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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended June 30, 2002

OR

For the transition period from              to             

Commission File Number 1-5007

TAMPA ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)

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 or 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 o

Number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date (July 31, 2002):

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 22

PART I. FINANCIAL INFORMATION

            In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments that are of a recurring nature and necessary to present fairly the financial position of Tampa Electric Company as of June 30, 2002 and 2001, and the results of operations and cash flows for the three-month and six-month periods ended June 30, 2002 and 2001. The results of operations for the three-month and six-month periods ended June 30, 2002 are not necessarily indicative of the entire fiscal year ending Dec. 31, 2002. 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, 2001 and to the notes on pages 9 through 13 of this report.

TAMPA ELECTRIC COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(in millions)

The accompanying notes are an integral part of the condensed consolidated financial statements.

TAMPA ELECTRIC COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS – continued
Unaudited
(in millions)

The accompanying notes are an integral part of the condensed consolidated financial statements.

TAMPA ELECTRIC COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(in millions)

The accompanying notes are an integral part of the condensed consolidated financial statements.

TAMPA ELECTRIC COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(in millions)

The accompanying notes are an integral part of the condensed consolidated financial statements.

TAMPA ELECTRIC COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(in millions)

The accompanying notes are an integral part of the condensed consolidated financial statements.

TAMPA ELECTRIC COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited
(in millions)

The accompanying notes are an integral part of the condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A.     Summary of Significant Accounting Policies

            Tampa Electric Company (the “Company”) is comprised of the Electric division, generally referred to as Tampa Electric and the Natural Gas division, which does business as Peoples Gas System, generally referred to as Peoples Gas System (PGS).

             Revenue Recognition : The Company recognizes revenues in accordance with the Securities and Exchange Commissions Staff Accounting Bulletin (SAB) 101, Revenue Recognition in Financial Statements . The criteria outlined in SAB 101 are that a) there is persuasive evidence that an arrangement exists; b) delivery has occurred or services have been rendered; c) the fee is fixed and determinable; and d) collectibility is reasonably assured. The Company recognizes revenues on a gross basis when earned for the physical delivery of products or services, and the risks and rewards of ownership have transferred to the buyer. Revenues for any financial or hedge transactions that do not result in physical delivery are reported on a net basis.

            The Company’s retail business and the prices charged to customers are regulated by the Florida Public Service Commission (FPSC). Tampa Electric’s wholesale business is regulated by the Federal Energy Regulatory Commission (FERC). As a result, the Company qualifies for the application of Financial Accounting Standard (FAS) 71, Accounting for the Effects of Certain types of Regulation . See Note D for a discussion of the applicability of FAS 71 to the Company.

             Accounting for Excise Taxes, Franchise Fees and Gross Receipts: Tampa Electric and PGS expense immaterial excise taxes when incurred. Tampa Electric and PGS are allowed to recover certain costs incurred from customers through prices approved by the regulatory process. The amounts included in customers’ bills for franchise fees and gross receipt taxes are included as revenues on the Condensed Consolidated Income Statement. These amounts totaled $18.7 million and $17.8 million, for the three months ended June 30, 2002 and 2001, respectively, and $35.9 million and $37.5 million, for the six months ended June 30, 2002 and 2001, respectively. Franchise fees and gross receipt taxes payable by the Tampa Electric and PGS are included as an expense on the Condensed Consolidated Statement of Income in Taxes, other than income, and equaled the revenues collected.

             Planned Major Maintenance: The Company accounts for planned maintenance projects by expensing the costs as incurred. Planned major maintenance projects that do not increase the overall life or value of the related assets are expensed. When the major maintenance materially increases the life or value of the underlying asset, the cost is capitalized. While normal maintenance outages covering various areas of Tampa Electric’s plants generally occur on at least a yearly basis, major overhauls occur less frequently. Concurrent with a planned major maintenance outage, the cost of adding or replacing retirement units-of-property is capitalized in conformity with FPSC and FERC regulations.

             Principles of Consolidation and Reclassifications: Tampa Electric Company is a wholly-owned subsidiary of TECO Energy, Inc. Certain reclassifications have been made to prior period amounts to conform with the current period presentations. These reclassifications did not affect total net income, total assets, or net cash flows.

B.     Derivatives and Hedging

            From time to time, the Company enters into futures, forwards, swaps and option contracts to limit the exposure to price fluctuations for the physical purchases and sales of natural gas in the course of normal operations at Tampa Electric and PGS, and to limit the exposure to interest rate fluctuations on debt issuances. The Company only uses derivatives to reduce normal operating and market risks, not for speculative purposes.

            FAS 133, Accounting for Derivative Instruments and Hedging , requires companies 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 the fair value of those instruments as either components of other comprehensive income (OCI) or in net income, depending on the designation of those instruments.

