-----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, IVTiv5j8T0S3wwD5yX1Lu7W446Psk7QE7iABOkOGT1SiNehLRMI2N94VN0DcWaPY GjrsmV2WjkE+cYrRbvQVzQ== 0001036050-99-000944.txt : 19990504 0001036050-99-000944.hdr.sgml : 19990504 ACCESSION NUMBER: 0001036050-99-000944 CONFORMED SUBMISSION TYPE: U5S PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990503 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: U5S SEC ACT: SEC FILE NUMBER: 001-13895 FILM NUMBER: 99608504 BUSINESS ADDRESS: STREET 1: 800 KING STREET P O BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19899 BUSINESS PHONE: 3024293114 MAIL ADDRESS: STREET 1: 800 KING ST STREET 2: P O BOX 231 CITY: WILMINGTON STATE: DE ZIP: 19899 U5S 1 ANNUAL REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. FORM U5S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1998 FILED PURSUANT TO THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 CONECTIV _______________________ NAME, TITLE AND ADDRESS OF OFFICER TO WHOM NOTICES AND CORRESPONDENCE CONCERNING THIS STATEMENT SHOULD BE ADDRESSED: JAMES P. LAVIN CONTROLLER CONECTIV 800 KING STREET WILMINGTON, DE 19899 TABLE OF CONTENTS
ITEM PAGE REF. - ---- --------- 1 System Companies and Investments Therein as of December 31, 1999 2 Acquisitions or Sales of Utility Assets 3 Issue, Sale, Pledge, Guarantee or Assumption of System Securities 4 Acquisition, Redemption or Retirement of System Securities 5 Investments in Securities of Nonsystem Companies 6 Officers and Directors 7 Contributions and Public Relations 8 Service, Sales and Construction Contracts 9 Wholesale Generators and Foreign Utility Companies 10 Financial Statements and Exhibits Consolidating Financial Statements Signature of Registrant's Officer Exhibits: SEC Act of 1934 Reports A Index to Corporate Organization & By-Laws Exhibits B Indentures or Contracts C Tax Allocation Agreement for 1998 D Other Documents Prescribed by Rule or Order E Report of Independent Accountants F Financial Data Tables G Organizational Chart of Exempt Wholesale Generators of Foreign Utility Holding Companies H Audited Financial Statements and Analytical Reviews and Conclusions Regarding Exempt Wholesale Generators or Foreign Utility Holding Companies I
ITEM 1. SYSTEM COMPANIES AND INVESTMENT THEREIN AS OF DECEMBER 31, 1998*
NUMBER OF % OF OWNER'S COMMON VOTING ISSUER BOOK BOOK VALUE NAME OF COMPANY SHARES OWNED POWER VALUE ($000) ($000) - --------------------------------------------------------------------------------------------------------------------- CONECTIV Atlantic City Electric Company (ACE) 18,320,937 100 730,093 730,093 Atlantic Capital I (ACE Cap I) N/A 100 2,165 2,165 Atlantic Capital II (ACE Cap II) N/A 100 773 773 Atlantic Energy Enterprises, Inc. (AEE) (a) 100 100 45,561 45,561 Atlantic Southern Properties, Inc. (ASP) 100 100 653 653 ATE Investments, Inc. (ATE) (b) 100 100 11,919 11,919 CoastalComm, Inc. (CI) 100 100 1,027 1,027 Atlantic Energy Technology, Inc. (AET) 100 100 112 112 The Earth Exchange, Inc. (TEE) 100 100 5 5 Conectiv Thermal Systems, Inc. (CTS) 100 100 7,373 7,373 ATS Operating Services, Inc. (AOS) (c) 50 100 - - Atlantic Jersey Thermal Systems, Inc. (AJTS) 100 100 43 43 Thermal Energy Limited Partnership (TELP) N/A 100 8,637 8,637 Atlantic Generation, Inc. (AGI) (d) 100 100 22,839 22,839 Pedrick General, Inc. (PED GEN) 100 100 2,476 2,476 Pedrick Ltd., Inc. (PED LTD) 100 100 5,963 5,963 Vineland General, Inc. (VINE LTD) 100 100 406 406 Vineland Limited, Inc. (VINE GEN) 100 100 3,809 3,809 Binghamton General, Inc. (BING GEN) 100 100 252 252 Binghamton Limited, Inc. (BING LTD) 100 100 467 467 Atlantic Energy International, Inc. (AEI) 100 100 (18) (18) Conectiv Communications, Inc. (CCI) (e) 1,000 100 34,163 34,163 Conectiv Energy Supply, Inc. (CES) (f) 1,000 100 (602) (602) Petron Oil Corporation (Petron) 1,000 100 4,076 4,076 Conectiv Resource Partners, Inc. (CRP) 1,000 100 (25) (25) Conectiv Services, Inc. (CSI) 1,000 100 64,227 64,227 Conectiv Plumbing LLC (Plumbing) 1,000 100 6,590 6,590 Conectiv Solutions, L.L.C. (Solutions) N/A 100 (5,350) (5,350) Power Consulting Group, Inc. (Power Consulting) N/A 100 3,685 3,685 Delmarva Capital Investments, Inc. (DCI) (g) 1,000 100 29,595 29,595 DCI I, Inc. (DCI I) 1,000 100 4,472 4,472 DCI II, Inc. (DCI II) 1,000 100 864 864 Christiana Capital Management, Inc. (CCM) 1,000 100 1,107 1,107 Delmarva Operating Services Company (DOSC) 1,000 100 3,682 3,682 DCTC-Burney, Inc. (DCTC) (h) 1,000 100 12,972 12,972 Delmarva Power & Light (DPL) 1,000 100 851,494 851,494 Delmarva Financing I (DPL Fin I) N/A 100 2,165 2,165 Delmarva Services Company (DSC) (i) 1,000 100 7,750 7,750
* As of 11:59 p.m. 12/31/1999 did not reflect corporate reorganization authorized in HCRA #35-26953 dated 12/16/1998. NOTES ($ in Thousands): (a) AEE owns 1,875,000 shares of Class D Preferred Stock, representing 12.5% of all outstanding issues of preferred stock, convertible under certain terms and conditions into 10.2% of the outstanding common stock of EMAX Solutions Partners, Inc., a Delaware corporation that develops environmental compliance software. As of December 31, 1998, the book value was $840. AEE also owns a 2.6% limited partnership interest in Tech Leaders II, a Delaware limited partnership that invests in energy and technology companies. As of December 31, 1998, the book value was $1,261. Finally, AEE holds a 50% equity interest in Enerval, LLC, a natural gas marketing venture. The book value, before fair market value evaluation reserves, was $3,550 as of December 31, 1998. (b) ATE owns 160 shares of common stock of Black Light Power, Inc., a development stage company that is engaged in hydrogen based energy production. As of December 31, 1998, the book value was $240. ATE also owns a 94% limited partnership interest in EnerTech Capital Partners L.P., a limited partnership that invests in and supports a variety of energy technology growth companies. The book value as of December 31, 1998 was $15,854. (c) ATS holds a 50% interest in Atlantic-Pacific Glendale, LLC, a Delaware limited liability company formed to construct, own and operate integrated energy facilities. The book value as of December 31, 1998 was $3,715. ATS holds a 50% interest in Atlantic-Pacific Las Vegas, LLC, a Delaware limited liability company formed to finance, own and operate integrated energy facilities. The book value as of December 31, 1998 was $24,534. (d) AGI owns a 4.9% limited partnership interest in Energy Investors Fund III, L.P. (Project Finance Fund), a Delaware limited partnership that invests in independent power production facilities. As of December 31, 1998, the book value was $3,354. (e) CCI owns 58,161 unregistered shares, or approximately 1% of the outstanding shares, of D&E Communications, Inc., a Pennsylvania corporation and publicly-held telecommunications company that holds a broadband PCS license. As of December 31, 1998, the book value was $793. (f) CES holds a 50% interest in Conectiv/CNE Energy Services LLC (CNEL), a Rule 58 energy marketing company. The book value of CNEL as of December 31, 1998 was $582. CES also holds a 50% interest in Conectiv/CNE Peaking, L.L.C. (CNEP), a gas peaking services company. The Book value of CNEP as of December 31, 1998 was $1,024. Finally, CES holds a 50% interest in Total Peaking Services, L.L.C. (TPS), a liquefaction and vaporization services company. The book value of TPS as of December 31, 1998 was $3,748. (g) DCI holds a 4.7% limited partnership interest in Luz Solar Partners, Ltd. IV which owns a solar powered generating station. The book value as of December 31, 1998, was $1,876. DCI owns a 27.5% limited partnership interest in UAH-Hydro Kennebec, L.P., a New York limited partnership which owns a hydro-electric project. The book value as of December 31, 1998, was $1,096. (h) Forest Products, L.P. is a Delaware limited partnership in which DCTC is the sole 1% general partner, and which is a general partner in Burney Forest Products, A Joint Venture. The book value as of December 31, 1998, was $0. Burney Forest Products, A Joint Venture, is a California general partnership which is owned by DCTC and Forest Products, L.P. The partnership owns a wood-burning qualifying facility in Burney, CA. DCTC's total direct and indirect ownership interest is 45%. The book value as of December 31, 1998, was $5,722. ITEM 1. Continued NOTES ($ in Thousands): (i) As of December 31, 1998, DSC held 127,750 shares (or 2.87%) of the common stock of Chesapeake Utilities Corporation, a publicly traded utility company with gas utility operations in Delaware, Maryland and Florida. As of December 31, 1998, the book value was $1,571. ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS
- ------------------------------------------------------------------------------------------------------------ NAME OF COMPANY BRIEF DESCRIPTION OF TRANSACTION Consideration EXEMPTION - ------------------------------------------------------------------------------------------------------------ Delmarva Power & Light Sale of Substation $4,100,000 44(b) Seaford, Delaware - ------------------------------------------------------------------------------------------------------------
ITEM 3. ISSUES, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM SECURITIES ------------------------------------------------------------------- DURING 1998 -----------
Principal Amount Or Stated Value --------------------------------------- Name of Company Pledged, Name of Issuer Issuing, Selling, Pledging Issued and Guaranteed, and Guaranteeing, or Assuming Sold or Assumed Date of Proceeds Commission Title of Issue Securities ($000) ($000) Transaction ($000) Authorization - -------------------------------------------------------------------------------------------------------------------------- ACE Rule 52 (See Certificate 7.38% Junior Subordinated of Notification Pursuant Debentures Series I to Rule 24 filed on Due 11/04/28 ACE $ 25,773 11/4/98 $ 25,773 March 30, 1999) Atlantic Capital II Rule 52 (See Certificate 7.38% Cumulative Trust of Notification Pursuant Preferred Capital Securities to Rule 24 filed on Due 11/04/28 Atlantic Capital II $ 25,000 (a) 11/4/98 $ 24,212 March 30, 1999) Conectiv Conectiv $ 52,861,506 Various n/a Rule 45 Surety Bonds
The above do not include guarantees of system companies which have been authorized by Commission order under the Public Utility Holding Company Act of 1935 and which are subject to Rule 24 Certificate filing requirements. ___________________________________ (a) 1,000,000 Shares of 7.38% Cumulative Trust Preferred Capital Securities were issued on November 4, 1998 at face value, pursuant to a Indenture dated October 1, 1998 resulting in proceeds of $24,212,500, net of underwrites's commissions of $787,500. ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES DURING 1998 beginning As of 3/1/98
Principal Amount Name of Issuer Name of Company Number of Redeemed and and Acquiring, redeeming or Shares Retired Date of Title of Issue Retiring Securities Acquired ($000) Transaction - ----------------------------------------------------------------------------------------------------------------------- DP&L 5.69% Medium Term Notes DP&L $ 25,000 (a) 6/24/98 6.95% First Mortgage BondsSinking Funds DP&L $ 955 (b) 6/1/98 5.75% Tax exempt Note DP&L $ 6,000 (c) 12/1/98 7.25% Tax exempt sinking fund DP&L $ 50 12/1/98 7.125% Tax exempt sinking fund DP&L $ 50 12/1/98 (E) Extingushiment Name of Issuer or Help for further and Consideration Disposition Commission Title of Issue ($000) (D) Authorization - -------------------------------------------------------------------------------------------------------- DP&L 5.69% Medium Term Notes $ 25,000 E Rule 42 6.95% First Mortgage BondsSinking Funds $ 955 E Rule 42 5.75% Tax exempt Note $ 6,000 E Rule 42 7.25% Tax exempt sinking fund $ 50 E Rule 42 7.125% Tax exempt sinking fund $ 50 E
(a) All $25,000,000 5.69% Series MTN's due on June 24, 1998 were retired on June 24, 1998 at a cost of $25,000,000, plus $90,881.94 accrued Interest (b) Sunking Fund payment of $954,600 was made on June 1, 1998 as per the Prospectus Supplement dated February 3, 1995 for the issuance of $25,800,000 of 6.95% Amortizing Bonds due June 1, 2008 (c) All $6,000,000 5.75% PC DEDA bonds due on December 1, 1998 were retired on December 1, 1998 at a cost of $6,000,000 plus $172,500 accrued interest ACE 5.50% Medium Term Note ACE $ 6,000 (a) 5/14/98 $ 6,000 E Rule 42 7.25% Debentures ACE $ 2,500 (b) 5/1/98 $ 2,500 E Rule 42 6.375% Pollution Control York Co. ACE $ 75 (c) 12/1/98 $ 75,000 E Rule 42 Sinking fund $8.20 Series Preferred Stock Sinking Fund ACE $ 10,000 (d) 8/1/98 $ 10,000 E Rule 42
(a) All $6,000,000 5.50% Series B MTN's due on May 14, 1998 were retired on May 14, 1998 At a cost of $6,000,000, plus $121,916.67 accrued Interest (b) All $2,500,000 7.250% Debentures due on May 1, 1998 were retired on May 1, 1998 At a cost of $2,500,000, plus $90,625 accrued Interest (c) All 75,000 6.375$ Pollution Control Bonds due December 1, 1998 were retried on December 1, 1998 At a cost of $75,000, plus $77,297 accured interest (d) All $10,000,000 $8.20 Series Preferred Stock due on August 1, 1998 were retired on August 1, 1998 At a cost of $10,000,000 plus $205,000 accured interest ITEM 4. Continued
Principal Amount Name of Issuer Name of Company Number of Redeemed and and Acquiring, redeeming or Shares Retired Date of Consideration Title of Issue Retiring Securities Acquired ($000) Transaction ($000) - ---------------------------------------------------------------------------------------------------------------------------- ACE 4.00% Preferred Stock ACE 52,732 $ 4,303 10/14/98 $ 4,303 4.10% Preferred Stock ACE 51,496 $ 4,300 10/14/98 $ 4,300 4.35% Preferred Stock ACE 11,898 $ 1,054 10/14/98 $ 1,054 4.35% Preferred Stock 2nd series ACE 34,320 $ 3,039 10/14/98 $ 3,039 4.75% Preferred Stock ACE 41,369 $ 4,002 10/14/98 $ 4,002 5.00% Preferred Stock ACE 45,880 $ 4,588 10/14/98 $ 4,588 CIV Common Stock buy back CIV 598,862 $ 13,232 Various $ 13,232 Extingushiment Name of Issuer or Help for further and Disposition Commission Title of Issue (D) Authorization - ------------------------------------------------------------------------------ ACE 4.00% Preferred Stock E HCR #35-26927 dated 10/16/98 4.10% Preferred Stock E HCR #35-26927 dated 10/16/98 4.35% Preferred Stock E HCR #35-26927 dated 10/16/98 4.35% Preferred Stock 2nd series E HCR #35-26927 dated 10/16/98 4.75% Preferred Stock E HCR #35-26927 dated 10/16/98 5.00% Preferred Stock E HCR #35-26927 dated 10/16/98 CIV Common Stock buy back E Rule 42
ITEM 5. INVESTMENTS IN SECURITIES OF NONSYSTEM COMPANIES The aggregate amount of investments at December 31, 1998, in persons operating in the system's retail service area are shown below.
1 Name of Aggregate Amount of Investments Number of Desription of Persons or Company in Persons (Entities) Operating in Persons Entities Retail Service Area of Owner (Entities) - ----------------------------------------------------------------------------------------------------------------------- PART I ACE (1) $ 5,244.69 3 Retail Company Securities DP&L(1) $ 148.91 4 Retail Company Securities DP&L $360,833.00 1 Limited Partnership which invests in start up Companies DP&L $256,250.00 1 Limited Partnership which invests in start up Companies
(1) All of DP&L and ACE's investments in securities represent bankruptcy distributions applicable to obligations of customers incurred in the ordinary course of business ITEM 6. OFFICERS AND DIRECTORS Part I. Names, principal business address and positions held as of December 31, 1998. The names and positions held as of December 31, 1998 of the officers and directors of System companies is presented in the tables on the pages that follow. The principal business address of each officer and director is: 800 King Street Wilmington, Delaware 19899 The symbols used to indicate the positions held by officers and directors are shown in the position symbol key as follows: POSITION KEY CODE --------------------------------- CB - Chairman of the Board CEO - Chief Executive Officer COO - Chief Operating Officer CFO - Chief Financial Officer P - President EVP - Executive Vice President SVP - Senior Vice President VP - Vice President VC - Vice Chairman GC - General Counsel T - Treasurer AT - Assistant Treasurer S - Secretary AS - Assistant Secretary C - Controller D - Director ITEM 6. Continued
- -------------------------------------------------------------------------------------------------------------------------- ATE ACE AEE AEI AET AGI AJTS ASP AOS - -------------------------------------------------------------------------------------------------------------------------- Michael G. Abercrombie - -------------------------------------------------------------------------------------------------------------------------- Arturo F. Agra VP AT AS - -------------------------------------------------------------------------------------------------------------------------- Jeffrey W. Allen - -------------------------------------------------------------------------------------------------------------------------- Robert L. Aveyard - -------------------------------------------------------------------------------------------------------------------------- John Bagnell AS - -------------------------------------------------------------------------------------------------------------------------- Larry Bainter - -------------------------------------------------------------------------------------------------------------------------- R. Frank Balotti - -------------------------------------------------------------------------------------------------------------------------- Samual W. Bowlby - -------------------------------------------------------------------------------------------------------------------------- Roberta S. Brown - -------------------------------------------------------------------------------------------------------------------------- Robert D. Burris - -------------------------------------------------------------------------------------------------------------------------- Donald E. Cain - -------------------------------------------------------------------------------------------------------------------------- Robert W. Carr - -------------------------------------------------------------------------------------------------------------------------- Peter F. Clark - -------------------------------------------------------------------------------------------------------------------------- Robert M. Collacchi - -------------------------------------------------------------------------------------------------------------------------- G. Edwin Collier - -------------------------------------------------------------------------------------------------------------------------- Carol C. Conrad AS AS AS AS AS AS AS AS AS - -------------------------------------------------------------------------------------------------------------------------- Howard E. Cosgrove CB CEOD CB CEOD CB CEOD CB CEOD CB CEOD CB CEOD CB CEOD CB CEOD CB CEOD - -------------------------------------------------------------------------------------------------------------------------- Frank E. DiCola VP VP - -------------------------------------------------------------------------------------------------------------------------- Audrey K. Dobertein - -------------------------------------------------------------------------------------------------------------------------- Moira K. Donoghue S S SVP CFO SVP CFO S S S S S - -------------------------------------------------------------------------------------------------------------------------- Barry R. Elson PD EVPD PD D D D PD D PD - -------------------------------------------------------------------------------------------------------------------------- Michael B. Emery - -------------------------------------------------------------------------------------------------------------------------- Stacey L. Evans - -------------------------------------------------------------------------------------------------------------------------- Joseph J. Feeley - -------------------------------------------------------------------------------------------------------------------------- Rovert H. Fiedler VP - -------------------------------------------------------------------------------------------------------------------------- Robert Gabbard - -------------------------------------------------------------------------------------------------------------------------- Paul S. Gerritsen - -------------------------------------------------------------------------------------------------------------------------- Sarah I. Gore - -------------------------------------------------------------------------------------------------------------------------- Barbara S. Graham SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD CFOD SVP SVP CFOD - -------------------------------------------------------------------------------------------------------------------------- Andrei M. Grecu - --------------------------------------------------------------------------------------------------------------------------
ITEM 6. Continued
- ----------------------------------------------------------------------------------------------------------------------------------- BING GEN BING LTD CCM CI CONECTIV CCI CES CRP CSI SOLUTIONS - ----------------------------------------------------------------------------------------------------------------------------------- Michael G. Abercrombie D - ----------------------------------------------------------------------------------------------------------------------------------- Arturo F. Agra VP AT AS VP AT AS VP AT AS - ----------------------------------------------------------------------------------------------------------------------------------- Jeffrey W. Allen VP VP VP - ----------------------------------------------------------------------------------------------------------------------------------- Robert L. Aveyard VP VP - ----------------------------------------------------------------------------------------------------------------------------------- John Bagnell - ----------------------------------------------------------------------------------------------------------------------------------- Larry Bainter - ----------------------------------------------------------------------------------------------------------------------------------- R. Frank Balotti D - ----------------------------------------------------------------------------------------------------------------------------------- Samual W. Bowlby - ----------------------------------------------------------------------------------------------------------------------------------- Roberta S. Brown VP - ----------------------------------------------------------------------------------------------------------------------------------- Robert D. Burris D - ----------------------------------------------------------------------------------------------------------------------------------- Donald E. Cain VP VP - ----------------------------------------------------------------------------------------------------------------------------------- Jay O. Carmean AS - ----------------------------------------------------------------------------------------------------------------------------------- Robert W. Carr VP VP COO - ----------------------------------------------------------------------------------------------------------------------------------- Peter F. Clark GC - ----------------------------------------------------------------------------------------------------------------------------------- Robert M. Collacchi - ----------------------------------------------------------------------------------------------------------------------------------- G. Edwin Collier AS - ----------------------------------------------------------------------------------------------------------------------------------- Carol C. Conrad AS AS AS AS AS AS AS AS AS AS - ----------------------------------------------------------------------------------------------------------------------------------- Howard E. Cosgrove COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD - ----------------------------------------------------------------------------------------------------------------------------------- Frank E. DiCola VP - ----------------------------------------------------------------------------------------------------------------------------------- Audrey K. Dobertein - ----------------------------------------------------------------------------------------------------------------------------------- Moira K. Donoghue S S S S S S S S S S - ----------------------------------------------------------------------------------------------------------------------------------- Barry R. Elson D D D PD EVPD PD D EVPD PD PD - ----------------------------------------------------------------------------------------------------------------------------------- Michael B. Emery - ----------------------------------------------------------------------------------------------------------------------------------- Stacey L. Evans - ----------------------------------------------------------------------------------------------------------------------------------- Joseph J. Feeley - ----------------------------------------------------------------------------------------------------------------------------------- Rovert H. Fiedler - ----------------------------------------------------------------------------------------------------------------------------------- Robert Gabbard - ----------------------------------------------------------------------------------------------------------------------------------- Paul S. Gerritsen VP - ----------------------------------------------------------------------------------------------------------------------------------- Sarah I. Gore - ----------------------------------------------------------------------------------------------------------------------------------- Barbara S. Graham SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD - ----------------------------------------------------------------------------------------------------------------------------------- Andrei M. Grecu AS - -----------------------------------------------------------------------------------------------------------------------------------
ITEM 6. Continued
- ----------------------------------------------------------------------------------------------------------------------------------- CTS CNEL CNEP DCI DCI I DCI II DCTC DOSC DPL DSC - ----------------------------------------------------------------------------------------------------------------------------------- Michael G. Abercrombie - ----------------------------------------------------------------------------------------------------------------------------------- Arturo F. Agra S AT VP AT AS VP AT AS - ----------------------------------------------------------------------------------------------------------------------------------- Jeffrey W. Allen - ----------------------------------------------------------------------------------------------------------------------------------- Robert L. Aveyard - ----------------------------------------------------------------------------------------------------------------------------------- John Bagnell - ----------------------------------------------------------------------------------------------------------------------------------- Larry Bainter VP - ----------------------------------------------------------------------------------------------------------------------------------- R. Frank Balotti - ----------------------------------------------------------------------------------------------------------------------------------- Samual W. Bowlby AS AS - ----------------------------------------------------------------------------------------------------------------------------------- Roberta S. Brown VP - ----------------------------------------------------------------------------------------------------------------------------------- Robert D. Burris - ----------------------------------------------------------------------------------------------------------------------------------- Donald E. Cain - ----------------------------------------------------------------------------------------------------------------------------------- Jay O. Carmean - ----------------------------------------------------------------------------------------------------------------------------------- Robert W. Carr - ----------------------------------------------------------------------------------------------------------------------------------- Peter F. Clark - ----------------------------------------------------------------------------------------------------------------------------------- Robert M. Collacchi - ----------------------------------------------------------------------------------------------------------------------------------- G. Edwin Collier - ----------------------------------------------------------------------------------------------------------------------------------- Carol C. Conrad AS AS AS AS AS AS AS - ----------------------------------------------------------------------------------------------------------------------------------- Howard E. Cosgrove COB CEOD D D COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD - ----------------------------------------------------------------------------------------------------------------------------------- Frank E. DiCola VP - ----------------------------------------------------------------------------------------------------------------------------------- Audrey K. Dobertein - ----------------------------------------------------------------------------------------------------------------------------------- Moira K. Donoghue S AS AS S S S S S S S - ----------------------------------------------------------------------------------------------------------------------------------- Barry R. Elson PD D D D D D D D EVPD D - ----------------------------------------------------------------------------------------------------------------------------------- Michael B. Emery - ----------------------------------------------------------------------------------------------------------------------------------- Stacey L. Evans - ----------------------------------------------------------------------------------------------------------------------------------- Joseph J. Feeley AT - ----------------------------------------------------------------------------------------------------------------------------------- Rovert H. Fiedler - ----------------------------------------------------------------------------------------------------------------------------------- Robert Gabbard - ----------------------------------------------------------------------------------------------------------------------------------- Paul S. Gerritsen VP - ----------------------------------------------------------------------------------------------------------------------------------- Sarah I. Gore - ----------------------------------------------------------------------------------------------------------------------------------- Barbara S. Graham SVP CFOD D D SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD - ----------------------------------------------------------------------------------------------------------------------------------- Andrei M. Grecu - -----------------------------------------------------------------------------------------------------------------------------------
ITEM 6. Continued
- ----------------------------------------------------------------------------------------------------------------------------------- TEE PED GEN PED LTD Petron Consuting Power TPS VINE GEN VINE LTD - ----------------------------------------------------------------------------------------------------------------------------------- Michael G. Abercrombie - ----------------------------------------------------------------------------------------------------------------------------------- Arturo F. Agra VP AT AS VP AT AS VP AT AS VP AT AS VP AT AS - ----------------------------------------------------------------------------------------------------------------------------------- Jeffrey W. Allen - ----------------------------------------------------------------------------------------------------------------------------------- Robert L. Aveyard - ----------------------------------------------------------------------------------------------------------------------------------- John Bagnell - ----------------------------------------------------------------------------------------------------------------------------------- Larry Bainter - ----------------------------------------------------------------------------------------------------------------------------------- R. Frank Balotti - ----------------------------------------------------------------------------------------------------------------------------------- Samual W. Bowlby AS - ----------------------------------------------------------------------------------------------------------------------------------- Roberta S. Brown - ----------------------------------------------------------------------------------------------------------------------------------- Robert D. Burris - ----------------------------------------------------------------------------------------------------------------------------------- Donald E. Cain - ----------------------------------------------------------------------------------------------------------------------------------- Jay O. Carmean - ----------------------------------------------------------------------------------------------------------------------------------- Robert W. Carr VP - ----------------------------------------------------------------------------------------------------------------------------------- Peter F. Clark - ----------------------------------------------------------------------------------------------------------------------------------- Robert M. Collacchi - ----------------------------------------------------------------------------------------------------------------------------------- G. Edwin Collier - ----------------------------------------------------------------------------------------------------------------------------------- Carol C. Conrad AS AS AS AS AS AS AS - ----------------------------------------------------------------------------------------------------------------------------------- Howard E. Cosgrove COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD - ----------------------------------------------------------------------------------------------------------------------------------- Frank E. DiCola - ----------------------------------------------------------------------------------------------------------------------------------- Audrey K. Dobertein - ----------------------------------------------------------------------------------------------------------------------------------- Moira K. Donoghue S S S S S AS S S - ----------------------------------------------------------------------------------------------------------------------------------- Barry R. Elson D D D D PD D D D - ----------------------------------------------------------------------------------------------------------------------------------- Michael B. Emery - ----------------------------------------------------------------------------------------------------------------------------------- Stacey L. Evans AS - ----------------------------------------------------------------------------------------------------------------------------------- Joseph J. Feeley AT - ----------------------------------------------------------------------------------------------------------------------------------- Rovert H. Fiedler - ----------------------------------------------------------------------------------------------------------------------------------- Robert Gabbard - ----------------------------------------------------------------------------------------------------------------------------------- Paul S. Gerritsen - ----------------------------------------------------------------------------------------------------------------------------------- Sarah I. Gore - ----------------------------------------------------------------------------------------------------------------------------------- Barbara S. Graham SVP CFO D SVP CFO D SVP CFO D SVP CFO D SVP CFO D SVP CFO D SVP CFO D - ----------------------------------------------------------------------------------------------------------------------------------- Andrei M. Grecu - -----------------------------------------------------------------------------------------------------------------------------------
