-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I72QSYuYvd9q4FO0B+sry+VQcyYu2N2nDAgSCfpAn5mWjIQhm/vvAI5U82FaImQK 1HVDPI1yCCPTZHxJhxKkoQ== 0000893220-98-001497.txt : 19980917 0000893220-98-001497.hdr.sgml : 19980917 ACCESSION NUMBER: 0000893220-98-001497 CONFORMED SUBMISSION TYPE: POS AMC PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19980916 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONECTIV INC CENTRAL INDEX KEY: 0001029590 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 510377417 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AMC SEC ACT: SEC FILE NUMBER: 070-09095 FILM NUMBER: 98710420 BUSINESS ADDRESS: STREET 1: 800 KING STREET P O BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19801 BUSINESS PHONE: 3024293448 MAIL ADDRESS: STREET 1: 800 KING ST STREET 2: P O BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19801 POS AMC 1 P.E. AMENDMENT #4 TO U-1 CONECTIV, INC. 1 As Filed with the Securities and Exchange Commission on September 16, 1998 File No. 70-9095 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------------------------------------- POST-EFFECTIVE AMENDMENT NO.4 TO APPLICATION-DECLARATION ON FORM U-1 UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ----------------------------------------------------------------- CONECTIV DELMARVA POWER & LIGHT COMPANY CONECTIV RESOURCE PARTNERS, INC. CONECTIV ENERGY SUPPLY COMPANY 800 King Street Wilmington, DE 19899 DELMARVA CAPITAL INVESTMENTS, INC. ATLANTIC CITY ELECTRIC COMPANY CONECTIV SERVICES, INC. ATLANTIC ENERGY ENTERPRISES, INC. CONECTIV COMMUNICATIONS, INC. ATLANTIC ENERGY INTERNATIONAL, INC. DELMARVA SERVICES COMPANY 6801 Black Horse Pike DCI I, INC. Egg Harbor Township, NJ 08234 DCI II, INC. DCTC-BURNEY, INC. ATLANTIC GENERATION, INC. CHRISTIANA CAPITAL MANAGEMENT, INC. ATLANTIC SOUTHERN PROPERTIES, INC. DELMARVA OPERATING SERVICES CO. ATE INVESTMENT, INC. CONECTIV SOLUTIONS, LLC CONECTIV THERMAL SYSTEMS, INC. CONECTIV ENERGY, INC.(1) COASTALCOMM, INC. POWER CONSULTING GROUP, INC. ATLANTIC ENERGY TECHNOLOGY, INC. CONECTIV PLUMBING LLC BINGHAMTON GENERAL, INC. 252 Chapman Road BINGHAMTON LIMITED, INC. P.O. Box 6066 PEDRICK LTD., INC. Newark, DE 19714 PEDRICK GEN., INC. VINELAND LIMITED, INC. PETRON OIL CORPORATION VINELAND GENERAL, INC. 180 Gordon Drive ATLANTIC JERSEY THERMAL SYSTEMS, INC. Exton, PA 19341-1328 ATS OPERATING SERVICES, INC. THE EARTH EXCHANGE, INC. ATLANTIC PAXTON COGENERATION, INC. 5100 Harding Highway Mays Landing, NJ 08330
------------------------------------------- (Names of companies filing this statement and addresses of principal executive offices) CONECTIV ------------------------------------------------------- (Name of top registered holding company parent) 2 Louis M. Walters Treasurer Conectiv 800 King Street Wilmington, DE 19899 ---------------------------------------------------- (Names and addresses of agents for service) The Commission is requested to send copies of all notices, orders and communications in connection with this Application-Declaration to:
Peter F. Clark, Esq. Joyce Koria Hayes, Esq. Conectiv 7 Graham Court 800 King Street Newark, DE 19711 Wilmington, DE 19899
3 The Application-Declaration as previously filed and amended is hereby further amended as follows: ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS: (a) Furnish a reasonably detailed and precise description of the proposed transaction, including a statement of the reasons why it is desired to consummate the transaction and the anticipated effect thereof. If the transaction is part of a general program, describe the program and its relation to the proposed transaction. A. Background. Conectiv, a Delaware corporation, previously filed an Application/Declaration on Form U-1 with the Securities and Exchange Commission (the "Commission") requesting authorization under Section 9(a)(2) of the Public Utility Holding Company Act of 1935, as amended (the "Act"), to consummate certain transactions resulting in the acquisition by Conectiv of all of the outstanding voting securities of Delmarva Power & Light Company, a Delaware and Virginia corporation and an operating public utility company ("Delmarva"), and Atlantic City Electric Company, a New Jersey corporation and an operating public utility company ("ACE") (File No. 70-9069)(ACE and Delmarva may be referred