1
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-50808
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED FEBRUARY 20, 2001
7,500,000 Shares
TECO ENERGY LOGO
Common Stock
------------------
Our common stock is listed on The New York Stock Exchange under the trading
symbol "TE." The last reported sale price on March 6, 2001 was $28.88 per share.
The underwriters have a 30-day option to purchase a maximum of 1,125,000
additional shares to cover over-allotments of shares.
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS TECO ENERGY
------------ -------------- ------------
Per Share............................................ $27.75 $0.832 $26.918
Total................................................ $208,125,000 $6,240,000 $201,885,000
Delivery of the shares of common stock will be made on or about March 12,
2001.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the prospectus to which it relates is truthful or
complete. Any representation to the contrary is a criminal offense.
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO. UBS WARBURG LLC
The date of this prospectus supplement is March 6, 2001.
2
------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
ABOUT THIS PROSPECTUS SUPPLEMENT...... S-1
SUMMARY............................... S-2
RECENT DEVELOPMENTS................... S-3
THE OFFERING.......................... S-5
USE OF PROCEEDS....................... S-6
CAPITALIZATION........................ S-7
SELECTED HISTORICAL FINANCIAL
INFORMATION......................... S-8
PAGE
----
DIVIDENDS AND PRICE RANGE............. S-9
UNDERWRITING.......................... S-10
NOTICE TO CANADIAN RESIDENTS.......... S-13
LEGAL MATTERS......................... S-14
EXPERTS............................... S-14
PROSPECTUS
PAGE
----
RISK FACTORS.......................... 1
FORWARD LOOKING STATEMENTS............ 1
TECO ENERGY........................... 2
RATIOS OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS....... 2
DESCRIPTION OF DEBT SECURITIES........ 3
DESCRIPTION OF PREFERRED STOCK........ 7
DESCRIPTION OF COMMON STOCK........... 9
ANTI-TAKEOVER EFFECTS OF OUR ARTICLES
OF INCORPORATION AND BYLAWS, FLORIDA
LAW AND OUR RIGHTS PLAN............. 9
PAGE
----
DESCRIPTION OF WARRANTS, AND OTHER
PURCHASE RIGHTS..................... 11
USE OF PROCEEDS....................... 13
PLAN OF DISTRIBUTION.................. 13
LEGAL MATTERS......................... 14
EXPERTS............................... 14
WHERE YOU CAN FIND MORE INFORMATION... 14
------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first is this prospectus supplement,
which describes the specific terms of this common stock offering. The second
part, the accompanying prospectus, gives more general information, some of which
may not apply to this offering.
If the description of the offering varies between this prospectus
supplement and the accompanying prospectus, you should rely on the information
in this prospectus supplement.
This prospectus supplement contains forward looking statements. For a
description of these statements and a discussion of the factors that may cause
our actual results to differ materially from these statements, see "Forward
Looking Statements" in the accompanying prospectus.
S-1
3
SUMMARY
This summary highlights information appearing elsewhere or incorporated by
reference in this prospectus supplement and the prospectus. This summary is not
complete and does not contain all of the information that you should consider
before purchasing the common stock. Unless the context requires otherwise,
references to "we," "us" or "our" refer collectively to TECO Energy and its
subsidiaries.
TECO ENERGY
Overview. We are an electric and gas utility holding company, exempt from
registration under the Public Utility Holding Company Act of 1935, with
important unregulated activities. We are in the process of transforming TECO
Energy from a predominantly regulated energy company to one that is
predominantly operating in deregulated competitive markets. Our unregulated
businesses include independent power generation and distribution, marine
transportation, coal mining, coalbed methane gas production, the marketing of
natural gas, energy services and engineering and, indirectly, the sale of
propane gas. The following describes our principal operations.
