<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U5S
ANNUAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 1998
FILED PURSUANT TO THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
CONECTIV
_______________________
NAME, TITLE AND ADDRESS OF OFFICER TO WHOM NOTICES
AND CORRESPONDENCE CONCERNING THIS STATEMENT
SHOULD BE ADDRESSED:
JAMES P. LAVIN
CONTROLLER
CONECTIV
800 KING STREET
WILMINGTON, DE 19899
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM PAGE REF.
- ---- ---------
<S> <C>
1 System Companies and Investments Therein as of December 31, 1999
2 Acquisitions or Sales of Utility Assets
3 Issue, Sale, Pledge, Guarantee or Assumption of System Securities
4 Acquisition, Redemption or Retirement of System Securities
5 Investments in Securities of Nonsystem Companies
6 Officers and Directors
7 Contributions and Public Relations
8 Service, Sales and Construction Contracts
9 Wholesale Generators and Foreign Utility Companies
10 Financial Statements and Exhibits
Consolidating Financial Statements
Signature of Registrant's Officer
Exhibits:
SEC Act of 1934 Reports A
Index to Corporate Organization & By-Laws Exhibits B
Indentures or Contracts C
Tax Allocation Agreement for 1998 D
Other Documents Prescribed by Rule or Order E
Report of Independent Accountants F
Financial Data Tables G
Organizational Chart of Exempt Wholesale Generators of Foreign
Utility Holding Companies H
Audited Financial Statements and Analytical Reviews and
Conclusions Regarding Exempt Wholesale Generators or Foreign
Utility Holding Companies I
</TABLE>
<PAGE>
ITEM 1. SYSTEM COMPANIES AND INVESTMENT THEREIN AS OF DECEMBER 31, 1998*
<TABLE>
<CAPTION>
NUMBER OF % OF OWNER'S
COMMON VOTING ISSUER BOOK BOOK VALUE
NAME OF COMPANY SHARES OWNED POWER VALUE ($000) ($000)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONECTIV
Atlantic City Electric Company (ACE) 18,320,937 100 730,093 730,093
Atlantic Capital I (ACE Cap I) N/A 100 2,165 2,165
Atlantic Capital II (ACE Cap II) N/A 100 773 773
Atlantic Energy Enterprises, Inc. (AEE) (a) 100 100 45,561 45,561
Atlantic Southern Properties, Inc. (ASP) 100 100 653 653
ATE Investments, Inc. (ATE) (b) 100 100 11,919 11,919
CoastalComm, Inc. (CI) 100 100 1,027 1,027
Atlantic Energy Technology, Inc. (AET) 100 100 112 112
The Earth Exchange, Inc. (TEE) 100 100 5 5
Conectiv Thermal Systems, Inc. (CTS) 100 100 7,373 7,373
ATS Operating Services, Inc. (AOS) (c) 50 100 - -
Atlantic Jersey Thermal Systems, Inc. (AJTS) 100 100 43 43
Thermal Energy Limited Partnership (TELP) N/A 100 8,637 8,637
Atlantic Generation, Inc. (AGI) (d) 100 100 22,839 22,839
Pedrick General, Inc. (PED GEN) 100 100 2,476 2,476
Pedrick Ltd., Inc. (PED LTD) 100 100 5,963 5,963
Vineland General, Inc. (VINE LTD) 100 100 406 406
Vineland Limited, Inc. (VINE GEN) 100 100 3,809 3,809
Binghamton General, Inc. (BING GEN) 100 100 252 252
Binghamton Limited, Inc. (BING LTD) 100 100 467 467
Atlantic Energy International, Inc. (AEI) 100 100 (18) (18)
Conectiv Communications, Inc. (CCI) (e) 1,000 100 34,163 34,163
Conectiv Energy Supply, Inc. (CES) (f) 1,000 100 (602) (602)
Petron Oil Corporation (Petron) 1,000 100 4,076 4,076
Conectiv Resource Partners, Inc. (CRP) 1,000 100 (25) (25)
Conectiv Services, Inc. (CSI) 1,000 100 64,227 64,227
Conectiv Plumbing LLC (Plumbing) 1,000 100 6,590 6,590
Conectiv Solutions, L.L.C. (Solutions) N/A 100 (5,350) (5,350)
Power Consulting Group, Inc. (Power Consulting) N/A 100 3,685 3,685
Delmarva Capital Investments, Inc. (DCI) (g) 1,000 100 29,595 29,595
DCI I, Inc. (DCI I) 1,000 100 4,472 4,472
DCI II, Inc. (DCI II) 1,000 100 864 864
Christiana Capital Management, Inc. (CCM) 1,000 100 1,107 1,107
Delmarva Operating Services Company (DOSC) 1,000 100 3,682 3,682
DCTC-Burney, Inc. (DCTC) (h) 1,000 100 12,972 12,972
Delmarva Power & Light (DPL) 1,000 100 851,494 851,494
Delmarva Financing I (DPL Fin I) N/A 100 2,165 2,165
Delmarva Services Company (DSC) (i) 1,000 100 7,750 7,750
</TABLE>
* As of 11:59 p.m. 12/31/1999 did not reflect corporate reorganization
authorized in HCRA #35-26953 dated 12/16/1998.
<PAGE>
NOTES ($ in Thousands):
(a) AEE owns 1,875,000 shares of Class D Preferred Stock, representing 12.5% of
all outstanding issues of preferred stock, convertible under certain terms
and conditions into 10.2% of the outstanding common stock of EMAX Solutions
Partners, Inc., a Delaware corporation that develops environmental
compliance software. As of December 31, 1998, the book value was $840.
AEE also owns a 2.6% limited partnership interest in Tech Leaders II, a
Delaware limited partnership that invests in energy and technology
companies. As of December 31, 1998, the book value was $1,261. Finally,
AEE holds a 50% equity interest in Enerval, LLC, a natural gas marketing
venture. The book value, before fair market value evaluation reserves,
was $3,550 as of December 31, 1998.
(b) ATE owns 160 shares of common stock of Black Light Power, Inc., a
development stage company that is engaged in hydrogen based energy
production. As of December 31, 1998, the book value was $240. ATE also
owns a 94% limited partnership interest in EnerTech Capital Partners L.P.,
a limited partnership that invests in and supports a variety of energy
technology growth companies. The book value as of December 31, 1998 was
$15,854.
(c) ATS holds a 50% interest in Atlantic-Pacific Glendale, LLC, a Delaware
limited liability company formed to construct, own and operate integrated
energy facilities. The book value as of December 31, 1998 was $3,715. ATS
holds a 50% interest in Atlantic-Pacific Las Vegas, LLC, a Delaware limited
liability company formed to finance, own and operate integrated energy
facilities. The book value as of December 31, 1998 was $24,534.
(d) AGI owns a 4.9% limited partnership interest in Energy Investors Fund III,
L.P. (Project Finance Fund), a Delaware limited partnership that invests in
independent power production facilities. As of December 31, 1998, the book
value was $3,354.
(e) CCI owns 58,161 unregistered shares, or approximately 1% of the outstanding
shares, of D&E Communications, Inc., a Pennsylvania corporation and
publicly-held telecommunications company that holds a broadband PCS
license. As of December 31, 1998, the book value was $793.
(f) CES holds a 50% interest in Conectiv/CNE Energy Services LLC (CNEL), a Rule
58 energy marketing company. The book value of CNEL as of December 31, 1998
was $582. CES also holds a 50% interest in Conectiv/CNE Peaking, L.L.C.