to from time to time as the "Utility Subsidiaries." Subsidiaries other than the Utility Subsidiaries may be referred to as the "Nonutility Subsidiaries." Conectiv and its Utility Subsidiaries and Nonutility Subsidiaries may be referred to as the "Conectiv System" or the "System.") The order approving the merger was issued on February 25, 1998 (Release No. 26832). Pursuant to the order issued in this file dated February 26, 1998 (Release No. 35-26833) (the "Order"), Conectiv was authorized to issue, from the date of the Order through December 31, 2000 (the "Authorization Period"), up to an aggregate of $500 million in common stock, par value $0.01 per share (the "Common Stock") and long-term debt. However, Conectiv requested that the Commission reserve jurisdiction over the issuance of long-term debt. Conectiv was also authorized to have up to $500 million of short-term debt at any one time outstanding during the Authorization Period. The Common Stock could be issued in public distributions effected through competitive bidding among, or private negotiations with, underwriters, dealers or agents or through private placements or other non-public offerings to one or more persons. In addition, Conectiv was authorized to issue up to five million shares of common stock through its Incentive Compensation Plan or Dividend Reinvestment Plan. The Order also reserved jurisdiction over the participation in the Conectiv System Money Pool by any subsidiaries acquired subsequent to the effective date of the Order. Financings authorized in the Order are subject to certain limitations contained therein as follows: (i) Conectiv's common equity will be at least 30% of its consolidated capitalization, as adjusted to reflect subsequent events that affect capitalization; (ii) the effective cost of money on long-term debt securities will not exceed 300 basis points over comparable term U.S. Treasury securities and the effective cost of money on short-term securities will not exceed 300 basis points over the comparable term London Interbank Offered Rate ("LIBOR"); (iii) maturity of indebtedness will not exceed 50 years; and (iv) the underwriting fees, commissions, or similar remuneration paid in connection with the issue, sale or distribution of a security will not exceed 5% of the principal amount of the financing. The Order also noted that "The proceeds from the sale of securities in external financing transactions will be used for general and corporate purposes including: (i) the financing of capital expenditures of the Conectiv System; (ii) the financing of working capital requirements of the Conectiv System; (iii) the acquisition, retirement, or redemption of existing securities; and (iv) direct or indirect investment in companies approved under an order of the Commission or exempt under rule 58 or Section 34 of the Act." 4 B. Authorizations Sought: Subject to the foregoing terms and restrictions, the purpose of this filing is to delete the request for a reservation of jurisdiction over the issuance of long-term debt in an amount, which when combined with the proceeds of any Common Stock issued during the Authorization Period (other than Common Stock issued pursuant to the Conectiv Incentive Plan or Dividend Reinvestment Plan) does not exceed $250 million, and request that such authorization be issued as quickly as possible, while reserving jurisdiction over the issuance of the balance of the $250 million of long-term debt originally requested. It is also requested that jurisdiction continue to be reserved over the issuance of securities that do not qualify for issuance pursuant to Rule 52 There is also pending in this file a request for an increase in short-term debt authorization for Conectiv to $300 million, for participation by Petron Oil Corporation in the Conectiv System Money Pool and for the issuance of Common Stock by Conectiv under the old Delmarva Incentive Plan. It is anticipated that a notice with respect to these transactions will be issued shortly. Conectiv is a combination company deriving revenues from the sale of both electricity and natural gas at the wholesale level. As of June 30, 1998, Conectiv's consolidated balance sheets reflect gross investments $245.6 million in gas utility plant and $156.1 million in common utility plant. For the six months ended June 30, 