Edgar Filing: TECO ENERGY INC

Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

July 25, 2006

TECO ENERGY, INC.

(Exact name of registrant as specified in its charter)

Florida

1-8180

59-2052286

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No.)


702 North Franklin Street, Tampa Florida		33602
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (813) 228-1111

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

Item 2.02: Results of Operations and Financial Condition

See the Press Release dated July 28, 2006, furnished as Exhibit 99.1 and incorporated herein by reference, reporting on TECO Energy, Inc.’s financial results for the three and six months ended June 30, 2006.

Section 5 – Corporate Governance and Management

Item 5.02: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

On July 25, 2006, Joseph P. Lacher was elected a member of the TECO Energy, Inc. and Tampa Electric Company Boards of Directors and was appointed to the Audit Committee of the Board of TECO Energy, Inc.

Section 9 – Financial Statements and Exhibits

Item 9.01: Financial Statements and Exhibits

(d)

Exhibits

99.1

Press Release dated July 28, 2006 reporting on TECO Energy, Inc.’s financial results for the three and six months ended June 30, 2006.

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 hereunto duly authorized.


Date: July 28, 2006				TECO ENERGY, INC.
				(Registrant)

				/s/ G. L. GILLETTE
				G. L. GILLETTE
				Executive Vice President
				and Chief Financial Officer (Principal Financial Officer)

EXHIBIT INDEX


Exhibit No.		Description of Exhibits
99.1		Press Release dated July 28, 2006, reporting on TECO Energy, Inc.’s financial results for the three and six months ended June 30, 2006.

LOGO

JUNE 2006

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 Ended						Six Months Ended						Twelve Months Ended
	June 30,						June 30,						June 30,
(millions except share data)	2006			2005			2006			2005			2006			2005
Revenues
Regulated electric and gas	$	670.0		$	537.7		$	1,312.5		$	1,059.8		$	2,546.5		$	2,138.3
Unregulated		192.6			181.3			386.5			343.9			758.9			619.8

Total revenues		862.6			719.0			1,699.0			1,403.7			3,305.4			2,758.1
Expenses
Regulated operations
Fuel		200.5			127.8			383.3			242.4			602.0			537.9
Purchased power		55.8			44.9			90.3			85.8			274.3			176.0
Cost of natural gas sold		88.1			66.4			210.9			149.9			411.2			257.1
Other		71.3			65.5			142.9			126.5			286.7			257.1
Other operations		165.4			170.0			331.8			315.6			669.7			632.6
Maintenance		49.9			37.1			94.9			76.1			187.2			147.0
Depreciation		70.6			69.9			140.9			140.0			283.1			277.1
Asset impairment		0.0			0.0			0.0			0.0			3.2			630.2
Restructuring charges		0.0			0.0			0.0			0.0			0.0			1.1
Sale of development stage entity		(10.7	)		0.0			(10.7	)		0.0			(10.7	)		0.0
Taxes, other than income		53.4			44.7			110.2			94.8			210.0			183.2

Total expenses		744.3			626.3			1,494.5			1,231.1			2,916.7			3,099.3

Income from operations		118.3			92.7			204.5			172.6			388.7			(341.2	)
Other income (expense)
Allowance for other funds used during construction		0.4			0.0			0.6			0.0			0.6			0.0
Other income		6.9			34.3			30.9			71.4			130.9			129.7
Gain (loss) on debt extinguishment		0.0			(71.5	)		0.0			(71.5	)		(2.7	)		(75.9	)
Impairment on TIE investment		0.0			0.0			0.0			0.0			0.0			(0.4	)
Income from equity investment		13.8			13.7			28.4			28.9			60.0			59.0

Total other income		21.1			(23.5	)		59.9			28.8			188.8			112.4
Interest charges
Interest expense		70.1			76.4			139.2			151.9			276.1			305.0
Allowance for borrowed funds used during construction		(0.1	)		0.0			(0.2	)		0.0			(0.2	)		0.0

Total interest charges		70.0			76.4			139.0			151.9			275.9			305.0

Income before provision for income taxes		69.4			(7.2	)		125.4			49.5			301.6			(533.8	)
Provision for income taxes		27.3			4.0			50.0			31.8			120.1			(208.3	)

