Employee Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Amount Recognized in Balance Sheet

The amounts recognized in TEC’s Consolidated Balance Sheets for pension and other postretirement benefit obligations and plan assets at December 31 were as follows:

TEC	Pension Benefits						Other Benefits
Amounts recognized in balance sheet
(millions)	2016			2015			2016			2015
Accrued benefit costs and other current liabilities	$	(0.7	)	$	(0.6	)	$	(9.5	)	$	(9.2	)
Deferred credits and other liabilities		(80.0	)		(69.3	)		(138.8	)		(142.3	)
	$	(80.7	)	$	(69.9	)	$	(148.3	)	$	(151.5	)

Schedule of Postretirement Benefit Amounts Recognized in Accumulated Other Comprehensive Income, Pretax and Regulatory Assets

The following table provides a detail of the unrecognized gains and losses and prior service credits and costs.

TEC	Pension Benefits				Other Benefits
Amounts recognized in regulatory assets
(millions)	2016		2015		2016			2015
Net actuarial loss (gain)	$	236.1	$	208.2	$	50.5		$	47.2
Prior service cost (credit)		0.7		0.0		(15.1	)		(17.0	)
Amount recognized	$	236.8	$	208.2	$	35.4		$	30.2

Benefit Obligations [Member]

Schedule of Assumptions Used to Determine Benefit

Assumptions used to determine benefit obligations at December 31:

	Pension Benefits						Other Benefits
	2016			2015			2016			2015
Discount rate		4.11	%		4.688	%		4.28	%		4.667	%
Rate of compensation increase-weighted average		2.57	%		3.87	%		2.48	%		2.50	%
Healthcare cost trend rate
Immediate rate	n/a			n/a				6.83	%		7.05	%
Ultimate rate	n/a			n/a				4.50	%		4.50	%
Year rate reaches ultimate	n/a			n/a			2038			2038

Schedule of One-Percentage-Point Change in Assumed Health Care Cost

A one-percentage-point change in assumed health care cost trend rates would have the following effect on TEC’s benefit obligation:

(millions)		1% Increase				1 % Decrease
Effect on PBO		$	4.9			$	(4.2	)

Net Periodic Benefit Cost [Member]

Schedule of Assumptions Used to Determine Benefit

Assumptions used to determine net periodic benefit cost for years ended December 31:

	Pension Benefits									Other Benefits
	2016			2015			2014 ⁽¹⁾			2016			2015			2014
Discount rate		4.688	%		4.258	%	5.118%/4.277%/4.331%			4.667%/3.85%				4.206	%		5.096	%
Expected long-term return on plan assets		7.00	%		7.00	%	7.25%/7.00%/7.00%			N/A			N/A			N/A
Rate of compensation increase		2.59	%		3.87	%		3.73	%		2.50	%		3.86	%		3.71	%
Healthcare cost trend rate
Initial rate	n/a			n/a			n/a				7.05	%		7.00	%		7.25	%
Ultimate rate	n/a			n/a			n/a				4.50	%		4.50	%		4.50	%
Year rate reaches ultimate	n/a			n/a			n/a			2038			2025			2025

(1)	TECO Energy performed a valuation as of January 1, 2014. TECO Energy remeasured its Retirement Plan on September 2, 2014 for the acquisition of NMGC and on October 31, 2014 for the expected curtailment of TECO Coal, resulting in the respective updated discount rates and EROAs.

Effect on Expenses [Member]

Schedule of One-Percentage-Point Change in Assumed Health Care Cost

A one-percentage-point change in assumed health care cost trend rates would have the following effect on TEC’s expense:

(millions)		1% Increase				1% Decrease
Effect on net periodic benefit cost		$	0.2			$	(0.2	)

TECO Energy [Member]

Schedule of Change in Plan Assets

Change in plan assets
Fair value of plan assets at beginning of year	$	625.4		$	648.0		$	0.0		$	0.0
Actual return on plan assets		55.3			(25.5	)		0.0			0.0
Employer contributions		37.4			55.0			(2.6	)		(2.1	)
Employer direct benefit payments		2.9			0.9			13.9			13.4
Plan participants’ contributions		0.0			0.0			2.6			2.1
Plan settlement		(2.1	)		0.0			0.0			0.0
Benefits paid		(68.7	)		(53.0	)		(13.9	)		(13.4	)
Direct benefit payments		(0.8	)		0.0			0.0			0.0
Fair value of plan assets at end of year ⁽¹⁾	$	649.4		$	625.4		$	0.0		$	0.0

(1)	The MRV of plan assets is used as the basis for calculating the EROA component of periodic pension expense. MRV reflects the fair value of plan assets adjusted for experience gains and losses (i.e. the differences between actual investment returns and expected returns) spread over five years.

