Mr. Scott LaFleur reports

EMERA TO ACQUIRE TECO ENERGY IN US$10.4 BILLION TRANSACTION

Emera Inc. and Teco Energy Inc. have entered a definitive agreement for Emera to acquire Teco Energy, creating a North American energy leader with over $20-billion (U.S.) of assets and more than 2.4 million electric and gas customers. Upon closing, Teco Energy will become a wholly owned subsidiary of Emera.

Highlights:

• EPS (earnings per share) accretion expected in the first full year of operations (2017), growing to more than 10 per cent by the third full year (2019);
• Teco Energy shareholders will receive $27.55 (U.S.) per share in cash, a 48-per-cent premium to the unaffected closing share price of July 15, 2015;
• The transaction provides additional support to Emera's 8-per-cent dividend growth target through 2019 and positions Emera to extend the dividend growth target beyond 2019;
• Upon closing, Emera will have approximately $20-billion (U.S.) in assets, making it a top 20 North American regulated utility;
• The transaction's rate base multiple, excluding net operating tax losses, is 1.6 times;
• The acquisition of Teco Energy is an ideal strategic fit for Emera due to its business and generation mix and expanded U.S. presence in constructive regulatory jurisdictions; the acquisition provides Emera with a new platform in growth markets and further opportunities to supply customers with cleaner generation;
• Pro forma for the transaction, Emera expects to maintain a strong investment-grade credit profile with greater than 80 per cent in regulated earnings;
• Teco Energy, Tampa Electric, Peoples Gas and New Mexico Gas Co. will maintain existing corporate headquarters in Tampa and Albuquerque.

Under the terms of the all-cash deal, which has been unanimously approved by the board of directors of both companies, Teco Energy shareholders will receive $27.55 (U.S.) per common share, a 48-per-cent premium based on Teco Energy's unaffected closing stock price on July 15, 2015 (the last trading day prior to news reports regarding Teco Energy's strategic review), and 25 per cent above Teco Energy's unaffected 52-week high. This represents a total purchase price of approximately $10.4-billion (U.S.), including assumption of approximately $3.9-billion (U.S.) of debt.

The closing of the transaction, which is expected to occur by mid-2016, is subject to Teco Energy common shareholder approval and certain regulatory and government approvals, including approval by the New Mexico Public Regulation Commission, the Federal Energy Regulatory Commission and compliance with any applicable requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction of customary closing conditions.

Transforms Emera from regional to North American energy leader

The transaction creates a top 20 North American regulated utility with geographic diversity and significant growth potential. Based on pro forma financial information as at June 30, 2015, following the completion of the transaction, Emera's total assets will increase to approximately $20-billion (U.S.), with 56 per cent of those assets in Florida, 23 per cent in Canada, 10 per cent in New England, 6 per cent in New Mexico and 5 per cent in the Caribbean.

"Our patient approach and disciplined investment criteria have resulted in a pure-play regulated utility transaction that we expect to be significantly accretive for Emera's shareholders and one that advances our strategic objectives," said Chris Huskilson, president and chief executive officer of Emera. "We have found our ideal match in Teco Energy."

Teco Energy's president and chief executive officer, John Ramil, said: "Teco Energy's team members have worked hard to consistently generate strong financial and operating results from our regulated businesses and have positioned the company well for long-term earnings growth. We are proud that Emera has recognized the value of our business and that our shareholders will be rewarded for their confidence in our company. The Teco team looks forward to contributing to Emera's bright future and the opportunities for growth across the organization."

Commitments to Teco Energy's communities and customers

"The acquisition of Teco Energy is underpinned by a deep commitment to Teco's existing employees and the Florida and New Mexico customers and communities they serve," Mr. Huskilson said. "Emera recognizes that Teco Energy and its employees are a vital presence in Florida and New Mexico and will look to preserve that presence by further investing in Teco Energy's existing employee base and communities, as has been done in other Emera acquisitions."

Teco Energy, Tampa Electric and Peoples Gas headquarters will remain in Tampa, Fla., and New Mexico Gas Co. headquarters will remain in Albuquerque, N.M. As part of Emera's commitment to the customers and communities in which it operates, operating boards will be established in Florida and New Mexico with local representation on both boards.

Emera will work expeditiously with Teco Energy to engage the Florida regulators and to process the required New Mexico state regulatory application in order to close the transaction as promptly as possible, with closing expected by mid-2016. Emera has committed to comply with all of the conditions contained in the New Mexico Public Regulation Commission order approving Teco Energy's acquisition of New Mexico Gas Co. Emera has a history of successfully executing acquisitions in the United States and working constructively through the related regulatory processes at the U.S. state and federal levels.

Rates charged by Tampa Electric, Peoples Gas and New Mexico Gas Co. will remain unchanged, except as allowed under Tampa Electric's 2013 rate case settlement or as approved by the Florida Public Service Commission and the New Mexico Public Regulation Commission.

Transaction highlights

The acquisition of Teco Energy accelerates Emera's financial goals

The transaction is expected to be significantly accretive to Emera's earnings per common share, with accretion expected in the first full year of operations (2017), growing to more than 10 per cent by the third full year (2019). Further, it provides additional support to Emera's 8-per-cent dividend growth target through 2019 and, upon closing, positions Emera to extend the dividend growth target beyond 2019.