Income from Continuing Operations before minority interests		42.1			(11.2	)		75.4			17.7			181.5			(325.5	)
Minority Interests		19.0			23.6			40.9			46.2			81.8			84.1

Income (loss) from Continuing Operations		61.1			12.4			116.3			63.9			263.3			(241.4	)
Discontinued operations
Income from discontinued operations		2.3			120.1			2.3			90.2			0.3			(118.4	)
Income tax benefit-discontinued operations		0.9			37.3			0.9			26.2			(0.6	)		(41.4	)

Total discontinued operations		1.4			82.8			1.4			64.0			0.9			(77.0	)

Income before cumulative effect of a chng in acct principle		62.5			95.2			117.7			127.9			264.2			(318.4	)
Cumulative effect of a change in accounting principle		0.0			0.0			0.0			0.0			0.0			0.0

Net income (loss)	$	62.5		$	95.2		$	117.7		$	127.9		$	264.2		$	(318.4	)


Average common shares outstanding (millions)		207.7			206.7			207.6			205.5			207.4			200.7

Earnings per average common share outstanding:
Earnings per share from continuing operations — basic		0.29			0.06			0.56			0.31			1.27			(1.20	)
Earnings per share from continuing operations — diluted		0.29			0.04			0.55			0.29			1.27			(1.20	)

Earnings per share — basic		0.30			0.46			0.57			0.62			1.27			(1.59	)
Earnings per share — diluted		0.30			0.44			0.56			0.60			1.27			(1.59	)

TECO ENERGY, Inc.

CONSOLIDATED BALANCE SHEETS (Unaudited)

(All significant intercompany transactions have been eliminated in the consolidated financial statements.)


(millions)	Jun-30-2006			Dec-31-2005
Assets
Current assets
Cash and cash equivalents	$	467.4		$	345.7
Restricted cash		37.2			37.6
Receivables		333.5			323.3
Inventories at average cost
Fuel		92.3			84.9
Materials and supplies		71.9			68.9
Current derivative asset		14.8			64.0
Income tax receivables		13.8			11.1
Prepayments and other current assets		29.3			40.4
Regulatory assets - current		261.4			296.3
Assets held for sale		0.0			0.0

Total current assets		1,321.6			1,272.2

Property, plant and equipment
Utility plant in service
Electric		4,955.6			4,892.3
Gas		855.7			839.5
Construction work in process		249.8			200.0
Other property		825.4			822.7

Property plant and equipment at original cost		6,886.5			6,754.5
Accumulated depreciation		(2,266.3	)		(2,187.6	)

Total property, plant and equipment (net)		4,620.2			4,566.9

Other assets
Deferred income taxes		728.4			735.7
Other investments		8.0			8.0
Regulatory assets		98.1			101.1
Investment in unconsolidated affiliates		301.4			297.1
Goodwill		59.4			59.4
Long-term derivative asset		0.4			4.9
Deferred charges and other assets		108.9			116.8
Assets held for sale		0.0			8.0

Total other assets		1,304.6			1,331.0

Total assets	$	7,246.4		$	7,170.1

Liabilities and capital
Current liabilities
Long-term debt due within one year
Recourse	$	5.9		$	5.9
Non-recourse		1.3			1.3
Notes payable		0.0			215.0
Accounts payable		293.8			354.7
Customer deposits		120.6			115.2
Current derivative liability		39.4			0.3
Interest accrued		54.7			50.0
Taxes accrued		60.8			34.9
Deferred tax liability		0.0			0.0
Regulatory liabilities - current		123.6			146.8
Liabilities associated with assets held for sale		0.0			1.8

Total current liabilities		700.1			925.9

Other liabilities
Deferred income taxes		0.0			0.0
Investment tax credit		15.9			17.3
Regulatory liabilities		554.3			543.1
Long-term derivative liability		0.7			0.0
Deferred credits and other liabilities		372.3			382.9
Long-term debt, less amount due within one year
Recourse		3,768.5			3,519.8
Non-recourse		10.4			11.7
Junior subordinated debt		177.7			177.7
Minority interest		0.0			0.0

Total other liabilities		4,899.8			4,652.5

Total Liabilities		5,599.9			5,578.4
Capital
Common equity		208.9			208.2
Paid in capital		1,453.1			1,527.0
Retained earnings		34.5			(83.1	)
Accumulated other comprehensive income		(50.0	)		(51.1	)

Common equity		1,646.5			1,601.0
Unearned compensation		0.0			(9.3	)

Total capital		1,646.5			1,591.7

Total liabilities and capital	$	7,246.4		$	7,170.1


Book Value Per Share	$	7.88		$	7.69

TECO ENERGY, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(All significant intercompany transactions have been eliminated in the consolidated financial statements.)


