-----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, CeLfjvoBdYKAWOkKl+BUikHni7h33x5ejAODW+6fVNm+8Bxy8vyVzhjMmp1fyAsW 45mvvonzhgLdpiSafYq3XA== 0000008192-95-000056.txt : 19951119 0000008192-95-000056.hdr.sgml : 19951119 ACCESSION NUMBER: 0000008192-95-000056 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATLANTIC CITY ELECTRIC CO CENTRAL INDEX KEY: 0000008192 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 210398280 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03559 FILM NUMBER: 95591785 BUSINESS ADDRESS: STREET 1: 6801 BLACK HORSE PIKE CITY: PLEASANTVILLE STATE: NJ ZIP: 08232 BUSINESS PHONE: 6096454100 MAIL ADDRESS: STREET 1: PO BOX 1264 CITY: PLEASANTVILLE STATE: NJ ZIP: 08232 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATLANTIC ENERGY INC CENTRAL INDEX KEY: 0000806393 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 222871471 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09760 FILM NUMBER: 95591786 BUSINESS ADDRESS: STREET 1: 6801 BLACK HORSE PIKE CITY: PLEASANTVILLE STATE: NJ ZIP: 08232 BUSINESS PHONE: 6096454500 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (x) Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 For Quarter ended September 30, 1995 ( ) Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Commission Registrant; State of Incorporation; IRS Employer File No. Address; and Telephone No. Identification No. 1-9760 Atlantic Energy, Inc. 22-2871471 (New Jersey) 6801 Black Horse Pike Egg Harbor Township, NJ 08234 (609) 645-4500 1-3559 Atlantic City Electric Company 21-0398280 (New Jersey) 6801 Black Horse Pike Egg Harbor Township, NJ 08234 (609) 645-4100 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuers' classes of common stock, as of the latest practicable date: Atlantic Energy, Inc. 52,539,465 (as of November 10, 1995) All of the outstanding shares of Common Stock of Atlantic City Electric Company are owned by Atlantic Energy, Inc. CONSOLIDATED STATEMENT OF INCOME Thousands of Dollars Quarter Ended September 30, 1995 1994 (unaudited) Operating Revenues-Electric $302,685 $272,708 Operating Expenses: Energy 62,513 67,714 Purchased Capacity 49,955 30,171 Operations 37,645 40,197 Maintenance 7,473 9,136 Depreciation and Amortization 19,620 18,351 State Excise Taxes 31,100 24,695 Federal Income Taxes 25,891 21,400 Other Taxes 2,006 2,613 Total Operating Expenses 236,203 214,277 Operating Income 66,482 58,431 Other Income: Allowance for Equity Funds Used During Construction 169 975 Other-Net 1,710 5,334 Total Other Income 1,879 6,309 Interest Charges: Interest on Long Term Debt 15,658 14,243 Other Interest Expense 605 645 Total Interest Charges 16,263 14,888 Allowance for Borrowed Funds Used During Construction (434) (780) Net Interest Charges 15,829 14,108 Less Preferred Stock Dividend Requirements of Subsidiary 3,787 4,309 Net Income $ 48,745 $ 46,323 Average Number of Shares of Common 52,543 54,353 Stock Outstanding (in thousands) Per Common Share: Earnings $ .93 $ .85 Dividends Declared $ .385 $ .385 Dividends Paid $ .385 $ .385 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS Thousands of Dollars Year-to-Date September 30, 1995 1994 (unaudited) Operating Revenues-Electric $727,519 $710,629 Operating Expenses: Energy 146,905 158,581 Purchased Capacity 142,939 97,840 Operations 111,169 115,419 Maintenance 22,204 27,184 Depreciation and Amortization 58,539 55,117 State Excise Taxes 78,460 75,786 Federal Income Taxes 38,230 43,394 Other Taxes 7,181 8,737 Total Operating Expenses 605,627 582,058 Operating Income 121,892 128,571 Other Income: Allowance for Equity Funds Used During Construction 829 2,697 Other-Net 5,582 9,512 Total Other Income 6,411 12,209 Interest Charges: Interest on Long Term Debt 44,804 42,862 Other Interest Expense 2,513 1,024 Total Interest Charges 47,317 43,886 Allowance for Borrowed Funds Used During Construction (1,158) (2,018) Net Interest Charges 46,159 41,868 Less Preferred Stock Dividend Requirements of Subsidiary 11,362 12,928 Net Income 70,782 85,984 Retained Earnings at Beginning of Period 249,181 256,549 319,963 342,533 Dividends Declared on Common Stock (61,000) (62,581) Retained Earnings at End of Period $258,963 $279,952 Average Number of Shares of Common Stock Outstanding (in thousands) 52,908 54,082 Per Common Share: Earnings $1.34 $1.59 Dividends Declared $1.155 $1.155 Dividends Paid $1.155 $1.155 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CASH FLOWS Thousands of Dollars Year-to-Date September 30, 1995 1994 (unaudited) Cash Flows Of Operating Activities: Net Income $ 70,782 $ 85,984 Deferred Purchased Power Costs 11,785 11,170 Deferred Energy Costs (15,901) (11,919) Depreciation and Amortization 58,539 55,117 Deferred Income Taxes-Net 11,201 18,099 Prepaid State Excise Taxes (20,257) (61,724) Employee Separation Costs (15,619) - Net Increase in Other Working Capital (11,296) (19,457) Preferred Stock Dividend Requirements of Subsidiary 11,362 12,928 Other-Net 4,676 (5,407) Net Cash Provided by Operating Activities 105,272 84,791 Cash Flows Of Investing Activities: Utility Cash Construction Expenditures (68,574) (79,592) Leased Property (6,262) (3,925) Nuclear Decommissioning Trust Fund Deposits (4,818) (4,818) Utility Plant Removal Costs (3,924) (3,585) Other-Net 806 (253) Net Cash Used by Investing Activities (82,772) (92,173) Cash Flows Of Financing Activities: Proceeds from Long Term Debt 126,704 22,693 Retirement and Maturity of Long Term Debt - (36,023) Increase in Short Term Debt 11,400 40,400 Proceeds from Common Stock Issued - 9,917 Purchases of Common Stock (29,626) - Dividends Declared on Preferred Stock (11,362) (12,928) Dividends Declared on Common Stock (61,000) (55,000) Other-Net 5,473 3,052 Net Cash Provided (Used) by Financing Activities 41,589 (27,889) Net Increase (Decrease) in Cash and Temporary Investments 64,089 (35,271) Cash and Temporary Investments, beginning of period 5,114 73,635 Cash and Temporary Investments, end of period $ 69,203 $ 38,364 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET Thousands of Dollars September 30, December 31, 1995 1994 (unaudited) ASSETS Electric Utility Plant: In Service $2,405,372 $2,348,873 Less Accumulated Depreciation 779,558 725,999 Net 1,625,814 1,622,874 Construction Work in Progress 117,281 110,078 Land Held for Future Use 6,941 6,941 Leased Property-Net 38,678 42,030 Electric Utility Plant-Net 1,788,714 1,781,923 Nonutility Property and Investments: Investment in Leveraged Leases 78,777 78,216 Nuclear Decommissioning Trust Fund 59,097 52,004 Nonutility Property and Equipment-Net 21,377 18,163 Other Investments and Funds 33,897 28,940 Total Nonutility Property and Investments 193,148 177,323 Current Assets: Cash and Temporary Investments 69,203 5,114 Accounts Receivable: Utility Service 74,946 54,554 Miscellaneous 16,392 14,067 Allowance for Doubtful Accounts (3,300) (3,300) Unbilled Revenues 37,651 32,070 Fuel (at average cost) 21,110 28,030 Materials and Supplies (at average cost) 26,281 27,823 Working Funds 14,348 14,475 Prepaid State Excise Taxes 32,714 5,287 Other Prepayments 7,579 6,596 Deferred Energy Costs 26,901 10,999 Deferred Income Taxes - 12,264 Total Current Assets 323,825 207,979 Deferred Debits: Unrecovered Purchased Power Costs 103,753 115,538 Recoverable Future Federal Income Taxes 85,854 85,854 Unrecovered State Excise Taxes 66,664 73,834 Unamortized Debt Costs 36,345 38,184 Other Regulatory Assets 54,714 47,055 Other 12,879 17,865 Total Deferred Debits 360,209 378,330 Total Assets $2,665,896 $2,545,555 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET Thousands of Dollars September 30, December 31, 1995 1994 (unaudited) LIABILITIES AND CAPITALIZATION Capitalization: Common Shareholders' Equity: Common Stock $ 563,892 $ 593,475 Retained Earnings 258,963 249,181 Total Common Shareholders' Equity 822,855 842,656 Preferred Stock of Atlantic Electric: Not Subject to Mandatory Redemption 40,000 40,000 Subject to Mandatory Redemption 149,250 149,250 Long Term Debt 871,129 778,288 Total Capitalization (excluding current portion) 1,883,234 1,810,194 Current Liabilities: Cumulative Preferred Stock Redemption Requirement 12,250 12,250 Long Term Debt 35,547 1,000 Short Term Debt 20,000 8,600 Accounts Payable 52,420 66,080 Taxes Accrued 37,702 10,409 Interest Accrued 16,807 19,168 Dividends Declared 24,015 24,681 Accrued Employee Separation Costs 10,981 26,600 Other 19,202 19,813 Total Current Liabilities 228,924 188,601 Deferred Credits and Other Liabilities: Deferred Income Taxes 412,845 412,574 Deferred Investment Tax Credits 49,745 51,646 Capital Lease Obligations 38,040 41,111 Other 53,108 41,429 Total Deferred Credits and Other Liabilities 553,738 546,760 Commitments and Contingencies (Notes 3, 4 and 6) Total Liabilities and Capitalization $2,665,896 $2,545,555 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Atlantic Energy, Inc. (the Company or AEI) is a public utility holding company. Its principal subsidiary is Atlantic City Electric Company (ACE), an electric utility. On January 1, 1995, AEI transferred direct ownership of its nonutility companies to a new subsidiary, Atlantic Energy Enterprises, Inc. (AEE). AEE serves as the holding company for the following nonutility companies: Atlantic Generation, Inc. (AGI), ATE Investment, Inc. (ATE), Atlantic Southern Properties, Inc. (ASP), Atlantic Energy Technology, Inc. (AET), and Atlantic Thermal Systems, Inc. (ATS). The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly- owned. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations of the nonutility companies are not significant and are classified under Other Income in the Consolidated Statement of Income. These consolidated financial statements reflect all normal, recurring adjustments and accruals which, in the opinion of management, are necessary for a fair presentation of the consolidated financial statements presented. The notes to the consolidated financial statements accompanying the Company's 1994 Annual Report to Shareholders and Form 10-K filed with the Securities and Exchange Commission should be read in conjunction with this report. Note 1 of these annual reports specifically identifies the significant accounting policies of the Company. The consolidated balance sheet contained in the financial statements presented herein that is labeled December 31, 1994 was derived from the audited consolidated balance sheet presented in the 1994 Annual Report to Shareholders and Form 10-K. Certain prior year amounts have been reclassified to conform to the current year reporting. 