EX-99.FS.78 4 w53452ex99-fs_78.txt CONECTIV'S PRO FORMA CONSOLIDATED BALANCE SHEET 1 Exhibit FS-7 CONECTIV AND SUBSIDIARIES ACTUAL AND PRO FORMA CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2001 (DOLLARS IN THOUSANDS) (UNAUDITED)
PRO FORMA ACTUAL ADJUSTMENTS PRO FORMA ---------- ----------- ---------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 350,041 $1,700,000(1) $2,050,041 Accounts receivable, net of allowances -- of $39,529 964,954 964,954 Inventories, at average cost 111,334 111,334 Deferred energy supply costs 26,048 26,048 Prepayments 58,258 58,258 Deferred income taxes, net -- -- ---------- ---------- ---------- 1,510,635 1,700,000 3,210,635 ---------- ---------- ---------- INVESTMENTS Investment in leveraged leases 51,089 51,089 Funds held by trustee 298,187 298,187 Other investments 69,106 69,106 ---------- ---------- ---------- 418,382 418,382 ---------- ---------- ---------- PROPERTY, PLANT AND EQUIPMENT Electric generation 910,744 910,744 Electric transmission and distribution 2,761,449 2,761,449 Gas transmission and distribution 285,341 285,341 Other electric and gas facilities 410,020 410,020 Telecommunications, thermal systems, and other property, plant, and equipment 190,981 190,981 ---------- ---------- ---------- 4,558,535 4,558,535 Less: Accumulated depreciation 1,853,175 1,853,175 ---------- ---------- ---------- Net plant in service 2,705,360 2,705,360 Construction work-in-progress 458,261 458,261 Leased nuclear fuel, at amortized cost 22,412 22,412 Goodwill, net 335,536 335,536 ---------- ---------- ---------- 3,521,569 3,521,569 ---------- ---------- ---------- DEFERRED CHARGES AND OTHER ASSETS Recoverable stranded costs, net 966,929 966,929 Deferred recoverable income taxes 75,308 75,308 Deferred energy supply costs 25,039 25,039 Deferred debt refinancing costs 19,373 19,373 Deferred other postretirement benefit costs 28,732 28,732 Prepaid pension costs 82,015 82,015 Unamortized debt expense 28,410 28,410 License fees 21,268 21,268 Other 75,941 75,941 ---------- ---------- ---------- 1,323,015 1,323,015 ---------- ---------- ---------- TOTAL ASSETS $6,773,601 $1,700,000 $8,473,601 ========== ========== ==========
See accompanying description of pro forma adjustments. -1- 2 Exhibit FS-7 CONECTIV AND SUBSIDIARIES ACTUAL AND PRO FORMA CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2001 (DOLLARS IN THOUSANDS) (UNAUDITED)
PRO FORMA ACTUAL ADJUSTMENTS PRO FORMA ----------- ----------- ----------- CAPITALIZATION AND LIABILITIES CURRENT LIABILITIES Short-term debt $ 782,922 $ 782,922 Long-term debt due within one year 216,040 216,040 Variable rate demand bonds 158,430 158,430 Accounts payable 573,191 573,191 Taxes accrued 151,631 151,631 Interest accrued 45,748 45,748 Dividends payable 23,891 23,891 Deferred energy supply costs -- -- Current capital lease obligation 15,600 15,600 Above-market purchased energy contracts and other electric restructuring liabilities 23,361 23,361 Deferred income taxes, net 8,491 8,491 Other 119,161 119,161 ----------- ----------- ----------- 2,118,466 2,118,466 ----------- ----------- ----------- DEFERRED CREDITS AND OTHER LIABILITIES Other postretirement benefits obligation 91,746 91,746 Deferred income taxes, net 735,750 735,750 Deferred investment tax credits 56,465 56,465 Regulatory liability for New Jersey income tax benefit 49,262 49,262 Above-market purchased energy contracts and other electric restructuring liabilities 91,467 91,467 Deferred gain on termination of purchased energy contract -- -- Derivative instruments 99,978 99,978 Other 60,952 60,952 ----------- ----------- ----------- 1,185,620 1,185,620 ----------- ----------- ----------- CAPITALIZATION Common stock: $0.01 per share par value; 150,000,000 shares authorized; shares outstanding - - 82,967,179 actual and pro forma 830 830 Class A common stock: $0.01 per share par value; 10,000,000 shares authorized; shares outstanding - - 5,742,315 actual and pro forma 57 57 Additional paid-in capital - - common stock 1,027,817 1,027,817 Additional paid-in capital - - Class A common stock 93,738 93,738 Retained earnings / (Accumulated deficit ) 178,488 178,488 Treasury shares, at cost: 130,604 shares in 2000 actual and pro forma -- -- Unearned compensation (2,428) (2,428) Accumulated other comprehensive income (55,662) (55,662) ----------- ----------- ----------- Total common stockholders' equity 1,242,840 1,242,840 Preferred stock of subsidiaries: Not subject to mandatory redemption 95,933 95,933 Subject to mandatory redemption 177,450 177,450 Long-term debt 1,953,292 1,700,000(1) 3,653,292 ----------- ----------- ----------- 3,469,515 1,700,000 5,169,515 ----------- ----------- ----------- Commitments and Contingencies -- -- ----------- ----------- ----------- TOTAL CAPITALIZATION AND LIABILITIES $ 6,773,601 $ 1,700,000 $ 8,473,601 =========== =========== ===========