	Three Months Ended June 30,						Six Months Ended June 30,						Twelve Months Ended June 30,
(millions)	2006			2005			2006			2005			2006			2005
Cash flows from operating activities
Net income	$	62.5		$	95.2		$	117.7		$	127.9		$	264.2		$	(318.4	)

Adjustments to reconcile net income to net cash:
Depreciation		70.6			70.0			140.9			140.0			283.1			284.1
Deferred income taxes		26.4			38.6			48.1			50.0			108.9			(194.5	)
Investment tax credit, net		(0.6	)		(0.7	)		(1.3	)		(1.4	)		(2.6	)		(2.8	)
Allowance for funds used during construction		(0.6	)		0.0			(0.9	)		0.0			(0.9	)		0.0
Non-cash stock compensation		4.3			3.0			7.0			3.8			8.7			10.6
Gain on asset sales, pretax		(10.4	)		(148.5	)		(26.7	)		(181.1	)		(107.2	)		(192.4	)
Noncash debt extinguishment, pretax		0.0			17.2			0.0			17.2			2.7			17.2
Equity in earnings of unconsolidated affiliates		(13.5	)		(12.9	)		(3.6	)		(11.1	)		(28.4	)		(39.6	)
Minority interest		(19.0	)		(23.6	)		(40.9	)		(46.2	)		(81.8	)		(84.1	)
Asset impairment, pretax		0.0			0.0			0.0			0.0			3.2			715.7
Goodwill impairment and intangible asset impairment, pretax		0.0			0.0			0.0			0.0			0.0			16.6
Contingent arbitration reserve, pretax		0.0			0.0			0.0			0.0			0.0			(5.6	)
Deferred recovery clause		(11.1	)		(22.6	)		67.6			(19.6	)		(67.1	)		(20.6	)
Receivables, less allowance for uncollectibles		(10.5	)		(29.1	)		(13.4	)		(40.3	)		(29.7	)		14.9
Inventories		(14.9	)		(6.7	)		(10.3	)		(28.3	)		(20.1	)		1.0
Prepayments and other current assets		(8.6	)		1.3			10.5			4.5			(1.6	)		1.0
Taxes accrued		6.6			4.3			23.1			9.4			(3.7	)		(175.2	)
Interest accrued		(27.1	)		(28.9	)		4.7			20.7			1.4			65.7
Accounts payable		42.2			(9.0	)		(50.3	)		16.2			52.5			(9.5	)
Other		(6.8	)		9.4			6.6			(6.3	)		15.7			50.9

		89.5			(43.0	)		278.8			55.4			397.3			135.0


Cash flows from investing activities
Capital expenditures		(101.0	)		(79.9	)		(179.2	)		(142.3	)		(332.1	)		(291.6	)
Allowance for funds used during construction		0.6			0.0			0.9			0.0			0.9			0.0
Net proceeds from sale of assets		10.1			125.9			28.0			154.9			183.1			363.0
Cash paid on disposition of business		0.0			(31.8	)		0.0			(31.8	)		0.0			(31.8	)
Restricted cash		(0.1	)		3.7			0.3			28.0			19.9			3.0
Investment in unconsolidated affiliates		0.0			0.1			0.0			0.1			2.7			1.6
Other non-current investments		0.0			0.0			0.0			4.2			(0.1	)		16.1