ITEM 6. Continued
- ----------------------------------------------------------------------------------------------------------------------------------- ATE ACE AEE AEI AET AGI AJTS ASP AOS - ----------------------------------------------------------------------------------------------------------------------------------- Gary Hanson AT AS P - ----------------------------------------------------------------------------------------------------------------------------------- Meredith I. Harlacher D P COOD D PD D D D PD D - ----------------------------------------------------------------------------------------------------------------------------------- Hudson P. Hoen, III - ----------------------------------------------------------------------------------------------------------------------------------- Cyrus H. Holley - ----------------------------------------------------------------------------------------------------------------------------------- George C. Hunt - ----------------------------------------------------------------------------------------------------------------------------------- Frederick Hutchinson - ----------------------------------------------------------------------------------------------------------------------------------- Jerrold L. Jacobs - ----------------------------------------------------------------------------------------------------------------------------------- Donna Johns AT AS AT AS - ----------------------------------------------------------------------------------------------------------------------------------- John W. Land VP VP - ----------------------------------------------------------------------------------------------------------------------------------- James P. Lavin C C C C C C C C C - ----------------------------------------------------------------------------------------------------------------------------------- Henry K. Levari VP - ----------------------------------------------------------------------------------------------------------------------------------- J. David McCann VP - ----------------------------------------------------------------------------------------------------------------------------------- Larry S. McGaughy - ----------------------------------------------------------------------------------------------------------------------------------- Richard B. McGlynn - ----------------------------------------------------------------------------------------------------------------------------------- Thomas E. Miloszewski - ----------------------------------------------------------------------------------------------------------------------------------- Bernard J. Morgan - ----------------------------------------------------------------------------------------------------------------------------------- Dean Musser - ----------------------------------------------------------------------------------------------------------------------------------- Weston E. Nellius - ----------------------------------------------------------------------------------------------------------------------------------- James E. Parrish - ----------------------------------------------------------------------------------------------------------------------------------- Harold I. Raveche - ----------------------------------------------------------------------------------------------------------------------------------- Philip S. Reese SVP - ----------------------------------------------------------------------------------------------------------------------------------- Joseph M. Rigby - ----------------------------------------------------------------------------------------------------------------------------------- Paul Rossi - ----------------------------------------------------------------------------------------------------------------------------------- Timothy J. Sanborn - ----------------------------------------------------------------------------------------------------------------------------------- Mark J. Schaefer - ----------------------------------------------------------------------------------------------------------------------------------- Lonnie C. Scott VP - ----------------------------------------------------------------------------------------------------------------------------------- Susan Seipel - ----------------------------------------------------------------------------------------------------------------------------------- Thomas S. Shaw D EVPD D D D PD D D D - ----------------------------------------------------------------------------------------------------------------------------------- Janet L. Shorter - -----------------------------------------------------------------------------------------------------------------------------------
ITEM 6. Continued
- ----------------------------------------------------------------------------------------------------------------------------------- BING GEN BING LTD CCM CI CONECTIV CCI CES CRP CSI SOLUTIONS - ----------------------------------------------------------------------------------------------------------------------------------- Gary Hanson - ----------------------------------------------------------------------------------------------------------------------------------- Meredith I. Harlacher D D PD D P COO D D PD D D - ----------------------------------------------------------------------------------------------------------------------------------- Hudson P. Hoen, III VP - ----------------------------------------------------------------------------------------------------------------------------------- Cyrus H. Holley D - ----------------------------------------------------------------------------------------------------------------------------------- George C. Hunt VP - ----------------------------------------------------------------------------------------------------------------------------------- Frederick Hutchinson AS - ----------------------------------------------------------------------------------------------------------------------------------- Jerrold L. Jacobs VC D - ----------------------------------------------------------------------------------------------------------------------------------- Donna Johns AT AS AT AS AT AS AT AS - ----------------------------------------------------------------------------------------------------------------------------------- Ralph E. Klesius SVP - ----------------------------------------------------------------------------------------------------------------------------------- John W. Land VP VP VP - ----------------------------------------------------------------------------------------------------------------------------------- James P. Lavin C C C C C C C C C C - ----------------------------------------------------------------------------------------------------------------------------------- Henry K. Levari VP - ----------------------------------------------------------------------------------------------------------------------------------- J. David McCann VP D - ----------------------------------------------------------------------------------------------------------------------------------- Richard B. McGlynn - ----------------------------------------------------------------------------------------------------------------------------------- Thomas E. Miloszewski VP AS - ----------------------------------------------------------------------------------------------------------------------------------- Bernard J. Morgan D - ----------------------------------------------------------------------------------------------------------------------------------- Dean Musser VP - ----------------------------------------------------------------------------------------------------------------------------------- Weston E. Nellius D - ----------------------------------------------------------------------------------------------------------------------------------- James E. Parrish SVP - ----------------------------------------------------------------------------------------------------------------------------------- Harold I. Raveche D - ----------------------------------------------------------------------------------------------------------------------------------- Philip S. Reese VP - ----------------------------------------------------------------------------------------------------------------------------------- Joseph M. Rigby VP - ----------------------------------------------------------------------------------------------------------------------------------- Paul Rossi - ----------------------------------------------------------------------------------------------------------------------------------- Timothy J. Sanborn VP - ----------------------------------------------------------------------------------------------------------------------------------- Mark J. Schaefer VP - ----------------------------------------------------------------------------------------------------------------------------------- Lonnie C. Scott VP - ----------------------------------------------------------------------------------------------------------------------------------- Susan Seipel - ----------------------------------------------------------------------------------------------------------------------------------- Thomas S. Shaw PD PD D D EVP D PD EVPD D ASD - ----------------------------------------------------------------------------------------------------------------------------------- Janet L. Shorter - -----------------------------------------------------------------------------------------------------------------------------------
ITEM 6. Continued
- ---------------------------------------------------------------------------------------------------------------------------------- CTS CNEL CNEP DCI DCI I DCI II DCTC DOSC DPL DSC - ---------------------------------------------------------------------------------------------------------------------------------- Gary Hanson AT AS - ---------------------------------------------------------------------------------------------------------------------------------- Meredith I. Harlacher D D D PD PD PD D D P COOD PD - ---------------------------------------------------------------------------------------------------------------------------------- Hudson P. Hoen, III VP - ---------------------------------------------------------------------------------------------------------------------------------- Cyrus H. Holley - ---------------------------------------------------------------------------------------------------------------------------------- George C. Hunt - ---------------------------------------------------------------------------------------------------------------------------------- Frederick Hutchinson - ---------------------------------------------------------------------------------------------------------------------------------- Jerrold L. Jacobs D - ---------------------------------------------------------------------------------------------------------------------------------- Donna Johns AT AS - ---------------------------------------------------------------------------------------------------------------------------------- Ralph E. Klesius - ---------------------------------------------------------------------------------------------------------------------------------- John W. Land VP VP VP - ---------------------------------------------------------------------------------------------------------------------------------- James P. Lavin C C C C C C C C - ---------------------------------------------------------------------------------------------------------------------------------- Henry K. Levari - ---------------------------------------------------------------------------------------------------------------------------------- J. David McCann - ---------------------------------------------------------------------------------------------------------------------------------- Richard B. McGlynn - ---------------------------------------------------------------------------------------------------------------------------------- Thomas E. Miloszewski - ---------------------------------------------------------------------------------------------------------------------------------- Bernard J. Morgan - ---------------------------------------------------------------------------------------------------------------------------------- Dean Musser - ---------------------------------------------------------------------------------------------------------------------------------- Weston E. Nellius - ---------------------------------------------------------------------------------------------------------------------------------- James E. Parrish - ---------------------------------------------------------------------------------------------------------------------------------- Harold I. Raveche - ---------------------------------------------------------------------------------------------------------------------------------- Philip S. Reese - ---------------------------------------------------------------------------------------------------------------------------------- Joseph M. Rigby - ---------------------------------------------------------------------------------------------------------------------------------- Paul Rossi - ---------------------------------------------------------------------------------------------------------------------------------- Timothy J. Sanborn - ---------------------------------------------------------------------------------------------------------------------------------- Mark J. Schaefer - ---------------------------------------------------------------------------------------------------------------------------------- Lonnie C. Scott VP - ---------------------------------------------------------------------------------------------------------------------------------- Susan Seipel VPD - ---------------------------------------------------------------------------------------------------------------------------------- Thomas S. Shaw D D D D D D PD PD EVPD D - ---------------------------------------------------------------------------------------------------------------------------------- Janet L. Shorter - ----------------------------------------------------------------------------------------------------------------------------------
ITEM 6. Continued
-------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- TEE PGI PLI Petron PCG TPS VGI VLI - ---------------------------------------------------------------------------------------------------------------------------------- Gary Hanson - ---------------------------------------------------------------------------------------------------------------------------------- Meredith I. Harlacher D D D D D D D D - ---------------------------------------------------------------------------------------------------------------------------------- Hudson P. Hoen, III - ---------------------------------------------------------------------------------------------------------------------------------- Cyrus H. Holley - ---------------------------------------------------------------------------------------------------------------------------------- George C. Hunt - ---------------------------------------------------------------------------------------------------------------------------------- Frederick Hutchinson - ---------------------------------------------------------------------------------------------------------------------------------- Jerrold L. Jacobs - ---------------------------------------------------------------------------------------------------------------------------------- Donna Johns AT AS - ---------------------------------------------------------------------------------------------------------------------------------- Ralph E. Klesius - ---------------------------------------------------------------------------------------------------------------------------------- John W. Land - ---------------------------------------------------------------------------------------------------------------------------------- James P. Lavin C C C C C C C - ---------------------------------------------------------------------------------------------------------------------------------- Henry K. Levari - ---------------------------------------------------------------------------------------------------------------------------------- J. David McCann - ---------------------------------------------------------------------------------------------------------------------------------- Larry S. McGaughy - ---------------------------------------------------------------------------------------------------------------------------------- Richard B. McGlynn - ---------------------------------------------------------------------------------------------------------------------------------- Thomas E. Miloszewski - ---------------------------------------------------------------------------------------------------------------------------------- Bernard J. Morgan - ---------------------------------------------------------------------------------------------------------------------------------- Dean Musser - ---------------------------------------------------------------------------------------------------------------------------------- Weston E. Nellius - ---------------------------------------------------------------------------------------------------------------------------------- James E. Parrish - ---------------------------------------------------------------------------------------------------------------------------------- Harold I. Raveche - ---------------------------------------------------------------------------------------------------------------------------------- Philip S. Reese - ---------------------------------------------------------------------------------------------------------------------------------- Joseph M. Rigby - ---------------------------------------------------------------------------------------------------------------------------------- Timothy J. Sanborn - ---------------------------------------------------------------------------------------------------------------------------------- Mark J. Schaefer - ---------------------------------------------------------------------------------------------------------------------------------- Lonnie C. Scott - ---------------------------------------------------------------------------------------------------------------------------------- Susan Seipel - ---------------------------------------------------------------------------------------------------------------------------------- Thomas S. Shaw D PD PD PD D PD PD D - ---------------------------------------------------------------------------------------------------------------------------------- Janet L. Shorter - ----------------------------------------------------------------------------------------------------------------------------------
ITEM 6. Continued
- ---------------------------------------------------------------------------------------------------------------------------------- ATE ACE AEE AEI AET AGI AJTS ASP AOS - ---------------------------------------------------------------------------------------------------------------------------------- William H. Spence VP - ---------------------------------------------------------------------------------------------------------------------------------- Richard H. Treml - ---------------------------------------------------------------------------------------------------------------------------------- Leslie Thomas-Dawson - ---------------------------------------------------------------------------------------------------------------------------------- Louis A. Tonelli - ---------------------------------------------------------------------------------------------------------------------------------- Eileen K. Unger - ---------------------------------------------------------------------------------------------------------------------------------- John C. van Roden - ---------------------------------------------------------------------------------------------------------------------------------- Louis M. Walters T T AS T T T T T T T - ---------------------------------------------------------------------------------------------------------------------------------- James C. Weller VP - ---------------------------------------------------------------------------------------------------------------------------------- James H. Weller VP - ---------------------------------------------------------------------------------------------------------------------------------- Nathan L. Wilson AS - ---------------------------------------------------------------------------------------------------------------------------------- Stephen D. Winand - ----------------------------------------------------------------------------------------------------------------------------------
ITEM 6. Continued
- ---------------------------------------------------------------------------------------------------------------------------------- BGI BLI CCM CI CONECTIV CCI CES CRP CSI SOLUTIONS - ---------------------------------------------------------------------------------------------------------------------------------- William H. Spence VP VP - ---------------------------------------------------------------------------------------------------------------------------------- Richard H. Treml ASD - ---------------------------------------------------------------------------------------------------------------------------------- Leslie Thomas-Dawson - ---------------------------------------------------------------------------------------------------------------------------------- Louis A. Tonelli - ---------------------------------------------------------------------------------------------------------------------------------- Eileen K. Unger VP - ---------------------------------------------------------------------------------------------------------------------------------- John C. van Roden SVP CFO - ---------------------------------------------------------------------------------------------------------------------------------- Louis M. Walters T T T T T AS T T T T T - ---------------------------------------------------------------------------------------------------------------------------------- James C. Weller VP VP VP VP - ---------------------------------------------------------------------------------------------------------------------------------- James H. Weller - ---------------------------------------------------------------------------------------------------------------------------------- Nathan L. Wilson AS - ---------------------------------------------------------------------------------------------------------------------------------- Stephen D. Winand - ----------------------------------------------------------------------------------------------------------------------------------
ITEM 6. Continued
- ----------------------------------------------------------------------------------------------------------------------------------- CTS CNEL CNEP DCI DCI I DCI II DCTC DOSC DPL DSC - ----------------------------------------------------------------------------------------------------------------------------------- William H. Spence VP - ----------------------------------------------------------------------------------------------------------------------------------- Richard H. Treml - ----------------------------------------------------------------------------------------------------------------------------------- Leslie Thomas-Dawson AS - ----------------------------------------------------------------------------------------------------------------------------------- Louis A. Tonelli - ----------------------------------------------------------------------------------------------------------------------------------- Eileen K. Unger - ----------------------------------------------------------------------------------------------------------------------------------- John C. van Roden - ----------------------------------------------------------------------------------------------------------------------------------- Louis M. Walters T T T T AS T T T AS T - ----------------------------------------------------------------------------------------------------------------------------------- James C. Weller VP VP - ----------------------------------------------------------------------------------------------------------------------------------- James H. Weller - ----------------------------------------------------------------------------------------------------------------------------------- Nathan L. Wilson AS AS - ----------------------------------------------------------------------------------------------------------------------------------- Stephen D. Winand T T S - -----------------------------------------------------------------------------------------------------------------------------------
ITEM 6. Continued
- -------------------------------------------------------------------------------------------------------------------------- TEE PGI PLI Petron PCG TPS VGI VLI - -------------------------------------------------------------------------------------------------------------------------- William H. Spence VP - -------------------------------------------------------------------------------------------------------------------------- Richard H. Treml - -------------------------------------------------------------------------------------------------------------------------- Leslie Thomas-Dawson - -------------------------------------------------------------------------------------------------------------------------- Louis A. Tonelli AT - -------------------------------------------------------------------------------------------------------------------------- Eileen K. Unger - -------------------------------------------------------------------------------------------------------------------------- John C. van Roden - -------------------------------------------------------------------------------------------------------------------------- Louis M. Walters T T T T T T T - -------------------------------------------------------------------------------------------------------------------------- James C. Weller VP VP VP VP VP - -------------------------------------------------------------------------------------------------------------------------- James H. Weller - -------------------------------------------------------------------------------------------------------------------------- Nathan L. Wilson AS - -------------------------------------------------------------------------------------------------------------------------- Stephen D. Winand T S - --------------------------------------------------------------------------------------------------------------------------
ITEM 6. OFFICERS AND DIRECTORS (Continued) Part II. Financial connections of directors and executive officers as of December 31, 1998. Part III(a). COMPENSATION OF OFFICERS AND DIRECTORS. CONECTIV BOARD PERSONNEL & COMPENSATION COMMITTEE REPORT PRINCIPLES OF EXECUTIVE COMPENSATION PROGRAM The Personnel & Compensation Committee of the Board of Directors is comprised of four non-employee Directors. The Committee provides an independent review of the Company's performance objectives and executive compensation. OVERALL OBJECTIVES The Company's philosophy is to link compensation to business strategies and results, to align total compensation of executives with the long-term interests of stockholders, to motivate its senior executives to meet the challenging objectives established for the Company and to create an urgency for success in the newly-formed Company. The Company's executive compensation program is de- signed to: . provide total compensation that emphasizes long-term performance which creates stockholder value; . facilitate the rapid transition to a competitive business environment; . reflect the market conditions for attracting and retaining high- quality executives and ensure that such executives have a continuing stake in the long-term success of the Company; and . create significant levels of stock ownership. The elements of the executive compensation program are: . total compensation levels that are competitive with those provided by the competitive market, defined as a blend of companies in the utility and industrial markets; . base compensation levels related to responsibility level and individual performance; . annual variable compensation that varies based on corporate, unit and in-dividual performance; and, . long-term variable compensation based on long-term increases in stock- holder value. TOTAL COMPENSATION Total compensation opportunities are developed for Company executives by Watson Wyatt, the firm that provides executive compensation consulting services tothe Company. This is done using several published compensation survey sources and public proxy data to define the competitive market. Overall, the total compensation structure for executives is targeted at the median for similar positions at companies of similar size, including both utilities and industrial companies (Compensation Comparison Group)1. Individual reward levels vary based on individual contributions and performance. Total compensation includes three components: base compensation, annual variable compensation and long-term variable compensation. The targets for each component of the executive compensation program are reviewed on an annual basis to ensure alignment with the Company's compensation philosophy and a proper balance between short-and long-term objectives. BASE COMPENSATION Base compensation for executive officers is determined by evaluating the responsibilities of the positions held and the experience of the individuals, coupled with a review of compensation for comparable positions at other companies. Base compensation is reviewed on an annual basis and adjustments are based on the performance of the Company and each executive officer. Annual base compensation increases eflect the individual's performance and contribution over several years in addition to the results for a single year. Following the 1998 increases, the overall base compensation level for the five named executive officers was slightly below the median of the base compensation targeted levels defined by the surveys and proxies. ANNUAL VARIABLE COMPENSATION The Company's annual variable compensation is designed to motivate participants to accomplish stretch financial and individual goals and to increase the sense of urgency to deliver significant results on an annual basis. Annual variable compensation target opportunities are designed to be at or above the median of the blended utility and industrial market and for the named executive officers vary from 40% to 50% of base compensation, with maximum awards of 60% to 75% of base compensation. Annual variable compensation is paid in a combination of cash (80%) and restricted stock units (20%) and is based on the achievement of predetermined corporate and individual goals. The plan for 1998 provides that payouts will occur only after a specified earnings target is achieved. _______________ 1 The Compensation Comparison Group does not include all of the same companies as the published industry indices in the Comparison of 10 Month Cumulative Total Return chart included in this Proxy Statement. However, 34 of the 85 companies included in the EEI Executive Compensation Report, which is one element of the Compensation Comparison Group, are also part of either the Dow Jones Electric Utilities Index or the S&P 500 Index. For 1998, each individual covered by the plan was eligible to earn a variable compensation award between 0% and 150% of target. The portion of each individual award attributable to corporate, line of business, and group performance were determined and specific measures were developed at the beginning of the year. These measures were primarily financial for 1998 to accelerate the transition of the Company to a more competitive environment and included corporate measures of earnings, cash flow return on capital employed and cash flow. Each business group and line of business also developed specific financial measures to support their business plans. The Management Stock Purchase Program (MSPP) was designed as a means to promote significant executive stock ownership in the new company and to help meet stock ownership guidelines. The program requires that 20% of the individual's earned annual variable compensation must be used to acquire restricted stock units (RSUs). Individuals may also voluntarily use up to an additional 30% (for a total of 50%) of their earned annual variable compensation to acquire RSUs. All RSUs are acquired at a 20% discount from Fair Market Value on the date paid. Each RSU is a proxy for one share of Common Stock, has a value equal to one share and earns at the rate of the Common Stock dividend. RSUs are restricted from sale or use for a 3-year period and are distributed in shares of Common Stock. LONG-TERM