to their implied fair value based on the binding offer less estimated costs to sell. On Mar. 12, 2015, the SPA was further amended to extend the closing date to Apr. 24, 2015. On Apr. 17, 2015, the SPA was amended again to further extend the closing date to June 5, 2015, in order to allow for Cambrian’s financing arrangements to be completed (see Note 16).  No additional asset impairments were recorded in the first quarter of 2015.

The SPA contains customary representations, warranties, covenants, and closing conditions, including the purchaser’s obtaining debt financing in order to pay a portion of the purchase prices. The SPA also contains indemnification provisions subject to specified limitations as to time and amount. In addition, the SPA, as amended, is subject to termination by either party if specified closing conditions are not met by June 5, 2015. After closing of the sale, TECO Energy will not have influence over operations of TECO Coal, therefore the contingent payments and indemnification provisions are not considered to meet the definition of direct cash flows under the applicable discontinued operations FASB guidance.

All periods have been adjusted to reflect the reclassification of results from operations to discontinued operations for TECO Coal and certain charges at Parent that directly relate to the sale of TECO Coal.

The following table provides a summary of the carrying amounts of the significant assets and liabilities reported in the combined current and non-current “Assets held for sale” and “Liabilities associated with assets held for sale” line items:

Assets held for sale
(millions)	Mar. 31, 2015		Dec. 31, 2014
Current assets (1)	$	97.1	$	109.6
Property, plant and equipment, net and other long-term assets		60.9		59.8
Total assets held for sale	$	158.0	$	169.4
Liabilities associated with assets held for sale
(millions)	Mar. 31, 2015		Dec. 31, 2014
Current liabilities	$	33.7	$	39.4
Long-term liabilities		65.7		65.4
Total liabilities associated with assets held for sale	$	99.4	$	104.8

(1) Certain items within Current assets are excluded from the SPA working capital adjustments.

TECO Guatemala

In 2012, TECO Guatemala completed the sale of its interests in the Alborada and San José power stations, and related solid fuel handling and port facilities in Guatemala. All periods presented reflect the classification of results from operations for TECO Guatemala and certain charges at Parent that directly relate to TECO Guatemala as discontinued operations. While TECO Energy and its subsidiaries no longer have assets or operations in Guatemala, its subsidiary, TECO Guatemala Holdings, LLC, has retained its rights under its arbitration claim filed against the Republic of Guatemala (see Note 10). The first quarter 2015 charges shown in the table below are legal costs associated with that claim.  Additionally, in March 2014, an indemnification provision for an uncertain tax position at TCAE that was provided for in the 2012 purchase agreement was reversed due to a favorable final decision by the highest court in Guatemala, resulting in the income from operations amount shown in the table below.

Combined Components of Discontinued Operations

The following table provides selected components of discontinued operations related to the sales of TECO Coal and TECO Guatemala:

Components of income from discontinued operations	Three months ended
	Mar. 31,
(millions)	2015			2014
Revenues—TECO Coal	$	72.7		$	106.1
Loss from operations—TECO Coal		(9.5	)		(3.8	)
Income (loss) from operations—TECO Guatemala		(0.1	)		5.0
Loss from discontinued operations—TECO Coal		(9.5	)		(3.8	)
Income (loss) from discontinued operations—TECO Guatemala		(0.1	)		5.0
Income (loss) from discontinued operations		(9.6	)		1.2
Benefit for income taxes		(3.8	)		(0.5	)
Income (loss) from discontinued operations, net	$	(5.8	)	$	1.7