		(90.4	)		18.0			(150.0	)		13.1			(125.6	)		60.3


Cash flows from financing activities
Dividends		(39.7	)		(39.4	)		(79.3	)		(78.7	)		(158.3	)		(152.4	)
Common stock		2.2			6.6			3.8			190.9			9.2			194.7
Proceeds from long-term debt		244.2			297.8			327.6			298.9			340.6			298.9
Repayment of long-term debt		0.0			(380.0	)		(87.2	)		(388.5	)		(192.7	)		(527.0	)
Minority interest		18.1			25.6			43.0			47.4			78.7			80.0
Early exchange of equity units		0.0			0.0			0.0			0.0			0.0			(17.7	)
Net increase (decrease) in short-term debt		(150.0	)		(10.0	)		(215.0	)		(45.0	)		(70.0	)		40.0
Equity contract adjustment payments		0.0			0.0			0.0			(2.0	)		0.0			(9.2	)

		74.8			(99.4	)		(7.1	)		23.0			7.5			(92.7	)


Net increase (decrease) in cash and cash equivalents		73.9			(124.4	)		121.7			91.5			279.2			102.6
Cash and cash equivalents at beginning of period		393.5			312.6			345.7			96.7			188.2			85.6

Cash and cash equivalents at end of period	$	467.4		$	188.2		$	467.4		$	188.2		$	467.4		$	188.2

TECO ENERGY, Inc.

SEGMENT INFORMATION (Unaudited)


(millions)		Tampa Electric		Peoples Gas ⁽⁷⁾		TECO Coal			TECO Transport			TECO Guatemala			TWG Merchant			Other & Eliminations			TECO Energy
*Three months ended Jun. 30,*
2006	Revenues - outsiders	$	532.5	$	137.4	$	144.7		$	46.1		$	1.7		$	—		$	0.2		$	862.6
	Sales to affiliates		0.6		—		—			31.1			—			—			(31.7	)		—

	Total revenues		533.1		137.4		144.7			77.2			1.7			—			(31.5	)		862.6
	Equity Earnings in Unconsolidated Affiliates		—		—		—			0.1			13.7			—			—			13.8
	Depreciation		46.7		9.1		9.0			5.5			0.2			—			0.1			70.6
	Restructuring costs		—		—		—			—			—			—			—			—
	Total interest charges ⁽¹⁾		26.9		3.9		2.4			1.4			3.7			—			31.7			70.0
	Allocated interest expense ⁽¹⁾		—		—		2.4			(0.3	)		3.6			—			(5.7	)		—
	Provision (Benefit) for income taxes		22.0		3.7		3.3			3.8			1.3			—			(6.8	)		27.3
	Net income (loss) from continuing operations	$	37.1	$	5.9	$	13.4		$	6.5		$	8.7		$	—		$	(10.5	)	$	61.1

2005	Revenues - outsiders	$	424.7	$	113.0	$	128.2		$	47.1		$	1.7		$	0.1		$	4.2		$	719.0
	Sales to affiliates		0.7		—		—			23.4			—			—			(24.1	)		—

	Total revenues		425.4		113.0		128.2			70.5			1.7			0.1			(19.9	)		719.0
	Equity Earnings in Unconsolidated Affiliates		—		—		—			(0.1	)		13.8			—			—			13.7
	Depreciation		46.6		8.6		8.9			5.4			0.1			0.2			0.1			69.9
	Restructuring costs		—		—		—			—			—			—			—			—
	Total interest charges ⁽¹⁾		23.8		3.8		3.2			1.2			3.6			4.4			36.4			76.4
	Allocated interest expense ⁽¹⁾		—		—		3.2			(0.2	)		3.6			4.4			(11.0	)		—
	Provision (Benefit) for income taxes		23.1		3.8		15.3			1.9			1.3			(4.8	)		(36.6	)		4.0
	Net income (loss) from continuing operations	$	38.8	$	6.0	$	28.4		$	5.3	⁽⁵⁾	$	7.9		$	(8.6	)	$	(65.4	)	$	12.4

*Six months ended Jun. 30,*
2006	Revenues - outsiders	$	988.8	$	323.7	$	284.8		$	97.8		$	3.8		$	—		$	0.1		$	1,699.0
	Sales to affiliates		1.2		—		—			54.7			—			—			(55.9	)		—

	Total revenues		990.0		323.7		284.8			152.5			3.8			—			(55.8	)		1,699.0
	Equity Earnings in Unconsolidated Affiliates		—		—		—			0.2			28.2			—			—			28.4
	Depreciation		93.1		18.2		18.2			11.0			0.4			—			—			140.9
	Restructuring costs		—		—		—			—			—			—			—			—
	Total interest charges ⁽¹⁾		53.3		7.8		5.0			2.6			7.4			—			62.9			139.0
	Allocated interest expense ⁽¹⁾		—		—		4.8			(0.5	)		7.2			—			(11.5	)		—
	Provision (Benefit) for income taxes		34.9		11.6		13.0			4.7			2.4			—			(16.6	)		50.0