(CNEP), a gas peaking services company. The Book value of CNEP as of
December 31, 1998 was $1,024. Finally, CES holds a 50% interest in Total
Peaking Services, L.L.C. (TPS), a liquefaction and vaporization services
company. The book value of TPS as of December 31, 1998 was $3,748.
(g) DCI holds a 4.7% limited partnership interest in Luz Solar Partners, Ltd.
IV which owns a solar powered generating station. The book value as of
December 31, 1998, was $1,876. DCI owns a 27.5% limited partnership
interest in UAH-Hydro Kennebec, L.P., a New York limited partnership which
owns a hydro-electric project. The book value as of December 31, 1998, was
$1,096.
(h) Forest Products, L.P. is a Delaware limited partnership in which DCTC is
the sole 1% general partner, and which is a general partner in Burney
Forest Products, A Joint Venture. The book value as of December 31, 1998,
was $0. Burney Forest Products, A Joint Venture, is a California general
partnership which is owned by DCTC and Forest Products, L.P. The
partnership owns a wood-burning qualifying facility in Burney, CA. DCTC's
total direct and indirect ownership interest is 45%. The book value as of
December 31, 1998, was $5,722.
<PAGE>
ITEM 1. Continued
NOTES ($ in Thousands):
(i) As of December 31, 1998, DSC held 127,750 shares (or 2.87%) of the common
stock of Chesapeake Utilities Corporation, a publicly traded utility
company with gas utility operations in Delaware, Maryland and Florida. As
of December 31, 1998, the book value was $1,571.
<PAGE>
ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
NAME OF COMPANY BRIEF DESCRIPTION OF TRANSACTION Consideration EXEMPTION
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Delmarva Power & Light Sale of Substation $4,100,000 44(b)
Seaford, Delaware
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 3. ISSUES, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM SECURITIES
-------------------------------------------------------------------
DURING 1998
-----------
<TABLE>
<CAPTION>
Principal Amount
Or Stated Value
---------------------------------------
Name of Company Pledged,
Name of Issuer Issuing, Selling, Pledging Issued and Guaranteed,
and Guaranteeing, or Assuming Sold or Assumed Date of Proceeds Commission
Title of Issue Securities ($000) ($000) Transaction ($000) Authorization
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ACE Rule 52 (See Certificate
7.38% Junior Subordinated of Notification Pursuant
Debentures Series I to Rule 24 filed on
Due 11/04/28 ACE $ 25,773 11/4/98 $ 25,773 March 30, 1999)
Atlantic Capital II Rule 52 (See Certificate
7.38% Cumulative Trust of Notification Pursuant
Preferred Capital Securities to Rule 24 filed on
Due 11/04/28 Atlantic Capital II $ 25,000 (a) 11/4/98 $ 24,212 March 30, 1999)
Conectiv Conectiv $ 52,861,506 Various n/a Rule 45
Surety Bonds
</TABLE>
The above do not include guarantees of system companies which
have been authorized by Commission order under the Public
Utility Holding Company Act of 1935 and which are subject to
Rule 24 Certificate filing requirements.
___________________________________
(a) 1,000,000 Shares of 7.38% Cumulative Trust Preferred Capital Securities were
issued on November 4, 1998 at face value, pursuant to a Indenture dated
October 1, 1998 resulting in proceeds of $24,212,500, net of underwrites's
commissions of $787,500.
<PAGE>
ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES DURING 1998
beginning As of 3/1/98
<TABLE>
<CAPTION>
Principal Amount
Name of Issuer Name of Company Number of Redeemed and
and Acquiring, redeeming or Shares Retired Date of
Title of Issue Retiring Securities Acquired ($000) Transaction
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DP&L
5.69% Medium Term Notes DP&L $ 25,000 (a) 6/24/98
6.95% First Mortgage BondsSinking Funds DP&L $ 955 (b) 6/1/98
5.75% Tax exempt Note DP&L $ 6,000 (c) 12/1/98
7.25% Tax exempt sinking fund DP&L $ 50 12/1/98
7.125% Tax exempt sinking fund DP&L $ 50 12/1/98
<CAPTION>
(E)
Extingushiment
Name of Issuer or Help for further
and Consideration Disposition Commission
Title of Issue ($000) (D) Authorization
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DP&L
5.69% Medium Term Notes $ 25,000 E Rule 42
6.95% First Mortgage BondsSinking Funds $ 955 E Rule 42
5.75% Tax exempt Note $ 6,000 E Rule 42
7.25% Tax exempt sinking fund $ 50 E Rule 42
7.125% Tax exempt sinking fund $ 50 E
</TABLE>
(a) All $25,000,000 5.69% Series MTN's due on June 24, 1998 were retired on
June 24, 1998 at a cost of $25,000,000, plus $90,881.94 accrued
Interest
(b) Sunking Fund payment of $954,600 was made on June 1, 1998 as per the
Prospectus Supplement dated February 3, 1995 for the issuance of
$25,800,000 of 6.95% Amortizing Bonds due June 1, 2008
(c) All $6,000,000 5.75% PC DEDA bonds due on December 1, 1998 were retired
on December 1, 1998 at a cost of $6,000,000 plus $172,500 accrued
interest
ACE
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
5.50% Medium Term Note ACE $ 6,000 (a) 5/14/98 $ 6,000 E Rule 42
7.25% Debentures ACE $ 2,500 (b) 5/1/98 $ 2,500 E Rule 42
6.375% Pollution Control York Co. ACE $ 75 (c) 12/1/98 $ 75,000 E Rule 42
Sinking fund
$8.20 Series Preferred Stock Sinking Fund ACE $ 10,000 (d) 8/1/98 $ 10,000 E Rule 42
</TABLE>
(a) All $6,000,000 5.50% Series B MTN's due on May 14, 1998 were retired
on May 14, 1998 At a cost of $6,000,000, plus $121,916.67 accrued
Interest
(b) All $2,500,000 7.250% Debentures due on May 1, 1998 were retired on
May 1, 1998 At a cost of $2,500,000, plus $90,625 accrued Interest
(c) All 75,000 6.375$ Pollution Control Bonds due December 1, 1998 were
retried on December 1, 1998 At a cost of $75,000, plus $77,297 accured
interest
(d) All $10,000,000 $8.20 Series Preferred Stock due on August 1, 1998
were retired on August 1, 1998 At a cost of $10,000,000 plus $205,000
accured interest
<PAGE>
ITEM 4. Continued
<TABLE>
<CAPTION>
Principal Amount
Name of Issuer Name of Company Number of Redeemed and
and Acquiring, redeeming or Shares Retired Date of Consideration
Title of Issue Retiring Securities Acquired ($000) Transaction ($000)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ACE
4.00% Preferred Stock ACE 52,732 $ 4,303 10/14/98 $ 4,303
4.10% Preferred Stock ACE 51,496 $ 4,300 10/14/98 $ 4,300
4.35% Preferred Stock ACE 11,898 $ 1,054 10/14/98 $ 1,054
4.35% Preferred Stock 2nd series ACE 34,320 $ 3,039 10/14/98 $ 3,039
4.75% Preferred Stock ACE 41,369 $ 4,002 10/14/98 $ 4,002
5.00% Preferred Stock ACE 45,880 $ 4,588 10/14/98 $ 4,588
CIV
Common Stock buy back CIV 598,862 $ 13,232 Various $ 13,232
<CAPTION>
Extingushiment
Name of Issuer or Help for further
and Disposition Commission
Title of Issue (D) Authorization
- ------------------------------------------------------------------------------
<S> <C> <C>
ACE
4.00% Preferred Stock E HCR #35-26927 dated 10/16/98
4.10% Preferred Stock E HCR #35-26927 dated 10/16/98
4.35% Preferred Stock E HCR #35-26927 dated 10/16/98
4.35% Preferred Stock 2nd series E HCR #35-26927 dated 10/16/98
4.75% Preferred Stock E HCR #35-26927 dated 10/16/98
5.00% Preferred Stock E HCR #35-26927 dated 10/16/98
CIV
Common Stock buy back E Rule 42
</TABLE>
<PAGE>
ITEM 5. INVESTMENTS IN SECURITIES OF NONSYSTEM COMPANIES
The aggregate amount of investments at December 31, 1998, in persons
operating in the system's retail service area are shown below.