1998, Conectiv's consolidated statements of income reflected $188.7 million in operating revenues from natural gas. The authorization sought herein is consistent with that issued for Cinergy Corp., Holding Company Act Release No. 26909 dated August 21, 1998 (1998 SEC LEXIS 1794). C. Compliance with Rule 54: Rule 54 promulgated under the Act states that in determining whether to approval the issue or sale of a security by a registered holding company for purposes other than the acquisition of an Exempt wholesale Generator ("EWG") or a Foreign Utility Company ("FUCO"), or other transactions by such registered holding company or its subsidiaries other than with respect to EWGs or FUCOs, the Commission shall not consider the effect of the capitalization or earnings of any subsidiary which is an EWG or a FUCO upon the registered holding company system if Rules 53(a)(b)(c) are satisfied. As demonstrated below, such rules are satisfied. Rule 53 requires that the aggregate investment in EWGs and FUCOs not exceed 50% of a system's consolidated retained earnings. Conectiv and its subsidiaries will not make any investments in EWGs and FUCOs that cause it to exceed that limitation, unless the Commission otherwise authorizes. Currently Conectiv has one insignificant indirect interest in an EWG. DCTC-Burney, Inc., an indirect subsidiary of Conectiv, holds a 45% direct and indirect interest in Burney Forest Products, a Joint Venture, which is an EWG. As of December 31, 1997, the book value of the investment was $0. Conectiv and its subsidiaries will maintain books and records to identify the investments in and earnings from EWGs and FUCOs in which they directly or indirectly hold an interest, thereby satisfying Rule 53(a)(2). In addition, the books and records of each such entity will be kept in conformity with United States generally accepted accounting principles ("GAAP"), the financial statements will be prepared according to GAAP, and Conectiv undertakes to provide the Commission access to such books and records and financial statements as it may request. Employees of Conectiv's domestic public-utility companies will not render services directly or indirectly to any EWGs or FUCOs in the Conectiv System, thereby satisfying Rule 53(a)(3). 5 Conectiv, in connection with any Form U-1 seeking approval of EWG or FUCO financing, will submit copies of such Form U-1 and every certificate filed pursuant to Rule 24 with every federal, state or local regulator having jurisdiction over the retail rates of the public utility companies in the Conectiv System. Rule 53(a)(4) will be correspondingly satisfied. None of the conditions described in Rule 53(b) exists with respect to Conectiv, thereby satisfying Rule 53(b) and making rule 53(c). (b) Describe briefly, and where practicable state the approximate amount of, any material interest in the proposed transaction, direct or indirect, of any associate company or affiliate of the applicant or any affiliate of any such associate company. Not applicable. (c) If the proposed transaction involves the acquisition of securities not issued by a registered holding company or a subsidiary thereof, describe briefly the business and property, present or proposed, of the issuer of such securities. Not applicable. (d) If the proposed transaction involves the acquisition or disposition of assets, describe briefly such assets, setting forth original cost, vendor's book cost (including the basis of determination) and applicable valuation and qualifying reserves. Not applicable. ITEM 2. FEES COMMISSIONS AND EXPENSES: (a) State (1) the fees, commissions and expenses paid or incurred, or to be paid or incurred, directly or indirectly, in connection with the proposed transaction by the applicant or declarant or any associate company thereof, and (2) if the proposed transaction involves the sale of securities at competitive bidding, the fees and expenses to be paid to counsel selected by applicant or declarant to act for the successful bidder. It is estimated that the fees, commissions and expenses ascertainable at this time to be incurred by Conectiv in connection with the preparation of this post-effective amendment are as follows: Fees for Outside Counsel $8,000 Miscellaneous Expenses 750 ------ Total $8,750