	Net income (loss) from continuing operations	$	59.5	$	18.5	$	38.1		$	11.6	⁽⁵⁾	$	17.3		$	—		$	(28.7	)	$	116.3

2005	Revenues - outsiders	$	804.1	$	255.7	$	238.0		$	94.1		$	3.9		$	0.4		$	7.5		$	1,403.7
	Sales to affiliates		1.4		—		—			43.8			—			—			(45.2	)		—

	Total revenues		805.5		255.7		238.0			137.9			3.9			0.4			(37.7	)		1,403.7
	Equity Earnings in Unconsolidated Affiliates		—		—		—			—			28.9			—			—			28.9
	Depreciation		93.2		17.3		17.9			10.8			0.3			0.3			0.2			140.0
	Restructuring costs		—		—		—			—			—			—			—			—
	Total interest charges ⁽¹⁾		48.1		7.6		6.4			2.6			7.1			10.2			69.9			151.9
	Allocated interest expense ⁽¹⁾		—		—		6.3			(0.2	)		7.0			10.2			(23.3	)		—
	Provision (Benefit) for income taxes		36.5		11.8		34.4			4.2			0.9			(8.0	)		(48.0	)		31.8
	Net income (loss) from continuing operations	$	60.8	$	18.8	$	55.9		$	9.4		$	19.4		$	(14.3	)	$	(86.1	)	$	63.9

*Twelve months ended Jun. 30,*
2006	Revenues - outsiders	$	1,929.0	$	617.4	$	551.9		$	196.2		$	7.5		$	—		$	3.4		$	3,305.4
	Sales to affiliates		2.3		—		—			96.6			—			—			(98.9	)		—

	Total revenues		1,931.3		617.4		551.9			292.8			7.5			—			(95.5	)		3,305.4
	Equity Earnings in Unconsolidated Affiliates		—		—		—			(0.1	)		57.3			—			2.8			60.0
	Depreciation		187.0		35.9		37.1			21.5			0.8			0.4			0.4			283.1
	Restructuring costs		—		—		—			—			—			—			—			—
	Total interest charges ⁽¹⁾		103.5		15.4		11.9			5.0			16.2			0.2			123.7			275.9
	Allocated interest expense ⁽¹⁾		—		—		11.0			(0.9	)		14.4			—			(24.5	)		—
	Provision (Benefit) for income taxes		89.0		18.2		43.6			8.7			(0.4	)		(2.9	)		(36.1	)		120.1
	Net income (loss) from continuing operations	$	145.8	$	29.2	$	97.5		$	22.5	⁽⁵⁾	$	38.3		$	(0.3	)⁽⁴⁾	$	(69.7	)⁽²⁾	$	263.3

2005	Revenues - outsiders	$	1,689.0	$	449.3	$	404.2		$	187.3		$	8.4		$	4.4		$	15.5		$	2,758.1
	Sales to affiliates		3.3		—		—			81.8			—			—			(85.1	)		—

	Total revenues		1,692.3		449.3		404.2			269.1			8.4			4.4			(69.6	)		2,758.1
	Equity Earnings in Unconsolidated Affiliates		—		—		—			0.2			58.5			0.5			(0.2	)		59.0
	Depreciation		183.0		34.5		35.6			21.9			0.7			0.8			0.6			277.1
	Restructuring costs		—		0.7		—			—			—			0.4			—			1.1
	Total interest charges ⁽¹⁾		95.4		15.1		12.6			5.0			14.1			33.1			129.7			305.0
	Allocated interest expense ⁽¹⁾		—		—		12.4			(0.8	)		13.7			33.1			(59.1	)		(0.7	)
	Provision (Benefit) for income taxes		81.2		17.4		38.9			7.3			(7.9	)		(252.7	)		(92.5	)		(208.3	)
	Net income (loss) from continuing operations	$	141.0	$	27.9	$	84.2	⁽⁶⁾	$	16.5		$	30.3	⁽³⁾	$	(419.8	)⁽⁴⁾	$	(121.5	)⁽²⁾	$	(241.4	)

(1)

Segment net income is reported on a basis that includes internally allocated financing costs. Allocated interest is included in Total interest charges.