VARIABLE COMPENSATION The Company's long-term variable compensation reinforces the importance of providing stockholders with a competitive return on their investment. Long-term variable compensation awards also strengthen the ability of the Company to attract, motivate and retain executives of superior capability and more closely align the interests of management with those of stockholders. Long-term grants for Conectiv executives are determined by setting a target percentage of base compensation based on median data in the Compensation Comparison Group and converting the target amounts to actual grants using the "Black-Scholes Model" for options and time and forfeiture discount methods for the other elements of the long-term grants. Long-term awards granted in 1998 consisted of non-qualified stock options, dividend equivalent units and performance accelerated restricted stock. Non- qualified stock options and dividend equivalent units were awarded to provide approximately two-thirds of the targeted value of the grant while the other one- third of the targeted value was provided through performance accelerated restricted stock. This stock vests as unrestricted Common Stock seven years from the award date. However, vesting may be accelerated if the price of Common Stock reaches certain predetermined levels prior to the seven years. All stock options were granted with exercise prices equal to the fair market value of Common Stock at the time of the grant. Performance accelerated restricted stock granted to the CEO and three other named executive officers is also subject to an additional condition tied to Total Shareholder Return over the seven year period. Failure to meet a predetermined Total Shareholder Return level over the restriction period will result in total forfeiture of their shares granted. The CEO and three other named executive officers also were given a special grant of performance accelerated stock options to increase emphasis on creating long-term shareholder value. All performance accelerated stock options were granted with exercise prices equal to the fair market value of Common Stock at the time of grant. These options do not vest and cannot be exercised for 9-1/2 years from the date of their grant unless the stock price increases to predetermined levels. Absent accelerated vesting at these predetermined stock prices, the shares will become exercisable in 9-1/2 years with expiration occurring at 10 years. This special grant resulted in the long-term variable compensation component and total compensation exceeding the targeted median values for these four executives for 1998 using the Black-Scholes valuation methodology. STOCK OWNERSHIP GUIDELINES To further reinforce the interests of stockholders, stock ownership guidelines have been established for the Board of Directors, Company officers, and other Company management. These guidelines require the individuals covered by the guidelines to have beneficial ownership of Common Stock, or securities convertible into Common Stock, with an aggregate value equal to certain multiples of each individual's salary (or annual retainers in the case of outside directors). Multiples range from five times to one times salary. The Chief Executive Officer's multiple is set at five times salary and outside Directors' multiples are set at three times the annual retainer. INTERNAL REVENUE CODE SECTION 162(M) The Committee considers the tax deductibility of compensation paid to executive officers and the impact of Section 162(m) of the Internal Revenue Code of1986, as amended (the "Code"), on the Company. This provision limits the amount of compensation that the Company may deduct from its taxable income for any year to $1 million for any of its five most highly compensated executive officers, unless certain requirements are met. The Committee has taken actions to limit the impact of the Code in the event that compensation paid to a named executive officer might otherwise not be deductible. The Committee will continue to seek ways to limit the impact of the Code; however, the Committee believes that the tax deduction limitation should not compromise the Company's ability to create incentive programs that support the business strategy and also attract and retain the executive talent required to compete successfully. Accordingly, achieving the desired flexibility in the design and delivery of compensation may periodically result in some compensation that is not deductible for federal income tax purposes. SUMMARY OF ACTIONS TAKEN BY THE PERSONNEL & COMPENSATION COMMITTEE The Personnel & Compensation Committee, consisting entirely of outside directors, provides direction and oversight to the Company's executive compensation plans, establishes the Company's compensation philosophy and assesses the effectiveness of the program as a whole. This includes activities such as reviewing the design of various plans and assessing the reasonableness of the total program consistent with the total compensation philosophy. The Committee also assists in administering key aspects of the Company's annual compensation program and variable compensation plan, such as reviewing annual compensation budgets and setting targets and corporate performance measures for the annual and long-term variable compensation plans. Finally, the Committee specifically implements the Company's executive compensation program as it directly pertains to the Chief Executive Officer and the Company's four other most highly compensated executives, i.e., the five "named executive officers." The Committee has determined that in an environment where competition is increasing, it is essential that the Company have the ability to attract, motivate and retain high quality executives from within and outside the utility industry. Because of the extremely competitive market for executive talent, the Personnel & Compensation Committee has adopted a compensation structure based on a blend of utility and general competitive industry markets. The structure is also flexible to allow setting salaries at pure general industry levels where that may be necessary to attract certain specific skills and experience. Consistent with this approach, the total compensation program relies on competitive base compensation generally at or below the median of the market with annual and long-term variable compensation opportunities generally above the median of the market. This places a much greater emphasis on variable compensation that aligns executive and stockholder interests. This total compensation philosophy is important to the success of the Company because the Company is facing increasing competition and related risks. The Company is not simply a utility anymore, but is rapidly becoming part of the general competitive industry market and, therefore, just as strategies for success must change, the compensation to drive success must also change. Prior to the merger involving Atlantic Energy and Delmarva and during 1998, this compensation philosophy enabled the Company to attract several key executives with experience and skills critical to the emerging competitive environment. These executives would not have been available under a traditional utility compensation philosophy. Significant actions by the Committee for fiscal year 1998 included adoption of the new Conectiv executive plans (Conectiv Variable Compensation Plan, Deferred Compensation Plan, Supplemental Executive Retirement Plan [SERP], and Change In Control Agreements) and other compensation and benefit plans for Conectiv employees. The Committee also sets base compensation, annual variable targets and performance measures and long-term grants under the various executive programs, including special awards of performance accelerated stock options to the CEO and the three other named executive officers described above. CHIEF EXECUTIVE OFFICER COMPENSATION Mr. Cosgrove's compensation reflects Conectiv's compensation philosophy. His base compensation, annual and regular long-term variable compensation place him at total compensation levels consistent with the median level of other CEO's at similarly-sized utility and manufacturing companies represented in the Compensation Comparison Group. Additional emphasis on achieving increased stockholder value has been created with a special grant of performance accelerated stock options. This special grant will cause his long term compensation and total compensation to exceed the median targets for 1998. BASE COMPENSATION ACTION Conectiv was formed by a merger involving Delmarva and Atlantic Energy in early 1998. Mr. Cosgrove's base compensation was set during the merger process to reflect the size of Conectiv and the increasing competitive environment in which Conectiv does business. His 1998 base compensation is at the median target level developed through a comparison of other Chief Executive Officers of similarly-sized corporations using a blend of utilities and general industry. His salary for 1999 will remain the same as in 1998. ANNUAL VARIABLE COMPENSATION To provide clear focus on increasing stockholder value through the successful completion of the merger and growing the new Conectiv businesses, Mr. Cosgrove received additional levels of long-term awards in place of an annual variable opportunity for 1997. Therefore, there is no annual variable pay for 1997 reflected in 1998 compensation. Mr. Cosgrove's annual variable compensation target opportunity for 1998 was set at 50% of base compensation, with a minimum payout of 0% and a maximum payout of 75% of base compensation. Payment of any award requires achieving a pre-determined level of 1998 earnings established by this Committee. Performance measures for 1998, predetermined by this Committee, included earnings available for common stock, cash flow return on capital employed and cash flow. Awards for 1998 for Mr. Cosgrove and the four other named executive officers have not been determined. LONG-TERM VARIABLE COMPENSATION Long-term incentive grants are a critical component of the Conectiv executive compensation philosophy, since they align executive interests very clearly with increased stockholder value. For 1998, Mr. Cosgrove received grants of non-qualified stock options, dividend equivalent units, performance accelerated restricted stock, and performance accelerated stock options (reflected in the Compensation Tables). The regular grants of non- qualified stock options, dividend equivalent units and performance accelerated restricted stock provided a long-term variable compensation opportunity approximately at the median of the defined competitive market. The special, non-recurring grant of performance accelerated stock options was awarded to create additional emphasis on achieving higher levels of stockholder value. In order for Mr. Cosgrove to receive any value from this grant prior to vesting at nine and one-half years, there must be a significant increase in stockholder value. Such increases prior to nine and one-half years will result in accelerated vesting of this grant in increments of one-third. The first third would vest when stockholder value increases by $400,000,000, at which time Mr. Cosgrove's options would vest at a value of $1,200,000, or .3% of the increase in stockholder value. The entire grant would vest if stockholder value increases by $800,000,000, at which time Mr. Cosgrove's options would vest at a value of $2,400,000 or .3% of the increase in stockholder value. Only under results that yield increases in stockholder value and trigger accelerated vesting of this grant would Mr. Cosgrove's 1998 compensation exceed the median target compensation level. PERSONNEL & COMPENSATION COMMITTEE S.I. Gore, Chairperson R.B. McGlynn M.B. Emery B.J. Morgan PERSONNEL & COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Personnel & Compensation Committee is comprised solely of non-officer directors. Logical Business Solutions, which is owned by Mr. Emery's son-in-law, Paul Kleiman, had contracts with Conectiv Resource Partners, Inc., a subsidiary of the Company, with a gross value of $227,000 during 1998 for information technology consulting services. Except as described in the preceding sentence, there are no Personnel & Compensation Committee interlocks. SUMMARY COMPENSATION TABLE The following table shows information regarding the compensation earned during the past year by the Company's Chief Executive Officer and by the Company's other four most highly-compensated executive officers for the fiscal year ending December 31, 1998. TABLE 1-- SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION ---------------------------- ANNUAL COMPENSATION AWARDS PAYOUTS --------------------------------------------------------------------------------------------------- VARIABLE COMPEN- ALL OTHER SATION SECURITIES LTIP COMPEN- NAME AND PRINCIPAL YEAR ANNUALIZED (BONUS) OTHER ANNUAL UNDERLYING Payouts SATION POSITION (1) SALARY (2) COMPENSATION OPTIONS (3) (4) - ------------------------------------------------------------------------------------------------------------------------------------ H.E. Cosgrove, Chairman 1998 $600,000 - 0 360,000 572,134 12,329 of the Board and Chief Executive Officer - ------------------------------------------------------------------------------------------------------------------------------------ M.I. Harlacher, 1998 340,000 - 0 - - 3,742 President - ------------------------------------------------------------------------------------------------------------------------------------ B.R. Elson, Executive 1998 325,000 - 0 170,000 21,560 4,074 Vice President - ------------------------------------------------------------------------------------------------------------------------------------ T.S. Shaw, Executive 1998 325,000 - 0 170,000 155,267 9,478 Vice President - ------------------------------------------------------------------------------------------------------------------------------------ B.S. Graham, Senior 1998 250,000 - 0 170,000 155,267 5,308 Vice President - ------------------------------------------------------------------------------------------------------------------------------------
____________ (1) Base salary is shown as an annualized amount. Other items of compensation reflect the full calendar 1998 compensation received from Conectiv and either Delmarva or Atlantic City Electric Company. (2) The 1998 bonus, which is an annual variable award, has not yet been determined. The target award is 50% of annualized salary for Mr. Cosgrove and 40% for Messrs. Harlacher, Elson and Shaw and Mrs. Graham. (3) During 1998 all restrictions lapsed on the performance-based restricted stock granted in 1995 and 1996 under the Delmarva LTIP due to the merger involving Delmarva and Atlantic Energy. Under the "change in control" provisions, the awards fully vested resulting in a payout to Mr. Cosgrove of 21,160 shares (11,570 for 1995 and 9,590 for 1996) valued at $454,940; to Mr. Shaw of 5,450 shares (2,870 for 1995 and 2,580 for 1996) valued at $117,175; and to Mrs. Graham of 5,450 shares (2,870 for 1995 and 2,580 for 1996) valued at $117,175. Shares were valued at $21.50 at the time of payout. Dividends on shares of restricted stock and dividend equivalents are accrued at the same rate as that paid to all holders of Common Stock. As of December 31, 1998; Mr. Cosgrove held 45,520 shares of restricted stock (35,520 for 1997 and 10,000 for 1998) and 30,000 Dividend Equivalent Units ("DEU's"); Mr. Elson held 4,000 shares of restricted stock for 1998 and 10,000 DEU's; Mr. Shaw held 12,010 shares of restricted stock (8,010 for 1997 and 4,000 for 1998) and 10,000 DEU's; Mrs. Graham held 12,010 shares of restricted stock (8,010 for 1997 and 4,000 for 1998) and 10,000 DEU's. Holders of restricted stock are entitled to receive dividends as declared. (4) The amount of All Other Compensation for each of the named executive officers for fiscal year 1998 include the following: Mr. Cosgrove, $2,125 in Company matching contributions to the Company's Savings and Investment Plan, $10,000 in Company matching contributions to the Company's Deferred Compensation Plan and $204 in term life insurance premiums paid by the Company; for Mr. Shaw, $2,630 in Company matching contributions to the Company's Savings and Investment Plan, $6,644 in Company matching contributions to the Company's Deferred Compensation Plan and $204 in term life insurance premiums paid by the Company; for Mrs. Graham, $2,604 in Company matching contributions to the Company's Savings and Investment Plan, $2,500 in Company matching contributions to the Company's Deferred Compensation Plan and $204 in term life insurance premiums paid by the Company; for Mr. Elson, $2,969 in Company matching contributions to the Company's Savings and Investment Plan and $1,105 in term life insurance premiums paid by the Company; and for Mr. Harlacher, $3,300 in Company matching contributions to the Company's Savings and Investment Plan and $442 in term life insurance premiums paid by the Company. TABLE 2 -- OPTION GRANTS IN LAST FISCAL YEAR (1)
- --------------------------------------------------------------------------------------------------------------------- NUMBER OF #OF TOTAL SECURITIES OPTIONS UNDERLYING GRANTED TO EXERCISE GRANT DATE OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT NAME GRANTED (#) FISCAL YEAR ($/SH) DATE VALUE (4) - --------------------------------------------------------------------------------------------------------------------- H.E. Cosgrove 300,000(2) 29% $22.84375 1/2/08 $385,831 60,000(3) 6% $22.84375 1/2/08 $137,063 - --------------------------------------------------------------------------------------------------------------------- M.I. Harlacher - 0% - - - - 0% - - - - --------------------------------------------------------------------------------------------------------------------- B.R. Elson 150,000(2) 14% $22.84375 1/2/08 $192,915 20,000(3) 2% $22.84375 1/2/08 $ 45,688 - --------------------------------------------------------------------------------------------------------------------- T.S. Shaw 150,000(2) 14% $22.84375 1/2/08 $192,915 20,000(3) 2% $22.84375 1/2/08 $ 45,688 - --------------------------------------------------------------------------------------------------------------------- B.S. Graham 150,000(2) 14% $22.84375 1/2/08 $192,915 20,000(2) 2% $22.84375 1/2/08 $ 45,688 - ---------------------------------------------------------------------------------------------------------------------
__________ (1) Currently, the Company does not grant stock appreciation rights. (2) Denotes Performance Accelerated Stock Options ("PASO's") which were granted on a one-time basis. PASO's have a ten-year term and vest and are first exercisable 9 and 1/2 years from date of grant without regard to stock price performance. Exercise date will accelerate for favorable stock price performance (i.e., first 1/3, second 1/3 and third 1/3 of PASO's vest after stock trades at $26, $28 or $30 per share, respectively, for ten consecutive trading days). There is a minimum holding period of three years from date of grant during which these options are not exercisable. (3) Denotes Nonqualified Stock Options. One-half of such Options vest and are exercisable at end of second year from date of grant. Second one-half vest and are exercisable at end of third year from date of grant. (4) Determined using the Black-Scholes model, incorporating the following material assumptions and adjustments: (a) exercise price of $22.84375, equal to the Fair Market Value ("FMV") as of date of grant; (b) an option term of ten years; (c) risk-free rate of return of 6.00%; (d) volatility of 20.00%; and (e) dividend yield of 7.00%. For valuation purposes, PASO's are valued as a premium-priced stock option as of the date of grant with an exercise price of $30 on a FMV of $22.84375. TABLE 3 -- AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
- ----------------------------------------------------------------------------------------------------------------- SHARES VALUE OF UNEXERCISED IN- ACQUIRED VALUE NUMBER OF SECURITIES UNDERLYING THE-MONEY OPTIONS AT FY- ON REALIZED UNEXERCISED OPTIONS AT FY-END (2) END(1) NAME EXERCISE ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNIXERCISABLE - ----------------------------------------------------------------------------------------------------------------- H.E. Cosgrove 0 0 14,400/360,000 $51,225/$596,250 - ----------------------------------------------------------------------------------------------------------------- M.I. Harlacher 0 0 - $ - - ----------------------------------------------------------------------------------------------------------------- B.R. Elson 0 0 0/170,000 $ 0/$281,563 - ----------------------------------------------------------------------------------------------------------------- T.S. Shaw 0 0 0/170,000 $ 0/$281,563 - ----------------------------------------------------------------------------------------------------------------- B.S. Graham 0 0 0/170,000 $ 0/$281,563 - -----------------------------------------------------------------------------------------------------------------
______________ (1) The closing price for the Company's common stock as reported by the New York Stock Exchange on December 31, 1998 was $24.50. Any value in the options would be based on the difference between the exercise price of the options and the value at the time of the exercise (e.g., $24.50 as of close of business on 12/31/98), which difference would be multiplied by the number of options exercised. (2) Only 14,400 stock options of Mr. Cosgrove are currently exercisable. None of the remaining options may be exercised earlier than two years from date of grant for regular, non-performance based options and nine and one half years from date of grant for performance based options (subject to accelerated vesting for favorable stock price performance). TABLE 4 -- LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
NUMBER OF RESTRICTED PERFORMANCE PERIOD SHARES/DIVIDEND UNTIL MATURATION NAME EQUIVALENT UNITS (#)(1) OR PAYOUT(2) ---- ----------------------- ------------ H. E. Cosgrove.......... 10,000 shs/30,000 units 3/2/05 M. I. Harlacher......... -- -- B. R. Elson............. 4,000 shs/10,000 units 3/2/05 T. S. Shaw.............. 4,000 shs/10,000 units 3/2/05 B. S. Graham............ 4,000 shs/10,000 units 3/2/05
______________ (1) In addition, Mr. Cosgrove held 35,520 performance shares (valued at $870,240) and Mr. Shaw and Mrs. Graham held 8,010 performance shares (valued at $196,245) from a 1997 award with a four year performance cycle under the Delmarva Power Long Term Incentive Plan. (2) Awards of Restricted Shares (Performance Accelerated Restricted Stock or "PARS") and Dividend Equivalent Units ("DEU's") were made to four of the named executive officers. The payout of shares of PARS may potentially be "performance accelerated." Restrictions may lapse any time after 3 years (i.e., after March 1, 2001) upon on achievement of favorable stock price performance goals. In the absence of such favorable performance, restrictions lapse after 7 years (i.e., March 2, 2005) provided that at least a defined level of average, total return to shareholders is achieved. As of December 31, 1998, Mr. Cosgrove's 10,000 Restricted Shares were valued at $245,000 and Messrs. Elson and Shaw and Mrs. Graham's 4,000 PARS were valued at $98,000. These values for both Restricted Shares and performance shares are based on the December 31, 1998 closing stock price of $24.50. For Dividend Equivalent Units, one DEU is equal in value to the regular quarterly dividend paid on one share of Conectiv common stock. The Dividend Equivalent Units shown are payable in cash for twelve quarters over a three year period ending with the quarterly dividend equivalent payable January 31, 2001. At that point, the 1998 DEU award lapses. PENSION PLAN The Conectiv Retirement Plan includes the Cash Balance Pension Plan and grandfathered provisions relating to the Delmarva Retirement Plan and the Atlantic Retirement Plan that apply to employees who had either 20 years of service or were age 50 on the effective date of the Cash Balance Pension Plan (January 1, 1999). Certain executives whose benefits from the Conectiv Retirement Plan are limited by the application of Federal tax laws also receive benefits from the Supplemental Executive Retirement Plan. CASH BALANCE PENSION PLAN The named executive officers participate in the Conectiv Retirement Plan and earn benefits that generally become vested after five years of service. On an annual basis, a recordkeeping account in a participant's name is credited with an amount equal to a percentage of the participant's total pay, including base salary, overtime and bonuses, depending on the employee's age at the end of the plan year, as follows:
% OF AGE AT END OF PLAN YEAR PAY ------------------------- --- Under 30........... 5 30 to 34........... 6 35 to 39........... 7 40 to 44........... 8 45 to 49........... 9 50 and over......... 10
These accounts also receive interest credits based on average U.S. Treasury Bill rates for the year. In addition, certain annuity benefits earned by participants under the former Delmarva and Atlantic Retirement Plans are fully protected as of December 31, 1998, and will be converted to an equivalent cash amount and included in each employee's initial cash balance account. When an employee terminates employment, the amount credited to his or her account is converted into an annuity or paid in a lump sum. SUPPLEMENTAL RETIREMENT BENEFITS Supplemental retirement benefits are provided to certain employees, including each executive officer, whose benefits under the Conectiv Retirement Plan are limited by type of compensation or amount under applicable Federal tax laws and regulations. Designated employees may also receive an annual benefit at retirement equal to a percentage of final average compensation multiplied by years of service reduced by the amount of all benefits received under the Conectiv Retirement Plan and other nonqualified arrangements. ESTIMATED RETIREMENT BENEFITS PAYABLE TO NAMED EXECUTIVE OFFICERS The following table shows the estimated retirement benefits, including supplemental retirement benefits under the plans applicable to the named executive officers, which would be payable if he or she were to retire at normal retirement age, which is age 65, at 1998 compensation, expressed in the form of a lump sum payment. Years of service credited to each named executive officer as of his or her normal retirement date are as follows: Mr. Cosgove, 42; Ms. Graham, 30; Mr. Shaw, 40; Mr. Elson, 16 (8 of which are additional years of service for purposes of the supplemental retirement benefits), and Mr. Harlacher, 43. ESTIMATED RETIREMENT BENEFITS
NAME YEAR OF 65TH BIRTHDAY LUMP SUM VALUE ---- --------------------- -------------- H. E. Cosgrove........ 2008 $2,993,000(2) B. S. Graham.......... 2013 1,540,000(1) T. S. Shaw............ 2012 1,789,000(2) B. R. Elson........... 2006 1,213,000(2) M. I. Harlacher....... 2007 2,323,000(2)
____________ (1) Amounts include (i) interest credits for cash balances projected to be 5.01% per annum on annual salary credits and prior service balances, if any, and (ii) accrued benefits as of December 31, 1998 under retirement plans then applicable to the named executive officer. Benefits are not subject to any offset for Social Security payments or other offset amounts and assume no future increases in base salary or total pay. (2) Under the Conectiv Retirement Plan's grandfather provisions, employees who participated in the Delmarva or Atlantic Retirement Plans and who met certain age and service requirements as of December 31, 1998, will have retirement benefits for all years of service up to retirement calculated according to their original final pay formula benefit. This benefit will be compared to the cash balance account and the employee will receive whichever is greater. Estimated benefits are based on the Delmarva Retirement Plan for Messrs. Cosgrove, Shaw and Elson, the Cash Balance Pension Plan for Mrs. Graham and the Atlantic Retirement Plan for Mr. Harlacher. The amount of benefit under such grandfathering is illustrated in the following tables applicable to the Delmarva and Atlantic Retirement Plans, respectively: DELMARVA RETIREMENT PLAN PENSION PLAN TABLE ANNUAL RETIREMENT BENEFITS IN SPECIFIED REMUNERATION AND YEARS OF SERVICE CLASSIFICATIONS
AVERAGE ANNUAL EARNINGS OR THE 5 CONSECUTIVE YEARS OF EARNINGS THAT RESULT IN THE HIGHEST AVERAGE 15 YRS. 20 YRS. 25 YRS. 30 YRS. 35 YRS. - ----------------------------- ------- ------- ------- ------- ------- $125,000............................ 28,599 38,132 47,665 57,198 66,732 200,000(1)........................ 46,599 62,132 77,665 93,198 108,732 300,000(1)........................ 70,599 94,132 117,665 141,198(2) 4,732(2) 400,000(1)........................ 94,599 126,132 157,665(2) 189,198(2) 220,732(2) 500,000(1)........................ 118,599 158,132(2) 197,665(2) 237,198(2) 276,732(2)
_____________ (1) Effective January 1, 1998, annual compensation recognized may not exceed $160,000. (2) For 1998, the limit on annual benefits is $130,000. Benefits are payable in the form of a 50% joint and surviving spouse annuity or lump sum and earnings include base salary, overtime and bonus. ATLANTIC RETIREMENT PLAN PENSION PLAN TABLE ANNUAL RETIREMENT BENEFITS IN SPECIFIED REMUNERATION AND YEARS OF SERVICE CLASSIFICATIONS
AVERAGE ANNUAL EARNINGS FOR THE 5 CONSECUTIVE YEARS OF EARNINGS THAT RESULT IN THE HIGHEST AVERAGE 15 YRS. 20 YRS. 25 YRS. 30 YRS. 35 YRS. $125,000.......................................... 30,000 40,000 50,000 60,000 70,000 200,000(1)...................................... 48,000 64,000 80,000 96,000 112,000 300,000(1)...................................... 72,000 96,000 120,000 144,000(2) 168,000(2) 400,000(1)...................................... 96,000 128,000 160,000(2) 192,000(2) 224,000(2) 500,000(1)...................................... 120,000 160,000(2) 200,000(2) 240,000(2) 280,000(2)
_____________ (1) Effective January 1, 1998, annual compensation recognized may not exceed $160,000. (2) For 1998, the limit on annual benefits is $130,000. Benefits are paid in the form of a life annuity or lump sum and earnings include base salary and bonus. CHANGE IN CONTROL SEVERANCE AGREEMENTS AND OTHER PROVISIONS The Company has entered into change in control severance agreements with Messrs. Cosgrove, Elson and Shaw and Mrs. Graham and two other senior executives. The agreements are intended to encourage the continued dedication of members of the Company's senior management team. These agreements provide potential benefits for such executives upon actual or constructive termination of employment (other than for cause) following a change in control of the Company, as defined in such agreements. Each affected executive would receive a severance payment equal to three times Base Salary and Bonus and Company-paid medical, dental, vision, group life and disability benefits during the three years after termination of employment, and a cash payment equal to the actuarial equivalent of accrued retirement pension credits equal to 36 months of additional service. In the event of a change in control, the Variable Compensation Plan provides that outstanding options become exercisable in full immediately, all conditions to the vesting of PARS are deemed satisfied and shares will be fully vested and nonforfeitable, DEU's will become fully vested and be immediately payable, variable compensation deferred under the Management Stock Purchase Program will be immediately distributed, and payment of variable compensation, if any, for the current year will be decided by the Board's Personnel & Compensation Committee. For the Deferred Compensation Plan, the Committee may decide to distribute all deferrals in cash immediately or continue the deferral elections of participants in which event the Company will fully fund a "springing rabbi trust" to satisfy the obligations. An independent institutional trustee will maintain any such trust established by reason of this provision. DIRECTOR COMPENSATION With the exception of Mr. Jacobs, directors who are not officers of the Company receive an annual retainer of $20,000 plus $1,000 for each Board and Committee meeting attended in person and $500 for each Board and Committee meeting attended by teleconference. Chairpersons of the Audit, Personnel & Compensation, Nominating and Nuclear Oversight Committees receive an additional annual retainer of $2,500. This program of director compensation was established by the Board of Directors in 1998. Mr. Jacobs provides services to the Company under a consulting contract with a value of $130,000 per year and receives no additional compensation as a director. Directors are eligible to participate in the Director Stock Purchase Plan and the Conectiv Deferred Compensation Plan. Under these plans, directors may defer any part of their director compensation into recordkeeping accounts of stock equivalent units at a 20% discount. These accounts earn at the rate of the Conectiv dividend. Part III(b). SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT. The following table provides information with respect to the only person who is known to Conectiv to be the beneficial owner of more than 5% of the outstanding shares of Common Stock of the Company.
NAME SHARES BENEFICIALLY PERCENT OF CLASS AND ADDRESS OF BENEFICIAL OWNER OWNED (1) (COMPANY COMMON STOCK) - ------------------------------- --------- ---------------------- Franklin Resources, Inc. 6,367,400 6.4% 777 Mariners Island Boulevard P.O. Box 7777 San Mateo, California 94403
___________ (1) The share ownership shown above is based on Amendment No. 4 to a Form 13G, dated December 31, 1998, filed with the Securities and Exchange Commission. Part III(c). Contracts and transactions. See Item 6 Part III(a) above. Part III(d). Indebtedness. See Item 6 Part III(a) above. Part III(e). Participation in bonus and profit sharing arrangement. See Item 6 Part III(a) above. Part III(f). Directors and officers rights to indemnity. Provisions for indemnification of directors and executive officers are included in the Certificate of Incorporation or By-Laws in accordance with applicable laws. DIRECTORS AND OFFICERS' LIABILITY INSURANCE - Insurance is purchased for all the Registrant's directors and executive officers, plus the directors and officers of the subsidiary companies. This insurance also indemnifies the Registrant and its subsidiary companies against any amounts paid by them as allowed by Corporate law or By-laws of the Registrant to covered directors and executive officers. ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS Part I. Expenditures for any political party, candidate for public office or holder of such office, or any committee or agent therefor. None. ITEM 7. Continued Part II. Expenditures for any citizens group or public relations counsel.