- Tampa Electric provides electric energy and related services to over
560,000 residential, commercial and industrial customers in its
high-growth West Central Florida service area covering approximately
2,000 square miles, including the City of Tampa and the surrounding
areas. Tampa Electric has approximately 3,800 megawatts of generating
capacity in operation, and is constructing additional capacity to serve
its growing customer base. It is in the process of repowering an older
coal-fired station to become a combined-cycle natural gas-fired facility,
which is expected to add 658 megawatts of generating capacity by 2004,
significantly reduce emissions and enhance fuel diversity.
- Peoples Gas System, acquired in 1997, is Florida's leading provider of
natural gas. With a presence in most of Florida's major metropolitan
areas, it serves over 256,000 residential and commercial customers. In
early 2000, it completed a major expansion to Southwest Florida to market
natural gas to a previously unserved high growth area of the state. The
company is continuing its expansion into other areas of Florida
previously unserved by natural gas by extending pipelines in Northeastern
and Southeastern Florida.
- TECO Power Services develops, builds, owns and operates electric
generation facilities and electric distribution and transmission
facilities primarily in the United States and Central America. It has
interests in or agreements to develop or to acquire more than 7,000 net
megawatts of generating capacity in operation, under construction or in
the late stages of development. The operating generating units include
the Hardee Power Station in Florida, the San Jose and Alborada generating
plants in Guatemala, the Hamakua plant in Hawaii, the Commonwealth
Chesapeake Station in Virginia on the Delmarva peninsula, wind and hydro
power facilities in Central and South America, a gas and coal-fired
facility in Eastern Europe and the Frontera Power Station in Texas, which
it has agreed to acquire. It owns two combined-cycle plants in the early
stages of construction in Mississippi and Arkansas, has an economic
interest related to two combined-cycle plants under construction in Texas
and is in a joint venture to build, own and operate two combined-cycle
plants in Arizona and in Arkansas. It also has entered into a memorandum
of understanding regarding the development of an integrated gasification
combined-cycle generation (IGCC) facility at the CITGO refinery in Lake
Charles, Louisiana using Texaco gasification technology.
- TECO Transport is a marine transportation business that operates a
U.S.-flag fleet of oceangoing vessels, a river barge fleet and a dry bulk
commodity transfer and storage deep water terminal. Its business is
primarily moving commodities via domestic inland rivers, the Gulf of
Mexico and the Caribbean, and to worldwide markets, including South
America, Asia, Africa and Europe.
- TECO Coal owns and operates several low-sulfur coal mines and handling
facilities in Kentucky and Tennessee. It mines and ships more than eight
million tons of coal annually for sale to domestic and European steel
companies, as well as domestic utilities and industrial customers. In
addition, it owns
S-2
4
and operates two synthetic fuel production facilities that qualify under
existing rules for Section 29 tax credits on non-conventional fuel
production through 2007.
- TECO Coalbed Methane extracts naturally occurring methane gas from seams
in the coal beds of Alabama's Black Warrior Basin. It has approximately
735 producing wells, all of which qualify under existing rules for
Section 29 tax credits on non-conventional fuel production through 2002.
It had proven reserves estimated at 182 billion cubic feet at December
31, 2000.
- TECO Solutions was formed to support TECO Energy's strategy of offering
customers a comprehensive and competitive package of energy services and
products with its Florida operations focus. Operating companies include
TECO BGA (formerly Bosek, Gibson and Associates) (BGA), BCH Mechanical
(BCH), TECO Gas Services and TECO Properties. BGA and BCH together can
deliver customized energy-efficient design and new construction,
operations and maintenance projects for commercial and public sector
clients. In addition, TECO Gas Services, our gas marketing company,
provides gas management and marketing services for large municipal,
industrial, commercial and power generation customers.
Strategy. Our business growth strategy is focused on the following three
areas:
- Capitalize on a growing Florida economy and the expected shift to a more
competitive energy market in Florida with our electric and gas operations
and energy services business. Tampa Electric believes that it has the
competitive generating capacity to serve increased demand and expand its
market share in a more competitive energy market in Florida.
- Increase TECO Power Services' portfolio of quality projects, particularly
in the high growth areas of the United States market, to become a leading
generation company positioned to take advantage of competitive energy
markets, including in Florida.