2. The components of Federal Income Tax expense are as follows (in thousands of dollars): Quarter Ended September 30, 1995 1994 (unaudited) Current $21,281 $29,685 Deferred 7,029 (6,095) Total Federal Income Tax Expense 28,310 23,590 Less Amounts Included in Other Income 2,419 2,190 Federal Income Taxes Included in Operating Expenses $25,891 $21,400 A reconciliation of the expected Federal income taxes compared to the reported Federal Income Tax expense computed by applying the statutory rate follows: Tax Computed at the Statutory Rate of 35% $28,295 $25,978 Utility Plant Basis Differences (310) 123 Investment Tax Credits (642) (634) Other-Net 967 (1,877) Total Federal Income Tax Expense $28,310 $23,590 Effective Federal Income Tax Rate 35% 32% Year-to-Date September 30, 1995 1994 (unaudited) Current $29,560 $28,479 Deferred 11,021 18,104 Total Federal Income Tax Expense 40,581 46,583 Less Amounts Included in Other Income 2,351 3,189 Federal Income Taxes Included in Operating Expenses $38,230 $43,394 Tax Computed at the Statutory Rate of 35% $42,954 $50,923 Utility Plant Basis Differences 483 1,631 Investment Tax Credits (1,917) (1,901) Deferred Tax Adjustments - (375) Other-Net (939) (3,695) Total Federal Income Tax Expense $40,581 $46,583 Effective Federal Income Tax Rate 33% 32% Certain prior year reconciliation amounts have been reclassified to conform to current year reporting. The Company is awaiting settlement by the IRS concerning taxes in 1984 through 1986. The impending settlement is not expected to have a material impact to the Company. 3. On April 17, 1995, ACE filed a petition with the New Jersey Board of Public Utilities (BPU) requesting a $37.0 million increase in annual levelized energy clause (LEC) revenues. The petition also requested that the proposed rates be implemented on a provisional basis, for service rendered on and after June 1, 1995. This request for provisional rates was to avoid any further increase in the proposed rates that would result from compression as the implementation of the proposed rates are delayed beyond the June 1, 1995 date. Compression results from a shorter recovery period requiring the increase in costs to be collected over a reduced level of sales. The requested LEC increase is due primarily to increased costs associated with the purchase of energy and capacity from Independent Power Producers (IPP's). ACE has BPU approved contracts with four IPP's. This LEC request represents the first filing that includes a full year of contract costs for all four IPP's. Though ACE's petition supports a $67.6 million increase in LEC revenues, ACE has voluntarily reduced its request by $30.6 million in order to keep its rates competitive. This reduction was accomplished by offering to forego the recovery of $10 million in LEC revenues under the Southern New Jersey Economic Initiative tariff rider and to defer recovery of $20.6 million of LEC costs. ACE will seek full recovery of the $20.6 million deferred LEC costs, without carrying costs, in its next annual LEC filing. On July 7, 1995, the BPU approved the provisional $37.0 million increase in annual LEC revenues effective for service rendered to customers on and after July 7, 1995. Evidentiary hearings for the determination of final LEC rates were held in August 1995. The matter is now before the Administrative Law Judge whose decision is expected by the end of November 1995. A final BPU decision is expected by the end of 1995. ACE cannot predict the outcome of the final decision at this time. On November 1, 1994, ACE filed a Motion with the BPU for reconsideration of its order in the matter of the Generic Proceeding on the double recovery of capacity costs. This matter concerns the Ratepayer Advocate's allegation that ACE and other New Jersey electric utility companies are recovering capacity costs associated with IPP contracts concurrently in base rates and LEC rates. By its order the BPU found that the Ratepayer Advocate had reserved its right to argue for an adjustment to the LEC rates approved in the 1992, 1993 and 1994 LEC proceedings. ACE's Motion argues that the Stipulation settling the 1992 LEC and the BPU's order approving that Stipulation did not include language granting such rights to the Ratepayer Advocate. On March 22, 1995, ACE's Motion was denied by the BPU on the grounds that this issue was previously addressed in its initial order. Evidentiary hearings in the Generic Proceeding are scheduled throughout 1995 and into 1996 with a final decision expected during the third quarter of 1996. In September 1995, the Ratepayer Advocate filed testimony which calculates ACE's over-recovery of capacity costs for the four year period, June 1991 through May 1995, at $46 million. ACE will file rebuttal testimony in mid-December 1995. ACE cannot predict the outcome of the decision at this time. 4. In August 1995, ACE issued and sold $80 million of First Mortgage Bonds in the form of Medium Term Notes in the following increments: $30 million of 6.81% Series due 2001; $25 million of 7.01% Series due 2002; $1 million of 7.25% Series due 2010; $7 million of 7.63% Series due 2014; $15 million of 7.68% Series due 2015; $2 million of 7.68% Series due 2016. Net proceeds in the amount of $79.5 million from these issuances were used primarily for the October 1, 1995 redemption of $53.9 million principal amount of the 9 1/4% Series First Mortgage Bonds due 10/1/2019 at a price of 105.15%. In addition, proceeds were used for ACE's ongoing construction program and repayment of short term debt. ACE's Cumulative Preferred Stock and long term debt securities are not widely held and generally trade infrequently. Their estimated aggregate fair market values at September 30, 1995 are approximately $195 million and $876 million, respectively. Their estimated aggregate fair market values at December 31, 1994 were approximately $185 million and $693 million, respectively. At September 30, 1995, ACE had no outstanding short term debt. At September 30, 1995, AEI had $20 million outstanding under an unsecured short term debt facility. Proceeds from this borrowing were used to repay funds temporarily provided by subsidiary companies and for the acquisition of the Company's common stock. As of September 30, 1995, AEI had $6.8 million outstanding in temporary funding from subsidiaries. Amounts outstanding under both temporary facilities were repaid from the revolving credit and term loan facility referred to below in October 1995. In September 1995, AEI established a $75 million revolving credit and term loan facility. The revolver is comprised of a 364 day senior revolving credit facility in the amount of $35 million and a three year senior revolving credit facility in the amount of $40 million. Interest rates on borrowings will be based on senior debt ratings and on the borrowing option selected by the Company. There were no borrowings outstanding on either facility as of September 30, 1995. In addition to repayment of amounts outstanding under the temporary loan facilities referred to above, this facility will be used to fund further acquisitions of Company common stock and for other general corporate purposes. At September 30, 1995, ATE had outstanding $23.3 million under its revolving credit and term loan facility. The estimated aggregate fair market value of ATE's senior notes at September 30, 1995 and December 31, 1994 was approximately $15 million and $14 million, respectively. 5. As of September 30, 1995 and December 31, 1994, 52,539,465 and 54,155,245 shares of common stock were outstanding, respectively. During the third quarter of 1995, the Company reacquired and cancelled 65,000 shares of its common stock at a cost of $1.2 million. Year-to-date ended September 30, 1995, the Company reacquired and cancelled 1,625,000 shares of its common stock at a total cost of $29.6 million. The prices paid for these shares ranged from $17.625 to $18.875 per share. Funding for stock acquisitions had been provided in part by temporary funding from subsidiary companies and the short term borrowing facility referred to above. 6. ACE, a 7.41% owner in the Salem Nuclear Generating Station (Salem), was advised by Public Service Electric & Gas Company (PS), operator of Salem, that Salem Unit 1 and Unit 2 were taken out of service on May 16, 1995 and June 7, 1995, respectively. ACE has been advised that PS subsequently informed the Nuclear Regulatory Commission (NRC) that the units would remain shutdown until there is a thorough review and resolution of certain equipment and management issues that have affected Salem's operation and PS estimates that Unit 1 and Unit 2 will both return to service during the second quarter of 1996, although no assurances have been given by PS. ACE's share of additional operation and maintenance expenses associated with restart activities are currently estimated to be slightly less than $4 million for 1995. An estimate of additional restart expenses for 1996 has not yet been released by PS pending the completion of the assessment of Unit 2 and development of the final scope of work required. ACE is subject to a BPU imposed nuclear performance standard for all of its jointly-owned nuclear units. ACE anticipates that the 1995 aggregate capacity factor of the five nuclear units in which ACE owns a minority interest will be below the 65% minimum annual standard established by the BPU, due to the shutdown of the above mentioned units. As a result, ACE has provided for a 1995 performance penalty of $1.2 million after tax. CONSOLIDATED STATEMENT OF INCOME Thousands of Dollars Quarter Ended September 30, 1995 1994 (unaudited) Operating Revenues-Electric $303,031 $272,769 