(2)

Results for the 12 months ended Jun. 30, 2006 and Jun. 30, 2005 include $1.7 million and $45.0 million, respectively, of after-tax debt extinguishment charges at TECO Parent. Also included in the 12 months ended Jun. 30, 2006 is the $8.1 million gain on the sale of McAdams taking place in the 2nd quarter of 2006.

(3)

TECO Guatemala’s net income for the 12 months ended Jun. 30, 2005 includes a $12.8 million after-tax charge for steam turbine impairments as well as $1.9 million for the reversal of tax expense related to cash repatriations.

(4)

TWG Merchant’s results for the 12 months ended Jun. 30, 2006 included a net $1.9 million benefit and the results for the 12 months ended Jun. 30, 2005 included net charges totaling $381.7 million, both related to the Dell and McAdams power stations. Note that in 2006, remaining results for TWG Merchant are included in Parent/other.

(5)

TECO Transport’s results include net storm (costs) benefits of: $0.7 million for Q2 2006, $(2.1) million for the 6 months ended Jun. 30, 2006 and $(1.0) million for the 12 months ended Jun. 30, 2006.

(6)

TECO Coal’s results for the 12 months ended Jun. 30, 2005 include a $7.0 million benefit related to synfuel tax credits that had been written-off in 2003’s fourth quarter.

(7)

Results for Peoples Gas in 2006 include the remaining operating Solutions companies.

TAMPA ELECTRIC COMPANY

ELECTRIC OPERATING STATISTICS (Unaudited)


	Operating Revenues*						Percent Change		Sales—Kilowatt-hours*		Percent Change
Three Months Ended June 30,	2006			2005			Percent Change		2006	2005	Percent Change
Residential	$	234,859		$	192,357		22.1		2,138,136	1,951,320	9.6
Commercial		151,746			126,147		20.3		1,601,984	1,519,622	5.4
Industrial — Phosphate		15,582			16,423		(5.1	)	236,938	303,186	(21.9	)
Industrial — Other		29,167			24,282		20.1		349,376	334,482	4.5
Other sales of electricity		40,384			34,155		18.2		415,691	398,118	4.4

		471,738			393,364		19.9		4,742,125	4,506,728	5.2
Deferred and other revenues		32,906			10,071		—		—	—	—
Sales for resale		17,834			13,085		36.3		209,163	204,119	2.5
Other operating revenue		9,208			8,885		3.6		—	—	—
SO2 Allowance Sales		1,405			—		—		—	—	—

	$	533,091		$	425,405		25.3		4,951,288	4,710,847	5.1

Average customers		651,755			633,040		3.0		—	—	—

Retail Output to Line									5,275,701	4,965,998	6.2


	Operating Revenues*						Percent Change		Sales—Kilowatt-hours*		Percent Change
Six Months Ended June 30,	2006			2005			Percent Change		2006	2005	Percent Change
Residential	$	439,471		$	369,782		18.8		3,982,239	3,738,584	6.5
Commercial		285,119			240,275		18.7		2,995,604	2,877,101	4.1
Industrial — Phosphate		28,940			33,058		(12.5	)	437,615	612,172	(28.5	)
Industrial — Other		55,430			46,575		19.0		662,051	644,001	2.8
Other sales of electricity		77,070			65,752		17.2		785,807	759,055	3.5

		886,030			755,442		17.3		8,863,316	8,630,913	2.7
Deferred and other revenues		4,315			6,923		(37.7	)	—	—	—
Sales for resale		38,319			24,536		56.2		470,343	377,548	24.6
Other operating revenue		19,133			18,533		3.2		—	—	—
SO2 Allowance Sales		42,168			—		—		—	—	—