- ------------------------------------------------------------------------------------------------- NAME OF ACCOUNTS COMPANY NAME OF RECIPIENT PURPOSE CHARGED AMOUNT - ------------------------------------------------------------------------------------------------- General public relations Admin. & Conectiv Stanton Communications consulting Gen. $207,400 - --------------------------------------------------------------------------------------------------
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS Part I. Intercompany Contracts. Part II. System contracts to purchase goods or services from any affiliate (other than a System company) or a company in which any director or executive officer is a partner or owns 5% or more of any class of equity securities. None. Part III. System contracts with others on a continuing basis for management, supervisory, or financial advisory review. None. ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES 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. Due to earnings of the EWG that have not been distributed, the net book investment in the EWG as of March 31, 1998 was $5.065 million. However, there has been no additional post- merger investment in this EWG by Conectiv or a subsidiary. ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS Page Ref -------- CONSOLIDATING FINANCIAL STATEMENTS CONSOLIDATING STATEMENT OF INCOME FOR THE PERIOD ENDED DECEMBER 31, 1998 Conectiv and Subsidiaries F-1A Delmarva Power and Light Company and Subsidiaries F-1B Atlantic City Electric Company and Subsidiaries F-1C Delmarva Capital Investments, Inc. and Subsidiaries F-1D Conectiv Energy Supply, Inc. and Subsidiary F-1E Atlantic Energy Enterprises, Inc. and Subsidiaries F-1F Conectiv Services, Inc. and Subsidiary F-1G Conectiv Solutions LLC and Subsidiary F-1H Conectiv Thermal Systems, Inc. and Subsidiaries F-1I Atlantic Generation, Inc. and Subsidiaries F-1J Atlantic Energy Technology, Inc. and Subsidiary F-1K CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 1998 Conectiv and Subsidiaries F-2A Delmarva Power and Light Company and Subsidiaries F-2B Atlantic City Electric Company and Subsidiaries F-2C Delmarva Capital Investments, Inc. and Subsidiaries F-2D Conectiv Energy Supply, Inc. and Subsidiary F-2E Atlantic Energy Enterprises, Inc. and Subsidiaries F-2F Conectiv Services, Inc. and Subsidiary F-2G Conectiv Solutions LLC and Subsidiary F-2H Conectiv Thermal Systems, Inc. and Subsidiaries F-2I Atlantic Generation, Inc. and Subsidiaries F-2J Atlantic Energy Technology, Inc. and Subsidiary F-2K CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED DECEMBER 31, 1998 Conectiv and Subsidiaries F-3A Delmarva Power and Light Company and Subsidiaries F-3B Atlantic City Electric Company and Subsidiaries F-3C Delmarva Capital Investments, Inc. and Subsidiaries F-3D Conectiv Energy Supply, Inc. and Subsidiary F-3E Atlantic Energy Enterprises, Inc. and Subsidiaries F-3F Conectiv Services, Inc. and Subsidiary F-3G Conectiv Solutions LLC and Subsidiary F-3H Conectiv Thermal Systems, Inc. and Subsidiaries F-3I Atlantic Generation, Inc. and Subsidiaries F-3J Atlantic Energy Technology, Inc. and Subsidiary F-3K CONSOLIDATING STATEMENT OF RETAINED EARNINGS FOR THE PERIOD ENDED DECEMBER 31, 1998 Conectiv and Subsidiaries F-4A Delmarva Power and Light Company and Subsidiaries F-4B Atlantic City Electric Company and Subsidiaries F-4C Delmarva Capital Investments, Inc. and Subsidiaries F-4D Conectiv Energy Supply, Inc. and Subsidiary F-4E Atlantic Energy Enterprises, Inc. and Subsidiaries F-4F Conectiv Services, Inc. and Subsidiary F-4G Conectiv Solutions LLC and Subsidiary F-4H Conectiv Thermal Systems, Inc. and Subsidiaries F-4I Atlantic Generation, Inc. and Subsidiaries F-4J Atlantic Energy Technology, Inc. and Subsidiary F-4K ITEM 10. Continued Consolidated Notes 1 through 22, pages II-23 through II-55, to the Consolidated Financial Statements of Conectiv's 1998 Form 10-K filed on March 26, 1999 is incorporated herein by reference. Consolidated Notes 1 through 18, pages II-19, through II-37, to the Consolidated Financial Statements of Atlantic City Electric Company's 1998 Form 10-K filed on March 26, 1999 is incorporated herein by reference. Consolidated Notes 1through 21, pages II-21 through II-41 to the Consolidated Financial Statements of Delmarva Power & Light Company's 1998 Form 10-K filed on March 26, 1999 is incorporated herein by reference. SIGNATURE Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the Registrant has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. Conectiv /s/ James P. Lavin ------------------------------- James P. Lavin Controller Date: May 3, 1999 Item 10. Continued Exhibits filed as part of this report: A - SEC Act of 1934 Reports incorporated by reference B - Index to Corporate Organization & By-Laws Exhibits C - Indentures or Contracts D - Tax Allocation Agreement for 1998 E - Other Documents Prescribed by Rule or Order F - Report of Independent Accountants G - Financial Data Tables H - Organizational Chart of Exempt Wholesale Generators of Foreign Utility Holding Companies I - Audited Financial Statements and Analytical Reviews and Conclusions Regarding Exempt Wholesale Generators or Foreign Utility Holding Companies EXHIBIT A Conectiv's 1998 Proxy Statement and Annual Report to Shareholders filed with the Commission on February 5, 1999 (File No. 1-13895) is incorporated herein by reference. EXHIBIT B Index to corporate organization and by-laws exhibits filed pursuant to the Public Utility Holding Company Act of 1935.
----------------------------------------- Exhibit B Notes ----------------------------------------- Articles of Incorporation* By-Laws* - ----------------------------------------------------------------------------------------------------------- Conectiv - ----------------------------------------------------------------------------------------------------------- Atlantic City Electric Company - ----------------------------------------------------------------------------------------------------------- Atlantic Capital I - ----------------------------------------------------------------------------------------------------------- Atlantic Capital II - ----------------------------------------------------------------------------------------------------------- Atlantic Energy Enterprises, Inc. - ----------------------------------------------------------------------------------------------------------- Atlantic Southern Properties, Inc. - ----------------------------------------------------------------------------------------------------------- ATE Investments, Inc. - ----------------------------------------------------------------------------------------------------------- CoastalComm, Inc. - ----------------------------------------------------------------------------------------------------------- Atlantic Energy Technology, Inc. - ----------------------------------------------------------------------------------------------------------- The Earth Exchange, Inc. - ----------------------------------------------------------------------------------------------------------- Conectiv Thermal System, Inc. - ----------------------------------------------------------------------------------------------------------- ATS Operating Services, Inc. - ----------------------------------------------------------------------------------------------------------- Atlantic Jersey Thermal Systems, Inc. - ----------------------------------------------------------------------------------------------------------- Thermal Energy Limited Partnership - ----------------------------------------------------------------------------------------------------------- Atlantic Generation, Inc. - ----------------------------------------------------------------------------------------------------------- Pedrick Gen., Inc. - ----------------------------------------------------------------------------------------------------------- Pedrick Ltd, Inc. - ----------------------------------------------------------------------------------------------------------- Vineland General, Inc. - ----------------------------------------------------------------------------------------------------------- Vineland Limited, Inc. - ----------------------------------------------------------------------------------------------------------- Binghamton General, Inc. - ----------------------------------------------------------------------------------------------------------- Binghamton Limited, Inc. - ----------------------------------------------------------------------------------------------------------- Atlantic Energy International - ----------------------------------------------------------------------------------------------------------- Conectiv Communications, Inc. - ----------------------------------------------------------------------------------------------------------- Conectiv Energy Supply, Inc. - ----------------------------------------------------------------------------------------------------------- Petron Oil Corporation - ----------------------------------------------------------------------------------------------------------- Conectiv Resource Partners, Inc. - ----------------------------------------------------------------------------------------------------------- Conectiv Services, Inc. - ----------------------------------------------------------------------------------------------------------- Conectiv Plumbing LLC - ----------------------------------------------------------------------------------------------------------- Conectiv Solutions, L.L.C. - ----------------------------------------------------------------------------------------------------------- Power Consulting Group, Inc. - ----------------------------------------------------------------------------------------------------------- Delmarva Capital Investments, Inc. - ----------------------------------------------------------------------------------------------------------- DCI I, Inc. - ----------------------------------------------------------------------------------------------------------- DCI II, Inc. - ----------------------------------------------------------------------------------------------------------- Christiana Capital Management, Inc. - ----------------------------------------------------------------------------------------------------------- Delmarva Operating Services Company - ----------------------------------------------------------------------------------------------------------- DCTC-Burney, Inc. - ----------------------------------------------------------------------------------------------------------- Delmarva Power & Light - ----------------------------------------------------------------------------------------------------------- Delmarva Financing I - ----------------------------------------------------------------------------------------------------------- Delmarva Services Company - ----------------------------------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------------------------------
* To be filed by amendment EXHIBIT C (a) *Reference is made to Delmarva Power & Light Company's 1998 Form 10-K, page IV-2, filed with the Commission on March 29, 1999 (File No. 1- 1405) and to Atlantic City Electric Company's 1998 Form 10-K, pages IV-3 through IV-3; for the indentures and other fundamental documents defining the rights of security holders. * Incorporated herein by reference. EXHIBIT D A copy of the System Intercompany Income Tax Allocation Agreement (Agreement) is filed herewith as Exhibit D to Form U-5S (1998). EXHIBIT E Copies of other documents prescribed by rule or order. EXHIBIT F REPORT OF INDEPENDENT ACCOUNTANTS --------------------------------- EXHIBIT G Financial Data Tables are filed herewith as Exhibit 27. EXHIBIT H Reference is made to Item 1, footnote (h) to Connectiv's Form U-5S (1998) filed herewith. EXHIBIT I Not Applicable Conectiv and Subsidiaries Consolidating Statement of Income for the Year Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, Conectiv Reclasses and Conectiv DPL Consolidated Consol Entries Parent CRP Consolidated ------------ -------------- ------ --- ------------ Operating Revenues Electric $ 2,203,748 $ 1,025 $ - $ - $ 1,329,393 Gas 535,082 4,463 - - 528,646 Other Services 332,776 (138,912) - 136,562 14,427 --------------- ----------- ----------- ---------- ----------- Total 3,071,606 (133,424) - 136,562 1,872,466 --------------- ----------- ----------- ---------- ----------- Operating Expenses Electric fuel and purchased power 875,816 (153,323) - - 630,431 Gas purchased 486,411 - - - 486,411 Other services' cost of sales 263,319 - - - 8,010 Purchased electric capacity 182,676 153,323 - - 29,353 Employee separation and other Merger related costs 27,704 (61,087) - - 27,704 Operation and maintenance 532,419 (159,572) 1,567 135,182 249,761 Depreciation 241,420 6,175 - 611 131,209 Taxes other than income taxes 74,926 1 72 14 38,290 --------------- ----------- ----------- ---------- ----------- 2,684,691 (214,483) 1,639 135,807 1,601,169 --------------- ----------- ----------- ---------- ----------- Operating Income 386,915 81,059 (1,639) 755 271,297 --------------- ----------- ----------- ---------- ----------- Other Income Allowance for equity funds used during construction 2,609 - - 2,135 Other income 34,251 (151,359) 157,135 48 (263) --------------- ----------- ----------- ---------- ----------- 36,860 (151,359) 157,135 48 1,872 --------------- ----------- ----------- ---------- ----------- Interest Expense Interest charges 153,644 2 3,958 856 82,415 Allowance for borrowed funds used during construction and (4,213) (1) (44) (53) (2,020) capitalized interest --------------- ----------- ----------- ---------- ----------- 149,431 1 3,914 803 80,395 --------------- ----------- ----------- ---------- ----------- Preferred Stock Dividend Requirements of Subsidiaries 15,326 - - - 10,040 --------------- ----------- ----------- ---------- ----------- Income Before Income Taxes 259,018 (70,301) 151,582 - 182,734 Income Taxes 105,817 35,585 (1,619) 26 74,676 --------------- ----------- ----------- ---------- ----------- Net Income $ 153,201 $ (105,886) $153,201 $ (26) $ 108,058 =============== ============ =========== ========== =========== Earnings Applicable to Common Stock Comon Stock $ 141,292 Class A common stock 11,909 --------------- $ 153,201 ===============
F-1A Page 1 of 3 Conectiv and Subsidiaries Consolidating Statement of Income for the Year Ended December 31, 1998 (Dollars In Thousands)
ACE DCI* CES* AEE* Consolidated Consolidated Consolidated Consolidated AEI ------------ ------------ ------------ ------------ ------------ Operating Revenues Electric $ 873,173 $ - Gas - - Other Services 2,569 - ----------- ---------- Total 875,742 - ----------- ---------- Operating Expenses Electric fuel and purchased power 398,708 - Gas purchased - - Other services' cost of sales 1,912 - Purchased electric capacity - - Employee separation and other Merger related costs 61,087 - Operation and maintenance 196,978 18 Depreciation 94,269 - Taxes other than income taxes 35,687 - ----------- ---------- 788,641 18 ----------- ---------- Operating Income 87,101 (18) ----------- ---------- Other Income Allowance for equity funds used during construction 474 - Other income 7,095 - ----------- ---------- 7,569 - ----------- ---------- Interest Expense Interest charges 53,014 - Allowance for borrowed funds used during construction (749) - and capitalized interest ----------- ---------- 52,265 - ----------- ---------- Preferred Stock Dividend Requirements of Subsidiaries 5,286 - ----------- ---------- Income Before Income Taxes 37,119 (18) Income Taxes 13,374 - ----------- ----------- Net Income $ 23,745 $ (18) =========== ============= Earnings Applicable to Common Stock Comon Stock Class A common stock
* CONFIDENTIAL TREATMENT REQUESTED F-1A Page 2 of 3 Conectiv and Subsidiaries Consolidating Statement of Income for the Year Ended December 31, 1998 (Dollars in Thousands)
CSI* Solutions* DSC Consolidated Consolidated CCI* ------------ ---------------- ---------------- --------- Operating Revenues Electric $ - Gas - Other Services - ------------ Total - ------------ Operating Expenses Electric fuel and purchased power - Gas purchased - Other services' cost of sales - Purchased electric capacity - Employee separation and other Merger related costs - Operation and maintenance (1,589) Depreciation 412 Taxes other than income taxes 89 ------------ (1,088) ------------ Operating Income 1,088 ------------ Other Income Allowance for equity funds used during construction - Other income 150 ------------ 150 ------------ Interest Expense Interest charges 374 Allowance for borrowed funds used during construction and capitalized interest - ------------ 374 ------------ Preferred Stock Dividend Requirements of Subsidiaries - ------------ Income Before Income Taxes 864 Income Taxes 299 ------------ ------------ Net Income $ 565 ============ Earnings Applicable to Common Stock Common Stock Class A common stock
* CONFIDENTIAL TREATMENT REQUESTED F-1A Page 3 of 3 Delmarva Power and Light Company and Subsidiaries Consolidating Statement of Income for the Year Ended December 31, 1998 (Dollars in Thousands)
Eliminations, Total DPL Reclasses and DPL DPL Consolidated Consol Entries Parent Fin I ------------ --------------- ------ ----- Operating Revenues Electric $ 1,329,393 $ - $ 1,329,393 $ - Gas 528,646 - 528,646 - Other Services 14,427 - 14,427 - ------------ ------------- ----------- -------- Total 1,872,466 - 1,872,466 - ------------ ------------- ----------- -------- Operating Expenses Electric fuel and purchased power 630,431 - 630,431 - Gas purchased 486,411 - 486,411 - Other services' cost of sales 8,010 - 8,010 - Purchased electric capacity 29,353 - 29,353 - Employee separation and other Merger related costs 27,704 - 27,704 - Operation and maintenance 249,761 - 249,761 - Depreciation 131,209 - 131,209 - Taxes other than income taxes 38,290 - 38,290 - ------------ ------------- ----------- -------- 1,601,169 - 1,601,169 - ------------ ------------- ----------- -------- Operating Income 271,297 - 271,297 - ------------ ------------- ----------- -------- Other Income Allowance for equity funds used during construction 2,135 - 2,135 - Other income (263) (5,863) (88) 5,688 ------------ ------------- ----------- -------- 1,872 (5,863) 2,047 5,688 ------------ ------------- ----------- -------- Interest Expense Interest charges 82,415 (11,551) 88,278 5,688 Allowance for borrowed funds used during construction and capitalized interest (2,020) - (2,020) - ------------ ------------- ----------- -------- 80,395 (11,551) 86,258 5,688 ------------ ------------- ----------- -------- Preferred Stock Dividend Requirements of Subsidiaries 10,040 5,688 4,352 - ------------ ------------- ----------- -------- Income Before Income Taxes 182,734 - 182,734 - Income Taxes 74,676 - 74,676 - ------------ ------------- ----------- -------- ------------ ------------- ----------- -------- Net Income $ 108,058 $ - $ 108,058 $ - ============ ============= =========== ========
F-1B Atlantic City Electric Company and Subsidiaries Consolidating Statement of Income for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Eliminations, Total ACE Reclasses and Consolidated Consol Entries ACE Parent ACE Cap I ACE Cap II ---------------- ------------------ -------------- ------------- -------------- Operating Revenues Electric $ 873,173 $ - $ 873,173 $ - $ - Gas - - - - - Other Services 2,569 - 2,569 - - ---------- ------------ ---------- ------------ ------------- Total 875,742 - 875,742 - - ---------- ------------ ---------- ------------ ------------- Operating Expenses Electric fuel and purchased power 398,708 - 398,708 - - Gas purchased - - - - - Other services' cost of sales 1,912 - 1,912 - - Purchased electric capacity - - - - - Employee separation and other Merger related costs 61,087 - 61,087 - - Operation and maintenance 196,978 - 196,978 - - Depreciation 94,269 - 94,269 - - Taxes other than income taxes 35,687 - 35,687 - - ---------- ------------ ---------- ------------ ------------- 788,641 - 788,641 - - ---------- ------------ ---------- ------------ ------------- Operating Income 87,101 - 87,101 - - ---------- ------------ ---------- ------------ ------------- Other Income Allowance for equity funds used during construction 474 - 474 - - Other income 7,095 5,247 7,253 4,812 277 ---------- ------------ ---------- ------------ ------------- 7,569 5,247 7,727 4,812 277 ---------- ------------ ---------- ------------ ------------- Interest Expense Interest charges 53,014 (5,247) 58,261 - - Allowance for borrowed funds used during construction and capitalized - interest (749) - (749) - - ---------- ------------ ---------- ------------ ------------- 52,265 (5,247) 57,512 - - ---------- ------------ ---------- ------------ ------------- Preferred Stock Dividend Requirements of Subsidiaries 5,286 - 197 4,812 277 ---------- ------------ ---------- ------------ ------------- Income Before Income Taxes 37,119 - 37,119 - - Income Taxes 13,374 - 13,374 - - ---------- ------------ ---------- ------------ ------------- ---------- ------------ ---------- ------------ ------------- Net Income $ 23,745 $ - $ 23,745 $ - $ - ========== ============ ========== =========== ============
F-1C Delmarva Capital Investments, Inc. and Subsidiaries* Consolidating Statement of Income for the Year Ended December 31, 1998 (Dollars in Thousands)
Eliminations, Total DCI Reclasses and Consolidated Consol Entries DCI Parent DCI I DCI II ---------------- ------------------ -------------- ---------- ---------- Operating Revenues Electric Gas Other Services Total Operating Expenses Electric fuel and purchased power Gas purchased Other services' cost of sales Purchased electric capacity Employee separation and other Merger related costs Operation and maintenance Depreciation Taxes other than income taxes Operating Income Other Income Allowance for equity funds used during construction Other income Interest Expense Interest charges Allowance for borrowed funds used during construction and capitalized interest Preferred Stock Dividend Requirements of Subsidiaries Income Before Income Taxes Income Taxes Net Income
* CONFIDENTIAL TREATMENT REQUESTED F-1D Page 1 of 2 Delmarva Capital Investments, Inc. and Subsidiaries* Consolidating Statement of Income for the Year Ended December 31, 1998 (Dollars in Thousands)
CCM DOSC DCTC -------------- --------------- --------------- Operating Revenues Electric Gas Other Services Total Operating Expenses Electric fuel and purchased power Gas purchased Other services' cost of sales Purchased electric capacity Employee separation and other Merger related costs Operation and maintenance Depreciation Taxes other than income taxes Operating Income Other Income Allowance for equity funds used during construction Other income Interest Expense Interest charges Allowance for borrowed funds used during construction and capitalized interest Preferred Stock Dividend Requirements of Subsidiaries Income Before Income Taxes Income Taxes Net Income
* CONFIDENTIAL TREATMENT REQUESTED F-1D Page 2 of 2 Conectiv Energy Supply, Inc. and Subsidiary* Consolidating Statement of Income for the Year Ended December 31, 1998 (Dollars in Thousands)
Eliminations, Total CES Reclasses and Consolidated Consol Entries CES Parent Petron ------------ -------------- ---------- ------ Operating Revenues Electric Gas Other Services Total Operating Expenses Electric fuel and purchased power Gas purchased Other services' cost of sales Purchased electric capacity Employee separation and other Merger related costs Operation and maintenance Depreciation Taxes other than income taxes Operating Income Other Income Allowance for equity funds used during construction Other income Interest Expense Interest charges Allowance for borrowed funds used during construction and capitalized interest Preferred Stock Dividend Requirements of Subsidiaries Income Before Income Taxes Income Taxes Net Income
* CONFIDENTIAL TREATMENT REQUESTED F-1E Atlantic Energy Enterprises, Inc. and Subsidiaries* Consolidating Statement of Income for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Eliminations, Total AEE Reclasses and Consolidated Consol Entries AEE Parent ASP ATE ---------------- ------------------ -------------- ------- -------- Operating Revenues Electric Gas Other Services Total Operating Expenses Electric fuel and purchased power Gas purchased Other services' cost of sales Purchased electric capacity Employee separation and other Merger related costs Operation and maintenance Depreciation Taxes other than income taxes Operating Income Other Income Allowance for equity funds used during construction Other income Interest Expense Interest charges Allowance for borrowed funds used during construction and capitalized interest Preferred Stock Dividend Requirements of Subsidiaries Income Before Income Taxes Income Taxes Net Income
* CONFIDENTIAL TREATMENT REQUESTED F-1F Page 1 of 2 Atlantic Energy Enterprises, Inc. and Subsidiaries* Consolidating Statement of Income for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
CTS AGI AET Consolidated CI Consolidated Consolidated ----------------- --------- ----------------- ---------------- Operating Revenues Electric Gas Other Services Total Operating Expenses Electric fuel and purchased power Gas purchased Other services' cost of sales Purchased electric capacity Employee separation and other Merger related costs Operation and maintenance Depreciation Taxes other than income taxes Operating Income Other Income Allowance for equity funds used during construction Other income Interest Expense Interest charges Allowance for borrowed funds used during construction and capitalized interest Preferred Stock Dividend Requirements of Subsidiaries Income Before Income Taxes Income Taxes Net Income
* CONFIDENTIAL TREATMENT REQUESTED F-1F Page 2 of 2 Conectiv Services, Inc. and Subsidiary* Consolidating Statement of Income for the Year Ended December 31, 1998 (Dollars in Thousands)
Eliminations, Total CSI Reclasses and Consolidated Consol Entries CSI Parent Plumbing ---------------- ------------------ -------------- ------------ Operating Revenues Electric Gas Other Services Total Operating Expenses Electric fuel and purchased power Gas purchased Other services' cost of sales Purchased electric capacity Employee separation and other Merger related costs Operation and maintenance Depreciation Taxes other than income taxes Operating Income Other Income Allowance for equity funds used during construction Other income Interest Expense Interest charges Allowance for borrowed funds used during construction and capitalized interest Preferred Stock Dividend Requirements of Subsidiaries Income Before Income Taxes Income Taxes Net Income
* CONFIDENTIAL TREATMENT REQUESTED F-1G Conectiv Solutions LLC and Subsidiary* Consolidating Statement of Income for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Eliminations, Total Solutions Reclasses and Solutions Power Consolidated Consol Entries Parent Consulting --------------- -------------- --------- ---------- Operating Revenues Electric Gas Other Services Total Operating Expenses Electric fuel and purchased power Gas purchased Other services' cost of sales Purchased electric capacity Employee separation and other Merger related costs Operation and maintenance Depreciation Taxes other than income taxes Operating Income Other Income Allowance for equity funds used during construction Other income Interest Expense Interest charges Allowance for borrowed funds used during construction and capitalized interest Preferred Stock Dividend Requirements of Subsidiaries Income Before Income Taxes Income Taxes Net Income
* CONFIDENTIAL TREATMENT REQUESTED F-1H Conectiv Thermal Systems, Inc. and Subsidiaries* Consolidating Statement of Income for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Eliminations, Total CTS Reclasses and Consolidated Consol Entries CTS Parent AJTS AOS TELP ------------ -------------- ---------- -------- --------- --------- Operating Revenues Electric Gas Other Services Total Operating Expenses Electric fuel and purchased power Gas purchased Other services' cost of sales Purchased electric capacity Employee separation and other Merger related costs Operation and maintenance Depreciation Taxes other than income taxes Operating Income Other Income Allowance for equity funds used during construction Other income Interest Expense Interest charges Allowance for borrowed funds used during construction and capitalized interest Preferred Stock Dividend Requirements of Subsidiaries Income Before Income Taxes Income Taxes Net Income