Operating Expenses: Energy 62,513 67,714 Purchased Capacity 49,955 30,171 Operations 37,437 40,346 Maintenance 7,483 9,158 Depreciation and Amortization 19,620 18,351 State Excise Taxes 31,100 24,695 Federal Income Taxes 25,891 21,400 Other Taxes 2,006 2,613 Total Operating Expenses 236,005 214,448 Operating Income 67,026 58,321 Other Income: Allowance for Equity Funds Used During Construction 169 975 Miscellaneous Income-Net 1,300 4,491 Total Other Income 1,469 5,466 Interest Charges: Interest on Long Term Debt 15,658 14,243 Other Interest Expense 605 645 Total Interest Charges 16,263 14,888 Allowance for Borrowed Funds Used During Construction (434) (780) Net Interest Charges 15,829 14,108 Net Income 52,666 49,679 Less Preferred Dividend Requirements 3,787 4,309 Balance Available for Common Shareholder $ 48,879 $ 45,370 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS Thousands of Dollars Year-to-Date September 30, 1995 1994 (unaudited) Operating Revenues-Electric $727,943 $710,765 Operating Expenses: Energy 146,905 158,581 Purchased Capacity 142,939 97,840 Operations 111,113 115,860 Maintenance 22,230 27,249 Depreciation and Amortization 58,539 55,117 State Excise Taxes 78,460 75,786 Federal Income Taxes 38,230 43,394 Other Taxes 7,181 8,737 Total Operating Expenses 605,597 582,564 Operating Income 122,346 128,201 Other Income: Allowance for Equity Funds Used During Construction 829 2,697 Miscellaneous Income-Net 6,540 8,416 Total Other Income 7,369 11,113 Interest Charges: Interest on Long Term Debt 44,804 42,862 Other Interest Expense 2,513 1,024 Total Interest Charges 47,317 43,886 Allowance for Borrowed Funds Used During Construction (1,158) (2,018) Net Interest Charges 46,159 41,868 Net Income 83,556 97,446 Retained Earnings at Beginning of Period 249,767 256,961 333,323 354,407 Dividends Declared: Cumulative Preferred Stock 11,362 12,928 Common Stock 61,014 62,581 Total Dividends Declared 72,376 75,509 Retained Earnings at End of Period $260,947 $278,898 Earnings for Common Stock: Net Income $ 83,556 $ 97,446 Less Preferred Dividend Requirements 11,362 12,928 Balance Available for Common Shareholder $ 72,194 $ 84,518 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CASH FLOWS Thousands of Dollars Year-to-Date September 30, 1995 1994 (unaudited) Cash Flows Of Operating Activities: Net Income $ 83,556 $ 97,446 Deferred Purchased Power Costs 11,785 11,170 Deferred Energy Costs (15,901) (11,919) Depreciation and Amortization 58,539 55,117 Deferred Federal Income Taxes-Net 8,685 16,201 Prepaid State Excise Taxes (20,257) (61,724) Employee Separation Costs (15,619) - Net Increase in Other Working Capital (8,597) (20,202) Other-Net 9,020 (2,168) Net Cash Provided by Operating Activities 111,211 83,921 Cash Flows Of Investing Activities: Cash Construction Expenditures (68,574) (79,592) Leased Property (6,262) (3,925) Nuclear Decommissioning Trust Fund Deposits (4,818) (4,818) Plant Removal Costs (3,924) (3,585) Other-Net 6,305 3,782 Net Cash Used by Investing Activities (77,273) (88,138) Cash Flows Of Financing Activities: Proceeds from Long Term Debt 104,404 22,693 Retirement and Maturity of Long Term Debt - (36,023) (Decrease) Increase in Short Term Debt (8,600) 40,400 Proceeds from Capital Lease Obligations 6,262 3,925 Capital Contributions 313 25,270 Dividends Declared on Preferred Stock (11,362) (12,928) Dividends Declared on Common Stock (61,014) (62,581) Other-Net (833) (869) Net Cash Provided (Used)by Financing Activities 29,170 (20,113) Net Increase (Decrease) in Cash and Temporary Investments 63,108 (24,330) Cash and Temporary Investments, beginning of period 3,459 60,243 Cash and Temporary Investments, end of period $ 66,567 $ 35,913 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET Thousands of Dollars September 30, December 31, 1995 1994 (unaudited) ASSETS Electric Utility Plant: In Service $2,405,372 $2,348,873 Less Accumulated Depreciation 779,558 725,999 Net 1,625,814 1,662,874 Construction Work in Progress 117,281 110,078 Land Held for Future Use 6,941 6,941 Leased Property-Net 38,678 42,030 Electric Utility Plant-Net 1,788,714 1,781,923 Nonutility Property and Investments: Nuclear Decommissioning Trust Fund 59,097 52,004 Other Property, Investments and Funds 2,041 3,139 Total Nonutility Property and Investments 61,138 55,143 Current Assets: Cash and Temporary Investments 66,567 3,459 Accounts Receivable: Utility Service 74,946 54,554 Miscellaneous 18,201 15,804 Allowance for Doubtful Accounts (3,300) (3,300) Unbilled Revenues 37,651 32,070 Fuel (at average cost) 21,110 28,030 Materials and Supplies (at average cost) 26,281 27,823 Working Funds 14,347 14,475 Prepaid State Excise Taxes 32,714 5,287 Deferred Energy Costs 26,901 10,999 Deferred Income Taxes - 12,141 Prepayments 5,716 6,473 Total Current Assets 321,134 207,815 Deferred Debits: Unrecovered Purchased Power Costs 103,753 115,538 Recoverable Future Federal Income Taxes 85,854 85,854 Unrecovered State Excise Taxes 66,664 73,834 Unamortized Debt Costs 36,260 38,083 Other Regulatory Assets 54,714 47,055 Other 11,519 16,071 Total Deferred Debits 358,764 376,435 Total Assets $2,529,750 $2,421,316 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET Thousands of Dollars September 30, December 31, 1995 1994 (unaudited) LIABILITIES AND CAPITALIZATION Capitalization: Common Shareholder's Equity: Common Stock $ 54,963 $ 54,963 Premium on Capital Stock 231,081 231,081 Contributed Capital 263,062 262,749 Capital Stock Expense (2,300) (2,300) Retained Earnings 260,947 249,767 Total Common Shareholder's Equity 807,753 796,260 Cumulative Preferred Stock: Not Subject to Mandatory Redemption 40,000 40,000 Subject to Mandatory Redemption 149,250 149,250 Long Term Debt 856,129 763,288 Total Capitalization (excluding current portion) 1,853,132 1,748,798 Current Liabilities: Cumulative Preferred Stock Redemption Requirement 12,250 12,250 Long Term Debt 12,247 - Short Term Debt - 8,600 Accounts Payable 52,260 65,632 Federal Income Taxes Payable-Affiliate 38,194 9,537 Other Taxes Accrued 3,654 3,490 Interest Accrued 16,329 19,048 Dividends Declared 24,015 24,681 Accrued Employee Separation Costs 10,981 26,600 Other 18,189 19,134 Total Current Liabilities 188,119 188,972 Deferred Credits and Other Liabilities: Deferred Income Taxes 348,817 350,697 Deferred Investment Tax Credits 49,745 51,646 Capital Lease Obligations 38,040 41,102 Other 51,897 40,101 Total Deferred Credits and Other Liabilities 488,499 483,546 Commitments and Contingencies (Notes 3, 4 and 5) Total Liabilities and Capitalization $2,529,750 $2,421,316 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Atlantic City Electric Company (the Company and ACE) is a wholly-owned subsidiary of Atlantic Energy, Inc. The consolidated financial statements include the accounts of the Company and its subsidiary, which is wholly-owned. All significant intercompany accounts and transactions have been eliminated in consolidation. These consolidated financial statements reflect all normal, recurring adjustments and accruals which, in the opinion of management, are necessary for a fair presentation of the consolidated financial statements presented. The notes to the consolidated financial statements accompanying the Company's 1994 Annual Report on Form 10-K filed with the Securities and Exchange Commission should be read in conjunction with this report. Note 1 of these annual reports specifically identifies the significant accounting policies of the Company. The consolidated balance sheet contained in the financial statements presented herein that is labeled December 31, 1994 was derived from the audited consolidated balance sheet presented in the 1994 Form 10-K. Certain prior year amounts have been reclassified to conform to the current year reporting. 2. The components of Federal Income Tax expense are as follows (in thousands of dollars): Quarter Ended September 30, 1995 1994 (unaudited) Current $22,311 $30,184 Deferred 6,074 (6,977) Total Federal Income Tax Expense 28,385 23,207 Less Amounts Included in Other Income 2,494 1,807 Federal Income Taxes Included in Operating Expenses $25,891 $21,400 A reconciliation of the expected Federal income taxes compared to the reported Federal Income Tax expense computed by applying the statutory rate follows: Tax Computed at the Statutory Rate of 35% $28,369 $25,510 Utility Plant Basis Differences (310) 123 Investment Tax Credits (634) (634) Other-Net 960 (1,792) Total Federal Income Tax Expense $28,385 $23,207 Effective Federal Income Tax Rate 35% 32% Year-to-Date September 30, 1995 1994 (unaudited) Current $32,609 $29,997 Deferred 8,685 16,201 Total Federal Income Tax Expense 41,294 46,198 Less Amounts Included in Other Income 3,064 2,804 Federal Income Taxes Included in Operating Expenses $38,230 $43,394 Tax Computed at the Statutory Rate of 35% $43,698 $50,275 Utility Plant Basis Differences 483 1,631 Investment Tax Credits (1,901) (1,901) Deferred Tax Adjustments - (375) Other-Net (986) (3,432) Total Federal Income Tax Expense $41,294 $46,198 Effective Federal Income Tax Rate 33% 32% Certain prior year reconciliation amounts have been reclassified to conform to the current year reporting. The Company is awaiting settlement by the IRS concerning taxes in 1984 through 1986. The impending settlement is not expected to have a material impact to the Company. 