(2)	Represent amounts for TECO Energy’s Florida-based other postretirement benefit plan.

Schedule of Net Periodic Benefit Cost

TECO Energy	Pension Benefits									Other Benefits ⁽¹⁾
	2016			2015			2014			2016			2015			2014
(millions)
Service cost	$	18.8		$	20.9		$	18.3		$	1.8		$	1.9		$	2.4
Interest cost		30.8			30.3			32.0			7.4			7.0			10.4
Expected return on plan assets		(45.8	)		(43.3	)		(41.8	)		0.0			0.0			0.0
Amortization, settlement, or curtailment of:
Actuarial loss		16.4			15.1			13.5			0.2			0.0			0.2
Prior service (benefit) cost		0.3			(0.2	)		(0.4	)		(2.4	)		(2.4	)		(0.2	)
Curtailment loss (gain)		1.3			0.0			3.9			0.0			0.0			(0.2	)
Special termination benefit		0.0			0.0			0.2			0.0			0.0			0.0
Settlement loss		0.6			0.0			0.0			0.0			0.0			0.0
Net periodic benefit cost	$	22.4		$	22.8		$	25.7		$	7.0		$	6.5		$	12.6

1.	Represent amounts for TECO Energy’s Florida-based other postretirement benefit plan

Schedule of Amounts Recognized in OCI and Regulatory Assets

New prior service cost	$	1.3		$	0.0		$	0.0		$	0.0		$	0.0	$	(23.2	)
Net loss (gain) arising during the year		46.8			74.5			44.1			5.0			0.4		(10.1	)
Amounts recognized as component of net periodic benefit cost:
Amortization or curtailment recognition of prior service (benefit) cost		(0.3	)		0.2		0.4				2.4			2.5		0.3
Amortization or settlement of actuarial gain (loss)		(17.1	)		(15.1	)		(13.5	)		(0.2	)		0.0		(0.2	)
Total recognized in OCI and regulatory assets	$	30.7		$	59.6		$	31.0		$	7.2		$	2.9	$	(33.2	)
Total recognized in net periodic benefit cost, OCI and regulatory assets	$	53.1		$	82.4		$	56.7		$	14.2		$	9.4	$	(20.6	)

(1)	Represent amounts for TECO Energy’s Florida-based other postretirement benefit plan.

Schedule of Pension Plan Assets

TECO Energy’s strategy is to hire proven managers and allocate assets to reflect a mix of investment styles, emphasize preservation of principal to minimize the impact of declining markets, and stay fully invested except for cash to meet benefit payment obligations and plan expenses.

TECO Energy	2016 Target Allocation			Actual Allocation, End of Year
Asset Category				2016			2015
Equity securities	52%-58%				56	%		53	%
Fixed income securities	42%-48%				44	%		47	%
Total		100	%		100	%		100	%

Schedule of Fair Value Hierarchy Plan's Investments

The following table sets forth by level within the fair value hierarchy the plan’s investments as of December 31, 2016 and 2015.