(b) If any person to whom fees or commissions have been or are to be paid in connection with the proposed transaction is an associate company or an affiliate of the applicant or declarant, or is an affiliate of an associate company, set forth the facts with respect thereto. The financial statements and other portions of this application/declaration were prepared by personnel of Conectiv Resource Partners, Inc., whose time will be allocated to Conectiv at cost. 6 ITEM 3. APPLICABLE STATUTORY PROVISIONS: (a) State the sections of the Act and the rules thereunder believed to be applicable to the proposed transaction. If any section or rule would be applicable in the absence of a specific exemption, state the basis of exemption. The issuance of debentures by Conectiv is subject to Sections 6 and 7 of the Act. As noted above, the authorization sought herein is consistent with that issued in Cinergy Corp., Holding Company Act Release No. 26909 dated August 21, 1998 (1998 SEC LEXIS 1794). Rule 54 is also applicable to the issuance of securities by Conectiv. Compliance with Rule 54 is discussed above. ITEM 4. REGULATORY APPROVAL. (a) State the nature and extent of the jurisdiction of any State commission or any Federal commission (other than the Securities and Exchange Commission) over the proposed transaction. Not applicable. (b) Describe the action taken or proposed to be taken before any commission named in answer to paragraph (a) of this item in connection with the proposed transaction. Not applicable. ITEM 5. PROCEDURE. (a) State the date when Commission action is requested. If the date is less than 40 days from the date of the original filing, set forth the reasons for acceleration. The Commission is respectfully requested to issue and publish the requisite supplemental order with respect to the filing of this post-effective amendment to the Form U-1 as expeditiously as possible to permit Conectiv to proceed with appropriate actions. (b) State (i) whether there should be a recommended decision by a hearing officer, (ii) whether there should be a recommended decision by any other responsible officer of the Commission, (iii) whether the Division of Corporate Regulation may assist in the preparation of the Commission's decision, and (iv) whether there should be a 30-day waiting period between the issuance of the Commission's order and the date on which it is to become effective. It is submitted that a recommended decision by a hearing or other responsible officer of the Commission is not needed with respect to the proposed transactions. The Office of Public Utility Regulation of the Division of Investment Management may assist in the preparation of the Commission's decision. There should be no waiting period between the issuance of the Commission's order and the date on which it is to become effective. 7 ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS The following exhibits are made a part of this statement: (a) Exhibits F-4 Opinion of Counsel H-5 Financial Data Schedule (b) Financial Statements A. Conectiv Balance Sheet as of June 30, 1998: B. Conectiv Income Statements for the Six Months Ended June 30, 1998: C. Pro Forma Entries ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS (a) Describe briefly the environmental effects of the proposed transaction in terms of the standards set forth in Section 102(2)(C) of the National Environmental Policy Act (42 U.S.C. 4312(2)(C)). If the response to this item is a negative statement as to the applicability of Section 102(2)(C) in connection with the proposed transaction, also briefly state the reasons for that response. As more fully described in Item 1(a), the proposed transactions subject to the jurisdiction of this Commission relate to the issuance of securities. The proposed transactions involve no major federal action significantly affecting the human environment. (b) State whether any other federal agency has prepared or is preparing an environmental impact statement ("EIS") with respect to the proposed transaction. If any other Federal agency has prepared or is preparing an EIS, state which agency or agencies and indicate the status of that EIS preparation. None. 8 SIGNATURE Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned companies have duly caused this Post-Effective Amendment No. 4 to Form U-1 to be signed on their behalf by the undersigned thereunto duly authorized.