- Expand our marine transportation business through improved asset
utilization and asset additions.
RECENT DEVELOPMENTS
INVESTMENTS IN PANDA ENERGY PROJECTS
On September 25, 2000, TECO Power Services announced a $93 million
investment with an affiliate of Panda Energy International relating to two Texas
projects totaling 2,000 gross megawatts. These projects are planned to be
brought online in phases; the first phase began commercial operation in December
2000, and all the remaining capacity is anticipated to be in-service in the
third quarter of 2001.
On November 14, 2000, TECO Power Services announced a joint venture with
Panda Energy International to build, own and operate two merchant power plants
with an expected total capital cost of $2.4 billion. TECO Power Services' equity
investment in these projects is expected to be approximately $1.1 billion. The
plant sites, which would have a combined capacity of nearly 4,600 megawatts, are
located in El Dorado, Arkansas and Gila Bend, Arizona. The first phase of the El
Dorado project is expected to begin commercial operation in the fall of 2002,
with commercial operation of the entire facility expected in spring of 2003. The
Gila Bend project is expected to begin commercial operation in the spring of
2003, with all phases expected to be completed by the summer of the same year.
TECO Power Services has also committed, under certain circumstances, to purchase
turbine generator sets at an aggregate purchase price of approximately $176
million, which might be used in connection with future projects with Panda
Energy or otherwise.
ACQUISITION OF GENPOWER PROJECTS
On October 30, 2000, TECO Power Services announced its acquisition of
GenPower's interests in two independent power projects being developed by
GenPower in Arkansas and Mississippi. The combined capacity of the two plants,
which are expected to begin operation during the fourth quarter of 2002, is
nearly 1,200 megawatts. TECO Power Services' equity investment in these projects
is expected to be about $330 million and the total capital costs of the projects
are expected to be $730 million.
S-3
5
DEVELOPMENT RIGHTS FOR CITGO PROJECT
On November 16, 2000, TECO Power Services announced the signing of a
memorandum of understanding with CITGO Petroleum Corporation providing for the
exclusive right to develop a 670-net megawatt IGCC power plant adjacent to
CITGO's Lake Charles Manufacturing Complex in Louisiana using Texaco proprietary
gasification technology. Texaco Power and Gasification Global, Inc. will have
the right to participate in the development of the project. The plant is not
expected to begin commercial operation before January 2005. TECO Power Services'
equity investment in this project is expected to be about $130 million.
ACQUISITION OF FRONTERA POWER STATION
On February 8, 2001, TECO Power Services announced that it had agreed to
purchase American Electric Power's (AEP) 500 megawatt Frontera Power Station,
located near McAllen, Texas, approximately two miles from the Mexican border.
AEP is being required by the Federal Energy Regulatory Commission to divest its
ownership of this facility as part of its merger with Central and South West
Corporation, which was completed last summer. TECO Power Services' equity
investment in the project is expected to be about $120 million, with total
capital investment for the acquisition being $265 million.
ISSUANCE OF TRUST PREFERRED SECURITIES
In December 2000, TECO Capital Trust I issued 8,000,000 trust preferred
securities with an aggregate liquidation amount of $200 million, which represent
a corresponding amount of company preferred securities of TECO Funding Company
I, LLC. Holders of the trust preferred securities are entitled to quarterly
distributions at an annual rate of 8.50% of the liquidation amount of the trust
preferred securities. In connection with the issuance of the trust preferred
securities, TECO Energy issued junior subordinated notes to TECO Funding Company
I, LLC. Our payments on these notes will be the only source of funds for the
distributions to the trust preferred security holders. We have guaranteed these
payments and if we do not make them, or choose to defer them, we will be
restricted from paying dividends or making distributions to the holders of our
common stock.
RATINGS DOWNGRADE
As previously reported, in 2000 Fitch Investor Services, Inc. and Standard
& Poor's Ratings Services lowered the ratings on the debt securities of TECO
Energy and Tampa Electric, and Moody's Investors Service, Inc. placed the
ratings of these securities on review for potential downgrade. We expect Moody's
to complete its review in the near future.