Pension Plan Investments

TECO Energy	At Fair Value as of December 31, 2016
(millions)
	Level 1			Level 2			Level 3		NAV ⁽¹⁾		Total
Cash	$	2.1		$	0.0		$	0.0	$	0.0	$	2.1
Accounts receivable		27.4			0.0			0.0		0.0		27.4
Accounts payable		(58.9	)		0.0			0.0		0.0		(58.9	)
Cash collateral		1.0			0.0			0.0		0.0		1.0
Short-term investment funds (STIFs)		11.6			0.0			0.0		0.0		11.6
Common stocks		44.0			0.0			0.0		0.0		44.0
Real estate investment trusts (REITs)		3.4			0.0			0.0		0.0		3.4
Mutual funds		181.1			0.0			0.0		0.0		181.1
Municipal bonds		0.0			2.6			0.0		0.0		2.6
Government bonds		0.0			32.2			0.0		0.0		32.2
Corporate bonds		0.0			39.2			0.0		0.0		39.2
Asset backed securities (ABS)		0.0			0.3			0.0		0.0		0.3
Mortgage-backed securities (MBS)		0.0			8.4			0.0		0.0		8.4
Collateralized mortgage obligations (CMOs)		0.0			1.3			0.0		0.0		1.3
Swaps		0.0			1.0			0.0		0.0		1.0
Purchase options (swaptions)		0.0			1.7			0.0		0.0		1.7
Written options (swaptions)		0.0			(2.0	)		0.0		0.0		(2.0	)
Miscellaneous (open position)		0.0			0.1			0.0		0.0		0.1
Investments not utilizing the practical expedient		211.7			84.8			0.0		0.0		296.5
Mutual fund ⁽¹⁾		0.0			0.0			0.0		82.7		82.7
Common and collective trusts ⁽¹⁾		0.0			0.0			0.0		270.2		270.2
Total investments	$	211.7		$	84.8			0.0	$	352.9	$	649.4

(1)

In accordance with accounting standards, certain investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts in this table are to permit reconciliation of the fair value hierarchy to amounts presented in the Consolidated Balance Sheet.

TECO Energy	At Fair Value as of December 31, 2015
(millions)
	Level 1				Level 2			Level 3		NAV⁽¹⁾			Total
Cash	$	1.9			$	0.0		$	0.0	$	0.0		$	1.9
Accounts receivable		14.3				0.0			0.0		0.0			14.3
Accounts payable		(27.2	)			0.0			0.0		0.0			(27.2	)
Money markets		0.0				0.2			0.0		0.0			0.2
Discounted notes		0.0				0.7			0.0		0.0			0.7
STIFs		12.4		⁽²⁾		0.0			0.0		0.0			12.4
Common stocks		90.9				0.0			0.0		0.0			90.9
ADRs		5.7				0.0			0.0		0.0			5.7
REITs		4.8				0.0			0.0		0.0			4.8
Mutual funds		175.6		⁽²⁾		0.0			0.0		0.0			175.6
Municipal bonds		0.0				5.0			0.0		0.0			5.0
Government bonds		0.0				56.2			0.0		0.0			56.2
Corporate bonds		0.0				32.2			0.0		0.0			32.2
ABS		0.0				0.3			0.0		0.0			0.3
MBS, net short sales		0.0				8.7			0.0		0.0			8.7
CMOs		0.0				1.5			0.0		0.0			1.5
Purchased options (swaptions)		0.0				1.1			0.0		0.0			1.1
Miscellaneous		0.0				0.1			0.0		0.0			0.1
Long futures		0.0				(0.9	)		0.0		0.0			(0.9	)
Written options (swaptions)		0.0				(1.0	)		0.0		0.0			(1.0	)
Investments not utilizing the practical expedient		278.4				104.1			0.0		0.0			382.5
Common and collective trusts ⁽¹⁾		0.0				0.0			0.0		171.6	⁽²⁾		171.6
Mutual fund ⁽¹⁾		0.0				0.0			0.0		71.3			71.3
Total investments	$	278.4			$	104.1		$	0.0	$	242.9		$	625.4

The following list details the pricing inputs and methodologies used to value the investments in the pension plan:

•

Cash collateral is valued at cash posted due to its short-term nature.

•

The STIF is valued at net asset value (NAV). The fund is an open-end investment, resulting in a readily-determinable fair value. Additionally, shares may be redeemed any business day at the NAV calculated after the order is accepted. The NAV is validated with purchases and sales at NAV. These factors make the STIF a level 1 asset.

•

The primary pricing inputs in determining the fair value of the Common stocks and REITs are closing quoted prices in active markets.

•

The primary pricing inputs in determining the level 1 mutual funds are the mutual funds’ NAVs. The funds are registered open-ended mutual funds and the NAVs are validated with purchases and sales at NAV. Since the fair values are determined and published, they are considered readily-determinable fair values and therefore Level 1 assets.