DATE: CONECTIV DELMARVA POWER & LIGHT COMPANY CONECTIV RESOURCE PARTNERS, INC. CONECTIV ENERGY SUPPLY COMPANY DELMARVA CAPITAL INVESTMENTS, INC. CONECTIV SERVICES, INC. DCI I, INC. DCI II, INC. DCTC-BURNEY, INC. CHRISTIANA CAPITAL MANAGEMENT, INC. DELMARVA OPERATING SERVICES COMPANY POWER CONSULTING GROUP, INC. CONECTIV SOLUTIONS, LLC CONECTIV PLUMBING, LLC ATLANTIC CITY ELECTRIC COMPANY ATLANTIC ENERGY ENTERPRISES, INC. ATLANTIC ENERGY INTERNATIONAL, INC. ATLANTIC GENERATION, INC. ATLANTIC SOUTHERN PROPERTIES, INC. ATE INVESTMENT, INC. CONECTIV THERMAL SYSTEMS, INC. COASTALCOMM, INC. ATLANTIC ENERGY TECHNOLOGY, INC. BINGHAMTON GENERAL, INC. BINGHAMTON LIMITED, INC. PEDRICK LIMITED, INC. PEDRICK GENERAL, INC. VINELAND LIMITED, INC. VINELAND GENERAL, INC. ATLANTIC JERSEY THERMAL SYSTEMS, INC. ATS OPERATING SERVICES, INC. THE EARTH EXCHANGE, INC. ATLANTIC PAXTON COGENERATION, INC. PETRON OIL CORPORATION September 16, 1998 /s/ L. M. Walters ----------------- L. M. Walters Treasurer
9 CONECTIV PRO FORMA CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1998 (DOLLARS IN THOUSANDS) (UNAUDITED)
Pro Forma Consolidated Pro Forma Consolidated Conectiv Adjustments Conectiv ---------------- ---------------- -------------- ASSETS ------ CURRENT ASSETS Cash and cash equivalents $ 68,994 $ 250,000 (1) $ 318,994 Accounts receivable 355,489 - 355,489 Inventories, at average cost: Fuel (coal, oil, and gas) 50,042 - 50,042 Materials and supplies 68,196 - 68,196 Prepaid New Jersey sales and excise taxes 62,207 - 62,207 Prepayments 9,960 - 9,960 Deferred energy costs 5,972 - 5,972 Deferred income taxes, net 1,065 - 1,065 ---------------- ---------------- --------------- 621,925 250,000 871,925 ---------------- ---------------- --------------- INVESTMENTS Investment in leveraged leases 122,608 - 122,608 Funds held by trustee 162,129 - 162,129 Other investments 71,311 - 71,311 ---------------- ---------------- --------------- 356,048 - 356,048 ---------------- ---------------- --------------- PROPERTY, PLANT, and EQUIPMENT Electric utility plant 5,583,487 - 5,583,487 Gas utility plant 245,644 - 245,644 Common utility plant 156,132 - 156,132 ---------------- ---------------- --------------- 5,985,263 - 5,985,263 Less: Accumulated depreciation 2,402,550 - 2,402,550 ---------------- ---------------- --------------- Net utility plant in service 3,582,713 - 3,582,713 Construction work-in-progress 221,829 - 221,829 Leased nuclear fuel, at amortized cost 61,029 - 61,029 Nonutility property, net 179,717 - 179,717 Goodwill, net 345,337 - 345,337 ---------------- ---------------- --------------- 4,390,625 - 4,390,625 ---------------- ---------------- --------------- DEFERRED CHARGES AND OTHER ASSETS Unrecovered purchased power costs 57,277 - 57,277 Deferred recoverable income taxes 170,990 - 170,990 Unrecovered New Jersey state excise tax 40,374 - 40,374 Deferred debt refinancing costs 46,447 - 46,447 Deferred other postretirement benefit costs 36,227 - 36,227 Prepaid employee benefit costs 57,593 - 57,593 Unamortized debt expense 27,427 - 27,427 License fees 25,393 - 25,393 Other 76,822 - 76,822 ---------------- ---------------- --------------- 538,550 - 538,550 ---------------- ---------------- --------------- TOTAL ASSETS $ 5,907,148 $ 250,000 $ 6,157,148 ================ ================ ===============
10 CONECTIV PRO FORMA CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1998 (DOLLARS IN THOUSANDS) (UNAUDITED)
Pro Forma Consolidated Pro Forma Consolidated Conectiv Adjustments Conectiv ---------------- ------------------ --------------- CAPITALIZATION AND LIABILITIES ------------------------------ CURRENT LIABILITIES Short-term debt $ 333,939 $ - $ 333,939 Long-term debt and preferred stock due within one year 78,674 - 78,674 Variable rate demand bonds 102,500 - 102,500 Accounts payable 139,080 - 139,080 Taxes accrued 19,547 (2,844) (3) 16,703 Interest accrued 42,582 8,125 (2) 50,707 Dividends payable 47,167 - 47,167 Current capital lease obligation 28,537 - 28,537 Accrued employee separation and other merger-related costs 23,055 - 23,055 Other 57,534 - 57,534 ----------------- -------------- --------------- 872,615 5,281 877,896 ----------------- -------------- --------------- DEFERRED CREDITS AND OTHER LIABILITIES