	$	989,965		$	805,434		22.9		9,333,659	9,008,461	3.6

Average customers		650,278			631,362		3.0		—	—	—

Retail Output to Line									9,538,695	9,207,444	3.6


	Operating Revenues*						Percent Change		Sales—Kilowatt-hours*		Percent Change
Twelve Months Ended June 30,	2006			2005			Percent Change		2006	2005	Percent Change
Residential	$	907,789		$	810,841		12.0		8,802,116	8,223,424	7.0
Commercial		561,285			506,948		10.7		6,352,485	6,050,249	5.0
Industrial — Phosphate		59,153			66,379		(10.9	)	974,345	1,190,637	(18.2	)
Industrial — Other		105,173			95,188		10.5		1,346,685	1,305,446	3.2
Other sales of electricity		151,623			138,191		9.7		1,668,607	1,596,891	4.5

		1,785,023			1,617,547		10.4		19,144,238	18,366,647	4.2
Deferred and other revenues		(78,591	)		(10,416	)	—		—	—	—
Sales for resale		64,334			46,357		38.8		866,443	732,902	18.2
Other operating revenue		38,653			38,833		(0.5	)	—	—	—
SO2 Allowance Sales		121,927			—		—		—	—	—

	$	1,931,346		$	1,692,321		14.1		20,010,681	19,099,549	4.8

Average customers		645,205			626,534		3.0		—	—	—

Retail Output to Line									20,193,608	19,317,300	4.5

*	in thousands

PEOPLES GAS SYSTEM

GAS OPERATING STATISTICS (Unaudited)

Operating Revenues*

Percent
Change

Therms*

Percent
Change

Three Months Ended June 30,

2006

2005

2006

2005

By Customer Segment:

Residential

28,366

27,318

3.8

13,243

13,725

(3.5

)

Commercial

38,895

39,241

(0.9

)

88,592

92,912

(4.6

)

Industrial

2,517

2,549

(1.3

)

54,947

55,652

(1.3

)

Off System Sales

53,001

33,472

58.3

68,967

44,291

55.7

Power generation

3,813

2,612

46.0

114,090

56,214

—

Other revenues

9,312

7,817

19.1

—

135,904

113,009

20.3

339,839

262,794

29.3

By Sales Type:

System supply

104,669

84,633

23.7

97,890

76,933

27.2

Transportation

21,923

20,559

6.6

241,949

185,861

30.2

Other revenues

9,312

7,817

19.1

—

135,904

113,009

20.3

339,839

262,794

29.3

Average customers

328,254

319,257

2.8

—

Operating Revenues*

Percent
Change

Therms*

Percent
Change

Six Months Ended June 30,

2006

2005

2006

2005

By Customer Segment:

Residential

90,630

76,549

18.4

44,476

43,820

1.5

Commercial

94,970

91,063

4.3

198,163

208,355

(4.9

)

Industrial

5,407

5,284

2.3

112,787

111,603

1.1

Off System Sales

102,304

60,495

69.1

126,226

87,432

44.4

Power generation

6,637

5,600

18.5

180,726

120,145

50.4

Other revenues

20,797

16,736

24.3

—

320,745

255,727

25.4

662,378

571,355

15.9

By Sales Type:

System supply

253,541

194,301

30.5

207,610

177,127

17.2

Transportation

46,407

44,690

3.8

454,768

394,228

15.4

Other revenues

20,797

16,736

24.3

—

320,745

255,727

25.4

662,378

571,355

15.9

Average customers

328,166

318,123

3.2

—

Operating Revenues*

Percent
Change

Therms*

Percent
Change

Twelve Months Ended June 30,

2006

2005

2006

2005

By Customer Segment:

Residential

152,979

122,830

24.5

71,386

67,435

5.9

Commercial

177,740

156,945

13.2

370,096

376,897

(1.8

)

Industrial

10,991

9,786

12.3

209,216

211,305

(1.0

)

Off System Sales

218,466

117,030

86.7

225,387

184,690

22.0

Power generation

14,760

11,237

31.4

352,279

267,126

31.9

Other revenues

39,544

31,512

25.5

—

614,480

449,340

36.8

1,228,364

1,107,453

10.9

By Sales Type:

System supply

485,982

334,729

45.2

367,576

332,767

10.5

Transportation

88,954

83,099

7.0

860,788

774,686

11.1

Other revenues

39,544

31,512

25.5

—

614,480

449,340

36.8

1,228,364

1,107,453

10.9

Average customers

323,405

313,553

3.1

—

*	in thousands