* CONFIDENTIAL TREATMENT REQUESTED F-1I Atlantic Generation, Inc. and Subsidiaries* Consolidating Statement of Income for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Eliminations, Total AGI Reclasses and Consolidated Consol Entries AGI Parent PED GEN PED LTD ---------------- ------------------ -------------- ----------- ----------- Operating Revenues Electric Gas Other Services Total Operating Expenses Electric fuel and purchased power Gas purchased Other services' cost of sales Purchased electric capacity Employee separation and other Merger related costs Operation and maintenance Depreciation Taxes other than income taxes Operating Income Other Income Allowance for equity funds used during construction Other income Interest Expense Interest charges Allowance for borrowed funds used during construction and capitalized interest Preferred Stock Dividend Requirements of Subsidiaries Income Before Income Taxes Income Taxes Net Income
* CONFIDENTIAL TREATMENT REQUESTED F-1J Page 1 of 2 Atlantic Generation, Inc. and Subsidiaries* Consolidating Statement of Income for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
VINE GEN VINE LTD BING GEN BING LTD ------------ ------------ ------------- ------------ Operating Revenues Electric Gas Other Services Total Operating Expenses Electric fuel and purchased power Gas purchased Other services' cost of sales Purchased electric capacity Employee separation and other Merger related costs Operation and maintenance Depreciation Taxes other than income taxes Operating Income Other Income Allowance for equity funds used during construction Other income Interest Expense Interest charges Allowance for borrowed funds used during construction and capitalized interest Preferred Stock Dividend Requirements of Subsidiaries Income Before Income Taxes Income Taxes Net Income
* CONFIDENTIAL TREATMENT REQUESTED F-1J Page 2 of 2 Atlantic Energy Technology, Inc. and Subsidiary* Consolidating Statement of Income for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Eliminations,* Total AET* Reclasses and Consolidated Consol Entries AET Parent* TEE* ------------ ------------- ------------ --------- Operating Revenues Electric Gas Other Services Total Operating Expenses Electric fuel and purchased power Gas purchased Other services' cost of sales Purchased electric capacity Employee separation and other Merger related costs Operation and maintenance Depreciation Taxes other than income taxes Operating Income Other Income Allowance for equity funds used during construction Other income Interest Expense Interest charges Allowance for borrowed funds used during construction and capitalized interest Preferred Stock Dividend Requirements of Subsidiaries Income Before Income Taxes Income Taxes Net Income
* CONFIDENTIAL TREATMENT REQUESTED F-1K Conectiv and Subsidiaries Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, Conectiv Reclasses and Conectiv DPL Consolidated Consol. Entries Parent CRP Consolidated ------------ --------------- ------------- ---------- --------------- Assets Current Assets Cash & cash equivalents $ 65,884 $ - $ 18,691 $ (114) $ 1,761 Accounts receivable 455,088 (43,953) 212,400 9,716 261,060 Inventories, at average cost Fuel (coal, oil and gas) 71,701 - - - 44,212 Material and supplies 73,047 - - - 39,323 Prepaid New Jersey sales/excise taxes 20,078 - - - - Prepayments 17,278 - - 930 10,735 Deferred income taxes, net 20,796 - - - 13,061 ---------------------------------------------------------------------------- 723,872 (43,953) 231,091 10,532 370,152 ---------------------------------------------------------------------------- Investments Investment in leveraged leases 122,256 - - - - Funds held by trustee 174,509 - - - 60,208 Other investments 90,913 (1,968,181) 1,965,577 - 1,103 ---------------------------------------------------------------------------- 387,678 (1,968,181) 1,965,577 - 61,311 ---------------------------------------------------------------------------- Property, Plant, and Equipment Electric utility plant 5,649,827 - 29 - 3,049,099 Gas utility plant 249,383 - - - 249,383 Common utility plant 169,883 - 11,774 158,109 ---------------------------------------------------------------------------- 6,069,093 - 29 11,774 3,456,591 Less: Accumulated depreciation (2,499,915) - (16) (611) (1,492,183) ---------------------------------------------------------------------------- Net utility plant in service 3,569,178 - 13 11,163 1,964,408 Utility construction work-in-progress 236,830 - - 379 138,496 Leased nuclear fuel, at amortized cost 63,328 - - - 28,325 Nonutility property, net 208,215 (3,000) - 5,796 4,561 Goodwill, net 402,836 282,866 - - 71,914 ---------------------------------------------------------------------------- 4,480,387 279,866 13 17,338 2,207,704 ---------------------------------------------------------------------------- Deferred Charges & Other Assets Unrecovered purchased power costs 48,274 - - - - Deferred recoverable income taxes 184,434 - - - 82,211 Unrecovered state excise taxes 35,594 - - - - Deferred debt refinancing costs 44,223 - - - 16,181 Unrecovered OPEB costs 34,978 - - - - Prepaid employee benefits costs 16,132 (61,781) - - 88,390 Unamortized debt expense 27,375 - - - 12,141 License fees 24,706 - - - - Other 80,021 - 226 157 45,999 ---------------------------------------------------------------------------- 495,737 (61,781) 226 157 244,922 ---------------------------------------------------------------------------- Total Assets $ 6,087,674 $ (1,794,049) $ 2,196,907 $ 28,027 $ 2,884,089 ============================================================================
F-2A Page 1 of 6 Conectiv and Subsidiaries Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
ACE DCI* CES* AEE* Consolidated Consolidated Consolidated Consolidated AEI -------------- -------------- ------------ ------------ ------------- Assets Current Assets Cash & cash equivalents $ 28,766 $ - Accounts receivable 116,034 (18) Inventories, at average cost Fuel (coal, oil and gas) 27,233 - Material and supplies 21,297 - Prepaid New Jersey sales/excise taxes 20,078 - Prepayments 4,420 - Deferred income taxes, net 7,735 - -------------- ------------- 225,563 (18) -------------- ------------- Investments Investment in leveraged leases - - Funds held by trustee 102,765 - Other investments 112 - -------------- ------------- 102,877 - -------------- ------------- Property, Plant, and Equipment Electric utility plant 2,600,699 - Gas utility plant - - Common utility plant - - -------------- ------------- 2,600,699 - Less :Accumulated depreciation (1,007,105) - -------------- ------------- Net utility plant in service 1,593,594 - Utility construction work-in-progress 97,955 - Leased nuclear fuel, at amortized cost 35,003 - Nonutility property, net 8,208 - Goodwill, net - - -------------- ------------- 1,734,760 - -------------- ------------- Deferred Charges & Other Assets Unrecovered purchased power costs 48,274 - Deferred recoverable income taxes 102,223 - Unrecovered state excise taxes 35,594 - Deferred debt refinancing costs 28,042 - Unrecovered OPEB costs 34,978 - Prepaid employee benefits costs (10,477) - Unamortized debt expense 14,141 - License fees - - Other 30,156 - -------------- ------------- 282,931 - -------------- ------------- Total Assets $ 2,346,131 $ (18) ============== ============
* CONFIDENTIAL TREATMENT REQUESTED F-2A Page 2 of 6 Conectiv and Subsidiaries Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
CSI* Solutions* DSC Consolidated Consolidated CCI* ----------- -------------- ------------- ----------- Assets Current Assets Cash & cash equivalents $ - Accounts receivable (80) Inventories, at average cost Fuel (coal, oil and gas) - Material and supplies - Prepaid New Jersey sales/excise taxes - Prepayments - Deferred income taxes, net - ----------- (80) ----------- Investments Investment in leveraged leases - Funds held by trustee - Other investments 1,571 ----------- 1,571 ----------- Property, Plant, and Equipment Electric utility plant - Gas utility plant - Common utility plant - ----------- - Less: Accumulated depreciation - ----------- Net utility plant in service - Utility construction work-in-progress - Leased nuclear fuel, at amortized cost - Nonutility property, net 10,744 Goodwill, net - ----------- 10,744 ----------- Deferred Charges & Other Assets Unrecovered purchased power costs - Deferred recoverable income taxes - Unrecovered state excise taxes - Deferred debt refinancing costs - Unrecovered OPEB costs - Prepaid employee benefits costs - Unamortized debt expense 43 License fees - Other 11 ----------- 54 ----------- Total Assets $ 12,289 ===========
* CONFIDENTIAL TREATMENT REQUESTED F-2A Page 3 of 6 Conectiv and Subsidiaries Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, Conectiv Reclasses and Conectiv DPL Consolidated Consol. Entries Parent CRP Consolidated ---------------- ------------------- -------------- --------- ---------------- Capitalization & Liabilities Current Liabilities Short-term debt $ 376,061 $ - $ 339,000 $ - $ 21,700 Long-term debt due within one year 80,822 - - - 31,287 Variable rate demand bonds 125,100 - - - 71,500 Accounts payable 240,775 - - 19,493 177,915 Taxes accrued 41,299 - (45,408) (1,123) 16,257 Interest accrued 37,346 - 12,707 450 5,751 Dividends payable 47,743 (43,954) 1,015 - 23,616 Deferred energy costs 15,990 - 45,845 - 413 Current capital lease obligation 28,314 - - - 12,479 Accrued employee separation and - - - - - other merger-related costs 12,173 - 50 - 2,509 Other 76,168 - 416 7,884 27,587 ----------------------------------------------------------------------------------- 1,081,791 (43,954) 353,625 28,704 391,014 ----------------------------------------------------------------------------------- Deferred Credits and Other Liabilities Other postretirement benefits obligation 102,268 63,625 - - (5,964) Deferred income taxes, net 862,179 (56,832) 121 1,345 461,799 Deferred investment tax credits 79,525 - - - 37,383 Long-term capital lease obligation 36,603 - - - 17,003 Other 50,702 - - 3 19,747 ----------------------------------------------------------------------------------- 1,131,277 6,793 121 1,348 529,968 ----------------------------------------------------------------------------------- Capitalization Common Stock 1,007 (103,742) 1,007 1 2 Class A common stock 66 - 66 - - Additional paid-in-capital common 1,462,675 (1,195,875) 1,462,675 - 528,893 Additional paid-in-capital--Class A common 107,095 - 107,095 - - Retained Earnings 276,939 (457,271) 276,939 (26) 322,599 ----------------------------------------------------------------------------------- 1,847,782 (1,756,888) 1,847,782 (25) 851,494 Treasury stock (3,797) - (3,797) - - Unearned Compensation (824) - (824) - - ----------------------------------------------------------------------------------- Total common stockholders' equity 1,843,161 (1,756,888) 1,843,161 (25) 851,494 Preferred stock of subsidiaries: Not subject to mandatory redemption 95,933 - - - 89,702 Subject to mandatory redemption 188,950 - - - 70,000 Long-term debt 1,746,562 - - - 951,911 ----------------------------------------------------------------------------------- 3,874,606 (1,756,888) 1,843,161 (25) 1,963,107 ----------------------------------------------------------------------------------- Total Capitalization & Liabilities $ 6,087,674 $ (1,794,049) $ 2,196,907 $ 28,027 $ 2,884,089 ===================================================================================
F-2A Page 4 of 6 Conectiv and Subsidiaries Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
ACE DCI* CES* AEE* Consolidated Consolidated Consolidated Consolidated AEI* ---------------- ----------------- -------------- ------------- ------------- Capitalization & Liabilities Current Liabilities Short-term debt $ - $ - Long-term debt due within one year 30,075 - Variable rate demand bonds 22,600 - Accounts payable 28,848 - Taxes accrued 22,916 - Interest accrued 29,627 - Dividends payable 22,236 - Deferred energy costs 15,577 - Current capital lease obligation 15,729 - Accrued employee separation and - - other merger-related costs 9,554 - Other 28,770 - --------------- --------------- 225,932 - --------------- --------------- Deferred Credits and Other Liabilities Other postretirement benefits obligation 44,607 - Deferred income taxes, net 343,430 - Deferred investment tax credits 42,142 - Long-term capital lease obligation 19,523 - Other 24,096 - --------------- --------------- 473,798 - --------------- --------------- Capitalization Common Stock 54,963 - Class A common stock - - Additional paid-in-capital common 493,007 1,043 Additional paid-in-capital-Class A common - - Retained Earnings 182,123 (1,061) --------------- --------------- 730,093 (18) Treasury stock - - Unearned Compensation - - --------------- --------------- Total common stockholders' equity 730,093 (18) Preferred stock subsidiaries: Not subject to mandatory redemption 6,231 - Subject to mandatory redemption 118,950 - Long-term debt 791,127 - --------------- --------------- 1,646,401 (18) --------------- --------------- Total Capitalization & Liabilities $ 2,346,131 $ (18) =============== ===============
* CONFIDENTIAL TREATMENT REQUESTED F-2A Page 5 of 6 Conectiv and Subsidiaries Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
CSI* Solution* DSC Consolidated Consolidated CCI* -------------- --------------- --------------- -------------- Capitalization & Liabilities Current Liabilities Short-term debt $ - Long-term debt within one year 998 Variable rate demand bonds - Accounts payable (2,385) Taxes accrued (116) Interest accrued - Dividends payable - Deferred energy costs - Current capital lease obligation - Accrued employee seperation and - other merger-related costs - Other - -------------- (1,503) -------------- Deferred Credits and Other Liabilities Other postretirement benefits obligation - Deferred income taxes, net 2,599 Deferred investment tax credits - Long-term capital lease obligation - Other - -------------- 2,599 -------------- Capitalization Common Stock 1 Class A common stock - Additional paid-in-capital common 5,097 Additional paid-in-capital--Class A common - Retained Earnings 2,652 -------------- 7,750 Treasury stock - Unearned Compensation - -------------- Total common stockholders' equity 7,750 Preferred stock of subsidiaries: Not subject to mandatory redemption - Subject to mandatory redemption - Long-term debt 3,443 -------------- 11,193 -------------- Total Capitalization & Liabilities $ 12,289 ==============
* CONFIDENTIAL TREATMENT REQUESTED F-2A Page 6 of 6 Delmarva Power and Light Company and Subsidiaries Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, DPL Reclasses and DPL DPL Consolidated Consol. Entries Parent Fin I ------------- --------------- --------------- ----------- Assets Current Assets Cash & cash equivalents $ 1,761 $ - $ 1,761 $ - Accounts receivable 261,060 - 261,060 - Inventories, at average cost Fuel (coal, oil and gas) 44,212 - 44,212 - Material and supplies 39,323 - 39,323 - Prepaid New Jersey sales and excise taxes - - - - Prepayments 10,735 - 10,735 - Deferred income taxes, net 13,061 - 13,061 - ---------------------------------------------------------------- 370,152 - 370,152 - ---------------------------------------------------------------- Investments Investment in leveraged leases - - - - Funds held by trustee 60,208 - 60,208 - Other investments 1,103 (74,330) 3,268 72,165 ---------------------------------------------------------------- 61,311 (74,330) 63,476 72,165 ---------------------------------------------------------------- Property, Plant, and Equipment Electric utility plant 3,049,099 - 3,049,099 - Gas utility plant 249,383 - 249,383 - Common utility plant 158,109 - 158,109 - ---------------------------------------------------------------- 3,456,591 - 3,456,591 - Less: Accumulated depreciation (1,492,183) - (1,492,183) ---------------------------------------------------------------- Net utility plant in service 1,964,408 - 1,964,408 - Utility construction work-in-progress 138,496 - 138,496 - Leased nuclear fuel, at amortized cost 28,325 - 28,325 - Nonutility property, net 4,561 - 4,561 - Goodwill, net 71,914 - 71,914 - ---------------------------------------------------------------- 2,207,704 - 2,207,704 - ---------------------------------------------------------------- Deferred Charges & Other Assets Unrecovered purchased power costs - - - - Deferred recoverable income taxes 82,211 - 82,211 - Unrecovered state excise taxes - - - - Deferred debt refinancing costs 16,181 - 16,181 - Unrecovered OPEB costs - - - - Prepaid employee benefits costs 88,390 - 88,390 - Unamortized debt expense 12,141 - 12,141 - License fees - - - - Other 45,999 - 45,999 - ---------------------------------------------------------------- 244,922 - 244,922 - ---------------------------------------------------------------- Total Assets $ 2,884,089 $ (74,330) $ 2,886,254 $ 72,165 ================================================================
F-2B Page 1 of 2 Deimarva Power and Light Company and Subsidiaries Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, DPL Reclasses and DPL DPL Consolidated Consol. Entries Parent Fin I ------------ --------------- ------------ ----------- Capitalization & Liabilities Current Liabilities Short-term debt $ 21,700 $ - $ 21,700 $ - Long-term debt due within one year 31,287 - 31,287 - Variable rate demand bonds 71,500 - 71,500 - Accounts payable 177,915 - 177,915 - Taxes accrued 16,257 - 16,257 - Interest accrued 5,751 - 5,751 - Dividends payable 23,616 - 23,616 - Deferred energy costs 413 - 413 - Current capital lease obligation 12,479 - 12,479 - Accrued employee seperation and - - - - other merger-related costs 2,509 - 2,509 - Other 27,587 - 27,587 - --------------------------------------------------------------- 391,014 - 391,014 - --------------------------------------------------------------- Deferred Credits and Other Liabilities Other postretirement benefits obligation (5,964) - (5,964) - Deferred income taxes, net 461,799 - 461,799 - Deferred investment tax credits 37,383 - 37,383 - Long-term capital lease obligation 17,003 - 17,003 - Other 19,747 - 19,747 - --------------------------------------------------------------- 529,968 - 529,968 - --------------------------------------------------------------- Capitalization Common Stock 2 (2,165) 2 2,165 Class A common stock - - - - Additional paid-in-capital common 528,893 - 528,893 - Additional paid-in-capital--Class A common - - - - Retained Earnings 322,599 - 322,599 - --------------------------------------------------------------- 851,494 (2,165) 851,494 2,165 Treasury stock - - - - Unearned Compensation - - - - --------------------------------------------------------------- Total common stockholders' equity 851,494 (2,165) 851,494 2,165 Preferred stock of subsidiaries : Not subject to mandatory redemption 89,702 - 89,702 - Subject to mandatory redemption 70,000 - - 70,000 Advances from associated company - (72,165) 72,165 - Long-term debt 951,911 - 951,911 - --------------------------------------------------------------- 1,963,107 (74,330) 1,965,272 72,165 --------------------------------------------------------------- Total Capitalization & Liabilities $2,884,089 $ (74,330) $ 2,886,254 $ 72,165 ===============================================================
F-2B Page 2 of 2 Atlantic City Electric Company and Subsidiaries Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, ACE Reclasses and ACE ACE ACE Consolidated Consol. Entries Parent Cap I Cap II ------------ --------------- ----------- --------- ---------- Assets Current Assets Cash & cash equivalents $ 28,766 $ - $ 28,766 $ - $ - Accounts receivable 116,034 - 116,034 - - Inventories, at average cost Fuel (coal, oil and gas) 27,233 - 27,233 - - Material and supplies 21,297 - 21,297 - - Prepaid New Jersey sales and excise taxes 20,078 - 20,078 - - Prepayments 4,420 - 4,420 - - Deferred income taxes, net 7,735 - 7,735 - - ---------------------------------------------------------------------------- 225,563 - 225,563 - - ---------------------------------------------------------------------------- Investments Investment in leveraged leases - - - - - Funds held by trustee 102,765 - 102,765 - - Other investments 112 (100,876) 3,050 72,165 25,773 ---------------------------------------------------------------------------- 102,877 (100,876) 105,815 72,165 25,773 ---------------------------------------------------------------------------- Property, Plant, and Equipment Electric utility plant 2,600,699 - 2,600,699 - - Gas utility plant - - - - - Common utility plant - - - - - --------------------------------------------------------------------------- 2,600,699 - 2,600,699 - - Less: Accumulated depreciation (1,007,105) - (1,007,105) - - --------------------------------------------------------------------------- Net utility plant in service 1,593,594 - 1,593,594 - - Utility construction work-in-progress 97,955 - 97,955 - - Leased nuclear fuel, at amortized cost 35,003 - 35,003 - - Nonutility property, net 8,208 - 8,208 - - Goodwill, net - - - - - ---------------------------------------------------------------------------- 1,734,760 - 1,734,760 - - ---------------------------------------------------------------------------- Deferred Charges & Other Assets Unrecovered purchased power costs 48,274 - 48,274 - - Deferred recoverable income taxes 102,223 - 102,223 - - Unrecovered state excise taxes 35,594 - 35,594 - - Deferred debt refinancing costs 28,042 - 28,042 - - Unrecovered OPEB costs 34,978 - 34,978 - - Prepaid employee benefits costs (10,477) - (10,477) - - Unamortized debt expense 14,141 - 14,141 - - License fees - - - - - Other 30,156 - 30,156 - - ---------------------------------------------------------------------------- 282,931 - 282,931 - - ---------------------------------------------------------------------------- Total Assets $ 2,346,131 $ (100,876) $ 2,349,069 $ 72,165 $ 25,773 ============================================================================
F-2C Page 1 of 2
Atlantic City Electric Company and Subsidiaries Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands) Total Eliminations, ACE Reclasses and ACE ACE ACE Consolidated Consol. Entries Parent Cap I Cap II ------------ --------------- ------ ----- ------ Capitalization & Liabilities Current Liabilities Short-term debt $ - $ - $ - $ - $ - Long-term debt due within one year 30,075 - 30,075 - - Variable rate demand bonds 22,600 - 22,600 - - Accounts payable 28,848 - 28,848 - - Taxes accrued 22,916 - 22,916 - - Interest accrued 29,627 - 29,627 - - Dividends payable 22,236 - 22,236 - - Deferred energy costs 15,577 - 15,577 - - Current capital lease obligation 15,729 - 15,729 - - Accrued employee seperation and - - - - - other merger-related costs 9,554 - 9,554 - - Other 28,770 - 28,770 - - -------------------------------------------------------------------------- 225,932 - 225,932 - - -------------------------------------------------------------------------- Deferred Credits and Other Liabilities Other postretirement benefits obligation 44,607 - 44,607 - - Deferred income taxes, net 343,430 - 343,430 - - Deferred investment tax credits 42,142 - 42,142 - - Long-term capital lease obligation 19,523 - 19,523 - - Other 24,096 - 24,096 - - -------------------------------------------------------------------------- 473,798 - 473,798 - - -------------------------------------------------------------------------- Capitalization Common Stock 54,963 (2,938) 54,963 2,165 773 Class A common stock - - - - - Additional paid-in-capital common 493,007 - 493,007 - - Additional paid-in-capital--Class A common - - - - - Retained Earnings 182,123 - 182,123 - - -------------------------------------------------------------------------- 730,093 (2,938) 730,083 2,165 773 Treasury stock - - - - Unearned Compensation - - - - - -------------------------------------------------------------------------- Total common stockholders' equity 730,093 (2,938) 730,093 2,165 773 Preferred stock of subsidiares : Not subject to mandatory redemption 6,231 - 6,231 - - Subject to mandatory redemption 118,950 - 23,950 70,000 25,000 Advances from associated company - (97,938) 97,938 - - Long-term debt 791,127 - 791,127 - - -------------------------------------------------------------------------- 1,646,401 (100,876) 1,649,339 72,165 25,773 -------------------------------------------------------------------------- Total Capitalization & Liabilities $2,346,131 $(100,876) $2,349,069 $72,165 $25,773 ==========================================================================
F-2C Page 2 of 2 Delmarva Capital Investments, Inc. and Subsidiaries* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total* Eliminations,* DCI Reclasses and DCI* DCI* DCI* Consolidated Consol. Entries Parent I II ------------- ----------------- --------- -------- ------- Assets Current Assets Cash & cash equivalents Accounts receivable Inventories, at average cost Fuel (coal, oil and gas) Material and supplies Prepaid New Jersey sales and excise taxes Prepayments Deferred income taxes, net Investments Investment in leveraged leases Funds held by trustee Other investments Property, Plant, and Equipment Electric utility plant Gas utility plant Common utility plant Less: Accumulated depreciation Net utility plant in service Utility construction work-in-progress Leased nuclear fuel, at amortized cost Nonutility property, net Goodwill, net Deferred Charges & Other Assets Unrecovered purchased power costs Deferred recoverable income taxes Unrecovered state excise taxes Deferred debt refinancing costs Unrecovered OPEB costs Prepaid employee benefits costs Unamortized debt expense License fees Other Total Assets
* CONFIDENTIAL TREATMENT REQUESTED F-2D Page 1 of 4 Delmarva Capital Investments, Inc. and Subsidiaries* Consolidating Balance Sheet as of December 31, 1998 D (Dollars in Thousands)
CCM DOSC DCTC ----------- ----------- ------------ Assets Current Assets Cash & cash equivalents Accounts receivable Inventories, at average cost Fuel (coal, oil and gas) Material and supplies Prepaid New Jersey sales and excise taxes Prepayments Deferred income taxes, net Investments Investment in leveraged leases Funds held by trustee Other investments Property, Plant, and Equipment Electric utility plant Gas utility plant Common utility plant Less: Accumulated depreciation Net utility plant in service Utility construction work-in-progress Leased nuclear fuel, at amortized cost Nonutility property, net Goodwill, net Deferred Charges & Other Assets Unrecovered purchased power costs Deferred recoverable income taxes Unrecovered state excise taxes Deferred debt refinancing costs Unrecovered OPEB costs Prepaid employee benefits costs Unamortized debt expense License fees Other Total Assets
* CONFIDENTIAL TREATMENT REQUESTED F-2D Page 2 of 4 Delmarva Capital Investments, Inc. and Subsidiaries* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, DCI Reclasses and DCI DCI DCI Consolidated Consol. Entries Parent I II ------------ --------------- ----------- ---------- ---------- Capitalization & Liabilities Current Liabilities Short-term debt Long-term debt due within one year Variable rate demand bonds Accounts payable Taxes accrued Interest accrued Dividends payable Deferred energy costs Current capital lease obligation Accrued employee seperation and other merger-related costs Other Deferred Credits and Other Liabilities Other postretirement benefits obligation Deferred income taxes, net Deferred investment tax credits Long-term capital lease obligation Other Capitalization Common Stock Class A common stock Additional paid-in-capital common Additional paid-in-capital--Class A common Retained Earnings Treasury stock Unearned Compensation Total common stockholders' equity Preferred stock of subsidiares: Not subject to mandatory redemption Subject to mandatory redemption Long-term debt Total Capitalization & Liabilities
* CONFIDENTIAL TREATMENT REQUESTED F-2D Page 3 of 4 Delmarva Capital Investments, Inc. and Subsidiaries* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
CCM* DOSC* DCTC* ------- -------- -------- Capitalization & Liabilities Current Liabilities Short-term debt Long-term debt due within one year Variable rate demand bonds Accounts payable Taxes accrued Interest accrued Dividends payable Deferred energy costs Current capital lease obligation Accrued employee separation and other merger-related costs Other Deferred Credits and Other Liabilities Other postretirement benefits obligation Deferred income taxes, net Deferred investment tax credits Long-term capital lease obligation Other Capitalization Common Stock Class A common stock Additional paid-in-capital common Additional paid-in-capital--Class A common Retained Earnings Treasury stock Unearned Compensation Total common stockholders' equity Preferred stock of subsidiares: Not subject to mandatory redemption Subject to mandatory redemption Long-term debt Total Capitalization & Liabilities
* CONFIDENTIAL TREATMENT REQUESTED F-2D Page 4 of 4