<TABLE>
<CAPTION>
1 Name of Aggregate Amount of Investments Number of Desription of Persons or
Company in Persons (Entities) Operating in Persons Entities
Retail Service Area of Owner (Entities)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PART I ACE (1) $ 5,244.69 3 Retail Company Securities
DP&L(1) $ 148.91 4 Retail Company Securities
DP&L $360,833.00 1 Limited Partnership which invests
in start up Companies
DP&L $256,250.00 1 Limited Partnership which invests
in start up Companies
</TABLE>
(1) All of DP&L and ACE's investments in securities represent
bankruptcy distributions applicable to obligations of customers
incurred in the ordinary course of business
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS
Part I. Names, principal business address and positions held as of December
31, 1998.
The names and positions held as of December 31, 1998 of the officers
and directors of System companies is presented in the tables on the
pages that follow. The principal business address of each officer and
director is:
800 King Street
Wilmington, Delaware 19899
The symbols used to indicate the positions held by officers and
directors are shown in the position symbol key as follows:
POSITION KEY CODE
---------------------------------
CB - Chairman of the Board
CEO - Chief Executive Officer
COO - Chief Operating Officer
CFO - Chief Financial Officer
P - President
EVP - Executive Vice President
SVP - Senior Vice President
VP - Vice President
VC - Vice Chairman
GC - General Counsel
T - Treasurer
AT - Assistant Treasurer
S - Secretary
AS - Assistant Secretary
C - Controller
D - Director
<PAGE>
ITEM 6. Continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
ATE ACE AEE AEI AET AGI AJTS ASP AOS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Michael G. Abercrombie
- --------------------------------------------------------------------------------------------------------------------------
Arturo F. Agra VP AT AS
- --------------------------------------------------------------------------------------------------------------------------
Jeffrey W. Allen
- --------------------------------------------------------------------------------------------------------------------------
Robert L. Aveyard
- --------------------------------------------------------------------------------------------------------------------------
John Bagnell AS
- --------------------------------------------------------------------------------------------------------------------------
Larry Bainter
- --------------------------------------------------------------------------------------------------------------------------
R. Frank Balotti
- --------------------------------------------------------------------------------------------------------------------------
Samual W. Bowlby
- --------------------------------------------------------------------------------------------------------------------------
Roberta S. Brown
- --------------------------------------------------------------------------------------------------------------------------
Robert D. Burris
- --------------------------------------------------------------------------------------------------------------------------
Donald E. Cain
- --------------------------------------------------------------------------------------------------------------------------
Robert W. Carr
- --------------------------------------------------------------------------------------------------------------------------
Peter F. Clark
- --------------------------------------------------------------------------------------------------------------------------
Robert M. Collacchi
- --------------------------------------------------------------------------------------------------------------------------
G. Edwin Collier
- --------------------------------------------------------------------------------------------------------------------------
Carol C. Conrad AS AS AS AS AS AS AS AS AS
- --------------------------------------------------------------------------------------------------------------------------
Howard E. Cosgrove CB CEOD CB CEOD CB CEOD CB CEOD CB CEOD CB CEOD CB CEOD CB CEOD CB CEOD
- --------------------------------------------------------------------------------------------------------------------------
Frank E. DiCola VP VP
- --------------------------------------------------------------------------------------------------------------------------
Audrey K. Dobertein
- --------------------------------------------------------------------------------------------------------------------------
Moira K. Donoghue S S SVP CFO SVP CFO S S S S S
- --------------------------------------------------------------------------------------------------------------------------
Barry R. Elson PD EVPD PD D D D PD D PD
- --------------------------------------------------------------------------------------------------------------------------
Michael B. Emery
- --------------------------------------------------------------------------------------------------------------------------
Stacey L. Evans
- --------------------------------------------------------------------------------------------------------------------------
Joseph J. Feeley
- --------------------------------------------------------------------------------------------------------------------------
Rovert H. Fiedler VP
- --------------------------------------------------------------------------------------------------------------------------
Robert Gabbard
- --------------------------------------------------------------------------------------------------------------------------
Paul S. Gerritsen
- --------------------------------------------------------------------------------------------------------------------------
Sarah I. Gore
- --------------------------------------------------------------------------------------------------------------------------
Barbara S. Graham SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD CFOD SVP SVP CFOD
- --------------------------------------------------------------------------------------------------------------------------
Andrei M. Grecu
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 6. Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
BING GEN BING LTD CCM CI CONECTIV CCI CES CRP CSI SOLUTIONS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Michael G. Abercrombie D
- -----------------------------------------------------------------------------------------------------------------------------------
Arturo F. Agra VP AT AS VP AT AS VP AT AS
- -----------------------------------------------------------------------------------------------------------------------------------
Jeffrey W. Allen VP VP VP
- -----------------------------------------------------------------------------------------------------------------------------------
Robert L. Aveyard VP VP
- -----------------------------------------------------------------------------------------------------------------------------------
John Bagnell
- -----------------------------------------------------------------------------------------------------------------------------------
Larry Bainter
- -----------------------------------------------------------------------------------------------------------------------------------
R. Frank Balotti D
- -----------------------------------------------------------------------------------------------------------------------------------
Samual W. Bowlby
- -----------------------------------------------------------------------------------------------------------------------------------
Roberta S. Brown VP
- -----------------------------------------------------------------------------------------------------------------------------------
Robert D. Burris D
- -----------------------------------------------------------------------------------------------------------------------------------
Donald E. Cain VP VP
- -----------------------------------------------------------------------------------------------------------------------------------
Jay O. Carmean AS
- -----------------------------------------------------------------------------------------------------------------------------------
Robert W. Carr VP VP COO
- -----------------------------------------------------------------------------------------------------------------------------------
Peter F. Clark GC
- -----------------------------------------------------------------------------------------------------------------------------------
Robert M. Collacchi
- -----------------------------------------------------------------------------------------------------------------------------------
G. Edwin Collier AS
- -----------------------------------------------------------------------------------------------------------------------------------
Carol C. Conrad AS AS AS AS AS AS AS AS AS AS
- -----------------------------------------------------------------------------------------------------------------------------------
Howard E. Cosgrove COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD
- -----------------------------------------------------------------------------------------------------------------------------------
Frank E. DiCola VP
- -----------------------------------------------------------------------------------------------------------------------------------
Audrey K. Dobertein
- -----------------------------------------------------------------------------------------------------------------------------------
Moira K. Donoghue S S S S S S S S S S
- -----------------------------------------------------------------------------------------------------------------------------------
Barry R. Elson D D D PD EVPD PD D EVPD PD PD
- -----------------------------------------------------------------------------------------------------------------------------------
Michael B. Emery
- -----------------------------------------------------------------------------------------------------------------------------------
Stacey L. Evans
- -----------------------------------------------------------------------------------------------------------------------------------
Joseph J. Feeley
- -----------------------------------------------------------------------------------------------------------------------------------
Rovert H. Fiedler
- -----------------------------------------------------------------------------------------------------------------------------------
Robert Gabbard
- -----------------------------------------------------------------------------------------------------------------------------------
Paul S. Gerritsen VP
- -----------------------------------------------------------------------------------------------------------------------------------
Sarah I. Gore
- -----------------------------------------------------------------------------------------------------------------------------------
Barbara S. Graham SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD
- -----------------------------------------------------------------------------------------------------------------------------------
Andrei M. Grecu AS
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 6. Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
CTS CNEL CNEP DCI DCI I DCI II DCTC DOSC DPL DSC
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Michael G. Abercrombie
- -----------------------------------------------------------------------------------------------------------------------------------
Arturo F. Agra S AT VP AT AS VP AT AS
- -----------------------------------------------------------------------------------------------------------------------------------