Emera's pro forma regulated earnings are projected to be greater than 80 per cent of its total earnings. The transaction further diversifies cash flows and, pro forma for the transaction, Emera expects to maintain a strong investment-grade credit profile.

Emera and Teco Energy operations are aligned

Emera and Teco Energy both have commitments to environmental leadership. Tampa Electric and Emera's Nova Scotia Power are both vertically integrated electric utilities on similar paths to reduce emissions and provide cleaner generation for their customers.

Teco Energy operates in growth economies

Teco Energy's operations are located in vibrant markets experiencing job growth and a strong housing market that are expected to contribute to some of the strongest customer growth in the United States. The operations are also concentrated in what Dominion Bond Rating Service describes as the "highly constructive regulatory jurisdiction" of Florida.

Teco Energy provides a new growth platform for Emera to apply its strategy, adding new geography, regulatory and business diversification.

Upon closing, the transaction expands Emera's geographic platform into Florida and New Mexico, adding two new regions beyond its existing U.S. base in the northeast United States. The transaction will also establish Emera in the regulated natural gas local distribution business, which shares many of the key competencies of a regulated electric utility, such as a safety culture, a customer service focus, asset management expertise and regulatory experience.

There are significant near-term capital and customer service investment opportunities. Taken together, the pro forma capital expenditure profile of the two companies includes approximately $6.4-billion in capital investments from 2016 to 2019.

Teco Energy's utility operations will remain focused on reliably, safely and cost-effectively providing energy and energy-related services at prices below national averages. Tampa Electric expects to invest more than $2-billion (U.S.) over the next five years on facilities and infrastructure to serve customers, including the completion of the Polk Power Station units 2 to 5 combined cycle conversion project. Peoples Gas expects to invest approximately $100-million (U.S.) annually to maintain and expand its system to serve its growing customer base and reliably provide service. New Mexico Gas Co. expects to invest approximately $60-million (U.S.) annually to support customer growth and improve reliability.

Teco Coal

Emera fully supports Teco's continuing efforts to divest Teco Coal and expects Teco Coal to be divested at or prior to transaction close.

Financing

Emera has a fully committed $6.5-billion (U.S.) bridge financing facility in place with JP Morgan Chase and Scotiabank. Permanent financing of the transaction is expected to be obtained by one or more placements of common equity, preferred equity and long-term debt, the timing of which is expected to be influenced by the regulatory approvals process and subject to prevailing market conditions.

Advisers

JP Morgan acted as lead financial adviser and Scotiabank acted as financial adviser to Emera. Legal advisers to Emera were Davis Polk & Wardwell LLP and Osler Hoskin & Harcourt LLP.

Morgan Stanley acted as the lead strategic and financial adviser and Moelis & Company acted as financial adviser to Teco Energy. Skadden Arps Slate Meagher & Flom LLP and Holland & Knight LLP acted as legal counsel.

Teleconference call

Emera will be hosting a teleconference Friday, Sept. 4, 2015, at 7 p.m. Atlantic Time (6 p.m. in Toronto/Montreal/New York, 5 p.m. in Winnipeg, 4 p.m. in Calgary and 3 p.m. in Vancouver) to discuss this transaction.

Analysts and other interested parties in North America wanting to participate in the call should dial 1-888-241-0551 at least 10 minutes prior to the start of the call. International participants wanting to participate should dial 647-427-3415. No passcode is required. The teleconference will be recorded. If you are unable to join the teleconference live, you can dial for playback toll-free at 1-855-859-2056 and international participants wanting to listen to the playback can dial 404-537-3406. The conference ID is 26383740 (available until midnight on Sept. 21, 2015).

Presentation slides for the conference call will be available and the teleconference will be webcast live at the Emera website and available for playback for one year.

Additional information and where to find it

The proposed acquisition will be submitted to shareholders of Teco Energy for their consideration. In connection with the acquisition, Teco Energy will file a proxy statement and other materials with the U.S. Securities and Exchange Commission. This press release is not a substitute for the proxy statement or any other document that Teco Energy may send to its shareholders in connection with the proposed transaction.

Teco Energy shareholders are advised to read the proxy statement for the proposed acquisition when it is filed, and any amendment or supplement thereto that may be filed, with the SEC, because they will contain important information about Teco Energy and the acquisition.

All such documents, when filed, are available free of charge at the SEC's website or upon request by contacting Teco Energy, investor relations, by telephone at 1-800-810-2032 or via e-mail at investorrelations@tecoenergy.com.

Teco Energy's filings with the SEC are also available on Teco Energy's website.

Participants in the solicitation

Emera and Teco Energy, their respective directors, executive officers, as well as certain other members of management and employees, may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Emera's directors and executive officers is available in its management information circular statement filed on March 5, 2015, in connection with its 2015 annual meeting of shareholders, and information regarding Teco Energy's directors and executive officers is available in its proxy statement filed with the SEC on March 11, 2015, in connection with its 2015 annual meeting of shareholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by securityholdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC when they become available.

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