Conectiv Energy Supply, Inc. and Subsidiary* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands) Total Eliminations, CES Reclasses and CES Consolidated Consol. Entries Parent Petron ------------ --------------- ------ ------ Assets Current Assets Cash & cash equivalents Accounts receivable Inventories, at average cost Fuel (coal, oil and gas) Material and supplies Prepayments Deferred income taxes, net Investments Investment in leveraged leases Funds held by trustee Other investments Property, Plant, and Equipment Electric utility plant Gas utility plant Common utility plant Less: Accumulated depreciation Net utility plant in service Utility construction work-in-progress Leased nuclear fuel, at amortized cost Nonutility property, net Goodwill, net Deferred Charges & Other Assets Unrecovered purchased power costs Deferred recoverable income taxes Unrecovered state excise taxes Deferred debt refinancing costs Unrecovered OPEB costs Prepaid employee benefits costs Unamortized debt expense License fees Other Total Assets
* CONFIDENTIAL TREATMENT REQUESTED F-2E Page 1 of 2 Conectiv Energy Supply, Inc. and Subsidiary* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, CES Reclasses and CES Consolidated Consol. Entries Parent Petron ------------ --------------- ------ ------ Capitalization & Liabilities Current Liabilities Short-term debt Long-term debt due within one year Variable rate demand bonds Accounts payable Taxes accrued Interest accrued Dividends payable Deferred energy costs Current capital lease obligation Accrued employee separation and other merger-related costs Other Deferred Credits and Other Liabilities Other postretirement benefits obligation Deferred income taxes, net Deferred investment tax credits Long-term capital lease obligation Other Capitalization Common Stock Class A common stock Additional paid-in-capital common Additional paid-in-capital--Class A common Retained Earnings Treasury stock Unearned Compensation Total common stockholders' equity Preferred stock of subsidiaries: Not subject to mandatory redemption Subject to mandatory redemption Advances from associated company Long-term debt Total Capitalization & Liabilities
* CONFIDENTIAL TREATMENT REQUESTED F-2E Page 2 of 2 Atlantic Energy Enterprises, Inc. and Subsidiaries* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, AEE Reclasses and AEE Consolidated Consol. Entries Parent ASP ATE -------------- ---------------- -------------- -------------- --------------- Assets Current Assets Cash & cash equivalents Accounts receivable Inventories, at average cost Fuel (coal, oil and gas) Material and supplies Prepayments Deferred income taxes, net Investments Investment in leveraged leases Funds held by trustee Other investments Property, Plant, and Equipment Electric utility plant Gas utility plant Common utility plant Less: Accumulated depreciation Net utility plant in service Utility construction work-in-progress Leased nuclear fuel, at amortized cost Nonutility property, net Goodwill, net Deferred Charges & Other Assets Unrecovered purchased power costs Deferred recoverable income taxes Unrecovered NJ state excise taxes Deferred debt refinancing costs Unrecovered OPEB costs Prepaid employee benefits costs Unamortized debt expense License fees Other Total Assets
* CONFIDENTIAL TREATMENT REQUESTED F-2F Page 1 of 4 Atlantic Energy Enterprises, Inc. and Subsidiaries* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
CTS AGI AET Consolidated CI Consolidated Consolidated ---------------- ------------- ------------------ ------------------ Assets Current Assets Cash & cash equivalents Accounts receivable Inventories, at average cost Fuel (coal, oil and gas) Material and supplies Prepayments Deferred income taxes, net Investments Investment in leveraged leases Funds held by trustee Other investments Property, Plant, and Equipment Electric utility plant Gas utility plant Common utility plant Less: Accumulated depreciation Net utility plant in service Utility construction work-in-progress Leased nuclear fuel, at amortized cost Nonutility property, net Goodwill, net Deferred Charges & Other Assets Unrecovered purchased power costs Deferred recoverable income taxes Unrecovered NJ state excise taxes Deferred debt refinancing costs Unrecovered OPEB costs Prepaid employee benefits costs Unamortized debt expense License fees Other Total Assets
* CONFIDENTIAL TREATMENT REQUESTED F-2F Page 2 of 4 Atlantic Energy Enterprises, Inc. and Subsidiaries* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, AEE Reclasses and AEE Consolidated Consol. Entries Parent ASP ATE -------------- ----------------- ------------ ----------- ------------ Capitalization & Liabilities Current Liabilities Short-term debt Long-term debt due within one year Variable rate demand bonds Accounts payable Taxes accrued Interest accrued Dividends payable Deferred energy costs Current capital lease obligation Accrued employee seperation and other merger-related costs Other Deferred Credits and Other Liabilities Other postretirement benefits obligation Deferred income taxes, net Deferred investment tax credits Long-term capital lease obligation Other Capitalization Common Stock Class A common stock Additional paid-in-capital common Additional paid-in-capital--Class A common Retained Earnings Treasury stock Unearned Compensation Total common stockholders' equity Preferred stock of subsidiares: Not subject to mandatory redemption Subject to mandatory redemption Long-term debt Total Capitalization & Liabilities
* CONFIDENTIAL TREATMENT REQUESTED F-2F Page 3 of 4 Atlantic Energy Enterprises, Inc. and Subsidiaries* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
CTS AGI AET Consolidated CI Consolidated Consolidated --------------- ------- --------------- --------------- Capitalization & Liabilities Current Liabilities Short-term debt Long-term debt due within one year Variable rate demand bonds Accounts payable Taxes accrued Interest accrued Dividends payable Deferred energy costs Current capital lease obligation Accrued employee separation and other merger-related costs Other Deferred Credits and Other Liabilities Other postretirement benefits obligation Deferred income taxes, net Deferred investment tax credits Long-term capital lease obligation Other Capitalization Common Stock Class A common stock Additional paid-in-capital common Additional paid-in-capital--Class A common Retained Earnings Treasury stock Unearned Compensation Total common stockholders' equity Preferred stock of subsidiaries: Not subject to mandatory redemption Subject to mandatory redemption Long-term debt Total Capitalization & Liabilities
* CONFIDENTIAL TREATMENT REQUESTED F-2F Page 4 of 4 Conectiv Services, Inc. and Subsidiary* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, CSI Reclasses and CSI Consolidated Consol. Entries Parent Plumbing -------------- ----------------- ---------------- ---------------- Assets Current Assets Cash & cash equivalents Accounts receivable Inventories, at average cost Fuel (coal, oil and gas) Material and supplies Prepayments Deferred income taxes, net Investments Investment in leveraged leases Funds held by trustee Other investments Property, Plant, and Equipment Electric utility plant Gas utility plant Common utility plant Less: Accumulated depreciation Net utility plant in service Utility construction work-in-progress Leased nuclear fuel, at amortized cost Nonutility property, net Goodwill, net Deferred Charges & Other Assets Unrecovered purchased power costs Deferred recoverable income taxes Unrecovered NJ state excise taxes Deferred debt refinancing costs Unrecovered OPEB costs Prepaid employee benefits costs Unamortized debt expense License fees Other Total Assets
* CONFIDENTIAL TREATMENT REQUESTED F-2G Page 1 of 2
Conectiv Services, Inc., and Subsidiary* Consolidating Balance sheet as of December 31, 1998 (Dollars in Thousands) Total Eliminations, CSI Reclasses and CSI Consolidated Consol. Entries Parent Plumbing ---------------- ------------------- ---------- ------------- Capitalization & Liabilities Current Liabilities Short-term debt Long-term debt due within one year Variable rate demand bonds Accounts payable Taxes accrued Interest accrued Dividends payable Deferred energy costs Current capital lease obligation Accrued employee separation and other merger-related costs Other Deferred Credits and Other Liabilities Other postretirement benefits obligation Deferred income taxes, net Deferred investment tax credits Long-term capital lease obligation Other Capitalization Common Stock Class A common stock Additional paid-in-capital common Additional paid-in-capital--Class A common Retained Earnings Treasury stock Unearned Compensation Total common stockholders' equity Preferred stock of subsidiaries: Not subject to mandatory redemption Subject to mandatory redemption Long-term debt Total Capitalization & Liabilities
* CONFIDENTIAL TREATMENT REQUESTED F-2G Page 2 of 2 Conectiv Solutions LLC and Subsidiary* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, Solutions Reclasses and Solutions Power Consolidated Consol. Entries Parent Consulting --------------- ---------------- ------ ---------- Assets Current Assets Cash & cash equivalents Accounts receivable Inventories, at average cost Fuel (coal, oil and gas) Material and supplies Prepayments Deferred income taxes, net Investments Investment in leveraged leases Funds held by trustee Other investments Property, Plant, and Equipment Electric utility plant Gas utility plant Common utility plant Less: Accumulated depreciation Net utility plant in service Utility construction work-in-progress Leased nuclear fuel, at amortized cost Nonutility property, net Goodwill, net Deferred Charges & Other Assets Unrecovered purchased power costs Deferred recoverable income taxes Unrecovered state excise taxes Deferred debt refinancing costs Unrecovered OPEB costs Prepaid employee benefits costs Unamortized debt expense License fees Other Total Assets
* CONFIDENTIAL TREATMENT REQUESTED F-2H Page 1 of 2 Conectiv Solutions LLC and Subsidiary* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, Solutions Reclasses and Solutions Power Consolidated Consol. Entries Parent Consulting -------------- ----------------- ------------ --------------- Capitalization & Liabilities Current Liabilities Short-term debt Long-term debt due within one year Variable rate demand bonds Accounts payable Taxes accrued Interest accrued Dividends payable Deferred energy costs Current capital lease obligation Accrued employee separation and other merger-related costs Other Deferred Credits and Other Liabilities Other postretirement benefits obligation Deferred income taxes, net Deferred investment tax credits Long-term capital lease obligation Other Capitalization Common Stock Class A common stock Additional paid-in-capital common Additional paid-in-capital--Class A common Retained Earnings Treasury stock Unearned Compensation Total common stockholders' equity Preferred stock of subsidiares: Not subject to mandatory redemption Subject to mandatory redemption Advances from associated company Long-term debt Total Capitalization & Liabilities
* CONFIDENTIAL TREATMENT REQUESTED F-2H Page 2 of 2 Conectiv Thermal Systems, Inc. and Subsidiaries* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, CTS Reclasses and CTS Consolidated Consol. Entries Parent AJTS AOS TELP --------------- ----------------- -------- ---------- ---------- ---------- Assets Current Assets Cash & cash equivalents Accounts receivable Inventories, at average cost Fuel (coal, oil and gas) Material and supplies Prepayments Deferred income taxes, net Investments Investment in leveraged leases Funds held by trustee Other investments Property, Plant, and Equipment Electric utility plant Gas utility plant Common utility plant Less: Accumulated depreciation Net utility plant in service Utility construction work-in-progress Leased nuclear fuel, at amortized cost Nonutility property, net Goodwill, net Deferred Charges & Other Assets Unrecovered purchased power costs Deferred recoverable income taxes Unrecovered NJ state excise taxes Deferred debt refinancing costs Unrecovered OPEB costs Prepaid employee benefits costs Unamortized debt expense License fees Other Total Assets
* CONFIDENTIAL TREATMENT REQUESTED F-2I Page 1 of 2 Conectiv Thermal Systems, Inc. and Subsidiaries* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, CTS Reclasses and CTS Consolidated Consol. Entries Parent AJTS AOS TELP ---------------- ------------------- ---------- --------- ------- -------- Capitalization & Liabilities Current Liabilities Short-term debt Long-term debt due within one year Variable rate demand bonds Accounts payable Taxes accrued Interest accrued Dividends payable Deferred energy costs Current capital lease obligation Accrued employee seperation and other merger-related costs Other Deferred Credits and Other Liabilities Other postretirement benefits obligation Deferred income taxes, net Deferred investment tax credits Long-term capital lease obligation Other Capitalization Common Stock Class A common stock Additional paid-in-capital common Additional paid-in-capital--Class A common Retained Earnings Treasury stock Unearned Compensation Total common stockholders' equity Preferred stock of subsidiares : Not subject to mandatory redemption Subject to mandatory redemption Long-term Debt Total Capitalization & Liabilities
* CONFIDENTIAL TREATMENT REQUESTED F-2I Page 2 of 2 Atlantic Generation, Inc. and Subsidiaries* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, AGI Reclasses and AGI PED PED Consolidated Consol. Entries Parent GEN LTD ------------ --------------- ------ --- --- Assets Current Assets Cash & cash equivalents Accounts receivable Inventories, at average cost Fuel (coal, oil and gas) Material and supplies Prepayments Deferred income taxes, net Investments Investment in leveraged leases Funds held by trustee Other investments Property, Plant, and Equipment Electric utility plant Gas utility plant Common utility plant Less: Accumulated depreciation Net utility plant in service Utility construction work-in-progress Leased nuclear fuel, at amortized cost Nonutility property, net Goodwill, net Deferred Charges & Other Assets Unrecovered purchased power costs Deferred recoverable income taxes Unrecovered NJ state excise taxes Deferred debt refinancing costs Unrecovered OPEB costs Prepaid employee benefits costs Unamortized debt expense License fees Other Total Assets
* CONFIDENTIAL TREATMENT REQUESTED F-2J Page 1 of 4 Atlantic Generation, Inc. and subsidiaries* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
VINE VINE BING BING GEN LTD GEN LTD ---------- ---------- ---------- ----------- Assets Current Assets Cash & cash equivalents Accounts receivable Inventories, at average cost Fuel (coal, oil and gas) Material and supplies Prepayments Deferred income taxes, net Investments Investment in leveraged leases Funds held by trustee Other investments Property, Plant, and Equipment Electric utility plant Gas utility plant Common utility plant Less: Accumulated depreciation Net utility plant in service Utility construction work-in-progress Leased nuclear fuel, at amortized cost Nonutility property, net Goodwill, net Deferred Charges & Other Assets Unrecovered purchased power costs Deferred recoverable income taxes Unrecovered NJ state excise taxes Deferred debt refinancing costs Unrecovered OPEB costs Prepaid employee benefits costs Unamortized debt expense License fees Other Total Assets
* CONFIDENTIAL TREATMENT REQUESTED F-2J Page 2 of 4 Atlantic Generation, Inc. and Subsidiaries* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, AGI Reclasses and AGI PED PED Consolidated Consol. Entries Parent GEN LTD ------------ --------------- ------ --- --- Capitalization & Liabilities Current Liabilities Short-term debt Long-term debt due within one year Variable rate demand bonds Accounts payable Taxes accrued Interest accrued Dividends payable Deferred energy costs Current capital lease obligation Accrued employee seperation and other merger-related costs Other Deferred Credits and Other Liabilities Other postretirement benefits obligation Deferred income taxes, net Deferred investment tax credits Long-term capital lease obligation Other Capitalization Common Stock Class A common stock Additional paid-in-capital common Additional paid-in-capital--Class A common Retained Earnings Treasury stock Unearned Compensation Total common stockholders' equity Preferred stock of subsidiares : Not subject to mandatory redemption Subject to mandatory redemption Long-term Debt Total Capitalization & Liabilities
* CONFIDENTIAL TREATMENT REQUESTED F-2J Page 3 of 4 Atlantic Generation, Inc. and Subsidiaries* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
VINE VINE BING BING GEN LTD GEN LTD ---- ---- ---- ---- Capitalization & Liabilities Current Liabilities Short-term debt Long-term debt due within one year Variable rate demand bonds Accounts payable Taxes accrued Interest accrued Dividends payable Deferred energy costs Current capital lease obligation Accrued employee seperation and other merger-related costs Other Deferred Credits and Other Liabilities Other postretirement benefits obligation Deferred income taxes, net Deferred investment tax credits Long-term capital lease obligation Other Capitalization Common Stock Class A common stock Additional paid-in-capital common Additional paid-in-capital--Class A common Retained Earnings Treasury stock Unearned Compensation Total common stockholders' equity Preferred stock of subsidiares: Not subject to mandatory redemption Subject to mandatory redemption Long-term Debt Total Capitalization & Liabilities
* CONFIDENTIAL TREATMENT REQUESTED F-2J Page 4 of 4 Atlantic Energy Technology, Inc. and Subsidiary* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, AET Reclasses and AET Consolidated Consol. Entries Parent TEE ------------ --------------- ------ --- Assets Current Assets Cash & cash equivalents Accounts receivable Inventories, at average cost Fuel (coal, oil and gas) Material and supplies Prepayments Deferred income taxes, net Investments Investment in leveraged leases Funds held by trustee Other investments Property, Plant, and Equipment Electric utility plant Gas utility plant Common utility plant Less :Accumulated depreciation Net utility plant in service Utility construction work-in-progress Leased nuclear fuel, at amortized cost Nonutility property, net Goodwill, net Deferred Charges & Other Assets Unrecovered purchased power costs Deferred recoverable income taxes Unrecovered NJ state excise taxes Deferred debt refinancing costs Unrecovered OPEB costs Prepaid employee benefits costs Unamortized debt expense License fees Other Total Assets
* CONFIDENTIAL TREATMENT REQUESTED F-2K Page 1 of 2 Atlantic Energy Technology, Inc. and Subsidiary* Consolidating Balance Sheet as of December 31, 1998 (Dollars in Thousands)
Total Eliminations, AET Reclasses and AET Consolidated Consol. Entries Parent TEE ---------------- ------------------- ---------- ------- Capitalization & Liabilities Current Liabilities Short-term debt Long-term debt due within one year Variable rate demand bonds Accounts payable Taxes accrued Interest accrued Dividends payable Deferred energy costs Current capital lease obligation Accrued employee separation and other merger-related costs Other Deferred Credits and Other Liabilities Other postretirement benefits obligation Deferred income taxes, net Deferred investment tax credits Long-term capital lease obligation Other Capitalization Common Stock Class A common stock Additional paid-in-capital common Additional paid-in-capital--Class A common Retained Earnings Treasury stock Unearned Compensation Total common stockholders' equity Preferred stock of subsidiaries: Not subject to mandatory redemption Subject to mandatory redemption Long-term debt Total Capitalization & Liabilities
* CONFIDENTIAL TREATMENT REQUESTED F-2K Page 2 of 2 Conectiv and Subsidiaries Consolidating Statement of Cash Flows for the Year Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, Conectiv Reclasses and Conectiv DPL Consolidated Consol. Entries Parent CRP Consolidated ------------ ------------- ------------- ------------ ------------ Cash Flows From Operating Activities Net income $ 153,201 $(105,886) $ 153,201 $ (26) $ 108,058 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 261,457 6,174 - 611 140,936 Allowance for equity funds used during construction (2,609) - - - (2,135) Investment tax credit adjustments, net (4,002) - - - (2,560) Deferred income taxes, net 4,620 35,583 121 1,345 5,796 Net change in: Accounts receivable (118,578) 43,953 (208,443) (9,714) (68,300) Inventories (9,691) - - - (6,876) Prepaid New Jersey sales and excise taxes (20,078) - - - - Accounts payable 107,005 8,236 (45,452) 19,493 78,291 Other current assets & liabilities 26,996 (117,893) 6,674 6,279 34,324 Gains on sales of assets (2,795) - - - (1,549) Other, net (23,217) (38,081) 19,646 - (27,888) ------------ ------------- ------------ ------------ ------------ Net cash provided by operating activities 372,309 (167,914) (74,253) 17,988 258,097 ------------ ------------ ------------- ------------ ------------ Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired (2,590) 26,310 - - (5,272) Capital expenditures (224,831) - - (17,957) (112,924) Investments in partnerships (28,594) - - - (103) Sales of nonutility assets 5,617 - - - - Sales of utility assets 3,804 - - - 3,804 Deposits to nuclear decommissioning trust funds (10,676) - - - (4,238) Other, net 2,082 - (293) (145) 2,003 ------------ ------------- ------------ ------------ ------------ Net cash used by investing activities (259,352) 26,310 (293) (18,102) (116,730) ------------ ------------ ------------- ------------ ------------ Cash Flows From Financing Activities Common dividends paid (154,101) 176,150 (154,101) - (94,700) Capital contributions - - (27,496) - (23,660) Issuances: Long-term debt 33,000 - - - 33,000 Common stock 63 - - - 63 Preferred stock 25,000 - - - - Redemptions: Long-term debt (200,078) - (53,500) - (32,054) Common stock (13,232) - (11,249) - (1,983) Preferred stock (33,769) - - - - Principal portion of capital lease payments (20,037) - - - (9,724) Net change in short-term debt 282,889 - 339,000 - (26,974) Cost of issuances and refinancings (2,147) - (390) - (259) ------------ ------------- ------------ ------------ ------------ Net cash used by financing activities (82,412) 176,150 92,264 - (156,291) ------------ ------------- ------------ ------------ ------------ Net change in cash and cash equivalents 30,545 34,546 17,718 (114) (14,924) Beginning of year cash and cash equivalents 35,339 (34,546) 973 - 16,685 ------------ ------------- ------------ ------------ ------------ End of year cash and cash equivalents $ 65,884 $ - $ 18,691 $ (114) $1,761 =========== ============ ============ =========== ===========
F-3A Page 1 of 3 Conectiv and Subsidiaries Consolidating Statement of Cash Flows for the Year Ended December 31, 1998 (Dollars in Thousands)
ACE DCI* CES* AEE* Consolidated Consolidated Consolidated Consolidated AEI ------------ ------------ ------------ ------------ ---------- Cash Flows From Operating Activities Net income $ 23,745 $ (18) Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 104,582 - Allowance for equity funds used during construction (474) - Investment tax credit adjustments, net (1,442) - Deferred income taxes, net (40,128) - Net change in: Accounts receivable (7,233) 18 Inventories 3,292 - Prepaid New Jersey sales and excise taxes (20,078) - Accounts payable 8,947 - Other current assets & liabilities 112,488 - Gains on sales of assets - - Other, net 23,402 - ---------------- ---------- Net cash provided by operating activities 207,101 - ---------------- ---------- Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired - - Capital expenditures (58,955) - Investments in partnerships (102) - Sales of nonutility assets - - Sales of utility assets - - Deposits to nuclear decommissioning trust funds (6,438) - Other, net (423) - ---------------- ---------- Net cash used by investing activities (65,918) - ---------------- ---------- Cash Flows From Financing Activities Common dividends paid (81,450) - Capital contributions - - Issuances: Long-term debt - - Common stock - - Preferred stock 25,000 - Redemptions: Long-term debt (8,575) - Common stock - - Preferred stock (33,769) - Principal portion of capital lease payments (10,313) - Net change in short-term debt (30,200) - Cost of issuances and refinancings (1,269) - ---------------- ---------- Net cash used by financing activities (140,576) - ---------------- ---------- Net change in cash and cash equivalents 607 - Beginning of year cash and cash equivalents 28,159 - ---------------- ---------- End of year cash and cash equivalents $ 28,766 $ - =============== ==========
* CONFIDENTIAL TREATMENT REQUESTED F-3A Page 2 of 3 Conectiv and Subsidiaries Consolidating Statement of Cash Flows for the Year Ended December 31, 1998 (Dollars in Thousands)
CSI* Solutions* DSC Consolidated Consolidated CCI* -------- ------------ ------------ ----- Cash Flows From Operating Activities Net income $ 565 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 412 Allowance for equity funds used during construction - Investment tax credit adjustments, net - Deferred income taxes, net 113 Net change in: Accounts receivable 191 Inventories - Prepaid New Jersey sales and excise taxes - Accounts payable (2,385) Other current assets & liabilities 42 Gains on sales of assets - Other, net 11 ------------- Net cash provided by operating activities (1,051) ------------- Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired - Capital expenditures - Investments in partnerships - Sales of nonutility assets - Sales of utility assets - Deposits to nuclear decommissioning trust funds - Other, net 1 ------------- Net cash used by investing activities 1 ------------- Cash Flows From Financing Activities Common dividends paid - Capital contributions - Issuances: Long-term debt - Common stock - Preferred stock - Redemptions: Long-term debt (913) Common stock - Preferred stock - Principal portion of capital lease payments - Net change in short-term debt - Cost of issuances and refinancings - ------------- Net cash used by financing activities (913) ------------- Net change in cash and cash equivalents (1,963) Beginning of year cash and cash equivalents 1,963 ------------- End of year cash and cash equivalents $ - =============
* CONFIDENTIAL TREATMENT REQUESTED F-3A Page 3 of 3 Delmarva Power and Light Company and Subsidiaries Consolidating Statement of Cash Flows for the Year Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, DPL Reclasses and DPL DPL Consolidated Consol. Entries Parent Fin I ------------ --------------- ------------- ---------- Cash Flows From Operating Activities Net income $ 108,058 $ - $ 108,058 $ - Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 140,936 - 140,936 - Allowance for equity funds used during construction (2,135) - (2,135) - Investment tax credit adjustments, net (2,560) - (2,560) - Deferred income taxes, net 5,796 - 5,796 - Net change in: Accounts receivable (68,300) - (68,300) - Inventories (6,876) - (6,876) - Prepaid New Jersey sales and excise taxes - - - - Accounts payable 78,291 - 78,291 - Other current assets & liabilities 34,324 - 34,324 - Gains on sales of assets (1,549) - (1,549) - Other, net (27,888) - (27,888) - ------------ ------------ ------------ --------- Net cash provided by operating activities 258,097 - 258,097 - ------------ ------------ ------------ --------- Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired (5,272) - (5,272) - Capital expenditures (112,924) - (112,924) - Investments in partnerships (103) - (103) - Sales of nonutility assets - - - - Sales of utility assets 3,804 - 3,804 - Deposits to nuclear decommissioning trust funds (4,238) - (4,238) - Other, net 2,003 - 2,003 - ------------ ------------ ------------ --------- Net cash used by investing activities (116,730) - (116,730) - ------------ ------------ ------------ --------- Cash Flows From Financing Activities Common dividends paid (94,700) - (94,700) - Capital contributions (23,660) - (23,660) - Issuances: Long-term debt 33,000 - 33,000 - Common stock 63 - 63 - Preferred stock - - - - Redemptions: Long-term debt (32,054) - (32,054) - Common stock (1,983) - (1,983) - Preferred stock - - - - Principal portion of capital lease payments (9,724) - (9,724) - Net change in short-term debt (26,974) - (26,974) - Cost of issuances and refinancings (259) - (259) - ------------ ------------ ------------ --------- Net cash used by financing activities (156,291) - (156,291) - ------------ ------------ ------------ --------- Net change in cash and cash equivalents (14,924) - (14,924) - Beginning of year cash and cash equivalents 16,685 - 16,685 - ------------ ------------ ------------ --------- End of year cash and cash equivalents $1,761 $ - $ 1,761 $ - ============ ============ ============ =========
