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TECO Energy explains hold up on earnings conference
By Jeff Pines
Washington, Feb. 9 - TECO Energy, Inc. said it rescheduled its earnings conference to give its accountants one last review of its fourth quarter and 2003 results. The company's bottom line was not the issue, but how to treat its decision to end its ownership of the Gila and Union River projects.
Robert Fagan, TECO Energy's chairman, president and chief executive officer, said exiting the projects was a "tough decision" but leaving them will reduce the company's risk to earnings and cash flow from the merchant power projects.
Contrary to what some might think, the company could not just walk away and hand the banks the keys to the power plants, he said. The project companies' lenders have agreed to buy the companies from TECO Energy.
Others who have tried ended up locked in lengthy, expensive court battles, he cautioned.
In addition, the company expects to reap a $450 million deferred tax benefit from the sale of the plants. It expects to close the sale of the project companies to the lender banks by Sept. 30.
The Tampa, Fla.-based energy company will continue to reduce its merchant energy business and focus more on the Florida market.
Management wants to get the company's investment grade rating back and is looking at what it can do to achieve that.
There are no immediate plans to sell any equity, but the company has been focusing on exiting the Gila and Union River projects. Later in the year, it may start looking at what can be done to improve the company's balance sheet.
To lower its debt maturing in 2007, TECO Energy plans to use free cash, according to Gordon Gillette, senior vice president and chief financial officer.
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