•

The primary pricing inputs in determining the fair value of Municipal bonds are benchmark yields, historical spreads, sector curves, rating updates, and prepayment schedules. The primary pricing inputs in determining the fair value of Government bonds are the U.S. treasury curve, CPI, and broker quotes, if available. The primary pricing inputs in determining the fair value of Corporate bonds are the U.S. treasury curve, base spreads, YTM, and benchmark quotes. ABS and CMOs are priced using to-be-announced (TBA) prices, treasury curves, swap curves, cash flow information, and bids and offers as inputs. MBS are priced using TBA prices, treasury curves, average lives, spreads, and cash flow information.

•

Swaps are valued using benchmark yields, swap curves, and cash flow analyses.

•

Options are valued using the bid-ask spread and the last price.

•

The primary pricing input in determining the fair value of the mutual fund utilizing the practical expedient is its NAV. It is an unregistered open-ended mutual fund. The fund holds primarily corporate bonds, debt securities and other similar instruments issued by U.S. and non-U.S. public- or private-sector entities. The fund may purchase or sell securities on a when-issued basis. These transactions are made conditionally because a security has not yet been issued in the market, although it is authorized. A commitment is made regarding these transactions to purchase or sell securities for a predetermined price or yield, with payment and delivery taking place beyond the customary settlement period. Since this mutual fund is a closed-end mutual fund and the prices are not published to an external source, it uses NAV as a practical expedient.

•

The common collective trusts are private funds valued at NAV. The NAVs are calculated based on bid prices of the underlying securities. Since the prices are not published to external sources, NAV is used as a practical expedient. Certain funds invest primarily in equity securities of domestic and foreign issuers while others invest in long duration U.S. investment-grade fixed income assets and seeks to increase return through active management of interest rate and credit risks. The funds honor subscription and redemption activity regularly.

•

Discounted notes are valued at amortized cost.

•

Treasury bills are valued using benchmark yields, reported trades, broker dealer quotes, and benchmark securities.

•

Futures are valued using futures data, cash rate data, swap rates, and cash flow analyses.

Schedule of Benefit Payments

Expected Benefit Payments

TECO Energy			Other
(including projected service and net of employee contributions)	Pension		Postretirement
	Benefits		Benefits
(millions)
2017	$	78.3	$	11.0
2018		51.8		11.2
2019		55.6		11.5
2020		56.1		11.6
2021		58.7		11.7
2022-2026		312.4		58.9

TECO Energy [Member] | Other Postretirement Benefits Florida-Based Plan [Member]

Schedule of Change in Benefit Obligation

TECO Energy	Pension Benefits						Other Benefits ⁽²⁾
Obligations and Funded Status
(millions)	2016			2015			2016			2015
Change in benefit obligation
Net benefit obligation at beginning of year	$	732.9		$	728.9		$	172.3		$	174.3
Service cost		18.8			20.9			1.8			1.9
Interest cost		30.8			30.3			7.4			7.0
Plan participants’ contributions		0.0			0.0			2.6			2.1
Plan amendments		1.2			0.0			0.0			0.0
Plan curtailment		1.3			0.0			0.0			0.0
Plan settlement		(2.1	)		0.0			0.0			0.0
Benefits paid		(69.5	)		(53.0	)		(13.9	)		(13.4	)
Actuarial loss (gain)		56.3			5.8			5.0			0.4
Net benefit obligation at end of year	$	769.7		$	732.9		$	175.2		$	172.3

1.	Represent amounts for TECO Energy’s Florida-based other postretirement benefit plan

Schedule of Funded status

At December 31, the aggregate financial position for TECO Energy pension plans and Florida-based other postretirement plans with benefit obligations in excess of plan assets was as follows:

TECO Energy	Pension Benefits						Other Benefits ⁽¹⁾
Funded Status
(millions)	2016			2015			2016			2015
Benefit obligation (PBO/APBO)	$	769.7		$	732.9		$	175.2		$	172.3
Less: Fair value of plan assets		649.4			625.4			0.0			0.0
Funded status at end of year	$	(120.3	)	$	(107.5	)	$	(175.2	)	$	(172.3	)

(1)	Represent amounts for TECO Energy’s Florida-based other postretirement benefit plan.