F-3B Atlantic City Electric Company and Subsidiaries Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, ACE Reclasses and ACE ACE ACE Consolidated Consol. Entries Parent Cap I Cap II ------------ --------------- ------------ ---------- ------------ Cash Flows From Operating Activities Net income $ 23,745 $ - $ 23,745 $ - $ - Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 104,582 - 104,582 - - Allowance for equity funds used during construction (474) - (474) - - Investment tax credit adjustments, net (1,442) - (1,442) - - Deferred income taxes, net (40,128) - (40,128) - - Net change in: Accounts receivable (7,233) - (7,233) - - Inventories 3,292 - 3,292 - - Prepaid New Jersey sales and excise taxes (20,078) - (20,078) - - Accounts payable 8,947 - 8,947 - - Other current assets & liabilities 112,488 - 112,488 - - Gains on sales of assets - - - - - Other, net 23,402 - 23,402 - - ----------- --------------- ------------ ---------- ------------ Net cash provided by operating activities 207,101 - 207,101 - - ----------- --------------- ------------ ---------- ------------ Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired - - - - - Capital expenditures (58,955) - (58,955) - - Investments in partnerships (102) - (102) - - Sales of nonutility assets - - - - - Sales of utility assets - - - - - Deposits to nuclear decommissioning trust funds (6,438) - (6,438) - - Other, net (423) 773 24,577 - (25,773) ----------- --------------- ------------ ---------- ------------ Net cash used by investing activities (65,918) 773 (40,918) - (25,773) ----------- --------------- ------------ ---------- ------------ Cash Flows From Financing Activities Common dividends paid (81,450) - (81,450) - - Capital contributions - - - - - Issuances: Long-term debt - - - - - Common stock - (773) - - 773 Preferred stock 25,000 - - - 25,000 Redemptions: Long-term debt (8,575) - (8,575) - - Common stock - - - - - Preferred stock (33,769) - (33,769) - - Principal portion of capital lease payments (10,313) - (10,313) - - Net change in short-term debt (30,200) - (30,200) - - Cost of issuances and refinancings (1,269) - (1,269) - - ----------- --------------- ------------ ---------- ------------ Net cash used by financing activities (140,576) (773) (165,576) - 25,773 ----------- --------------- ------------ ---------- ------------ Net change in cash and cash equivalents 607 - 607 - - Beginning of year cash and cash equivalents 28,159 - 28,159 - - =========== =============== ============ ========== ============ End of year cash and cash equivalents $ 28,766 $ - $ 28,766 $ - $ - =========== =============== ============ ========== ============
F-3C Delmarva Capital Investments, Inc. and Subsidiaries* Consolidating Statement of Cash Flows for the Year Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, DCI Reclasses and DCI DCI DCI Consolidated Consol. Entries Parent I II ------------ ------------- ----------- ---------- ---------- Cash Flows From Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Allowance for equity funds used during construction Investment tax credit adjustments, net Deferred income taxes, net Net change in: Accounts receivable Inventories Prepaid New Jersey sales and excise taxes Accounts payable Other current assets & liabilities Gains on sales of assets Other, net Net cash provided by operating activities Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired Capital expenditures Investments in partnerships Sales of nonutility assets Sales of utility assets Deposits to nuclear decommissioning trust funds Other, net Net cash used by investing activities Cash Flows From Financing Activities Common dividends paid Capital contributions Issuances: Long-term debt Common stock Preferred stock Redemptions: Long-term debt Common stock Preferred stock Principal portion of capital lease payments Net change in short-term debt Cost of issuances and refinancings Net cash used by financing activities Net change in cash and cash equivalents Beginning of year cash and cash equivalents End of year cash and cash equivalents
* CONFIDENTIAL TREATMENT REQUESTED F-3D Page 1 of 2 Delmarva Capital Investments, Inc. and Subsidiaries* Consolidating Statement of Cash Flows for the Year Ended December 31, 1998 (Dollars in Thousands)
CCM DOSC DCTC ------------ ------------- ----------- Cash Flows From Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Allowance for equity funds used during construction Investment tax credit adjustments, net Deferred income taxes, net Net change in: Accounts receivable Inventories Prepaid New Jersey sales and excise taxes Accounts payable Other current assets & liabilities Gains on sales of assets Other, net Net cash provided by operating activities Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired Capital expenditures Investments in partnerships Sales of nonutility assets Sales of utility assets Deposits to nuclear decommissioning trust funds Other, net Net cash used by investing activities Cash Flows From Financing Activities Common dividends paid Capital contributions Issuances: Long-term debt Common stock Preferred stock Redemptions: Long-term debt Common stock Preferred stock Principal portion of capital lease payments Net change in short-term debt Cost of issuances and refinancings Net cash used by financing activities Net change in cash and cash equivalents Beginning of year cash and cash equivalents End of year cash and cash equivalents
* CONFIDENTIAL TREATMENT REQUESTED F-3D Page 2 of 2 Conectiv Energy Supply, Inc. and Subsidiary* Consolidating Statement of Cash Flows for the Year Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, CES Reclasses and CES Consolidated Consol. Entries Parent Petron ------------ ------------- ----------- ---------- Cash Flows From Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Allowance for equity funds used during construction Investment tax credit adjustments, net Deferred income taxes, net Net change in: Accounts receivable Inventories Prepaid New Jersey sales and excise taxes Accounts payable Other current assets & liabilities Gains on sales of assets Other, net Net cash provided by operating activities Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired Capital expenditures Investments in partnerships Sales of nonutility assets Sales of utility assets Deposits to nuclear decommissioning trust funds Other, net Net cash used by investing activities Cash Flows From Financing Activities Common dividends paid Capital contributions Issuances: Long-term debt Common stock Preferred stock Redemptions: Long-term debt Common stock Preferred stock Principal portion of capital lease payments Net change in short-term debt Cost of issuances and refinancings Net cash used by financing activities Net change in cash and cash equivalents Beginning of year cash and cash equivalents End of year cash and cash equivalents
* CONFIDENTIAL TREATMENT REQUESTED F-3E Atlantic Energy Enterprises, Inc. and Subsidiaries* Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, AEE Reclasses and AEE Consolidated Consol. Entries Parent ASP ATE ------------ --------------- -------- ---------- ----------- Cash Flows From Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Allowance for equity funds used during construction Investment tax credit adjustments, net Deferred income taxes, net Net change in: Accounts receivable Inventories Prepaid New Jersey sales and excise taxes Accounts payable Other current assets & liabilities Gains on sales of assets Other, net Net cash provided by operating activities Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired Capital expenditures Investments in partnerships Sales of nonutility assets Sales of utility assets Deposits to nuclear decommissioning trust funds Other, net Net cash used by investing activities Cash Flows From Financing Activities Common dividends paid Capital contributions Issuances: Long-term debt Common stock Preferred stock Redemptions: Long-term debt Common stock Preferred stock Principal portion of capital lease payments Net change in short-term debt Cost of issuances and refinancings Net cash used by financing activities Net change in cash and cash equivalents Beginning of year cash and cash equivalents End of year cash and cash equivalents
* CONFIDENTIAL TREATMENT REQUESTED F-3F Page 1 of 2 Atlantic Energy Enterprises, Inc. and Subsidiaries* Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
CTS AGI AET Consolidated CI Consolidated Consolidated ------------ --------- ------------ ------------ Cash Flows From Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Allowance for equity funds used during construction Investment tax credit adjustments, net Deferred income taxes, net Net change in: Accounts receivable Inventories Prepaid New Jersey sales and excise taxes Accounts payable Other current assets & liabilities Gains on sales of assets Other, net Net cash provided by operating activities Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired Capital expenditures Investments in partnerships Sales of nonutility assets Sales of utility assets Deposits to nuclear decommissioning trust funds Other, net Net cash used by investing activities Cash Flows From Financing Activities Common dividends paid Capital contributions Issuances: Long-term debt Common stock Preferred stock Redemptions: Long-term debt Common stock Preferred stock Principal portion of capital lease payments Net change in short-term debt Cost of issuances and refinancings Net cash used by financing activities Net change in cash and cash equivalents Beginning of year cash and cash equivalents End of year cash and cash equivalents
* CONFIDENTIAL TREATMENT REQUESTED F-3F Page 2 of 2 Conectiv Services, Inc. and Subsidiary* Consolidating Statement of Cash Flows for the Year Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, CSI Reclasses and CSI Consolidated Consol. Entries Parent Plumbing ------------ ------------- ----------- ---------- Cash Flows From Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Allowance for equity funds used during construction Investment tax credit adjustments, net Deferred income taxes, net Net change in: Accounts receivable Inventories Prepaid New Jersey sales and excise taxes Accounts payable Other current assets & liabilities Gains on sales of assets Other, net Net cash provided by operating activities Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired Capital expenditures Investments in partnerships Sales of nonutility assets Sales of utility assets Deposits to nuclear decommissioning trust funds Other, net Net cash used by investing activities Cash Flows From Financing Activities Common dividends paid Capital contributions Issuances: Long-term debt Common stock Preferred stock Redemptions: Long-term debt Common stock Preferred stock Principal portion of capital lease payments Net change in short-term debt Cost of issuances and refinancings Net cash used by financing activities Net change in cash and cash equivalents Beginning of year cash and cash equivalents End of year cash and cash equivalents
* CONFIDENTIAL TREATMENT REQUESTED F-3G Conectiv Solutions LLC and Subsidiary* Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, Solutions Reclasses and Solutions Power Consolidated Consol. Entries Parent Consulting ------------ ------------- ----------- ---------- Cash Flows From Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Allowance for equity funds used during construction Investment tax credit adjustments, net Deferred income taxes, net Net change in: Accounts receivable Inventories Prepaid New Jersey sales and excise taxes Accounts payable Other current assets & liabilities Gains on sales of assets Other, net Net cash provided by operating activities Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired Capital expenditures Investments in partnerships Sales of nonutility assets Sales of utility assets Deposits to nuclear decommissioning trust funds Other, net Net cash used by investing activities Cash Flows From Financing Activities Common dividends paid Capital contributions Issuances: Long-term debt Common stock Preferred stock Redemptions: Long-term debt Common stock Preferred stock Principal portion of capital lease payments Net change in short-term debt Cost of issuances and refinancings Net cash used by financing activities Net change in cash and cash equivalents Beginning of year cash and cash equivalents End of year cash and cash equivalents
* CONFIDENTIAL TREATMENT REQUESTED F-3H Conectiv Thermal Systems, Inc. and Subsidiaries* Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, CTS Reclasses and CTS Consolidated Consol. Entries Parent AJTS AOS TELP ------------ --------------- -------- --------- --------- --------- Cash Flows From Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Allowance for equity funds used during construction Investment tax credit adjustments, net Deferred income taxes, net Net change in: Accounts receivable Inventories Prepaid New Jersey sales and excise taxes Accounts payable Other current assets & liabilities Gains on sales of assets Other, net Net cash provided by operating activities Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired Capital expenditures Investments in partnerships Sales of nonutility assets Sales of utility assets Deposits to nuclear decommissioning trust funds Other, net Net cash used by investing activities Cash Flows From Financing Activities Common dividends paid Capital contributions Issuances: Long-term debt Common stock Preferred stock Redemptions: Long-term debt Common stock Preferred stock Principal portion of capital lease payments Net change in short-term debt Cost of issuances and refinancings Net cash used by financing activities Net change in cash and cash equivalents Beginning of year cash and cash equivalents End of year cash and cash equivalents
* CONFIDENTIAL TREATMENT REQUESTED F-3I Atlantic Generation, Inc. and Subsidiaries* Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, AGI Reclasses and AGI PED PED Consolidated Consol. Entries Parent GEN LTD ------------ --------------- -------- ---------- -------- Cash Flows From Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Allowance for equity funds used during construction Investment tax credit adjustments, net Deferred income taxes, net Net change in: Accounts receivable Inventories Prepaid New Jersey sales and excise taxes Accounts payable Other current assets & liabilities Gains on sales of assets Other, net Net cash provided by operating activities Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired Capital expenditures Investments in partnerships Sales of nonutility assets Sales of utility assets Deposits to nuclear decommissioning trust funds Other, net Net cash used by investing activities Cash Flows From Financing Activities Common dividends paid Capital contributions Issuances: Long-term debt Common stock Preferred stock Redemptions: Long-term debt Common stock Preferred stock Principal portion of capital lease payments Net change in short-term debt Cost of issuances and refinancings Net cash used by financing activities Net change in cash and cash equivalents Beginning of year cash and cash equivalents End of year cash and cash equivalents
* CONFIDENTIAL TREATMENT REQUESTED F-3J Page 1 of 2 Atlantic Generation, Inc. and Subsidiaries* Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
VINE VINE BING BING GEN LTD GEN LTD -------- ------- ------ ------ Cash Flows From Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Allowance for equity funds used during construction Investment tax credit adjustments, net Deferred income taxes, net Net change in: Accounts receivable Inventories Prepaid New Jersey sales and excise taxes Accounts payable Other current assets & liabilities Gains on sales of assets Other, net Net cash provided by operating activities Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired Capital expenditures Investments in partnerships Sales of nonutility assets Sales of utility assets Deposits to nuclear decommissioning trust funds Other, net Net cash used by investing activities Cash Flows From Financing Activities Common dividends paid Capital contributions Issuances: Long-term debt Common stock Preferred stock Redemptions: Long-term debt Common stock Preferred stock Principal portion of capital lease payments Net change in short-term debt Cost of issuances and refinancings Net cash used by financing activities Net change in cash and cash equivalents Beginning of year cash and cash equivalents End of year cash and cash equivalents
* CONFIDENTIAL TREATMENT REQUESTED F-3J Page 2 of 2 Atlantic Energy Technology, Inc. and Subsidiary* Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, AET Reclasses and AET Consolidated Consol. Entries Parent TEE ------------ --------------- ------ --- Cash Flows From Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Allowance for equity funds used during construction Investment tax credit adjustments, net Deferred income taxes, net Net change in: Accounts receivable Inventories Prepaid New Jersey sales and excise taxes Accounts payable Other current assets & liabilities Gains on sales of assets Other, net Net cash provided by operating activities Cash Flows From Investing Activities Acquisition of businesses, net of cash acquired Capital expenditures Investments in partnerships Sales of nonutility assets Sales of utility assets Deposits to nuclear decommissioning trust funds Other, net Net cash used by investing activities Cash Flows From Financing Activities Common dividends paid Capital contributions Issuances: Long-term debt Common stock Preferred stock Redemptions: Long-term debt Common stock Preferred stock Principal portion of capital lease payments Net change in short-term debt Cost of issuances and refinancings Net cash used by financing activities Net change in cash and cash equivalents Beginning of year cash and cash equivalents End of year cash and cash equivalents
* CONFIDENTIAL TREATMENT REQUESTED F-3K Conectiv and Subsidiaries Consolidating Statement of Retained Earnings for the Year Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, Conectiv Reclasses and Conectiv DPL Consolidated Consol. Entries Parent CRP Consolidated ------------- --------------- ----------- -------- -------------- Retained Earnings Balance at beginning of year $ 300,757 $ 5,143 $ - $ - $ 300,757 Transfer of DPL's nonutility subsidiaries to Connectiv Parent - - (8,644) - 8,644 Connectiv's initial investment in DPL - (309,401) 309,401 - - Acquisition of Atlantic subsidiaries - (224,160) - - - Net Income 153,201 (105,886) 153,201 (26) 108,058 Common stock dividends (155,302) 176,310 (155,302) - (94,860) Class A common stock dividends (20,994) - (20,994) - - Redemption of preferred stock (723) 723 (723) - - ------------- ------------- ---------- --------- ------------- Balance at end of year $ 276,939 $ (457,271) $ 276,939 $ (26) $ 322,599 ============= ============= ========== ========= =============
F-4A Page 1 of 3 Conectiv and Subsidiaries Consolidating Statement of Retained Earnings for the Year Ended December 31, 1998 (Dollars in Thousands)
ACE DCI* CES* AEE* Consolidated Consolidated Consolidated Consolidated AEI ------------- ------------ ------------ ------------ ------------ Retained Earnings Balance at beginning of year $ - $ - Transfer of DPL's nonutility subsidiaries to Conectiv Parent - - Conectiv's initial investment in DPL - - Acquisition of Atlantic subsidiaries 240,551 (1,043) Net Income 23,745 (18) Common stock dividends (81,450) - Class A common stock dividends - - Redemption of preferred stock (723) - ------------- ------------ Balance at end of year $182,123 $(1,061) ============= ============
* CONFIDENTIAL TREATMENT REQUESTED F-4A Page 2 of 3 Conectiv and Subsidiaries Consolidating Statement of Retained Earnings for the Year Ended December 31, 1998 (Dollars in Thousands)
CSI* Solutions* DSC Consolidated Consolidated CCI* ---------- ----------------- ---------------- ----------- Retained Earnings Balance at beginning of year $2,087 Transfer of DPL's nonutility subsidiaries to Conectiv Parent - Conectiv's initial investment in DPL - Acquisition of Atlantic subsidiaries - Net Income 565 Common stock dividends - Class A common stock dividends - Redemption of preferred stock - ------ Balance at end of year $2,652 ======
* CONFIDENTIAL TREATMENT REQUESTED F-4A Page 3 of 3 Delmarva Power and Light Company and Subsidiaries Consolidating Statement of Retained Earnings for the Year Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, DPL Reclasses and DPL DPL Consolidated Consol. Entries Parent Fin I ------------ ------------- ------------ ---------- Retained Earnings Balance at beginning of year $300,757 $ - $300,757 $ - Transfer of DPL's nonutility subsidiaries to Conectiv Parent 8,644 - 8,644 - Conectiv's initial investment in DPL - - - - Acquisition of Atlantic subsidiaries - - - - Net Income 108,058 - 108,058 - Common stock dividends (94,860) - (94,860) - Class A common stock dividends - - - - Redemption of preferred stock - - - - ----------- ------------ ------------ ---------- Balance at end of year $322,599 $ - $322,599 $ - =========== ============ =========== =========
F-4B Atlantic City Electric Company and Subsidiaries Consolidating Statement of Retained Earnings for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, ACE Reclasses and ACE ACE ACE Consolidated Consol. Entries Parent Cap I Cap II ------------ --------------- ------ ----- ------ Retained Earnings Balance at beginning of year $ - $ - $ - $ - $ - Transfer of DPL's nonutility subsidiaries to Conectiv Parent - - - - - Conectiv's initial investment in DPL - - - - - Acquisition of Atlantic subsidiaries 240,551 - 240,551 - - Net Income 23,745 - 23,745 - - Common stock dividends (81,450) - (81,450) - - Class A common stock dividends - - - - - Redemption of preferred stock (723) - (723) - - ----------- ------------- -------- --------- -------- Balance at end of year $182,123 $ - $182,123 $ - $ - =========== ============= ======== ========= ========
F-4C Delmarva Capital investments, Inc. and Subsidiaries* Consolidating Statement of Retained Earnings for the Year Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, DCI Reclasses and DCI DCI DCI Consolidated Consol. Entries Parent I II ------------ --------------- ----------- -------- -------- Retained Earnings Balance at beginning of year Transfer of DPL's nonutility subsidiaries to Conectiv Parent Conectiv's initial investment in DPL Acquisition of Atlantic subsidiaries Net Income Common stock dividends Class A common stock dividends Redemption of preferred stock Balance at end of year
* CONFIDENTIAL TREATMENT REQUESTED F-4D Page 1 of 2 Delmarva Capital Investments, Inc. and Subsidiaries* Consolidating Statement of Retained Earnings for the Year Ended December 31, 1998 (Dollars in Thousands)
CCM DOSC DCTC --------- ---------- ----------- Retained Earnings Balance at beginning of year Transfer of DPL's nonutility subsidiaries to Conectiv Parent Conectiv's initial investment in DPL Acquisition of Atlantic subsidiaries Net Income Common stock dividends Class A common stock dividends Redemption of preferred stock Balance at end of year
* CONFIDENTIAL TREATMENT REQUESTED F-4D Page 2 of 2 Conectiv Energy Supply, Inc. and Subsidiary* Consolidating Statement of Retained Earnings for the Year Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, CES Reclasses and CES Consolidated Consol. Entries Parent Petron ------------ --------------- ------ ------ Retained Earnings Balance at beginning of year Transfer of DPL's nonutility subsidiaries to Conectiv Parent Conectiv's initial investment in DPL Acquisition of Atlantic subsidiaries Net Income Common stock dividends Class A common stock dividends Redemption of preferred stock Balance at end of year
* CONFIDENTIAL TREATMENT REQUESTED F-4E Atlantic Energy Enterprises, Inc. and Subsidiaries* Consolidating Statement of Related Earnings for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, AEE Reclasses and AEE Consolidated Consol. Entries Parent ASP ATE ---------------- ------------------- ----------- -------- --------- Retained Earnings Balance at beginning of year Transfer of DPL's nonutility subsidiaries to Conectiv Parent Conectiv's initial investment in DPL Acquisition of Atlantic subsidiaries Net Income Common stock dividends Class A common stock dividends Redemption of preferred stock Balance at end of year
[CAPTION] * CONFIDENTIAL TREATMENT REQUESTED F-4F Page 1 of 2 Atlantic Energy Enterprises, Inc. and Subsidiaries* Consolidating Statement of Retained Earnings for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
CTS AGI AET Consolidated CI Consolidated Consolidated -------------- ----------- ----------- ----------- Retained Earnings Balance at beginning of year Transfer of DPL's nonutility subsidiaries to Conectiv Parent Conectiv's initial investment in DPL Acquisition of Atlantic subsidiaries Net Income Common stock dividends Class A common stock dividends Redemption of preferred stock Balance at end of year
* CONFIDENTIAL TREATMENT REQUESTED F-4F Page 2 of 2 Conectiv Services, Inc. and Subsidiary* Consolidating Statement of Retained Earnings for the Year Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, CSI Reclasses and CSI Consolidated Consol. Entries Parent Plumbing ------------ --------------- ---------- ---------- Retained Earnings Balance at beginning of year Transfer of DPL's nonutility subsidiaries to Conectiv Parent Conectiv's initial investment in DPL Acquisition of Atlantic subsidiaries Net Income Common stock dividends Class A common stock dividends Redemption of preferred stock Balance at end of year
* CONFIDENTIAL TREATMENT REQUESTED F-4G Conectiv Solutions LLC and Subsidiary* Consolidating Statement of Retained Earnings for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, Solutions Reclasses and Solutions Power Consolidated Consol. Entries Parent Consulting ---------------- ------------------- ------------- -------------- Retained Earnings Balance at beginning of year Transfer of DPL's nonutility subsidiaries to Conectiv Parent Conectiv's initial investment in DPL Acquisition of Atlantic subsidiaries Net Income Common stock dividends Class A common stock dividends Redemption of preferred stock Balance at end of year
* CONFIDENTIAL TREATMENT REQUESTED F-4H Conectiv Thermal Systems, Inc. and Subsidiaries* Consolidating Statement of Retained Earnings for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, CTS Reclasses and CTS Consolidated Consol. Entries Parent AJTS AOS TELP ------------ --------------- ------ ---- --- ---- Retained Earnings Balance at beginning of year Transfer of DPL's nonutility subsidiaries to Conectiv Parent Conectiv's initial investment in DPL Acquisition of Atlantic subsidiaries Net Income Common stock dividends Class A common stock dividends Redemption of preferred stock Balance at end of year
* CONFIDENTIAL TREATMENT REQUESTED F-4I Atlantic Generation, Inc. and Subsidiaries* Consolidating Statement of Retained Earnings for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, AGI Reclasses and AGI PED PED Consolidated Consol. Entries Parent GEN LTD ------------ --------------- ---------- ------- --------- Retained Earnings Balance at beginning of year Transfer of DPL's nonutility subsidiaries to Conectiv Parent Conectiv's initial investment in DPL Acquisition of Atlantic subsidiaries Net Income Common stock dividends Class A common stock dividends Redemption of preferred stock Balance at end of year
* CONFIDENTIAL TREATMENT REQUESTED F-4J Page 1 of 2 Atlantic Generation, Inc. and Subsidiaries* Consolidating Statement of Retained Earnings for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
VINE VINE BING BING GEN LTD GEN LTD ------------ ----------- ----------- ----------- Retained Earnings Balance at beginning of year Transfer of DPL's nonutility subsidiaries to Conectiv Parent Conectiv's initial investment in DPL Acquisition of Atlantic subsidiaries Net Income Common stock dividends Class A common stock dividends Redemption of preferred stock Balance at end of year
* CONFIDENTIAL TREATMENT REQUESTED F-4J Page 2 of 2 Atlantic Energy Technology, Inc. and Subsidiary* Consolidating Statement of Retained Earnings for the Ten Months Ended December 31, 1998 (Dollars in Thousands)
Total Eliminations, AET Reclasses and AET Consolidated Consol. Entries Parent TEE ---------- ------------- ---------- ---------- Retained Earnings Balance at beginning of year Transfer of DPL's nonutility subsidiaries to Conectiv Parent Conectiv's initial investment in DPL Acquisition of Atlantic subsidiaries Net Income Common stock dividends Class A common stock dividends Redemption of preferred stock Balance at end of year