            The changes in fair value that are recorded in OCI are not recognized in current net income. As the underlying hedged transaction matures or physical commodity is delivered, the deferred gain or loss on the related hedging instrument must be reclassified from OCI to earnings. For hedge transactions, the amount reclassified from OCI to earnings is offset in net income by the amount paid or received on the underlying physical transaction.

            At June 30, 2002, the Company had derivative liabilities totaling $0.2 million. There were no amounts in OCI related to derivatives designated as cash flow hedges at June 30, 2001. Amounts recorded in OCI reflect the value of derivative instruments designated as hedges, based on market prices as of the balance sheet date. These amounts are expected to fluctuate with movements in market prices and may or may not be realized as a loss upon reclassification from OCI.

            As of June 30, 2002, Tampa Electric had transactions in place to hedge commodity price risk that qualify for cash flow hedge accounting treatment under FAS 133. During the three months ended June 30, 2002, the Company reclassified net pretax losses of $0.1 million to earnings for cash flow hedges. There were no reclassifications for the six months ended June 30, 2002 or 2001. Amounts reclassified from OCI were related to cash flow hedges of physical purchases of natural gas. For these types of hedge relationships, the loss on the derivative, reclassified from OCI to earnings, is offset by the reduced expense arising from lower prices paid for spot purchases of natural gas.

C.     Comprehensive Income

            Statement of Financial Accounting Standards (FAS) No. 130, Reporting Comprehensive Income , requires that comprehensive income, which includes net income as well as certain changes in assets and liabilities recorded in common equity, be reported in the financial statements. For the six months ended June 30, 2002 OCI reflected the $0.1 million adjustment for cash flow hedge losses included that were reclassified to net income. There were no components of OCI for the three months ended June 30, 2002, or in the three or six months ended June 30, 2001.

D.     Regulatory Assets and Liabilities

            Tampa Electric and PGS maintain their accounts in accordance with recognized policies prescribed or permitted by the FPSC. In addition, Tampa Electric maintains its accounts in accordance with recognized policies prescribed or permitted by the FERC. These policies conform with generally accepted accounting principles in all material respects.

            The Company applies the accounting treatment permitted by FAS 71, Accounting for the Effects of Certain Types of Regulation. Areas of applicability include: deferral of revenues under approved regulatory agreements; revenue recognition resulting from cost recovery clauses that provide for monthly billing charges to reflect increases or decreases in fuel; purchased power, conservation and environmental costs; and deferral of costs as regulatory assets when cost recovery is ordered over a period longer than a fiscal year, to the period that the regulatory agency recognizes them. Details of the regulatory assets and liabilities as of June 30, 2002 and Dec. 31, 2001 are presented in the following table:

             ______________

E.     Purchased Power

            Tampa Electric purchases power on a regular basis primarily to meet the needs of its retail customers. For the three months and six months ended June 30, 2002, Tampa Electric purchased $63.5 million, and $102.7 million, respectively. Purchased power for the same periods last year were $75.1 million, and $129.7 million, respectively.

F.     Commitments and Contingencies

            The Company has made certain commitments in connection with its continuing construction program. Total construction expenditures during 2002 are estimated to be $608.2 million for Tampa Electric and $62.4 million for PGS.

            The 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 $20 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.

G.     Contribution by Operating Division

             ______________

H.     Long-Term Debt and Other Financings

            In June 2002, the Hillsborough County Industrial Development Authority (HCIDA) issued $147.1 million of HCIDA Pollution Control Revenue Refunding Bonds (Tampa Electric Company Project) Series 2002 for the benefit of the Company. The bonds were issued to refund three existing HCIDA Pollution Control Revenue Bonds in July and August 2002. The Company is responsible for repayment of the interest and principal associated with the issuance of the 2002 refunding bonds. The average rate on the new bonds is 5.33% compared to an average coupon rate of 7.64% on the refunded bonds. Restricted cash of $146.3 million held by the trustee from the proceeds of the 2002 refunding bonds is reflected as a financing activity in the Condensed Consolidated Statements of Cash Flows and was applied to payment of the refunded bonds in July and August 2002.

I.     New Accounting Pronouncements

             FAS 141 and FAS 142: Effective Jan. 1, 2002, the Company adopted Financial Accounting Standards Board FAS 141, Business Combinations , and FAS 142, Goodwill and Other Intangible Assets . FAS 141 requires all business combinations initiated after June 30, 2001, to be accounted for using the purchase method of accounting. With the adoption of FAS 142, goodwill is no longer subject to amortization. Rather, goodwill is subject to an annual assessment for impairment by applying a fair-value-based test. Under the new rules, an acquired intangible asset should be separately recognized if the benefit of the intangible asset is obtained through contractual or other legal rights, or if the intangible asset can be sold, transferred, licensed, rented, or exchanged, regardless of the acquirer’s intent to do so.

These intangible assets are required