3. On April 17, 1995, the Company filed a petition with the New Jersey Board of Public Utilities (BPU) requesting a $37.0 million increase in annual levelized energy clause (LEC) revenues. The petition also requested that the proposed rates be implemented on a provisional basis, for service rendered on and after June 1, 1995. This request for provisional rates was to avoid any further increase in the proposed rates that would result from compression as the implementation of the proposed rates are delayed beyond the June 1, 1995 date. Compression results from a shorter recovery period requiring the increase in costs to be collected over a reduced level of sales. The requested LEC increase is due primarily to increased costs associated with the purchase of energy and capacity from Independent Power Producers (IPP's). The Company has BPU approved contracts with four IPP's. This LEC request represents the first filing that includes a full year of contract costs for all four IPP's. Though the Company's petition supports a $67.6 million increase in LEC revenues, the Company has voluntarily reduced its request by $30.6 million in order to keep its rates competitive. This reduction was accomplished by offering to forego the recovery of $10 million in LEC revenues under the Southern New Jersey Economic Initiative tariff rider and to defer recovery of $20.6 million of LEC costs. The Company will seek full recovery of the $20.6 million deferred LEC costs, without carrying costs, in its next annual LEC filing. On July 7, 1995, the BPU approved the provisional $37.0 million increase in annual LEC revenues effective for service rendered to customers on and after July 7, 1995. Evidentiary hearings for the determination of final LEC rates were held in August 1995. The matter is now before the Administrative Law Judge whose decision is expected by the end of November 1995. A final BPU decision is expected by the end of 1995. The Company cannot predict the outcome of the final decision at this time. On November 1, 1994, the Company filed a Motion with the BPU for reconsideration of its order in the matter of the Generic Proceeding on the double recovery of capacity costs. This matter concerns the Ratepayer Advocate's allegation that the Company and other New Jersey electric utility companies are recovering capacity costs associated with IPP contracts concurrently in base rates and LEC rates. By its order the BPU found that the Ratepayer Advocate had reserved its right to argue for an adjustment to the LEC rates approved in the 1992, 1993 and 1994 LEC proceedings. The Company's Motion argues that the Stipulation settling the 1992 LEC and the BPU's order approving that Stipulation did not include language granting such rights to the Ratepayer Advocate. On March 22, 1995, the Company's Motion was denied by the BPU on the grounds that this issue was previously addressed in its initial order. Evidentiary hearings in the Generic Proceeding are scheduled throughout 1995 and into 1996 with a final decision expected during the third quarter of 1996. In September 1995, the Ratepayer Advocate filed testimony which calculates the Company's over-recovery of capacity costs for the four year period, June 1991 through May 1995, at $46 million. ACE will file rebuttal testimony in mid-December 1995. The Company cannot predict the outcome of the decision at this time. 4. In August 1995, the Company issued and sold $80 million of First Mortgage Bonds in the form of Medium Term Notes in the following increments: $30 million of 6.81% Series due 2001; $25 million of 7.01% Series due 2002; $1 million of 7.25% Series due 2010; $7 million of 7.63% Series due 2014; $15 million of 7.68% Series due 2015; $2 million of 7.68% Series due 2016. Net proceeds in the amount of $79.5 million from these issuances were used primarily for the October 1, 1995 redemption of $53.9 million principal amount of the 9 1/4% Series First Mortgage Bonds due 10/1/2019 at a premuim of 105.15%. Additionally, proceeds were used for ACE's ongoing construction program and repayment of short term debt. At September 30, 1995, the Company had no outstanding short term debt. The Company's Cumulative Preferred Stock and long term debt securities are not widely held and generally trade infrequently. Their estimated aggregate fair market values at September 30, 1995 are approximately $195 million and $876 million, respectively. Their estimated aggregate fair market values at December 31, 1994 were approximately $185 million and $693 million, respectively. 5. The Company, a 7.41% owner in the Salem Nuclear Generating Station (Salem), was advised by Public Service Electric & Gas Company (PS), operator of Salem, that Salem Unit 1 and Unit 2 were taken out of service on May 16, 1995 and June 7, 1995, respectively. ACE has been advised that PS subsequently informed the Nuclear Regulatory Commission (NRC) that the units would remain shutdown until there is a thorough review and resolution of certain equipment and management issues that have affected Salem's operation and PS estimates that Unit 1 and Unit 2 will both return to service during the second quarter of 1996, although no assurances have been given by PS. The Company's share of additional operation and maintenance expenses associated with restart activities are currently estimated by PS to be slightly less than $4 million for 1995. An estimate of additional restart expenses for 1996 has not yet been released by PS pending the completion of the assessment of Unit 2 and development of the final scope of work required. The Company is subject to a BPU imposed nuclear performance standard for all of its jointly-owned nuclear units. The Company anticipates that the 1995 aggregate capacity factor of the five nuclear units in which it owns a minority interest will be below the 65% minimum annual standard established by the BPU, due to the shutdown of the above mentioned units. As a result, the Company has provided for a 1995 performance penalty of $1.2 million after tax. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (unaudited) The following is management's discussion and analysis of significant factors which affected the Company's interim financial condition and results of operations. To properly assess and evaluate the Company's performance one should read, in conjunction with this report, the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's 1994 Annual Report to Shareholders (pages 25-33). ACE is the principal subsidiary of the Company and the following discussion focuses primarily on ACE. LIQUIDITY AND CAPITAL RESOURCES The operating needs of the Company, representing those of the consolidated group, are dependent upon the results of its subsidiaries, principally those of ACE. In August 1995, ACE issued and sold $80 million of First Mortgage Bonds in the form of Medium Term Notes in the following increments: $30 million of 6.81% Series due 2001; $25 million of 7.01% Series due 2002; $1 million of 7.25% Series due 2010; $7 million of 7.63% Series due 2014; $15 million of 7.68% Series due 2015; $2 million of 7.68% Series due 2016. Net proceeds in the amount of $79.5 million from these issuances were used primarily for the October 1, 1995 redemption of $53,9 million principal amount of the 9 1/4% Series First Mortgage Bonds due 10/1/2019 at a premium of 105.15%. Additionally, proceeds were sued for ACE's ongoing construction program and repayment of short term debt. At September 30, 1995, ACE had no outstanding short term debt. At September 30, 1995, AEI had $20 million outstanding under an unsecured short term debt facility. Proceeds from this borrowing were used to repay funds temporarily provided by subsidiary companies and for the acquisition of the Company's common stock. As of September 30, 1995, notes payable by AEI to subsidiaries amounted to $6.8 million. Amounts outstanding under both temporary arrangements were repaid from the revolving credit and term facility referred to below in October 1995. In September 1995, AEI established a $75 million revolving credit and term loan facility. The revolver is comprised of a 364 day senior revolving credit facility in the amount of $35 million and a three year senior revolving credit facility in the amount of $40 million. Interest rates on borrowings will be based on senior debt ratings and on the borrowing option selected by the Company. There were no borrowings on either facility as of September 30, 1995. In addition to repayment of amounts outstanding under the temporary loan arrangements referred to above, this facility will be used to fund further acquisitions of Company common stock and for other general corporate purposes. During the third quarter 1995, ATE increased the debt outstanding under its revolving credit and term loan facility by $3.8 million to $23.3 million. Proceeds were used to support the activities of affiliated companies. The Company reacquired and cancelled 65,000 shares of its common stock during the third quarter of 1995 at a total cost of $1.2 million. Year-to-date ended September 30, 1995, the Company reacquired and cancelled 1,625,000 shares of its common stock at a total cost of $29.6 million. Funding for the stock acquisitions had been provided in part by temporary funding from subsidiary companies and the short term borrowing facility referred to above. Current year Dividends Declared on Common Stock as presented on the Consolidated Statement of Cash Flows includes the effects of market purchases of common stock with reinvested dividends as instituted since July 1994. Prior to this, dividends reinvested were applied towards the issuance of original shares. RESULTS OF OPERATIONS Changes in net income and earnings per share for the periods ended September 30, 1995 versus the corresponding periods of the previous year are as follows: Periods Ended September 30, 1995 Quarter Year-to-Date Net Income 5.2% (17.7)% Earnings Per Share 9.4% (15.7)% The change in net income for the current quarter reflects an increase in electric revenues, offset in part by an increase in purchased capacity costs. The decrease in net income for the year-to-date period is due to an increase in purchased capacity costs. Total operating expenses, excluding purchased capacity costs, decreased in both current periods when compared to the respective prior year periods. Significant factors contributing to these changes are explained below. Unless otherwise specified, changes are in terms of the current year period compared to the corresponding prior year period. Utility Revenues Changes in Operating Revenues-Electric are disclosed in the following table: Periods Ended September 30, 1995 (Thousands of Dollars) Quarter Year-to-Date Base Revenues $ (20) $ (2,190) Levelized Energy Clause 15,643 40,822 Kilowatt-hour Sales 6,616 (14,422) Unbilled Revenues 4,413 8,749 Sales for Resale 4,736 (14,492) Other