S-4
6
THE OFFERING
Common stock offered................................. 7,500,000 shares
Common stock to be outstanding
after the offering................................. 134,039,242 shares (135,164,242 shares if
the over-allotment option is exercised in
full)
Use of proceeds...................................... We will use the net proceeds from the sale
of common stock to repay short-term debt and
for general corporate purposes. See "Use of
Proceeds" on page S-6.
Current indicated annual dividend
rate per share..................................... $1.34(1)
New York Stock Exchange symbol....................... TE
---------------
(1) Based upon dividends paid from the second quarter of 2000 through the first
quarter of 2001. Future dividends will be declared and paid at the
discretion of the Board of Directors and will depend on our future earnings,
financial condition and other factors.
S-5
7
USE OF PROCEEDS
Our net proceeds from the sale of the 7,500,000 shares of our common stock
in this offering (after deducting underwriting discounts and commissions and
estimated offering expenses) will be approximately $201.6 million ($231.9
million if the underwriters' over-allotment option in this offering is exercised
in full). We intend to use the net proceeds from this offering to reduce the
commercial paper balances of TECO Finance, a subsidiary of TECO Energy, which as
of February 28, 2001 had interest rates ranging from 5.3% to 6.5% and various
remaining terms until maturity of 37 days or less. We may also use the proceeds
for general corporate purposes, which may include investment in subsidiaries,
working capital, capital expenditures and other business opportunities. Pending
such uses, we will invest the net proceeds in short-term, interest bearing,
investment grade securities or obligations of, or guaranteed by, the United
States or its agencies.
S-6
8
CAPITALIZATION
The following table summarizes the historical capitalization of TECO Energy
and its subsidiaries at December 31, 2000, and its capitalization as adjusted to
reflect the issuance and sale of 7,500,000 shares of common stock (assuming no
exercise of the underwriters' over-allotment option) contemplated by this
prospectus supplement based on an offering price of $27.75 and our application
of the net proceeds in the manner described in "Use of Proceeds." The long-term
debt shown does not include $237.3 million of long-term debt due within one
year.
DECEMBER 31, 2000
----------------------
ACTUAL PROFORMA
AMOUNTS AS ADJUSTED
-------- -----------
($ IN MILLIONS)
Cash and cash equivalents................................... $ 99.6 $ 99.6
======== ========
Short-term debt............................................. 1,208.9 1,007.3
Long-term debt.............................................. 1,374.6 1,374.6
Redeemable preferred securities............................. 200.0 200.0
Common equity............................................... 1,559.5 1,761.1
-------- --------
Total capitalization.............................. $4,343.0 $4,343.0
======== ========
S-7
9
SELECTED HISTORICAL FINANCIAL INFORMATION
The table below presents selected historical consolidated income statement
data, cash flow information and balance sheet data of TECO Energy and its
subsidiaries. We derived this information from the audited financial statements
for the years ended December 31, 1997 through December 31, 2000. This
information is only a summary. You should read it in connection with our
historical financial statements and related notes and the "Management's
Discussion and Analysis of Financial Condition and Results of Operations," which
are incorporated by reference in this document. See "Where You Can Find More
Information" on page 14 of the accompanying prospectus.