See accompanying description of pro forma adjustments. -2- 3 Exhibit FS-8 CONECTIV AND SUBSIDIARIES ACTUAL AND PRO FORMA CONSOLIDATED STATEMENTS OF INCOME FOR THE TWELVE MONTHS ENDED JUNE 30, 2001 (DOLLARS IN THOUSANDS) (UNAUDITED)
PRO FORMA ACTUAL ADJUSTMENTS PRO FORMA ----------- ----------- ----------- OPERATING REVENUES Electric $ 3,310,467 $ 3,310,467 Gain on sales of electric generating plants 297,140 297,140 Gas 1,955,817 1,955,817 Other services 534,242 534,242 ----------- ----------- ----------- 6,097,666 6,097,666 ----------- ----------- ----------- OPERATING EXPENSES Electric fuel and purchased energy and capacity 2,027,525 2,027,525 Gas purchased 1,881,565 1,881,565 Other services' cost of sales 457,740 457,740 Special charges -- -- Gain on sale of interest in nuclear plants (16,612) (16,612) Operation and maintenance 513,193 513,193 Depreciation and amortization 248,696 248,696 Taxes other than income taxes 76,947 76,947 ----------- ----------- ----------- 5,189,054 5,189,054 ----------- ----------- ----------- OPERATING INCOME 908,612 908,612 ----------- ----------- ----------- OTHER INCOME 72,275 79,900(2) 152,175 ----------- ----------- ----------- INTEREST EXPENSE Interest charges 216,528 113,050(3) 329,578 Allowance for borrowed funds used during construction and capitalized interest (16,449) (16,449) ----------- ----------- ----------- 200,079 113,050 313,129 ----------- ----------- ----------- PREFERRED STOCK DIVIDEND REQUIREMENTS OF SUBSIDIARIES 20,427 20,427 ----------- ----------- ----------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 760,381 (33,150) 727,231 INCOME TAXES 319,637 (13,260)(4) 306,377 ----------- ----------- ----------- INCOME FROM CONTINUING OPERATIONS 440,744 (19,890) 420,854 DISCONTINUED TELECOMMUNICATION OPERATIONS LOSS FROM OPERATIONS, NET OF INCOME TAXES (23,885) (23,885) LOSS FROM DISPOSAL, NET OF INCOME TAXES (118,788) (118,788) ----------- ----------- ----------- NET INCOME $ 298,071 $ (19,890) $ 278,181 =========== =========== =========== EARNINGS (LOSS) APPLICABLE TO COMMON STOCK Common stock Continuing Operations $ 429,159 $ (19,890)(5) $ 409,269 Discontinued telecommunication operations Loss from operations (23,885) (23,885) Loss from disposal (118,788) (118,788) Class A common stock 11,585 11,585 ----------- ----------- ----------- $ 298,071 $ (19,890) $ 278,181 =========== =========== =========== COMMON STOCK AVERAGE SHARES OUTSTANDING (000) Common stock 82,702 82,702 Class A common stock 5,742 5,742 EARNINGS (LOSS) PER AVERAGE SHARE--BASIC AND DILUTED Common stock Continuing Operations $ 5.19 $ (0.24) $ 4.95 Discontinued telecommunication operations Loss from operations (0.29) (0.29) Loss from disposal (1.44) (1.44) Class A common stock 2.02 2.02 DIVIDENDS DECLARED PER SHARE Common stock $ 0.88 $ 0.88 Class A common stock $ 2.65 $ 2.65
See accompanying description of pro forma adjustments. -3- 4 Exhibit FS-7 & FS-8 Notes PRO FORMA ADJUSTMENTS
($000's) ---------- (1) Cash proceeds were assumed to be received from long-term debt issued at 6.65%, as a result of securitization of stranded costs, including stranded costs that are expected to result from buy-outs or buy-downs of purchased power contracts in addition to those which had occurred through June 30, 2001. The cash proceeds were assumed to be temporarily invested and earn a return of 4.7%. $1,700,000 ---------- (2) Other income increased due to the 4.7% return assumed to be earned on the temporarily invested proceeds from the issuance of $1,700,000 of long-term debt. $ 79,900 ---------- (3) Interest expense increased due to the $1,700,000 of long-term debt which was assumed to be issued at 6.65%. $ 113,050 ---------- (4) Represents the tax benefit, estimated to be 40%, from the decrease in pre-tax income due to the additional interest expense, net of the income on the invested proceeds. (5) For purposes of this pro forma, the change in earnings was assumed to impact only earnings applicable to common stock and not affect earnings applicable to Class A common stock.
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