Revenues (1,411) (1,577) Total $29,977 $ 16,890 Levelized Energy Clause (LEC) Revenues for the period increased due to a provisional rate increase in July 1995 of $37.0 million on an annual basis. Changes in Kilowatt-hour Sales are explained in the following section 'Billed Sales to Ultimate Utility Customers'. The changes in Unbilled Revenues are a result of the amount of kilowatt-hours consumed by, but not yet billed to, ultimate customers at the end of the respective periods, which are affected by weather and economic conditions and the corresponding price per kilowatt-hour. The changes in Sales for Resale to wholesale customers are a function of ACE's energy mix strategy, which in turn is dependent upon ACE's needs for energy, the energy needs of other utilities participating in the regional power pool of which ACE is a member, and the sources and prices of energy available. The increase in Sales for Resale for the quarter was the result of meeting new contract demands for bulk power sales to wholesale customers outside the regional power pool. The decline in Sales for Resale for the year-to-date period primarily reflects a decrease in available supplemental energy sources to ACE due to the expiration of a 200 megawatt capacity arrangement in May 1994. The year-to-date decline also recognizes a decrease in the demands of the regional power pool in the beginning of the current year due to the mild weather conditions when compared to the extreme weather conditions during the same period in 1994. Billed Sales to Ultimate Utility Customers Changes in billed kilowatt-hour sales are generally due to changes in the average number of customers and average customer use, which is affected by economic and weather conditions. Energy sales statistics, stated as percentage changes from the corresponding periods of the prior year, are shown below. Periods Ended September 30, 1995 Quarter Year-to-Date Average Average Customer Class Sales Use Cust Sales Use Cust Residential 3.9 % 2.7 % 1.2% (3.9)% (5.1)% 1.3% Commercial 3.4 2.1 1.2 .8 ( .8) 1.6 Industrial (5.7) (7.3) 1.7 (7.2) (8.5) 1.4 Total 2.4 1.2 1.2 (2.5) (3.7) 1.3 The increase in Residential sales and average use for the quarter is due to warmer summer temperatures in 1995 compared to the summer temperatures in 1994. The year-to-date decrease is due to the above normal temperatures during the heating season in contrast to the significantly below normal temperatures experienced during the 1994 heating season. Sales to the Commercial sector increased in the current quarter due to ongoing economic growth, favorable weather and a strong shore tourism season. The year-to-date growth in this sector is weaker than the current quarter's growth because of the contrast in heating season conditions mentioned above. Approximately one-half of the increase in the number of Commercial customers is due to the continuing popularity of ACE's night lighting programs. The sales declines in the Industrial sector for the current periods are primarily related to the impact of two former customers taking energy service from independent power producers commencing June 1994 and January 1995. Expenses Total Operating Expenses for quarter and year-to-date periods ended September 30, 1995 increased by 10.2% and 4.0%, respectively. Excluding depreciation and taxes, Total Operating Expenses increased by 7.0% and 6.1%, respectively, due to an increase in purchased capacity costs. Energy expense reflects the amount of energy needed to meet load requirements, as well as the various fuel and purchased energy sources used and the operation of the LEC. Changes in costs reflect the availability of low-cost generation from ACE-owned and purchased energy sources, the unit prices of the energy sources used and changes in the needs of other utilities participating in the regional power pool. The cost of energy is recovered from customers primarily through the operation of the LEC. Generally, earnings are not affected by energy costs because these costs are adjusted to match the associated LEC revenues. However since July 1994, ACE has voluntarily foregone recovery of certain amounts of otherwise recoverable fuel costs through its Southern New Jersey Economic Initiative (SNJEI), thereby reducing earnings. Such reduced recoveries are discretionary by ACE, and are influenced by competitive and economic factors. Otherwise, in any period the actual amount of LEC revenue recovered from customers will be greater or less than the actual amount of energy cost incurred and eligible for recovery in that period. Such respective overrecovery or underrecovery of energy costs is recorded on the Consolidated Balance Sheet as a liability or asset as appropriate. Amounts on the balance sheet are recognized in the Consolidated Statement of Income within Energy expense during the period in which they are subsequently recovered through the LEC. ACE was underrecovered by $26.9 million at September 30, 1995, as compared to $11 million at December 31, 1994. Energy expense for the quarter and year-to-date periods decreased by 7.7% and 7.4%, respectively. Excluding deferred energy costs, Energy expense for the quarter and year-to-date periods increased by 25.5% and decreased by 4.8%, respectively. The increase for the quarter was attributable to ACE utilizing alternative energy sources to replace energy and capacity lost due to the continued shutdown of the Salem units since May and June of 1995. The year-to-date decrease is due to lower generation needs as a result of reduced energy sales and a more favorable mix of energy supply sources that reduced per unit energy costs. This decrease was offset in part by the effects of ACE's SNJEI which foregoes recovery of otherwise eligible energy costs. The SNJEI reduced after tax income for the quarter and year-to-date periods by $1.6 million and $10.6 million, respectively. Purchased Capacity expense for the quarter and year-to-date periods increased 65.6% and 46.1%, respectively. This increase reflects the combination of capacity supplied by a nonutility cogeneration facility as a replacement for utility contracted capacity that expired in May 1994, and additional capacity supplied by another cogeneration facility that became available in late 1994. Sources of Energy by Fuel Source for the periods ended September 30, 1995 are as follows: Quarter Year-To-Date Coal 39% 37% Nuclear 12 20 Interchanged and Purchased 16 17 Nonutility Purchased 26 23 Oil and Natural Gas 7 3 Total 100% 100% Operations expense for the quarter and year-to-date periods decreased 6.3% and 3.7%, respectively, and Maintenance expense for the quarter and year-to-date periods decreased 18.2% and 18.3%, respectively, due to cost reduction initiatives employed by ACE in 1995. Depreciation expense for the quarter and year-to-date periods increased 6.9% and 6.2%, respectively, due to ACE's increased electric plant in service. State Excise Tax expense for the quarter increased 25.9% reflecting increased energy sales for the quarter. Federal Income Tax expense for the quarter and year-to-date periods increased 20.9% and decreased 11.9%, respectively, due to higher third quarter and lower year-to-date taxable income compared to the same periods last year. Total Interest charges for the quarter and year-to-date periods increased by 9.2% and 7.8%, respectively, reflecting the increase in long term debt outstanding during the periods. Other income for the quarter and year-to-date decreased 70.2% and 47.5%, respectively, due to a gain recognized in the third quarter of 1994 upon termination of a contract by a large industrial concern. Preferred Stock Dividend Requirements decreased 12.1% for both the quarter and year-to-date periods as a result of mandatory and optional sinking fund redemptions in November of 1994. In December 1994, ACE recorded the expected costs of a voluntary employee separation program. A total of 276 employees throughout the Company took the separation package. A majority of the employee separations occurred as of March 1, 1995, with the remaining separations to take place by December 31, 1995. The balance of the accrued separation costs on the Consolidated Balance Sheet at September 30, 1995 is $10.9 million compared to $26.6 million at December 31, 1994. ACE expects settlement of this obligation to be substantially completed by the end of 1996. ACE, a 7.41% owner in the Salem Nuclear Generating Station (Salem), was advised by Public Service Electric & Gas Company (PS), operator of Salem, that Salem Unit 1 and Unit 2 were taken out of service on May 16, 1995 and June 7, 1995, respectively. PS subsequently informed the Nuclear Regulatory Commission (NRC) that the units would remain shutdown until there is a thorough review and resolution of certain equipment and management issues that have affected Salem's operation. PS estimates that Unit 1 and Unit 2 will both return to service during the second quarter of 1996, although no assurances have been given by PS. ACE's share of additional operation and maintenance expenses associated with restart activities are currently estimated by PS to be slightly less than $4 million for 1995. An estimate of additional restart expenses for 1996 has not yet been released by PS pending the completion of the assessment of Unit 2 and development of the final scope of work required. ACE is subject to a BPU imposed nuclear performance standard for all of its jointly-owned nuclear units. ACE anticipates that the 1995 aggregate capacity factor of the five nuclear units in which ACE owns a minority interest will be below the 65% minimum annual standard established by the BPU primarily due to the shutdown of the above mentioned units. As a result, ACE has provided for a 1995 performance penalty of $1.2 million after tax. NONUTILITY ACTIVITIES Nonutility operations, which include AEI parent, for the quarter and year-to-date September 30, 1995 resulted in a net loss of $133 thousand and $1.4 million, respectively, compared to the same periods of the prior year which resulted in net income of $952 thousand and $1.5 million, respectively. Of these amounts, operations of AEE and subsidiaries for the quarter and year-to- date ended September 30, 1995 resulted in net income of $304 thousand and a net loss of $190 thousand, respectively, when compared to the same periods of the prior year which resulted in net income of $1.2 million and $1.9 million, respectively. The 1995 loss is largely due to administrative and general costs incurred in the development of various new businesses, offset in part by increased earnings from a partnership interest in cogeneration facilities that experienced increased revenues. AEI parent for the quarter and year-to-date periods ended September 30, 1995 resulted in a net loss of $437 thousand and $1.2 million, respectively. The same periods of the prior year resulted in a net loss of $201 thousand and $387 thousand, respectively. The 1995 loss is largely due to interest expense associated with short term borrowings. In July 1995, Atlantic Jersey Thermal System Inc., a special purpose wholly-owned subsidiary of ATS, organized a limited partnership, Thermal Energy Limited Partnership I, to develop, construct, own and operate a district heating and cooling system to serve certain customers in Atlantic City's business and casino district. In July 1995, ATS commenced operation and maintenance of an existing heating and cooling facility at a casino in Atlantic City. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (unaudited) The following is management's discussion and analysis of significant factors which affected the Company's interim financial condition and results of operations. To properly assess and evaluate the Company's performance one should read, in conjunction with this report, the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's 1994 Annual Report on Form 10-K filed with the Securities and Exchange Commission. LIQUIDITY AND CAPITAL RESOURCES In August 1995, the Company issued and sold $80 million of First Mortgage Bonds in the form of Medium Term Notes in the following increments: $30 million of 6.81% Series due 2001; $25 million of 7.01% Series due 2002; $1 million of 7.25% Series due 2010; $7 million of 7.63% Series due 2014; $15 million of 7.68% Series due 2015; $2 million of 7.68% Series due 2016. Net proceeds in the amount of $79.5 million from these issuances were used primarily for the October 1, 1995 redemption $53.9 million principal amount of the 9 1/4% Series First Mortgage Bonds due 10/01/2019 at a premium of 105.15%. Additionally, the proceeds were used for the ongoing construction program and repayment of short term debt. At September 30, 1995, the Company had no outstanding short term debt. RESULTS OF OPERATIONS Net income increased for the quarter by 6.0% from the corresponding period of 1994. The increase in net income for the current quarter reflects an increase in electric revenues which was offset in part by an increase in purchased capacity costs. Net income for the year-to-date period decreased 14.3% due to an increase in purchased capacity costs. Total operating expenses, excluding purchased capacity costs, decreased in both current periods when compared to the respective prior year periods. Significant factors contributing to these changes are explained below. Unless otherwise specified, changes are in terms of the current year period compared to the corresponding prior year period. Revenues Changes in Operating Revenues-Electric are disclosed in the following table: Periods Ended September 30, 1995 (Thousands of Dollars) Quarter Year-to-Date Base Revenues $ 265 $ (1,902) Levelized Energy Clause 15,643 40,822 Kilowatt-hour Sales 6,616 (14,422) Unbilled Revenues 4,413 8,749 Sales for Resale 4,736 (14,492) Other Revenues (1,411) (1,577) Total $30,262 $ 17,178 Levelized Energy Clause (LEC) Revenues for the period increased due to a provisional rate increase in July 1995 of $37.0 million on an annual basis. Changes in Kilowatt-hour Sales are explained in the following section 'Billed Sales to Ultimate Customers'. The changes in Unbilled Revenues are a result of the amount of kilowatt-hours consumed by, but not yet billed to, ultimate customers at the end of the respective periods, which are affected by weather and economic conditions and the corresponding price per kilowatt-hour. The changes in Sales for Resale to wholesale customers are a function of the Company's energy mix strategy, which in turn is dependent upon its needs for energy, the energy needs of other utilities participating in the regional power pool of which the Company is a member, and the sources and prices of energy available. The increase in Sales for Resale for the quarter was the result of meeting new contract demands for bulk power sales to wholesale customers outside the regional power pool. The decline in Sales for Resale for the year-to-date period primarily reflects a decrease in available supplemental energy sources to the Company due to the expiration of a 200 megawatt capacity arrangement in May 1994. The year-to-date decline also recognizes a decrease in the demands of the regional power pool in the beginning of the current year due to the mild weather conditions when compared to the extreme weather conditions during the same period in 1994. Billed Sales to Ultimate Customers Changes in billed kilowatt-hour sales are generally due to changes in the average number of customers and average customer use, which is affected by economic and weather conditions. Energy sales statistics, stated as percentage changes from the corresponding period of the prior year, are shown below. Periods Ended September 30, 1995 Quarter Year-to-Date Average Average Customer Class Sales Use Cust Sales Use Cust Residential 3.9 % 2.7 % 1.2% (3.9)% (5.1)% 1.3% Commercial 3.4 2.1 1.2 .8 ( .8) 1.6 Industrial (5.7) (7.3) 1.7 (7.2) (8.5) 1.4 Total 2.4 1.2 1.2 (2.5) (3.7) 1.3 The increase in Residential sales and average use for the quarter is due to warmer summer temperatures in 1995 compared to the summer temperatures in 1994. The year-to-date decrease is due to the above normal temperatures during the heating season in contrast to significantly below normal temperatures experienced during the 1994 heating season. Sales to the Commercial sector increased in the current quarter due to ongoing economic growth, favorable weather and a strong shore tourism season. The year- to-date growth in this sector is weaker than the current quarter's growth because of the contrast in heating season conditions mentioned above. Approximately one-half of the increase in the number of Commercial customers is due to the continuing popularity of the Company's night lighting programs. The sales declines in the Industrial sector for the current periods are primarily related to the impact of two former customers taking energy service from independent power producers commencing in June 1994 and January 1995. Expenses Total Operating Expenses for quarter and year-to-date periods ended September 30, 1995 increased by 10.1% and 4.0%, respectively. Excluding depreciation and taxes, Total Operating Expenses increased by 6.8% and 5.9%, respectively, due to an increase in purchased capacity costs. Energy expense reflects the amount of energy needed to meet load requirements, as well as the various fuel and purchased energy sources used and the operation of the LEC. Changes in costs reflect the availability of low-cost generation from Company- owned and purchased energy sources, the unit prices of the energy sources used and changes in the needs of other utilities participating in the regional power pool. The cost of energy is recovered from customers primarily through the operation of the LEC. Generally earnings are not affected by energy costs because these costs are adjusted to match the associated LEC revenues. However since July 1994, the Company has voluntarily foregone recovery of certain amounts of otherwise recoverable fuel costs through its Southern New Jersey Economic Initiative (SNJEI), thereby reducing earnings. Such reduced recoveries are discretionary by the Company, and are influenced by competitive and economic factors. Otherwise, in any period the actual amount of LEC revenue recovered from customers will be greater or less than the actual amount of energy cost incurred and eligible for recovery in that period. Such respective overrecovery or underrecovery of energy costs is recorded on the Consolidated Balance Sheet as a liability or asset as appropriate. Amounts on the balance sheet are recognized in the Consolidated Statement of Income within Energy expense during the period in which they are subsequently recovered through the LEC. The Company was underrecovered by $26.9 million at September 30, 1995, as compared to $11 million at December 31, 1994. Energy expense for the quarter and year-to-date periods decreased by 7.7% and 7.4%, respectively. Excluding deferred energy costs, Energy expense for the quarter and year-to-date periods increased by 25.5% and decreased by 4.8%, respectively. The increase for the quarter was attributable to the Company utilizing alternative energy sources to replace energy and capacity lost due to the continued shutdown of the Salem units since May and June of 1995. The year-to-date decrease is due to lower generation needs as a result of reduced energy sales and a more favorable mix of energy supply sources that reduced per unit energy costs. This decrease was offset in part by the effects of the Company's SNJEI which foregoes recovery of otherwise eligible energy costs. The SNJEI reduced after tax income for the quarter and year-to-date periods by $1.6 million and $10.6 million, respectively. Purchased Capacity expense for the quarter and year-to-date periods increased 65.6% and 46.1%, respectively. This increase reflects the combination of capacity supplied by a nonutility cogeneration facility as a replacement for utility contracted capacity that expired in May 1994, and additional capacity supplied by another cogeneration facility that became available in late 1994. Sources of Energy by Fuel Source for the periods ended September 30, 1995 are as follows: Quarter Year-to-Date Coal 39% 37% Nuclear 