Jeffrey W. Allen
- -----------------------------------------------------------------------------------------------------------------------------------
Robert L. Aveyard
- -----------------------------------------------------------------------------------------------------------------------------------
John Bagnell
- -----------------------------------------------------------------------------------------------------------------------------------
Larry Bainter VP
- -----------------------------------------------------------------------------------------------------------------------------------
R. Frank Balotti
- -----------------------------------------------------------------------------------------------------------------------------------
Samual W. Bowlby AS AS
- -----------------------------------------------------------------------------------------------------------------------------------
Roberta S. Brown VP
- -----------------------------------------------------------------------------------------------------------------------------------
Robert D. Burris
- -----------------------------------------------------------------------------------------------------------------------------------
Donald E. Cain
- -----------------------------------------------------------------------------------------------------------------------------------
Jay O. Carmean
- -----------------------------------------------------------------------------------------------------------------------------------
Robert W. Carr
- -----------------------------------------------------------------------------------------------------------------------------------
Peter F. Clark
- -----------------------------------------------------------------------------------------------------------------------------------
Robert M. Collacchi
- -----------------------------------------------------------------------------------------------------------------------------------
G. Edwin Collier
- -----------------------------------------------------------------------------------------------------------------------------------
Carol C. Conrad AS AS AS AS AS AS AS
- -----------------------------------------------------------------------------------------------------------------------------------
Howard E. Cosgrove COB CEOD D D COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD
- -----------------------------------------------------------------------------------------------------------------------------------
Frank E. DiCola VP
- -----------------------------------------------------------------------------------------------------------------------------------
Audrey K. Dobertein
- -----------------------------------------------------------------------------------------------------------------------------------
Moira K. Donoghue S AS AS S S S S S S S
- -----------------------------------------------------------------------------------------------------------------------------------
Barry R. Elson PD D D D D D D D EVPD D
- -----------------------------------------------------------------------------------------------------------------------------------
Michael B. Emery
- -----------------------------------------------------------------------------------------------------------------------------------
Stacey L. Evans
- -----------------------------------------------------------------------------------------------------------------------------------
Joseph J. Feeley AT
- -----------------------------------------------------------------------------------------------------------------------------------
Rovert H. Fiedler
- -----------------------------------------------------------------------------------------------------------------------------------
Robert Gabbard
- -----------------------------------------------------------------------------------------------------------------------------------
Paul S. Gerritsen VP
- -----------------------------------------------------------------------------------------------------------------------------------
Sarah I. Gore
- -----------------------------------------------------------------------------------------------------------------------------------
Barbara S. Graham SVP CFOD D D SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD SVP CFOD
- -----------------------------------------------------------------------------------------------------------------------------------
Andrei M. Grecu
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 6. Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
TEE PED GEN PED LTD Petron Consuting Power TPS VINE GEN VINE LTD
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael G. Abercrombie
- -----------------------------------------------------------------------------------------------------------------------------------
Arturo F. Agra VP AT AS VP AT AS VP AT AS VP AT AS VP AT AS
- -----------------------------------------------------------------------------------------------------------------------------------
Jeffrey W. Allen
- -----------------------------------------------------------------------------------------------------------------------------------
Robert L. Aveyard
- -----------------------------------------------------------------------------------------------------------------------------------
John Bagnell
- -----------------------------------------------------------------------------------------------------------------------------------
Larry Bainter
- -----------------------------------------------------------------------------------------------------------------------------------
R. Frank Balotti
- -----------------------------------------------------------------------------------------------------------------------------------
Samual W. Bowlby AS
- -----------------------------------------------------------------------------------------------------------------------------------
Roberta S. Brown
- -----------------------------------------------------------------------------------------------------------------------------------
Robert D. Burris
- -----------------------------------------------------------------------------------------------------------------------------------
Donald E. Cain
- -----------------------------------------------------------------------------------------------------------------------------------
Jay O. Carmean
- -----------------------------------------------------------------------------------------------------------------------------------
Robert W. Carr VP
- -----------------------------------------------------------------------------------------------------------------------------------
Peter F. Clark
- -----------------------------------------------------------------------------------------------------------------------------------
Robert M. Collacchi
- -----------------------------------------------------------------------------------------------------------------------------------
G. Edwin Collier
- -----------------------------------------------------------------------------------------------------------------------------------
Carol C. Conrad AS AS AS AS AS AS AS
- -----------------------------------------------------------------------------------------------------------------------------------
Howard E. Cosgrove COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD COB CEOD
- -----------------------------------------------------------------------------------------------------------------------------------
Frank E. DiCola
- -----------------------------------------------------------------------------------------------------------------------------------
Audrey K. Dobertein
- -----------------------------------------------------------------------------------------------------------------------------------
Moira K. Donoghue S S S S S AS S S
- -----------------------------------------------------------------------------------------------------------------------------------
Barry R. Elson D D D D PD D D D
- -----------------------------------------------------------------------------------------------------------------------------------
Michael B. Emery
- -----------------------------------------------------------------------------------------------------------------------------------
Stacey L. Evans AS
- -----------------------------------------------------------------------------------------------------------------------------------
Joseph J. Feeley AT
- -----------------------------------------------------------------------------------------------------------------------------------
Rovert H. Fiedler
- -----------------------------------------------------------------------------------------------------------------------------------
Robert Gabbard
- -----------------------------------------------------------------------------------------------------------------------------------
Paul S. Gerritsen
- -----------------------------------------------------------------------------------------------------------------------------------
Sarah I. Gore
- -----------------------------------------------------------------------------------------------------------------------------------
Barbara S. Graham SVP CFO D SVP CFO D SVP CFO D SVP CFO D SVP CFO D SVP CFO D SVP CFO D
- -----------------------------------------------------------------------------------------------------------------------------------
Andrei M. Grecu
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 6. Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
ATE ACE AEE AEI AET AGI AJTS ASP AOS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gary Hanson AT AS P
- -----------------------------------------------------------------------------------------------------------------------------------
Meredith I. Harlacher D P COOD D PD D D D PD D
- -----------------------------------------------------------------------------------------------------------------------------------
Hudson P. Hoen, III
- -----------------------------------------------------------------------------------------------------------------------------------
Cyrus H. Holley
- -----------------------------------------------------------------------------------------------------------------------------------
George C. Hunt
- -----------------------------------------------------------------------------------------------------------------------------------
Frederick Hutchinson
- -----------------------------------------------------------------------------------------------------------------------------------
Jerrold L. Jacobs
- -----------------------------------------------------------------------------------------------------------------------------------
Donna Johns AT AS AT AS
- -----------------------------------------------------------------------------------------------------------------------------------
John W. Land VP VP
- -----------------------------------------------------------------------------------------------------------------------------------
James P. Lavin C C C C C C C C C
- -----------------------------------------------------------------------------------------------------------------------------------
Henry K. Levari VP
- -----------------------------------------------------------------------------------------------------------------------------------
J. David McCann VP
- -----------------------------------------------------------------------------------------------------------------------------------
Larry S. McGaughy
- -----------------------------------------------------------------------------------------------------------------------------------
Richard B. McGlynn