Other postretirement benefits obligation 93,887 - 93,887 Deferred income taxes, net 866,221 - 866,221 Deferred investment tax credits 81,438 - 81,438 Long-term capital lease obligation 34,504 - 34,504 Other 56,036 - 56,036 ----------------- -------------- --------------- 1,132,086 - 1,132,086 ----------------- -------------- --------------- CAPITALIZATION Common stock: per share par value--$0.01; 150,000,000 shares authorized; shares outstanding--100,969,752 1,012 - 1,012 Class A common stock, $0.01 par value; 10,000,000 shares authorized; shares outstanding-- 6,560,612 66 - 66 Additional paid-in capital--common stock 1,474,063 - 1,474,063 Additional paid-in capital--Class A common stock 107,095 - 107,095 Retained earnings 247,824 (5,281) (2)(3) 242,543 ----------------- -------------- --------------- 1,830,060 (5,281) 1,824,779 Treasury shares, at cost; 226,619 shares (4,675) - (4,675) ----------------- -------------- --------------- Total common stockholders' equity 1,825,385 (5,281) 1,820,104 Preferred stock of subsidaries: Not subject to mandatory redemption 119,702 - 119,702 Subject to mandatory redemption 163,950 - 163,950 Long-term debt 1,793,410 250,000 (1) 2,043,410 ----------------- -------------- --------------- 3,902,447 244,719 4,147,166 ----------------- -------------- --------------- TOTAL CAPITALIZATION AND LIABILITIES $ 5,907,148 $ 250,000 $ 6,157,148 ================= ============== ===============
11 CONECTIV PRO FORMA CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED JUNE 30, 1998 (DOLLARS IN THOUSANDS) (UNAUDITED)
Pro Forma Consolidated Pro Forma Consolidated Conectiv Adjustments Conectiv ------------------ --------------- --------------- OPERATING REVENUES Electric $ 880,530 $ - $ 880,530 Gas 188,716 - 188,716 Other services 118,384 - 118,384 ----------------- --------------- -------------- 1,187,630 - 1,187,630 ----------------- --------------- -------------- OPERATING EXPENSES Electric fuel and purchased energy 329,969 - 329,969 Gas purchased 161,171 - 161,171 Other services' cost of sales 89,328 - 89,328 Purchased electric capacity 69,263 - 69,263 Employee separation and other merger-related costs 26,346 - 26,346 Operation and maintenance 238,530 - 238,530 Depreciation 109,862 - 109,862 Taxes other than income taxes 31,569 - 31,569 ----------------- --------------- -------------- 1,056,038 - 1,056,038 ----------------- --------------- -------------- OPERATING INCOME 131,592 - 131,592 ----------------- --------------- -------------- OTHER INCOME Allowance for equity funds used during construction 1,116 - 1,116 Other income 4,672 - 4,672 ----------------- --------------- -------------- 5,788 - 5,788 ----------------- --------------- -------------- INTEREST EXPENSE Interest charges 67,446 8,125 (2) 75,571 Allowance for borrowed funds used during construction and capitalized interest (1,588) - (1,588) ----------------- --------------- -------------- 65,858 8,125 73,983 ----------------- --------------- -------------- PREFERRED STOCK DIVIDEND REQUIREMENTS OF SUBSIDIARIES 8,247 - 8,247 ----------------- --------------- -------------- INCOME / (LOSS) BEFORE INCOME TAXES 63,275 (8,125) 55,150 INCOME TAXES 27,909 (2,844) (3) 25,065 ----------------- --------------- -------------- NET INCOME / (LOSS) $ 35,366 $ (5,281) $ 30,085 ================= =============== ============== EARNINGS / (LOSS) APPLICABLE TO COMMON STOCK Common stock $ 33,174 $ (5,281) $ 27,893 Class A common stock 2,192 - 2,192 ----------------- --------------- -------------- $ 35,366 $ (5,281) $ 30,085 ================= =============== ============== COMMON STOCK Average shares outstanding (000) Common stock 87,874 87,874 Class A common stock 6,561 6,561 Earnings / (Loss) per average share--basic and diluted Common stock $ 0.38 $ 0.32 Class A common stock $ 0.33 $ 0.33 Dividends declared per share Common stock $ 0.77 $ 0.77 Class A common stock $ 1.60 $ 1.60
12 PRO FORMA ENTRIES (DOLLARS IN THOUSANDS) (1) Dr. Cash $250,000 Cr. Long-term debt $250,000 To reflect the issuance of $250 million of long-term debt. (2) Dr. Interest expense $ 8,125 Cr. Accrued interest $ 8,125 To record six months of interest expense at 6.5%. (3) Dr. Accrued taxes $ 2,844 Cr. Income tax expense $ 2,844 To record the tax effect at 35%.