12 20 Interchanged and Purchased 16 17 Nonutility Purchased 26 23 Oil and Natural Gas 7 3 Total 100% 100% Operations expense for the quarter and year-to-date periods decreased by 7.2% and 4.1%, respectively, and Maintenance expense for the quarter and year-to-date periods decreased 18.3% and 18.4%, respectively, due to cost reduction initiatives employed in 1995. Depreciation expense for the quarter and year-to-date periods increased 6.9% and 6.2%, respectively, due to increased electric plant in service. State Excise Tax expense for the quarter increased by 25.9% reflecting increased energy sales for the quarter. Federal Income Tax expense for the quarter and year-to-date periods increased 20.9% and decreased 11.9%, respectively, due to higher third quarter and lower year-to-date taxable income compared to the same periods last year. Total Interest charges for the quarter and year-to-date periods increased by 9.2% and 7.8%, respectively, reflecting the increase in long term debt outstanding during the periods. Other Income for the quarter and year-to-date decreased 73.1% and 33.6%, respectively, due to a gain recognized in the third quarter of 1994 upon termination of a contract by a large industrial concern. Preferred Stock Dividend Requirements decreased 12.1% for both the quarter and year-to-date periods as a result of mandatory and optional sinking fund redemptions in November 1994. In December 1994, the Company recorded the expected costs of a voluntary employee separation program. A total of 276 employees throughout the Company took the separation package. A majority of the employee separations occurred as of March 1, 1995, with the remaining separations to take place by December 31, 1995. The balance of the accrued separation costs on the Consolidated Balance Sheet at September 30, 1995 is $10.9 million compared to $26.6 million at December 31, 1994. The Company expects settlement of this obligation to be substantially completed by the end of 1996. The Company, a 7.41% owner in the Salem Nuclear Generating Station (Salem), was advised by Public Service Electric & Gas Company (PS), operator of Salem, that Salem Unit 1 and Unit 2 were taken out of service on May 16, 1995 and June 7, 1995, respectively. PS subsequently informed the Nuclear Regulatory Commission (NRC) that the units would remain shutdown until there is a thorough review and resolution of certain equipment and management issues that have affected Salem's operation. PS estimates that Unit 1 and Unit 2 will both return to service during the second quarter of 1996, although no assurances have been given by PS. The Company's share of additional operation and maintenance expenses associated with restart activities are currently estimated by PS to be slightly less than $4 million for 1995. An estimate of additional restart expenses for 1996 has not yet been released by PS pending the completion of the assessment of Unit 2 and development of the final scope of work required. The Company is subject to a BPU imposed nuclear performance standard for all of its jointly-owned nuclear units. The Company anticipates that the 1995 aggregate capacity factor of the five nuclear units in which it owns a minority interest will be below the 65% minimum annual standard established by the BPU primarily due to the shutdown of the above mentioned units. As a result, the Company has provided for a 1995 performance penalty of $1.2 million after tax. Part II. Other Information Item 1. Legal Proceedings Certain developments have occurred in connection with matters previously reported under Part I, Item 1-Business in the Annual Report on Form 10-K for the fiscal year ended December 31, 1994 for Atlantic Energy, Inc. (AEI) and Atlantic City Electric Company (ACE); Part II, Other Information in the Quarterly Report on Form 10-Q for the quarters ended March 31, 1995 and June 30, 1995; and Part II, Item 5 in the Current Reports on Form 8-K dated October 19, 1995. In addition, certain new information is contained herein. Rate Matters ACE's rates for electric service at retail are subject to the approval of the New Jersey Board of Public Utilities (BPU). Reference is made to Note 3 of the Notes to Financial Statements for AEI and ACE filed herewith for information pertaining to the petition filed with the BPU for changes in the Levelized Energy Clause (LEC) revenues and the issue of the double recovery of capacity costs. As previously reported in the Company's report on Form 10-Q for the quarters ended March 31, 1995 and June 30, 1995, the New Jersey legislature enacted a regulatory reform bill in June 1995 that authorizes the BPU to approve alternative forms of rate regulation and to allow utilities to provide discounted rates in order to retain large customers. Alternative rate regulation is defined as regulation other than the traditional rate base, rate of return methodology. The bill was signed into law by New Jersey Governor Christine Whitman in July 1995 and provides for the recovery of up to 50 percent of the value of discounts in a subsequent base rate case if it can be adequately demonstrated that the discount benefits all ratepayers. The new law, P.L. 1995, c.180, provided a 90 day timeframe for the BPU to adopt specific standards by which utilities can establish off-tariff rates. In developing these standards, the BPU solicited input from all interested parties through the circulation of a draft proposal, a public hearing and two round table discussions. On October 27, 1995, the BPU issued its summary decision and order in the generic proceeding to consider and implement standards for off-tariff rate agreements pursuant to P.L. 1995, c. 180. The standards incorporate the following provisions: the utility must compare the revenue to be generated from the off-tariff rate agreement to the revenue which would have been generated otherwise; the utility must detail the need for the reduction in rates to each off-tariff rate customer; the method of determining the minimum electricity price an off-tariff agreement can contain; the term of an off-tariff agreement shall not exceed 7 years subject to several exceptions; certain annual filing requirements with the BPU on aggregated data pertaining to the implementation of off-tariff rate agreements; confidentiality of certain data and documents filed with the BPU pursuant to an off- tariff agreement. Specific off-tariff pricing arrangements with ACE'S customers will be limited by the resources available in the Company's business plan. Item 5. Other Information On September 20, 1995, Atlantic Energy announced the selection of Michael J. Barron to serve as chief financial officer. He will also serve as senior vice president and chief financial officer for Atlantic Electric. Barron succeeds J.G.Salomone who retired from the company earlier this year. In his new post, Barron will be responsible for developing and overseeing the financial strategy of Atlantic Energy and its affiliated companies. His responsibilities will include financial planning and administration, risk management, investor relations and property management. As previously reported in the Company's report on Form 10-Q for the quarter ended March 31, 1995, on March 29, 1995 the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking (NOPR) regarding several key electric utility industry issues such as transmission access, transmission pricing and recovery guidelines for stranded costs stemming from wholesale transactions. According to the NOPR, within 60 days of passage of a final rule, nondiscriminatory open-access transmission tariffs must be filed for ACE and all other affected electric utilities. These tariffs may be utilized by any participant in the wholesale market, such as utilities, nonutility generators, power marketers, municipalities and/or cooperatives. The NOPR further includes the requirement that utilities take service under the tariffs for their own wholesale sales and purchases of electric energy. The issue of retail wheeling has been left to the individual states to decide upon. On August 4, 1995, ACE filed its initial comments to the FERC's NOPR addressing such issues as full recovery of stranded costs by utilities, establishing a special category of stranded costs for nonutility generating contracts to help mitigate these costs, enforcing exit fees from departing customers and allowing existing power pools the opportunity to improve on the efficiency, reliability and economy currently provided. On October 4, 1995, ACE filed reply comments to FERC regarding initial comments filed by other respondents and reiterated its initial comments. FERC has scheduled technical conferences during the next few months to discuss issues regarding ancillary services, pro-forma tariffs and power pools. A final ruling is anticipated in March 1996. At this time the final outcome of this FERC NOPR can not be determined. The BPU is currently developing an Energy Master Plan (EMP) to define how the energy market will function within the state in the future. The EMP is being developed in three phases. The phase I report, issued in March 1995, outlined the broad policy objectives to be followed in developing more specific recommendations in phases II and III. Phase II will detail the activities needed to implement the objectives delineated in the phase I report. Phase III will include an assessment of energy prices, energy supply and energy use. Both phase II and III are scheduled for completion by the end of 1995. On September 15, 1995, ACE filed initial comments to the BPU's phase II notice of inquiry which requested opinions on a diverse set of issues. Highlights of ACE's comments include: the need for full recovery of stranded costs by utilities, system reliability must be maintained, retail wheeling should not be implemented, support the evolution of a more competitive bulk power market and development of a program to reduce utility energy supply costs and nonutility generation contract costs. On October 20, 1995, ACE submitted its reply comments to the BPU. Following a review period, the BPU is expected to issue a report