* CONFIDENTIAL TREATMENT REQUESTED F-4JK EXHIBIT D CONECTIV AND SUBSIDIARY COMPANIES --------------------------------- INTERCOMPANY INCOME TAX ALLOCATION AGREEMENT -------------------------------------------- PURSUANT TO TITLE 17, CHAPTER 11 OF THE CODE OF FEDERAL REGULATIONS PARAGRAPH (c) OF SECTION 250.45 ("RULE 45(c)") WHEREAS, CONECTIV, a corporation organized under the laws of the State of Delaware ("Conectiv") and a registered holding company under the Public Utility Holding Company Act of 1935 ("Act"), together with its subsidiary companies, direct and indirect, listed as parties hereto, comprise the members of the Conectiv consolidated group which will join annually in the filing of a consolidated Federal income tax return, and it is now the intention of Conectiv and its subsidiaries, direct and indirect, (hereinafter collectively referred to as the "Conectiv Group"), to enter into an agreement for the allocation of current federal income taxes; and WHEREAS, certain members of the Conectiv Group will join annually in the filing of certain consolidated state income tax returns (to the extent permitted or required under applicable state income tax laws), and it is now the intention of the Conectiv Group to enter into an agreement for the allocation of current state income taxes; and WHEREAS, Rule 45(c) has been adopted by the Securities and Exchange Commission with the specific intention of providing methods of allocating current income taxes by a registered holding company and its subsidiaries; and NOW, THEREFORE, each member of the Conectiv Group does hereby covenant and agree with one another that the current consolidated income tax liabilities of the Conectiv Group shall be allocated pursuant to Rule 45(c), so that each member of the Conectiv Group will benefit mutually from the application of Rule 45(c) as follows: I Definitions and Interpretation ------------------------------ Section 1.1 Definitions. For all purposes of this Agreement, except ----------- as otherwise expressly provided, the following terms shall have the following respective meanings: "Code" means the Internal Revenue Code of 1986, as amended. ---- "Conectiv" means Conectiv, a corporation, which is a registered -------- holding company under the Public Utility Holding Company Act of 1935. "Conectiv Resources" means Conectiv Resource Partners, Inc., a ------------------ Delaware corporation and a wholly-owned subsidiary of Conectiv. "Consolidated Group" means Conectiv and all of its subsidiaries which, ------------------ from time to time, may be included in any (i) federal income tax return filed by Conectiv in accordance with sections 1501 and 1502 of the Code or (ii) Other Return. "Consolidated Return" means any consolidated federal income tax return ------------------- or Other Return filed by Conectiv, whether before or after the date hereof, which includes one or more members of the Conectiv Group in a consolidated, combined or unitary group of which Conectiv is the common parent. "Consolidated Return Year" means any period during which Conectiv ------------------------ files a consolidated federal income tax return or Other Return that includes one or more members of the Conectiv Group in a consolidated, combined or unitary group of which Conectiv is the common parent. "Consolidated Taxable Income" is the taxable income of the --------------------------- Consolidated Group. "Consolidated Tax Liability" means, with reference to any taxable -------------------------- period, the consolidated, combined or unitary tax liability (including any interest, additions to tax and penalties) of the Consolidated Group for such taxable period (including the consolidated federal income tax liability and any other consolidated, combined or unitary liability for Other Taxes). "Other Return" means any consolidated, combined or unitary return of ------------ Other Taxes filed by Conectiv or another member of the Conectiv Group, whether before or after the date hereof, which covers the operations of one or more members of the Conectiv Group. -2- "Other Taxes" means any taxes (including any interest and penalties) ----------- payable to the government of any state, municipal or other political subdivision, including all agencies and instrumentalities of such government. "Person" means any individual, partnership, form, corporation, limited ------ liability company, joint stock company, unincorporated association, joint venture, trust or other entity or enterprise, or any government or political subdivision or agency, department or instrumentality thereof. "Regulations" means the Treasury Regulations promulgated under the ----------- Code. Section 1.2 References, Etc. The words "hereof", "herein" and --------------- ------ ------ "hereunder" and words of similar import when used in this Agreement shall refer --------- to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined herein in the singular shall have the same meanings in the plural and vice versa. All References herein to any Person includes such Person's successors and assigns. All references herein to Articles and Sections shall, unless the context requires a different construction, be deemed to be references to the Articles and Sections of this Agreement. In this Agreement, unless a clear contrary intention appears the word "including" (and with correlative meaning "include") means "including but --------- ------- not limited to." II Preparation and Filing of Tax Returns ------------------------------------- Section 2. 1 Federal Returns. --------------- (a) A U.S. consolidated federal income tax return shall be filed by Conectiv for the taxable year ended December 31, 1998 and for each subsequent taxable year in respect of which this Agreement is in effect and for which the Consolidated Group is required or permitted to file a consolidated federal income tax return. Conectiv and all its subsidiaries shall execute and file such consents, elections and other documents that may be required or appropriate for the proper filing of such returns. Conectiv Resources shall be responsible for the preparation of such income tax returns. (b) Inasmuch as the federal Consolidated Return for the year ended December 31, 1998 will be the first consolidated federal income tax return of the Consolidated Group, the Consolidated Group will elect, on a timely basis, in accordance with Code Section 1552(b) and Section 1.1552-1(c)(2) of the Regulations and in accordance with Revenue Procedure 90-39 to allocate its consolidated tax liability (other than alternative minimum tax and its related credits) among its members under the method described in Sections 1.1502- 33(d)(3) and 1.1552-1(a)(1) commencing with its first consolidated taxable year ended December 31, 1998. The general effect of such method is to first allocate the consolidated tax liability among the members of the Consolidated Group on the basis of the percentage of Consolidated Taxable Income (but not less than zero) which the taxable income of each member, if computed on a separate return, would bear to the -3- total amount of the taxable income for all members of the Consolidated Group so computed. Then such method allocates an additional amount (the "Tax Benefit Amount") to each member up to, but not greater than, the excess, if any, of its separate return tax liability over the amount allocated to such member in the previous sentence. The total of the Tax Benefit Amounts allocated to members shall result in payments to, and an increase in the earnings and profits of, the members who had items of deduction, loss or credits to which such Tax Benefit Amount is attributable. The allocation of the alternative minimum tax liability and the minimum tax credit, however, shall be allocated in the manner set forth in Proposed Treasury Regulation Section 1.1502-55. This method generally allocates (i) the alternative minimum tax based on the incremental resulting from the inclusion of the member in the consolidated return based on its relative separate adjusted alternative minimum tax and (ii) the minimum tax credit on the basis of the relative alternative minimum tax previously assigned to such member. (c) Each member's allocable share of the consolidated income tax liability as determined in Section 2.1(b) hereof shall be used in both (i) the determination of each Member's earnings and profits and (ii) determining the amounts to be paid (as provided in Section 3.4 of this Agreement) by Members to Conectiv with respect to each member's share of the Consolidated Group's Tax liability and payments from Conectiv to members with respect to the use of a member's tax attributes (d) The aggregate of all amounts paid by members of the Consolidated Group (the "Paying Members") as a result of the excess of each members separate return liability (as determined under Section 1.1552-1(a)(2)(ii) of the Regulations) over the amount allocated to such member as its share of the Consolidated Tax Liability under Code Section 1552 (i.e., the Tax Benefit Amount) shall be paid by Conectiv to the other members (the "Loss Members") which had tax deductions, losses and credits to which such payment by the Paying Members is attributable. The apportionment of such payments among Loss Members shall be in a manner that reflects the Consolidated Group's absorption of such tax attributes in the manner described in 2.1(e) below. The payments to the Loss Members for their tax attributes shall be pursuant to a consistent method which reasonably reflects such items of loss or credit (such consistency and reasonableness to be determined by the party charged with the administration of this Agreement in accordance with Section 3.5 of this Agreement). However, for this purpose, the amounts paid to Loss Members will generally be deemed consistent and reasonable if paid on a basis equal to maximum effective federal corporate income tax rate (currently 35 percent) of the tax losses utilized and 100 percent of tax credits utilized. (e) In apportioning the payments to Loss Members for the Tax Benefit Amount pursuant to Section 2.1(d) hereof: (i) any consolidated net operating loss shall ("NOL") be allocated among the group members pursuant to Regulations Section 1.1502- 79(a)(3). To the extent the consolidated NOL is carried back, any member's individually allocable NOL shall be deemed carried back and utilized in proportion to the amount that the member's NOL bears to the consolidated NOL. Analogous principles shall apply in the case of NOL carryforwards; -4- (ii) with respect to each type of credit used to offset all or a portion of the Consolidated Tax Liability otherwise payable, such credit shall be allocated among the members by crediting to each member an amount of credit which that member would have available to utilize on a separate return basis in a manner consistent with the method set forth in Section 2.1(e)(i) above. (iii) the cost of any credit recapture which results in the payment of tax shall be specifically allocated to the member whose credit is recaptured determined in a manner consistent wit the provisions of Section 2.1(e)(i) above. Section 2.2 Other Returns. (a) Conectiv will prepare, and Conectiv ------------- will file, all returns of Other Taxes which are required to be filed with respect to the operations of Conectiv and its subsidiaries. In the event any taxing authority requires or permits that a combined, consolidated or unitary return be filed for Other Taxes, which return includes both Conectiv and a subsidiary, Conectiv may elect to file such return and shall have the right to require any member to be included in such return. Conectiv will advise each of its subsidiaries included in each Other Return and of each governmental office in which any Other Return is filed. Other Taxes shall be allocated among the Conectiv Group in a manner that is consistent with the method set forth in Article II hereof. Furthermore, amounts due to Conectiv, or from Conectiv, with respect to Other Taxes shall be determined in a manner consistent with Sections 2.1(b) and 2.1(d). (b) Conectiv Resources shall prepare the Other Tax Returns of each member of the Conectiv Group that is obligated to file an Other Return that does not include any other member of the Conectiv Group. Such member shall be solely responsible and obligated to file such Other Return on its own behalf and to pay the tax liability with respect to such return from its own funds. (c) If any member of the Conectiv Group is required to file a combined, consolidated or unitary return for Other Taxes with another member of the Conectiv Group, but not with Conectiv (an "Other Taxes Subgroup"), then the member to be included in such return which is required to file such tax return for the Other Taxes Subgroup shall have the rights, powers and obligations to file such tax returns and apportion among and, collect and remit from, the other applicable members such Other Taxes as the rights, powers and obligations given to Conectiv under this Agreement with respect to the Consolidated Tax Liability. If the right to file a combined, consolidated or unitary return for Other Taxes is optional, then Conectiv shall decide which of its subsidiaries should, to the extent permitted by law, join in filing of such return. Conectiv Resources shall prepare all of such Other Tax Returns. Section 2. 3 Member Tax Information. The members of the Consolidated ---------------------- Group shall submit the tax information requested by Conectiv, in the manner and by the date requested, in order to enable the Treasurer to calculate the amounts payable by the members pursuant to Article III hereof. -5- III Responsibility for Tax; Intercompany Payments --------------------------------------------- Section 3.1 Responsibility. Assuming the members of the -------------- Consolidated Group have fulfilled their obligations pursuant to Sections 3.2 and 3.3 below, then Conectiv will be solely responsible for, and will indemnify and hold each member of the Consolidated Group harmless with respect to, the payment of: (a) the Consolidated Tax Liability for each taxable period for which, as determined under Section 2.1 hereof, Conectiv filed a Consolidated Return; and (b) any and all Other Taxes due or payable with respect to any Other Return. Section 3.2 Federal Tax Payments. (a) With respect to each -------------------- Consolidated Return Year, the Treasurer of Conectiv shall have the right to assess members of the Consolidated Group their share of estimated tax payments to be made on a projected consolidated federal income tax return for each year. Such members will pay, to Conectiv, such estimates not later than the 15th day of the 4th, 6th, 9th and 12th months of such Consolidated Return Year. The difference between a member's estimated tax payments used for computation of the quarterly estimated payments and such member's estimated Tax Liability for any Consolidated Return Year as determined under Section 2.1(b) hereof calculated for purposes of determining the Tax payment to be made together with a request for an extension of the due date for filing the Consolidated Return shall be paid to Conectiv no later than March 15th. Furthermore, any payments for the difference between a member's total estimated payments and such member's actual Tax Liability for any Consolidated Tax Return Year as determined under Section 2.1(b) hereof or any payments by Conectiv to a member pursuant to Section 2.1(d) hereof shall be made no later than the 10th day following the filing of the Consolidated Return for such Consolidated Return Year. (b) Conectiv shall have sole authority, to the exclusion of all other members of the Consolidated Group, to agree to any adjustment proposed by the Internal Revenue Service or any other taxing authority with respect to items of income, deductions or credits, as well as interest or penalties, attributable to any member of the Consolidated Group notwithstanding that such adjustment may increase the amounts payable by members of the Consolidated Group under this Section 3.2 or Section 3.3 hereof. In the event of any adjustment to the Consolidated Tax Liability relating to items of income, deductions or credit, as well as interest or penalties, attributable to any member of the Consolidated Group by reason of an amended return, claim for refund or audit by the Internal Revenue Service or any other taxing authority, the liability of all other members of the Consolidated Group under paragraphs (a) of this Section 3.2 or Section 3.3 hereof shall be redetermined to give effect to such adjustment as if such adjustment had been made as a part of the original computation of such liability, and payment from a member to Conectiv, or by Conectiv to a member, as the case may be, shall be promptly made after any payments are made to the Internal Revenue Service or any other taxing authority, refunds received or final determination of the matter in the case of contested proceedings. In such event, any payments between the parties shall bear interest at the then prevailing rate or rates on deficiencies assessed by the Internal Revenue Service or any other relevant taxing authority, during the period from the due date of the Consolidated Return (determined without regard to extensions of time for the filing thereof) for the Consolidated Return Year to which the adjustments were made to the date of payment. -6- Section 3.3 Other Tax Payments. Payments with respect to Other Taxes ------------------ and required estimates thereof for which any subsidiary of Conectiv has joint and several liability shall be calculated and made by or to such subsidiary in the same manner as that provided in Section 3.2. The principles set forth in Section 3.2 governing the determination and adjustment of payments as well as the method of payment to or from such subsidiary with respect to federal income taxes shall be equally applicable in determining and adjusting the amount of and due date of payments to be made to or from such subsidiary with respect to Other Taxes and estimates thereof. Each subsidiary of Conectiv shall pay, directly to the appropriate taxing authority, all taxes for which such subsidiary is liable and for which Conectiv does not have joint or several liability. Section 3.4 Conectiv. (a) Any payments to be made by a subsidiary of -------- Conectiv pursuant to Section 2.1, 2.2, 3.2 or 3.3 hereof shall be made by such subsidiary to Conectiv, in the form of cash payments to Conectiv. To the extent any payments are to be made to a subsidiary with respect to the use of such subsidiary's tax attributes by the Consolidated Group pursuant to Section 2.1(d), 2.2, 3.2(b) or 3.3 hereof, Conectiv shall make such payment to such subsidiary in the form of cash payments to the Member. (b) Tax payments by Conectiv with respect to any Consolidated Tax Liability shall be paid by Conectiv and shall be debited to the Member of the Consolidated Group for their respective shares of such Consolidated Tax Liability as determined pursuant to Article II hereof. Section 3.5 Administration. The provisions of this Agreement shall -------------- be administered by the Treasurer of Conectiv. Conectiv shall be responsible for maintaining the books and records reflecting the intercompany accounts reflecting the amounts owned, collected and paid with respect to Taxes pursuant to this Agreement. Conectiv will not be obligated to keep such funds in segregated accounts. Any actions to be taken by Conectiv under this Agreement may be delegated to, and performed by Conectiv Resources. IV Miscellaneous Provisions ------------------------ Section 4.1 Effect. The provisions hereof shall fix the rights and ------ obligations of the parties as to the matters covered hereby whether or not such are followed for federal income tax or other purposes by the Consolidated Group, including the computation of earnings and profits for federal income tax purposes. Section 4.2 Effective Date and Termination of Affiliation. This --------------------------------------------- Agreement shall be effective with respect to all taxable years ending on or after the date hereof, in which any subsidiary of Conectiv is a member of the Consolidated Group for any portion of the tax year. In the event that a party to this Agreement ceases to be a member of the Consolidated Group, the rights and obligations of such party and each other party to this Agreement shall survive, but only with respect -7- to taxable years including or ending before the date such party ceases to be a member of the Consolidated Group. Section 4.3 Notices. Any and all notices, requests or other ------- communications hereunder shall be given in writing (a) if to Conectiv, to Attention: Manager of Taxes, Facsimile Number: (302) 429-3017 and (b) if to any other person, at such other address as shall be furnished by such person by like notice to the other parties. Section 4.4 Expenses. Each party hereto shall pay its own expenses -------- incident to this Agreement and the transactions contemplated hereby, including all legal and accounting fees and disbursements. Section 4.5 Benefit and Burden. This Agreement shall inure to the ------------------ benefit of, and shall be binding upon, the parties hereto and their respective successors. Section 4.6 Entire Agreement. This Agreement constitutes the entire ---------------- agreement between the parties with respect to the matters covered hereby and supersedes all prior agreements and understandings, oral and written, with respect to such matters. Section 4.7 Amendments and Waiver. No amendment, modification, --------------------- change or cancellation of this Agreement shall be valid unless the same is in writing and signed by the parties hereto. No waiver of any provision of this Agreement shall be valid unless in writing and signed by the person against whom that waiver is sought to be enforced. The failure of any party at any time to insist upon strict performance of any condition, promise, agreement or understanding set forth herein shall not be construed as a waiver or relinquishment of the right to insist upon strict performance of the same or any other condition, promise, agreement or understanding at a future time. Section 4.8 Assignments. Neither this Agreement nor any right, ----------- interest or obligation hereunder may be assigned by any party hereto and any attempt to do so shall be null and void. Section 4.9 Severability. The invalidity or unenforceability of any ------------ particular provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted. -8- Section 4.10 Entire Agreement. THIS AGREEMENT SETS FORTH ALL OF THE ---------------- PROMISES, AGREEMENTS, CONDITIONS, UNDERSTANDINGS, WARRANTIES AND REPRESENTATIONS AMONG THE PARTIES WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY, AND SUPERSEDES ALL PRIOR AGREEMENTS, ARRANGEMENTS AND UNDERSTANDINGS BETWEEN THE PARTIES HERETO, WHETHER WRITTEN, ORAL OR OTHERWISE. THERE ARE NO PROMISES, AGREEMENTS, CONDITIONS, UNDERSTANDINGS, WARRANTIES OR REPRESENTATIONS, ORAL OR WRITTEN, EXPRESS OR IMPLIED, AMONG THE PARTIES EXCEPT AS SET FORTH HEREIN. Section 4.11 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND -------------- CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. Section 4.12 Counterparts. This Agreement may be executed in one or ------------ more counterparts, each of which shall constitute an original and together which shall constitute one instrument. The parties hereto specifically recognize that from time to time other corporations may become members of the Consolidated Group and hereby agree that such new members may become members to this Agreement by executing a copy of this Agreement and it will be effective as if all the members had resigned. Section 4.13 Attorneys' Fees. If either party hereto commences an --------------- action against the other party to enforce any of the terms, covenants, conditions or provisions of this Agreement, or because of a default by a party under this Agreement, the prevailing party in any such action shall be entitled to recover its costs, expenses and losses, including attorneys' fees, incurred in connection with the prosecution or defense of such action from the losing party. Section 4.14 No Third Party Rights. Nothing in this Agreement shall --------------------- be deemed to create any right in any creditor or other person or entity not a party hereto and this Agreement shall not be construed in any respect to be a contract in whole or in part for the benefit of any third party. Section 4.15 Further Documents. The parties agree to execute any and ----------------- all documents, and to perform any and all other acts, reasonably necessary to accomplish the purposes of this Agreement. Section 4.16 Headings and Captions. The headings and captions --------------------- contained in this Agreement are inserted and included solely for convenience and shall not be considered or given any effect in construing the provisions hereof if any question of intent should arise. -9- Section 4.17 Construction. The parties acknowledge that each of them ------------ has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review this Agreement with its legal counsel and that this Agreement shall be construed as if jointly drafted by the parties hereto. EXECUTED as of the date and year first above written. CONECTIV By: s/ John C. van Roden, Jr. ---------------------------------- Printed Name: John C. van Roden Jr. ------------------------ Title: Senior Vice President & CFO ------------------------------- ACE REIT, Inc. s/ Charles A. Mannix ATE Investments, Inc. s/ Louis M. Walters Atlantic City Electric Company s/ Louis M. Walters Atlantic Generation, Inc. s/ Louis M. Walters Atlantic Jersey Thermal Systems, Inc. s/ Louis M. Walters Atlantic Southern Properties s/ Louis M. Walters ATS Operating Services, Inc. s/ Louis M. Walters Binghamton General, Inc. s/ Louis M. Walters Binghamton Limited, Inc. s/ Louis M. Walters Pedrick Limited, Inc. s/ Louis M. Walters Conectiv Communications, Inc. s/ Louis M. Walters Conectiv Energy Supply, Inc. s/ Louis M. Walters Conectiv Operating Services Company s/ Louis M. Walters Conectiv Plumbing, LLC s/ Louis M. Walters Conectiv Resource Partners, Inc. s/ Louis M. Walters Conectiv Services, Inc. s/ Louis M. Walters Conectiv Solutions, LLC s/ Louis M. Walters Conectiv Thermal Systems, Inc. s/ Louis M. Walters DCI I, Inc. s/ Louis M. Walters DCTC Burney, Inc. s/ Louis M. Walters Delmarva Capital Investments, Inc. s/ Louis M. Walters Delmarva Power & Light Company s/ Louis M. Walters Delmarva Services Company s/ Louis M. Walters DPL REIT, Inc. s/ Charles A. Mannix Enerval LLC s/ Louis M. Walters Pedrick General, Inc. s/ Louis M. Walters The Earth Exchange, Inc. s/ Louis M. Walters ACE REIT Holding Co. s/ Charles A. Mannix Vineland General, Inc. s/ Louis M. Walters Vineland General, Inc. II s/ Louis M. Walters Vineland Limited, Inc. Louis M. Walters Vineland Limited, Inc. II Louis M. Walters Atlantic Paxton Cogeneration Louis M. Walters Geotech of Capital Region Louis M. Walters DPL REIT Holding Co. Charles A. Mannix -10- Delmarva Capital Technology Co s/ Louis M. Walters Delmarva Capital Realty Co. s/ Louis M. Walters Post & Rail Farms, Inc. s/ Louis M. Walters Christiana Capital Management, Inc. s/ Louis M. Walters Delstar Operating Company s/ Louis M. Walters Delwest Operating Company s/ Louis M. Walters Delcal Operating Company s/ Louis M. Walters Power Consulting Group s/ Louis M. Walters Petron Oil Corporation s/ Louis M. Walters Atlantic Energy Technology, Inc. s/ Louis M. Walters Coastal Communications, Inc. s/ Louis M. Walters Atlantic Energy Enterprises s/ Louis M. Walters Atlantic Energy International, Inc. s/ Louis M. Walters Abcool, Inc. s/ Louis M. Walters Altemp Energy Systems, Inc. s/ Louis M. Walters Luppold Heating and Air Conditioning s/ Louis M. Walters Luppold Fuels, Inc. s/ Louis M. Walters Babcock and Brandt, Inc. s/ Louis M. Walters Berkshire Mechanical, Inc. s/ Louis M. Walters Jones Refrigeration & Air Conditioning, Inc. s/ Louis M. Walters -11- EX-27.1 2 FINANCIAL DATA SCHEDULE - CONECTIV
UT 1,000 YEAR DEC-31-1998 JAN-01-1998 DEC-31-1998 PER-BOOK 3,569,178 595,893 723,872 495,737 702,994 6,087,674 1,073 1,569,770 276,939 1,843,161 188,950 95,933 1,746,562 376,061 0 0 80,822 0 36,603 28,314 1,691,268 6,087,674 3,071,606 105,817 2,684,691 2,790,508 281,098 36,860 317,958 164,757 153,201 0 153,201 176,296 153,644 372,309 1.50 1.50
EX-27.2 3 FINANCIAL DATA SCHEDULE - DELMARVA POWER & LIGHT COMPANY
UT 1 DELMARVA POWER AND LIGHT COMPANY 1,000 YEAR DEC-31-1998 JAN-01-1998 DEC-31-1998 PER-BOOK 1,964,409 65,871 384,948 250,888 238,735 2,904,851 2 528,893 322,599 851,494 70,000 89,703 951,911 21,700 0 0 31,287 0 17,003 12,481 859,272 2,904,851 1,872,466 74,676 1,601,169 1,675,845 196,621 1,872 198,493 90,435 108,058 0 108,058 94,860 82,415 258,097 0 0
EX-27.3 4 FINANCIAL DATA SCHEDULE - ATLANTIC CITY ELECTRIC COMPANY
UT 2 ATLANTIC CITY ELECTRIC COMPANY 1,000 10-MOS DEC-31-1998 MAR-01-1998 DEC-31-1998 PER-BOOK 1,593,593 111,084 236,177 293,410 132,958 2,367,222 54,963 493,007 182,123 730,093 118,950 6,231 791,127 0 0 0 30,075 0 19,523 15,728 655,495 2,367,222 875,742 13,374 788,641 802,015 73,727 7,569 81,296 57,551 23,745 0 23,745 81,450 0 207,101 0 0
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