- -----------------------------------------------------------------------------------------------------------------------------------
Thomas E. Miloszewski
- -----------------------------------------------------------------------------------------------------------------------------------
Bernard J. Morgan
- -----------------------------------------------------------------------------------------------------------------------------------
Dean Musser
- -----------------------------------------------------------------------------------------------------------------------------------
Weston E. Nellius
- -----------------------------------------------------------------------------------------------------------------------------------
James E. Parrish
- -----------------------------------------------------------------------------------------------------------------------------------
Harold I. Raveche
- -----------------------------------------------------------------------------------------------------------------------------------
Philip S. Reese SVP
- -----------------------------------------------------------------------------------------------------------------------------------
Joseph M. Rigby
- -----------------------------------------------------------------------------------------------------------------------------------
Paul Rossi
- -----------------------------------------------------------------------------------------------------------------------------------
Timothy J. Sanborn
- -----------------------------------------------------------------------------------------------------------------------------------
Mark J. Schaefer
- -----------------------------------------------------------------------------------------------------------------------------------
Lonnie C. Scott VP
- -----------------------------------------------------------------------------------------------------------------------------------
Susan Seipel
- -----------------------------------------------------------------------------------------------------------------------------------
Thomas S. Shaw D EVPD D D D PD D D D
- -----------------------------------------------------------------------------------------------------------------------------------
Janet L. Shorter
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 6. Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
BING GEN BING LTD CCM CI CONECTIV CCI CES CRP CSI SOLUTIONS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gary Hanson
- -----------------------------------------------------------------------------------------------------------------------------------
Meredith I. Harlacher D D PD D P COO D D PD D D
- -----------------------------------------------------------------------------------------------------------------------------------
Hudson P. Hoen, III VP
- -----------------------------------------------------------------------------------------------------------------------------------
Cyrus H. Holley D
- -----------------------------------------------------------------------------------------------------------------------------------
George C. Hunt VP
- -----------------------------------------------------------------------------------------------------------------------------------
Frederick Hutchinson AS
- -----------------------------------------------------------------------------------------------------------------------------------
Jerrold L. Jacobs VC D
- -----------------------------------------------------------------------------------------------------------------------------------
Donna Johns AT AS AT AS AT AS AT AS
- -----------------------------------------------------------------------------------------------------------------------------------
Ralph E. Klesius SVP
- -----------------------------------------------------------------------------------------------------------------------------------
John W. Land VP VP VP
- -----------------------------------------------------------------------------------------------------------------------------------
James P. Lavin C C C C C C C C C C
- -----------------------------------------------------------------------------------------------------------------------------------
Henry K. Levari VP
- -----------------------------------------------------------------------------------------------------------------------------------
J. David McCann VP D
- -----------------------------------------------------------------------------------------------------------------------------------
Richard B. McGlynn
- -----------------------------------------------------------------------------------------------------------------------------------
Thomas E. Miloszewski VP AS
- -----------------------------------------------------------------------------------------------------------------------------------
Bernard J. Morgan D
- -----------------------------------------------------------------------------------------------------------------------------------
Dean Musser VP
- -----------------------------------------------------------------------------------------------------------------------------------
Weston E. Nellius D
- -----------------------------------------------------------------------------------------------------------------------------------
James E. Parrish SVP
- -----------------------------------------------------------------------------------------------------------------------------------
Harold I. Raveche D
- -----------------------------------------------------------------------------------------------------------------------------------
Philip S. Reese VP
- -----------------------------------------------------------------------------------------------------------------------------------
Joseph M. Rigby VP
- -----------------------------------------------------------------------------------------------------------------------------------
Paul Rossi
- -----------------------------------------------------------------------------------------------------------------------------------
Timothy J. Sanborn VP
- -----------------------------------------------------------------------------------------------------------------------------------
Mark J. Schaefer VP
- -----------------------------------------------------------------------------------------------------------------------------------
Lonnie C. Scott VP
- -----------------------------------------------------------------------------------------------------------------------------------
Susan Seipel
- -----------------------------------------------------------------------------------------------------------------------------------
Thomas S. Shaw PD PD D D EVP D PD EVPD D ASD
- -----------------------------------------------------------------------------------------------------------------------------------
Janet L. Shorter
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 6. Continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
CTS CNEL CNEP DCI DCI I DCI II DCTC DOSC DPL DSC
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gary Hanson AT AS
- ----------------------------------------------------------------------------------------------------------------------------------
Meredith I. Harlacher D D D PD PD PD D D P COOD PD
- ----------------------------------------------------------------------------------------------------------------------------------
Hudson P. Hoen, III VP
- ----------------------------------------------------------------------------------------------------------------------------------
Cyrus H. Holley
- ----------------------------------------------------------------------------------------------------------------------------------
George C. Hunt
- ----------------------------------------------------------------------------------------------------------------------------------
Frederick Hutchinson
- ----------------------------------------------------------------------------------------------------------------------------------
Jerrold L. Jacobs D
- ----------------------------------------------------------------------------------------------------------------------------------
Donna Johns AT AS
- ----------------------------------------------------------------------------------------------------------------------------------
Ralph E. Klesius
- ----------------------------------------------------------------------------------------------------------------------------------
John W. Land VP VP VP
- ----------------------------------------------------------------------------------------------------------------------------------
James P. Lavin C C C C C C C C
- ----------------------------------------------------------------------------------------------------------------------------------
Henry K. Levari
- ----------------------------------------------------------------------------------------------------------------------------------
J. David McCann
- ----------------------------------------------------------------------------------------------------------------------------------
Richard B. McGlynn
- ----------------------------------------------------------------------------------------------------------------------------------
Thomas E. Miloszewski
- ----------------------------------------------------------------------------------------------------------------------------------
Bernard J. Morgan
- ----------------------------------------------------------------------------------------------------------------------------------
Dean Musser
- ----------------------------------------------------------------------------------------------------------------------------------
Weston E. Nellius
- ----------------------------------------------------------------------------------------------------------------------------------
James E. Parrish
- ----------------------------------------------------------------------------------------------------------------------------------
Harold I. Raveche
- ----------------------------------------------------------------------------------------------------------------------------------
Philip S. Reese
- ----------------------------------------------------------------------------------------------------------------------------------
Joseph M. Rigby
- ----------------------------------------------------------------------------------------------------------------------------------
Paul Rossi
- ----------------------------------------------------------------------------------------------------------------------------------
Timothy J. Sanborn
- ----------------------------------------------------------------------------------------------------------------------------------
Mark J. Schaefer
- ----------------------------------------------------------------------------------------------------------------------------------
Lonnie C. Scott VP
- ----------------------------------------------------------------------------------------------------------------------------------
Susan Seipel VPD
- ----------------------------------------------------------------------------------------------------------------------------------
Thomas S. Shaw D D D D D D PD PD EVPD D
- ----------------------------------------------------------------------------------------------------------------------------------
Janet L. Shorter
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 6. Continued
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
TEE PGI PLI Petron PCG TPS VGI VLI
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gary Hanson
- ----------------------------------------------------------------------------------------------------------------------------------