13 EXHIBIT INDEX F-4 Opinion of Counsel H-5 Financial Data Schedule EX-99.F-4 2 OPINION OF COUNSEL 1 Exhibit F-4 September 16, 1998 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Conectiv SEC File Number 70-9095 Dear Sir or Madam: As General Counsel for Conectiv, a Delaware corporation ("Conectiv"), I have acted as counsel for Conectiv in connection with Post-Effective Amendment No. 4 to the Form U-1 Application/Declaration (File No. 70-9095) (the "Declaration") under the Public Utility Holding Company Act of 1935 (the "Act"), filed with the Securities and Exchange Commission (the "Commission") jointly by Conectiv, by two operating utility companies, Delmarva Power & Light Company and Atlantic City Electric Company, which are both wholly-owned subsidiaries of Conectiv, and by certain companies which are direct and indirect non-utility subsidiary companies. The authorization requested in Post-Effective Amendment No. 4 of the Declaration relates to external issuances of up to $250 million principal amount of long-term debt securities by Conectiv. The Commission continues to reserve jurisdiction with respect to the issuance by Conectiv of up to an additional $250 million in principle amount of long-term debt securities and the issuance of securities which do not qualify for exemption under Rule 52. There is also pending a request for an increase in short-term debt authorization for Conectiv to $300 million, for participation by Petron Oil Company in the Conectiv System Money Pool and for the issuance of Common Stock by Conectiv under the Delmarva Incentive Plan. It is anticipated that a notice with respect to these transactions will be issued shortly. In connection with this opinion, I, or attorneys in whom I have confidence, have examined originals or copies, certified or otherwise identified to my satisfaction, of such records of Conectiv and such other documents, certificates and corporate or other records as I have deemed necessary or appropriate as a basis for the opinions set forth herein. In my examination, I have assumed the genuineness of all signatures, the legal capacity of all persons, the authenticity of all documents submitted to me as originals, the conformity to original documents of documents submitted to me as certified or photostatic copies and the authenticity of the originals of such copies. 2 The opinions expressed below in respect of the proposed issuance of long-term debt securities are subject to the following assumptions, qualifications, limitations, conditions and exceptions: (a) The issuance of the long-term debt securities shall have been duly authorized and approved to the extent required by the governing documents and applicable state laws by the Board of Directors of Conectiv and any consideration to be received in exchange for issuance of the securities as provided in such resolutions shall have been received and the securities properly executed and issued as provided in said resolutions. (b) The Commission shall have duly entered an appropriate order or orders granting and permitting the Declaration, as amended by Post-Effective Amendment No. 4, to become effective under the Act and the rules and regulations thereunder and the proposed issuance of long-term debt securities is consummated in accordance with Declaration as amended by Post-Effective Amendment No. 4. (c) If any Conectiv long-term debt securities are issued in a public offering, registration statements shall have become effective pursuant to the