YEAR ENDED DECEMBER 31,
-----------------------------------------
2000 1999 1998 1997
-------- -------- -------- --------
($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
INCOME STATEMENT DATA
Operating revenues...................................... $2,295.1 $1,983.0 $1,955.7 $1,860.8
Operating income........................................ 413.6 423.6 401.3 412.7
Net income from continuing operations (excluding
non-recurring charges)................................ 250.9 220.5 223.8 216.8
Earnings per share (basic) from continuing operations
(excluding non-recurring charges)..................... $ 1.99 $ 1.68 $ 1.70 $ 1.66
Dividends paid per share................................ $ 1.330 $ 1.285 $ 1.225 $ 1.165
CASH FLOW INFORMATION
EBITDA(1)............................................... $ 681.8 $ 655.8 $ 634.3 $ 644.4
Cash interest, net of amounts capitalized............... 166.7 116.9 99.3 115.5
Capital expenditures.................................... 688.4 426.1 296.1 212.6
Cash flow from operations............................... 381.2 381.3 495.4 350.8
AS OF DECEMBER 31,
-----------------------------------------
2000 1999 1998 1997
-------- -------- -------- --------
($ IN MILLIONS)
BALANCE SHEET DATA
Total assets............................................ $5,676.2 $4,690.1 $4,179.3 $3,960.4
Capitalization:
Short-term debt....................................... 1,208.9 813.7 319.0 447.5
Long-term debt(2)..................................... 1,374.6 1,207.8 1,279.6 1,080.2
Redeemable preferred securities....................... 200.0 -- -- --
Common shareholders equity excluding the effects of
unearned compensation.............................. 1,559.5 1,472.5 1,569.2 1,512.2
Total capitalization.................................... 4,343.0 3,494.0 3,167.8 3,039.9
---------------
(1) EBITDA is defined as operating income before depreciation and amortization
(excludes other income and income taxes). EBITDA is not a measure of
performance under GAAP. While EBITDA should not be considered as a
substitute for net income, cash flows from operating activities and other
income or cash flow statement data prepared in accordance with GAAP, or as a
measure of profitability or liquidity, management understands that EBITDA is
customarily used as a measure in evaluating companies.
(2) Long-term debt excludes amounts due within one year of $237.3 million,
$155.8 million, $36.0 million and $12.7 million for 2000, 1999, 1998 and
1997, respectively.
S-8
10
DIVIDENDS AND PRICE RANGE
The table below sets forth, for the periods indicated, the high, low and
closing sales prices of our common stock on The New York Stock Exchange.
YEAR HIGH LOW CLOSE
---- ------ ------ ------
1997........................................................ $28.19 $22.75 $28.13
1998........................................................ 30.62 24.75 28.19
1999........................................................ 28.00 18.37 18.56
2000........................................................ 33.19 17.25 32.37
BY QUARTERS HIGH LOW CLOSE
----------- ------ ------ ------
1999 First Quarter......................................... $28.00 $19.87 $19.87
Second Quarter............................................ 23.81 19.75 22.75
Third Quarter............................................. 23.12 19.62 21.12
Fourth Quarter............................................ 22.50 18.37 18.56
2000 First Quarter......................................... $20.62 $17.25 $19.44
Second Quarter............................................ 23.12 19.19 20.06
Third Quarter............................................. 28.75 20.19 28.75
Fourth Quarter............................................ 33.19 26.56 32.37
The last sale price of the common stock on March 6, 2001, as reported on
The New York Stock Exchange, was $28.88 per share. As of March 5, 2001, we had
approximately 126,539,242 shares of common stock outstanding and 24,249 holders
of record.
The following table sets forth the dividends paid from 1997 through the
first quarter of 2001. Future dividends will be declared and paid at the
discretion of the Board of Directors and will depend on our future earnings,
financial condition and other factors.