Meredith I. Harlacher D D D D D D D D
- ----------------------------------------------------------------------------------------------------------------------------------
Hudson P. Hoen, III
- ----------------------------------------------------------------------------------------------------------------------------------
Cyrus H. Holley
- ----------------------------------------------------------------------------------------------------------------------------------
George C. Hunt
- ----------------------------------------------------------------------------------------------------------------------------------
Frederick Hutchinson
- ----------------------------------------------------------------------------------------------------------------------------------
Jerrold L. Jacobs
- ----------------------------------------------------------------------------------------------------------------------------------
Donna Johns AT AS
- ----------------------------------------------------------------------------------------------------------------------------------
Ralph E. Klesius
- ----------------------------------------------------------------------------------------------------------------------------------
John W. Land
- ----------------------------------------------------------------------------------------------------------------------------------
James P. Lavin C C C C C C C
- ----------------------------------------------------------------------------------------------------------------------------------
Henry K. Levari
- ----------------------------------------------------------------------------------------------------------------------------------
J. David McCann
- ----------------------------------------------------------------------------------------------------------------------------------
Larry S. McGaughy
- ----------------------------------------------------------------------------------------------------------------------------------
Richard B. McGlynn
- ----------------------------------------------------------------------------------------------------------------------------------
Thomas E. Miloszewski
- ----------------------------------------------------------------------------------------------------------------------------------
Bernard J. Morgan
- ----------------------------------------------------------------------------------------------------------------------------------
Dean Musser
- ----------------------------------------------------------------------------------------------------------------------------------
Weston E. Nellius
- ----------------------------------------------------------------------------------------------------------------------------------
James E. Parrish
- ----------------------------------------------------------------------------------------------------------------------------------
Harold I. Raveche
- ----------------------------------------------------------------------------------------------------------------------------------
Philip S. Reese
- ----------------------------------------------------------------------------------------------------------------------------------
Joseph M. Rigby
- ----------------------------------------------------------------------------------------------------------------------------------
Timothy J. Sanborn
- ----------------------------------------------------------------------------------------------------------------------------------
Mark J. Schaefer
- ----------------------------------------------------------------------------------------------------------------------------------
Lonnie C. Scott
- ----------------------------------------------------------------------------------------------------------------------------------
Susan Seipel
- ----------------------------------------------------------------------------------------------------------------------------------
Thomas S. Shaw D PD PD PD D PD PD D
- ----------------------------------------------------------------------------------------------------------------------------------
Janet L. Shorter
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 6. Continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
ATE ACE AEE AEI AET AGI AJTS ASP AOS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
William H. Spence VP
- ----------------------------------------------------------------------------------------------------------------------------------
Richard H. Treml
- ----------------------------------------------------------------------------------------------------------------------------------
Leslie Thomas-Dawson
- ----------------------------------------------------------------------------------------------------------------------------------
Louis A. Tonelli
- ----------------------------------------------------------------------------------------------------------------------------------
Eileen K. Unger
- ----------------------------------------------------------------------------------------------------------------------------------
John C. van Roden
- ----------------------------------------------------------------------------------------------------------------------------------
Louis M. Walters T T AS T T T T T T T
- ----------------------------------------------------------------------------------------------------------------------------------
James C. Weller VP
- ----------------------------------------------------------------------------------------------------------------------------------
James H. Weller VP
- ----------------------------------------------------------------------------------------------------------------------------------
Nathan L. Wilson AS
- ----------------------------------------------------------------------------------------------------------------------------------
Stephen D. Winand
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 6. Continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
BGI BLI CCM CI CONECTIV CCI CES CRP CSI SOLUTIONS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
William H. Spence VP VP
- ----------------------------------------------------------------------------------------------------------------------------------
Richard H. Treml ASD
- ----------------------------------------------------------------------------------------------------------------------------------
Leslie Thomas-Dawson
- ----------------------------------------------------------------------------------------------------------------------------------
Louis A. Tonelli
- ----------------------------------------------------------------------------------------------------------------------------------
Eileen K. Unger VP
- ----------------------------------------------------------------------------------------------------------------------------------
John C. van Roden SVP CFO
- ----------------------------------------------------------------------------------------------------------------------------------
Louis M. Walters T T T T T AS T T T T T
- ----------------------------------------------------------------------------------------------------------------------------------
James C. Weller VP VP VP VP
- ----------------------------------------------------------------------------------------------------------------------------------
James H. Weller
- ----------------------------------------------------------------------------------------------------------------------------------
Nathan L. Wilson AS
- ----------------------------------------------------------------------------------------------------------------------------------
Stephen D. Winand
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 6. Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
CTS CNEL CNEP DCI DCI I DCI II DCTC DOSC DPL DSC
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
William H. Spence VP
- -----------------------------------------------------------------------------------------------------------------------------------
Richard H. Treml
- -----------------------------------------------------------------------------------------------------------------------------------
Leslie Thomas-Dawson AS
- -----------------------------------------------------------------------------------------------------------------------------------
Louis A. Tonelli
- -----------------------------------------------------------------------------------------------------------------------------------
Eileen K. Unger
- -----------------------------------------------------------------------------------------------------------------------------------
John C. van Roden
- -----------------------------------------------------------------------------------------------------------------------------------
Louis M. Walters T T T T AS T T T AS T
- -----------------------------------------------------------------------------------------------------------------------------------
James C. Weller VP VP
- -----------------------------------------------------------------------------------------------------------------------------------
James H. Weller
- -----------------------------------------------------------------------------------------------------------------------------------
Nathan L. Wilson AS AS
- -----------------------------------------------------------------------------------------------------------------------------------
Stephen D. Winand T T S
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 6. Continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
TEE PGI PLI Petron PCG TPS VGI VLI
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William H. Spence VP
- --------------------------------------------------------------------------------------------------------------------------
Richard H. Treml
- --------------------------------------------------------------------------------------------------------------------------
Leslie Thomas-Dawson
- --------------------------------------------------------------------------------------------------------------------------
Louis A. Tonelli AT
- --------------------------------------------------------------------------------------------------------------------------
Eileen K. Unger
- --------------------------------------------------------------------------------------------------------------------------
John C. van Roden
- --------------------------------------------------------------------------------------------------------------------------
Louis M. Walters T T T T T T T
- --------------------------------------------------------------------------------------------------------------------------
James C. Weller VP VP VP VP VP
- --------------------------------------------------------------------------------------------------------------------------
James H. Weller
- --------------------------------------------------------------------------------------------------------------------------
Nathan L. Wilson AS
- --------------------------------------------------------------------------------------------------------------------------
Stephen D. Winand T S
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS (Continued)
Part II. Financial connections of directors and executive officers as of
December 31, 1998.
Part III(a). COMPENSATION OF OFFICERS AND DIRECTORS.
CONECTIV BOARD PERSONNEL & COMPENSATION COMMITTEE REPORT
PRINCIPLES OF EXECUTIVE COMPENSATION PROGRAM
The Personnel & Compensation Committee of the Board of Directors is comprised of
four non-employee Directors. The Committee provides an independent review of the
Company's performance objectives and executive compensation.
