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