COMMON DIVIDENDS
YEAR PER SHARE
---- ----------------
1997........................................................ $1.165
1998........................................................ 1.225
1999........................................................ 1.285
2000........................................................ 1.330
COMMON DIVIDENDS
BY QUARTERS PER SHARE
----------- ----------------
1999 First Quarter......................................... $0.310
Second Quarter............................................ 0.325
Third Quarter............................................. 0.325
Fourth Quarter............................................ 0.325
2000 First Quarter......................................... $0.325
Second Quarter............................................ 0.335
Third Quarter............................................. 0.335
Fourth Quarter............................................ 0.335
2001 First Quarter......................................... $0.335
S-9
11
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting
agreement dated March 6, 2001, we have agreed to sell to the underwriters named
below, for whom Credit Suisse First Boston Corporation is acting as
representative, the following respective numbers of shares of common stock:
NUMBER OF
UNDERWRITER SHARES
----------- ----------
Credit Suisse First Boston Corporation...................... 2,657,600
Goldman, Sachs & Co......................................... 1,328,800
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... 1,328,800
UBS Warburg LLC............................................. 1,328,800
Robert W. Baird & Co. Incorporated.......................... 167,500
A.G. Edwards & Sons, Inc.................................... 167,500
Friedman, Billings, Ramsey & Co., Inc....................... 167,500
Edward D. Jones & Co., L.P.................................. 167,500
J.J.B. Hilliard, W.L. Lyons, Inc............................ 31,000
Invemed Associates LLC...................................... 31,000
Legg Mason Wood Walker, Incorporated........................ 31,000
McDonald Investments Inc.................................... 31,000
Raymond James & Associates, Inc............................. 31,000
Sanders Morris Harris Inc. ................................. 31,000
----------
Total............................................. 7,500,000
==========
The underwriting agreement provides that the underwriters are obligated to
purchase all the shares of common stock in the offering if any are purchased,
other than those shares covered by the over-allotment option described below.
The underwriting agreement also provides that if an underwriter defaults, the
purchase commitments of non-defaulting underwriters may be increased or the
offering may be terminated.
We have granted to the underwriters a 30-day option to purchase on a pro
rata basis up to 1,125,000 additional shares at the public offering price less
the underwriting discounts and commissions. The option may be exercised only to
cover any over-allotments of common stock.
The underwriters propose to offer the shares of common stock initially at
the public offering price on the cover page of this prospectus supplement and to
selling group members at that price less a concession of $0.50 per share. The
underwriters and selling group members may allow a discount of $0.10 per share
on sales to other broker/dealers. After the initial public offering, the public
offering price and concession and discount to broker/dealers may be changed by
the representative.
The following table summarizes the compensation and estimated expenses we
will pay.
PER SHARE TOTAL
------------------------------- -------------------------------
WITHOUT WITH WITHOUT WITH
OVER-ALLOTMENT OVER-ALLOTMENT OVER-ALLOTMENT OVER-ALLOTMENT
-------------- -------------- -------------- --------------
Underwriting Discounts and Commissions
paid by us.............................. $0.832 $0.832 $6,240,000 $7,176,000
Expenses payable by us.................... $0.035 $0.030 $ 260,000 $ 260,000
We have agreed that we will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Securities and
Exchange Commission a registration statement under the Securities
S-10
12
Act of 1933 relating to, any shares of our common stock or securities
convertible into or exchangeable or exercisable for any shares of our common
stock, or publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of Credit Suisse First
Boston Corporation for a period of 60 days after the date of this prospectus
supplement, except issuances of equity-based awards pursuant to our director or
employee incentive plans, issuances pursuant to the exercise of outstanding
stock options and issuances under our Dividend Reinvestment and Common Stock
Purchase Plan.
Our executive officers and directors have agreed that they will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or indirectly,
any shares of our common stock or securities convertible into or exchangeable or
exercisable for any shares of our common stock, enter into a transaction which
would have the same effect, or enter into any swap, hedge or other arrangement
that transfers, in whole or in part, any of the economic consequences of
ownership of our common stock, whether any of these transactions are to be
settled by delivery of our common stock or other securities, in cash or
otherwise, or publicly disclose the intention to make any offer, sale, pledge or
disposition, or to enter into any transaction, swap, hedge or other arrangement,
without, in each case, the prior written consent of Credit Suisse First Boston
Corporation for a period of 60 days after the date of this prospectus.
We have agreed to indemnify the underwriters against liabilities under the
Securities Act, or contribute to payments which the underwriters may be required
to make in that respect.
The shares of common stock have been approved for listing on The New York
Stock Exchange, subject to official notice of issuance.
In the ordinary course of business, certain of the underwriters and their
affiliates have provided and continue to provide financial advisory, investment
banking and general financing and banking services for us and our affiliates for
customary fees.