Securities Act of 1933, as amended; no stop order shall have been entered with respect thereto; and the issuance of long-term debt securities shall have been consummated in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder. (d) Conectiv shall have obtained all consents, waivers and releases, if any, required for the issuance of long-term debt under all applicable governing corporate documents, contracts, agreements, debt instruments, indentures, franchises, licenses and permits. (e) No act or event other than as described herein shall have occurred subsequent to the date hereof which would change the opinions expressed above. Based on the foregoing, and subject to the assumptions and conditions set forth herein, I am of the opinion that, in the event the proposed long-term debt securities are issued in accordance with the Declaration as amended by Post-Effective Amendment No. 4: 1. All state laws applicable to the proposed issue of long-term debt will have been complied with; however, I express no opinion as to need to comply with state blue sky laws; 2. Conectiv is a validly organized and duly existing corporation under the laws of the State of Delaware; 2 3 3. The various debt instruments to be issued by Conectiv will be valid and binding obligations of Conectiv in accordance with the terms of such instruments, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and general equitable principles, whether considered in a proceeding in equity or at law; and 4. The issuance of long-term debt securities by Conectiv will not violate the legal rights of the holders of any securities issued by Conectiv or any associate company thereof. I hereby consent to the use of this opinion in connection with Post-Effective Amendment No. 4 to the Declaration. Very truly yours, /s/ Peter F. Clark Peter F. Clark 3 EX-99.H-5 3 FINANCIAL DATA SCHEDULE 1 [ARTICLE] OPUR1 [PERIOD-TYPE] 6-MOS 6-MOS [FISCAL-YEAR-END] DEC-31-1998 DEC-31-1998 [PERIOD-END] JUN-30-1998 JUN-30-1998 [BOOK-VALUE] PER BOOK PRO FORMA [TOTAL-NET-UTILITY-PLANT] 3,582,713 3,582,713 [OTHER-PROPERTY-AND-INVEST] 535,765 535,765 [TOTAL-CURRENT-ASSETS] 621,925 871,925 [TOTAL-DEFERRED-CHARGES] 538,550 538,550 [OTHER-ASSETS] 628,195 628,195 [TOTAL-ASSETS] 5,907,148 6,157,148 [COMMON] 1,078 1,078 [CAPITAL-SURPLUS-PAID-IN] 1,581,158 1,581,158 [RETAINED-EARNINGS] 247,824 242,543 [TOTAL-COMMON-STOCKHOLDERS-EQ] 1,825,385 1,820,104 [PREFERRED-MANDATORY] 163,950 163,950 [PREFERRED] 119,702 119,702 [LONG-TERM-DEBT-NET] 1,793,410 2,043,410 [SHORT-TERM-NOTES] 333,939 333,939 [LONG-TERM-NOTES-PAYABLE] 0 0 [COMMERCIAL-PAPER-OBLIGATIONS] 0 0 [LONG-TERM-DEBT-CURRENT-PORT] 68,674 68,674 [PREFERRED-STOCK-CURRENT] 10,000 10,000 [CAPITAL-LEASE-OBLIGATIONS] 34,504 34,504 [LEASES-CURRENT] 28,537 28,537 [OTHER-ITEMS-CAPITAL-AND-LIAB] 1,529,047 1,534,328 [TOT-CAPITALIZATION-AND-LIAB] 5,907,148 6,157,148 [GROSS-OPERATING-REVENUE] 1,187,630 1,187,630 [INCOME-TAX-EXPENSE] 27,909 25,065 [OTHER-OPERATING-EXPENSES] 1,056,038 1,056,038 [TOTAL-OPERATING-EXPENSES] 1,083,947 1,081,103 [OPERATING-INCOME-LOSS] 103,683 106,527 [OTHER-INCOME-NET] 5,788 5,788 [INCOME-BEFORE-INTEREST-EXPEN] 109,471 112,315 [TOTAL-INTEREST-EXPENSE] 74,105 82,230 [NET-INCOME] 35,366 30,085 [PREFERRED-STOCK-DIVIDENDS] 0 0 [EARNINGS-AVAILABLE-FOR-COMM] 35,366 30,085 [COMMON-STOCK-DIVIDENDS] 88,299 88,299 [TOTAL-INTEREST-ON-BONDS] 0 0 [CASH-FLOW-OPERATIONS] 0 0 [EPS-PRIMARY] 0.38 0.32 [EPS-DILUTED] 0.38 0.32
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