OVERALL OBJECTIVES
The Company's philosophy is to link compensation to business strategies and
results, to align total compensation of executives with the long-term interests
of stockholders, to motivate its senior executives to meet the challenging
objectives established for the Company and to create an urgency for success in
the newly-formed Company. The Company's executive compensation program is de-
signed to:
. provide total compensation that emphasizes long-term performance which
creates stockholder value;
. facilitate the rapid transition to a competitive business environment;
. reflect the market conditions for attracting and retaining high-
quality executives and ensure that such executives have a continuing
stake in the long-term success of the Company; and
. create significant levels of stock ownership.
<PAGE>
The elements of the executive compensation program are:
. total compensation levels that are competitive with those provided by
the competitive market, defined as a blend of companies in the utility
and industrial markets;
. base compensation levels related to responsibility level and
individual performance;
. annual variable compensation that varies based on corporate, unit and
in-dividual performance; and,
. long-term variable compensation based on long-term increases in stock-
holder value.
TOTAL COMPENSATION
Total compensation opportunities are developed for Company
executives by Watson Wyatt, the firm that provides executive compensation
consulting services tothe Company. This is done using several published
compensation survey sources and public proxy data to define the competitive
market. Overall, the total compensation structure for executives is targeted at
the median for similar positions at companies of similar size, including both
utilities and industrial companies (Compensation Comparison Group)1. Individual
reward levels vary based on individual contributions and performance. Total
compensation includes three components: base compensation, annual variable
compensation and long-term variable compensation. The targets for each component
of the executive compensation program are reviewed on an annual basis to ensure
alignment with the Company's compensation philosophy and a proper balance
between short-and long-term objectives.
BASE COMPENSATION
Base compensation for executive officers is determined by
evaluating the responsibilities of the positions held and the experience of the
individuals, coupled with a review of compensation for comparable positions at
other companies. Base compensation is reviewed on an annual basis and
adjustments are based on the performance of the Company and each executive
officer. Annual base compensation increases eflect the individual's performance
and contribution over several years in addition to the results for a single
year. Following the 1998 increases, the overall base compensation level for the
five named executive officers was slightly below the median of the base
compensation targeted levels defined by the surveys and proxies.
ANNUAL VARIABLE COMPENSATION
The Company's annual variable compensation is designed to
motivate participants to accomplish stretch financial and individual goals and
to increase the sense of urgency to deliver significant results on an annual
basis. Annual variable compensation target opportunities are designed to be at
or above the median of the blended utility and industrial market and for the
named executive officers vary from 40% to 50% of base compensation, with maximum
awards of 60% to 75% of base compensation.
Annual variable compensation is paid in a combination of cash
(80%) and restricted stock units (20%) and is based on the achievement of
predetermined corporate and individual goals. The plan for 1998 provides that
payouts will occur only after a specified earnings target is achieved.
_______________
1 The Compensation Comparison Group does not include all of the same companies
as the published industry indices in the Comparison of 10 Month Cumulative Total
Return chart included in this Proxy Statement. However, 34 of the 85 companies
included in the EEI Executive Compensation Report, which is one element of the
Compensation Comparison Group, are also part of either the Dow Jones Electric
Utilities Index or the S&P 500 Index.
<PAGE>
For 1998, each individual covered by the plan was eligible to earn a
variable compensation award between 0% and 150% of target. The portion of each
individual award attributable to corporate, line of business, and group
performance were determined and specific measures were developed at the
beginning of the year. These measures were primarily financial for 1998 to
accelerate the transition of the Company to a more competitive environment and
included corporate measures of earnings, cash flow return on capital employed
and cash flow. Each business group and line of business also developed specific
financial measures to support their business plans.
The Management Stock Purchase Program (MSPP) was designed as a means to
promote significant executive stock ownership in the new company and to help
meet stock ownership guidelines. The program requires that 20% of the
individual's earned annual variable compensation must be used to acquire
restricted stock units (RSUs). Individuals may also voluntarily use up to an
additional 30% (for a total of 50%) of their earned annual variable compensation
to acquire RSUs. All RSUs are acquired at a 20% discount from Fair Market Value
on the date paid. Each RSU is a proxy for one share of Common Stock, has a value
equal to one share and earns at the rate of the Common Stock dividend. RSUs are
restricted from sale or use for a 3-year period and are distributed in shares of
Common Stock.
LONG-TERM VARIABLE COMPENSATION
The Company's long-term variable compensation reinforces the importance of
providing stockholders with a competitive return on their investment. Long-term
variable compensation awards also strengthen the ability of the Company to
attract, motivate and retain executives of superior capability and more closely
align the interests of management with those of stockholders.
Long-term grants for Conectiv executives are determined by setting a target
percentage of base compensation based on median data in the Compensation
Comparison Group and converting the target amounts to actual grants using the
"Black-Scholes Model" for options and time and forfeiture discount methods for
the other elements of the long-term grants.
Long-term awards granted in 1998 consisted of non-qualified stock options,
dividend equivalent units and performance accelerated restricted stock. Non-
qualified stock options and dividend equivalent units were awarded to provide
approximately two-thirds of the targeted value of the grant while the other one-
third of the targeted value was provided through performance accelerated
restricted stock. This stock vests as unrestricted Common Stock seven years from
the award date. However, vesting may be accelerated if the price of Common Stock
reaches certain predetermined levels prior to the seven years. All stock options
were granted with exercise prices equal to the fair market value of Common Stock
at the time of the grant.
Performance accelerated restricted stock granted to the CEO and three other
named executive officers is also subject to an additional condition tied to
Total Shareholder Return over the seven year period. Failure to meet a
predetermined Total Shareholder Return level over the restriction period will
result in total forfeiture of their shares granted.
The CEO and three other named executive officers also were given a special
grant of performance accelerated stock options to increase emphasis on creating
long-term shareholder value. All performance accelerated stock options were
granted with exercise prices equal to the fair market value of Common Stock at
the time of grant. These options do not vest and cannot be exercised for 9-1/2
years from the date of their grant unless the stock price increases to
predetermined levels. Absent accelerated vesting at these predetermined stock
prices, the shares will become exercisable in 9-1/2 years with expiration
occurring at 10 years. This special grant resulted in the long-term variable
compensation component and total compensation exceeding the targeted median
values for these four executives for 1998 using the Black-Scholes valuation
methodology.
<PAGE>
STOCK OWNERSHIP GUIDELINES
To further reinforce the interests of stockholders, stock ownership
guidelines have been established for the Board of Directors, Company officers,
and other Company management. These guidelines require the individuals covered
by the guidelines to have beneficial ownership of Common Stock, or securities
convertible into Common Stock, with an aggregate value equal to certain
multiples of each individual's salary (or annual retainers in the case of
outside directors). Multiples range from five times to one times salary. The
Chief Executive Officer's multiple is set at five times salary and outside
Directors' multiples are set at three times the annual retainer.
INTERNAL REVENUE CODE SECTION 162(M)
The Committee considers the tax deductibility of compensation paid to
executive officers and the impact of Section 162(m) of the Internal Revenue Code
of1986, as amended (the "Code"), on the Company. This provision limits the
amount of compensation that the Company may deduct from its taxable income for
any year to $1 million for any of its five most highly compensated executive
officers, unless certain requirements are met.
The Committee has taken actions to limit the impact of the Code in the
event that compensation paid to a named executive officer might otherwise not be
deductible. The Committee will continue to seek ways to limit the impact of the
Code; however, the Committee believes that the tax deduction limitation should
not compromise the Company's ability to create incentive programs that support
the business strategy and also attract and retain the executive talent required
to compete successfully. Accordingly, achieving the desired flexibility in the
design and delivery of compensation may periodically result in some compensation
that is not deductible for federal income tax purposes.