In connection with the offering, the underwriters may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Securities Exchange Act
of 1934.
- Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.
- Over-allotment involves sales by the underwriters of shares in excess of
the number of shares the underwriters are obligated to purchase, which
creates a syndicate short position. The short position may be either a
covered short position or a naked short position. In a covered short
position, the number of shares over-allotted by the underwriters is not
greater than the number of shares which they may purchase in the
over-allotment option. In a naked short position, the number of shares
involved is greater than the number of shares in the over-allotment
option. The underwriters may close out any short position by either
exercising their over-allotment option and/or purchasing shares in the
open market.
- Syndicate covering transactions involve purchases of the common stock in
the open market after the distribution has been completed in order to
cover syndicate short positions. In determining the source of shares to
close out the short position, the underwriters will consider, among other
things, the price of shares available for purchase in the open market as
compared to the price at which they may purchase shares through the
over-allotment option. If the underwriters sell more shares than could be
covered by the over-allotment option, a naked short position, the
position can only be closed out by buying shares in the open market. A
naked short position is more likely to be created if the underwriters are
concerned that there could be downward pressure on the price of the
shares in the open market after pricing that could adversely affect
investors who purchase in the offering.
- Penalty bids permit the representative to reclaim a selling concession
from a syndicate member when the common stock originally sold by the
syndicate member is purchased in a stabilizing or syndicate covering
transaction to cover syndicate short positions.
S-11
13
These stabilizing transactions, syndicate covering transactions and penalty bids
may have the effect of raising or maintaining the market price of the common
stock or preventing or retarding a decline in the market price of our common
stock. As a result, the price of the common stock may be higher than the price
that might otherwise exist in the open market. These transactions may be
effected on The New York Stock Exchange or otherwise and, if commenced, may be
discontinued at any time.
A prospectus and prospectus supplement in electronic format may be made
available on the websites maintained by one or more of the underwriters
participating in this offering. The representative may agree to allocate a
number of shares to underwriters for sale to their online brokerage account
holders. Internet distributions will be allocated by the underwriters that will
make internet distributions on the same basis as other allocations. Merrill,
Lynch, Pierce, Fenner & Smith Incorporated uses electronic systems in connection
with offers and sales and distribution of certain securities and may use such
systems in this offering.
S-12
14
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the common stock in Canada is being made only on a
private placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of common stock are made. Any resale of the common stock in Canada must
be made under applicable securities laws which will vary depending on the
relevant jurisdiction, and which may require resales to be made under available
statutory exemptions or under a discretionary exemption granted by the
applicable Canadian securities regulatory authority. Purchasers are advised to
seek legal advice prior to any resale of the common stock.
REPRESENTATIONS OF PURCHASERS
By purchasing common stock in Canada and accepting a purchase confirmation
a purchaser is representing to us and the dealer from whom the purchase
confirmation is received that:
- the purchaser is entitled under applicable provincial securities laws to
purchase the common stock without the benefit of a prospectus qualified
under those securities laws;
- where required by law, that the purchaser is purchasing as principal and
not as agent; and
- the purchaser has reviewed the text above under "Resale Restrictions."
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer, and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of common stock to whom the Securities Act (British Columbia)
applies is advised that the purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
common stock acquired by the purchaser pursuant to this offering. The report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from us. Only one report must
be filed for common stock acquired on the same date and under the same
prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of common stock should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the common
stock in their particular circumstances and about the eligibility of the common
stock for investment by the purchaser under relevant Canadian legislation.
S-13
15
LEGAL MATTERS
Palmer & Dodge LLP, Boston, Massachusetts will pass upon the validity of
the securities offered hereby. Certain matters will be passed upon for the
underwriters by Ropes & Gray, Boston, Massachusetts.
EXPERTS
The consolidated financial statements incorporated in this prospectus
supplement by reference to the Current Report on Form 8-K/A of TECO Energy dated
February 20, 2001 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent certified public accountants, given on
the authority of said firm as experts in auditing and accounting.
S-14
16
TECO ENERGY LOGO