in March 1996 containing specific findings and recommendations. Nuclear As previously reported under Part 1, Item I-Business, "Regulation" and Note 1 of the Notes to Financial Statements in the Company's 1994 Annual Report on Form 10-K, New Jersey Administrative Code 14:5A-2.1 requires all New Jersey electric utilities to file with the BPU a nuclear decommissioning cost update by January 1, 1996 and every four years thereafter. Public Service Electric & Gas Company (PS), on behalf of the co-owners, has engaged an independent engineer to develop this estimate for Salem, Hope Creek and Peach Bottom, in which ACE is a 7.41%, 5.00% and 7.51% owner, respectively. ACE expects that its share of nuclear decommissioning cost will increase, however, the magnitude of the increase can not be determined at this time. Salem ACE is a 7.41% owner of Salem Nuclear Generating Station (Salem) operated by PS. As previously reported in the Company's reports on Form 10-Q for the quarter ended June 30, 1995 and Form 8-K's dated June 15, 1995, July 21, 1995 and October 19, 1995, ACE was advised by PS that Salem Units 1 and 2 were taken out of service on May 16, 1995 and June 7, 1995, respectively. The return of the units to service is predicated upon the completion of a thorough assessment of the equipment and management issues that have affected the operation of the station and the necessary corrections to assure safe and reliable operation over the long term. ACE has been advised by PS that they have completed the examination of Unit 1 to identify the scope of work necessary to achieve safe, sustained and reliable operation. A similar examination of Unit 2 is expected to be completed in November 1995. Following the completion of the Unit 2 work scope, PS will provide a final work scope for both units to the Nuclear Regulatory Commission (NRC) at a meeting to be held in mid- December. ACE has been informed by PS that significant progress has been made in identifying and resolving the equipment, process and personnel issues that have affected Salem station's past performance. PS has further advised that to date, more than 25% of the necessary work activities have been completed and many others have been initiated. PS has extended the time period to complete the scope of work on Unit 1 by 60 days. This has delayed the return of Unit 1 to commercial operation until the second quarter of 1996. PS has informed ACE that the current estimate for the return of Unit 2 to commercial operation remains the second quarter of 1996, although no assurances can be given. For further information, see Notes 5 and 6 of the Notes to Financial Statements for ACE and AEI, respectively. ACE has been advised by PS that senior management changes have been made at the following positions since July 1995- Senior Vice President-Nuclear Operations, Senior Vice President-Nuclear Engineering, General Manager-Salem Operations, Director-Nuclear Training, Director-Plant Engineering & Projects, Director-System Engineering, Director-Design Engineering, Director-Quality Assurance & Nuclear Safety Review, Manager-Salem Projects, Manager-Salem Maintenance and Manager-Salem Operations. PS has advised ACE that PS is committed to achieving high standards of safety and operational performance for its nuclear program. PS advised ACE that PS's objective is to restart and run the Salem plants in accordance with these standards so as to assure long term reliability and reduce overall production costs. ACE has been advised that on October 5, 1995, PS declared an alert at Salem Unit 1. The event involved a problem with the overhead annunciator panel in the Unit 1 control room. PS has chartered a significant event response team (SERT) to investigate the event, determine the root causes and suggest corrective actions. Simultaneously, the NRC formed a special inspection team to investigate the event during the period October 6 through October 18. What actions the NRC might take, if any, can not be determined at this time. At the time of the event there was no fuel in the reactor, no release of radiation and no danger to the public or on-site personnel. As previously reported, a Salem NRC enforcement conference was held on July 28, 1995 related to certain violations of NRC requirements. The violations included valves that were incorrectly positioned following a plant modification in May 1993, non-conservatisms in the setpoints for a pressurizer overpressure protection system and several examples of inadequate root cause determination of events, leading to insufficient corrective actions at Salem. On October 16, 1995, the NRC proposed cumulative civil penalties of $600,000 related to these violations. PS has advised the NRC that the proposed penalties would not be contested. ACE continues to evaluate the legal, regulatory and administrative implications of these events. At this time, it is impossible to predict what action may be taken, if any, by participation in any regulatory, administrative or civil proceedings which, if commenced, may affect the outcome of these matters and the ultimate responsibility for such costs and penalties. As a nonoperating minority owner, ACE believes that the safe and expeditious restart of the Salem units is of utmost importance to the customers and shareholders of ACE, and continues to actively encourage PS to take whatever steps are necessary and reasonable for PS to effectively and properly respond to concerns expressed by the NRC and to restart the units in a timely manner. ACE has conveyed these concerns directly to the management of PS. Hope Creek ACE is a 5% owner of Hope Creek Nuclear Generating Station (Hope Creek) which is operated by PS. As previously reported in the June 30, 1995 report on Form 10-Q, ACE was notified that on July 8, 1995, during a manual shutdown of Hope Creek, in order to repair control room ventilation equipment, operators partially opened a valve for a period of time and inadvertently reduced the effectiveness of the shutdown cooling system. The positioning of the valve and the resulting temperature change violated plant procedures and technical specifications, although the impact of the event to plant safety was minimal. On July 31, 1995, NRC staff met with plant management concerning this issue and subsequently decided to assign a special inspection team to independently evaluate this event as well as PS's response to it, including PS's procedures and training for operator handling of abnormal conditions. ACE was advised that on September 25, 1995, the NRC's special inspection team issued its report and identified several areas where operator and senior plant management performance during this event was inadequate. PS has advised that an NRC enforcement conference was held on November 6, 1995. Whether a penalty will be assessed or how significant it may be can not be determined at this time. ACE has been advised by PS that on September 19, 1995, the NRC issued a notice of violation for insufficient control room manning at Hope Creek during a three minute period in June, 1992. Two level IV violations with no civil penalty were received for this incident; one for the three minute period in which there was no senior reactor operator present and the other for not meeting the reporting requirements for this event. Peach Bottom ACE is a 7.51% owner of Peach Bottom Atomic Power Station (Peach Bottom) operated by PECO Energy Company (PECO). As previously reported in the June 30, 1995 report on Form 10-Q, ACE has been advised by PECO that on August 2, 1995, the NRC held an predecisional enforcement conference regarding three alleged violations in control and design activities and technical specification requirements regarding operability of the emergency diesel generators. ACE has been advised that on August 17, 1995, the NRC issued its notice of violation report and, in the report, recognized that PECO identified the problem issues, conducted a detailed root cause evaluation and took appropriate corrective actions. The NRC elected not to propose a civil penalty in this case based on the identification and corrective action taken by PECO. ACE has been advised by PECO that, by letter dated October 18, 1994, the NRC has approved PECO's request to rerate the authorized maximum reactor core power levels of Peach Bottom Units No. 2 and 3 by 5% to 3,458 megawatts from the current limits of 3,293 megawatts. The amendment of the Peach Bottom Unit No. 2 facility operating license was effective upon the date of the NRC approval letter. The amendment of the Unit No. 3 facility operating license became effective with the completion of hardware changes which were done during Unit No. 3's fall 1995 refueling outage. Item 6. Exhibits and Reports on 8-K Exhibits: See Exhibit Index Attached Reports on Form 8-K: A Current Report on Form 8-K was filed dated October 19, 1995 relating to the shutdown of Salem Unit 1 on May 16, 1995 and Salem Unit 2 on June 7,1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Atlantic Energy, Inc. Atlantic City Electric Company (Registrant) Date: November 14, 1995 By: /s/ L. M. Walters L. M. Walters Treasurer of Atlantic Energy, Inc. and Vice President, Treasurer and Assistant Secretary of Atlantic City Electric Company EXHIBIT INDEX 27 Financial Data Schedules for Atlantic Energy, Inc. and Atlantic City Electric Company for periods ended September 30, 1995. EX-27 2
UT 0000008192 Atlantic City Electric Company 9-MOS DEC-31-1995 SEP-30-1995 PER-BOOK 1,788,714 61,138 321,134 358,764 0 2,529,750 54,963 491,843 260,947 807,753 149,250 40,000 856,129 0 0 0 12,247 12,250 38,040 0 614,081 2,529,750 727,943 38,230 567,367 605,597 122,346 7,369 129,715 47,317 83,556 11,362 72,194 61,014 0 111,211 0 0
EX-27 3
UT 0000806393 Atlantic Energy, Inc. 9-MOS DEC-31-1995 SEP-30-1995 PER-BOOK 1,788,714 193,148 323,825 360,209 0 2,665,896 563,892 0 258,963 822,855 149,250 40,000 871,129 20,000 0 0 35,547 12,250 38,040 0 676,825 2,665,896 727,519 38,230 567,397 605,627 121,892 6,411 128,303 47,317 70,782 11,362 70,782 61,000 0 105,272 1.34 1.34
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