SUMMARY OF ACTIONS TAKEN BY THE PERSONNEL & COMPENSATION COMMITTEE
The Personnel & Compensation Committee, consisting entirely of outside
directors, provides direction and oversight to the Company's executive
compensation plans, establishes the Company's compensation philosophy and
assesses the effectiveness of the program as a whole. This includes activities
such as reviewing the design of various plans and assessing the reasonableness
of the total program consistent with the total compensation philosophy.
The Committee also assists in administering key aspects of the Company's
annual compensation program and variable compensation plan, such as reviewing
annual compensation budgets and setting targets and corporate performance
measures for the annual and long-term variable compensation plans.
Finally, the Committee specifically implements the Company's executive
compensation program as it directly pertains to the Chief Executive Officer and
the Company's four other most highly compensated executives, i.e., the five
"named executive officers."
The Committee has determined that in an environment where competition is
increasing, it is essential that the Company have the ability to attract,
motivate and retain high quality executives from within and outside the utility
industry.
Because of the extremely competitive market for executive talent, the
Personnel & Compensation Committee has adopted a compensation structure based on
a blend of utility and general competitive industry markets. The structure is
also flexible to allow setting salaries at pure general industry levels where
that may be necessary to attract certain specific skills and experience.
Consistent with this approach, the total compensation program relies on
competitive base compensation generally at or below the median of the market
with annual and long-term variable
<PAGE>
compensation opportunities generally above the median of the market. This places
a much greater emphasis on variable compensation that aligns executive and
stockholder interests.
This total compensation philosophy is important to the success of the
Company because the Company is facing increasing competition and related risks.
The Company is not simply a utility anymore, but is rapidly becoming part of the
general competitive industry market and, therefore, just as strategies for
success must change, the compensation to drive success must also change. Prior
to the merger involving Atlantic Energy and Delmarva and during 1998, this
compensation philosophy enabled the Company to attract several key executives
with experience and skills critical to the emerging competitive environment.
These executives would not have been available under a traditional utility
compensation philosophy.
Significant actions by the Committee for fiscal year 1998 included adoption
of the new Conectiv executive plans (Conectiv Variable Compensation Plan,
Deferred Compensation Plan, Supplemental Executive Retirement Plan [SERP], and
Change In Control Agreements) and other compensation and benefit plans for
Conectiv employees. The Committee also sets base compensation, annual variable
targets and performance measures and long-term grants under the various
executive programs, including special awards of performance accelerated stock
options to the CEO and the three other named executive officers described above.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Cosgrove's compensation reflects Conectiv's compensation philosophy.
His base compensation, annual and regular long-term variable compensation place
him at total compensation levels consistent with the median level of other CEO's
at similarly-sized utility and manufacturing companies represented in the
Compensation Comparison Group. Additional emphasis on achieving increased
stockholder value has been created with a special grant of performance
accelerated stock options. This special grant will cause his long term
compensation and total compensation to exceed the median targets for 1998.
BASE COMPENSATION ACTION
Conectiv was formed by a merger involving Delmarva and Atlantic Energy in
early 1998. Mr. Cosgrove's base compensation was set during the merger process
to reflect the size of Conectiv and the increasing competitive environment in
which Conectiv does business. His 1998 base compensation is at the median target
level developed through a comparison of other Chief Executive Officers of
similarly-sized corporations using a blend of utilities and general industry.
His salary for 1999 will remain the same as in 1998.
ANNUAL VARIABLE COMPENSATION
To provide clear focus on increasing stockholder value through the
successful completion of the merger and growing the new Conectiv businesses, Mr.
Cosgrove received additional levels of long-term awards in place of an annual
variable opportunity for 1997. Therefore, there is no annual variable pay for
1997 reflected in 1998 compensation.
Mr. Cosgrove's annual variable compensation target opportunity for 1998 was
set at 50% of base compensation, with a minimum payout of 0% and a maximum
payout of 75% of base compensation. Payment of any award requires achieving a
pre-determined level of 1998 earnings established by this Committee. Performance
measures for 1998, predetermined by this Committee, included earnings available
for common stock, cash flow return on capital employed and cash flow. Awards for
1998 for Mr. Cosgrove and the four other named executive officers have not been
determined.
LONG-TERM VARIABLE COMPENSATION
Long-term incentive grants are a critical component of the Conectiv
executive compensation philosophy, since they align executive interests very
clearly with increased stockholder value. For 1998,
<PAGE>
Mr. Cosgrove received grants of non-qualified stock options, dividend equivalent
units, performance accelerated restricted stock, and performance accelerated
stock options (reflected in the Compensation Tables). The regular grants of non-
qualified stock options, dividend equivalent units and performance accelerated
restricted stock provided a long-term variable compensation opportunity
approximately at the median of the defined competitive market.
The special, non-recurring grant of performance accelerated stock options
was awarded to create additional emphasis on achieving higher levels of
stockholder value. In order for Mr. Cosgrove to receive any value from this
grant prior to vesting at nine and one-half years, there must be a significant
increase in stockholder value. Such increases prior to nine and one-half years
will result in accelerated vesting of this grant in increments of one-third. The
first third would vest when stockholder value increases by $400,000,000, at
which time Mr. Cosgrove's options would vest at a value of $1,200,000, or .3% of
the increase in stockholder value. The entire grant would vest if stockholder
value increases by $800,000,000, at which time Mr. Cosgrove's options would vest
at a value of $2,400,000 or .3% of the increase in stockholder value. Only under
results that yield increases in stockholder value and trigger accelerated
vesting of this grant would Mr. Cosgrove's 1998 compensation exceed the median
target compensation level.
PERSONNEL & COMPENSATION COMMITTEE
S.I. Gore, Chairperson R.B. McGlynn
M.B. Emery B.J. Morgan
PERSONNEL & COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Personnel & Compensation Committee is comprised solely of non-officer
directors. Logical Business Solutions, which is owned by Mr. Emery's son-in-law,
Paul Kleiman, had contracts with Conectiv Resource Partners, Inc., a subsidiary
of the Company, with a gross value of $227,000 during 1998 for information
technology consulting services. Except as described in the preceding sentence,
there are no Personnel & Compensation Committee interlocks.
<PAGE>
SUMMARY COMPENSATION TABLE
The following table shows information regarding the compensation
earned during the past year by the Company's Chief Executive Officer and by the
Company's other four most highly-compensated executive officers for the fiscal
year ending December 31, 1998.
TABLE 1-- SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------------------------------------------------------------------------
VARIABLE
COMPEN- ALL OTHER
SATION SECURITIES LTIP COMPEN-
NAME AND PRINCIPAL YEAR ANNUALIZED (BONUS) OTHER ANNUAL UNDERLYING Payouts SATION
POSITION (1) SALARY (2) COMPENSATION OPTIONS (3) (4)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
H.E. Cosgrove, Chairman 1998 $600,000 - 0 360,000 572,134 12,329
of the Board and Chief
Executive Officer
- ------------------------------------------------------------------------------------------------------------------------------------
M.I. Harlacher, 1998 340,000 - 0 - - 3,742
President
- ------------------------------------------------------------------------------------------------------------------------------------
B.R. Elson, Executive 1998 325,000 - 0 170,000 21,560 4,074
Vice President
- ------------------------------------------------------------------------------------------------------------------------------------
T.S. Shaw, Executive 1998 325,000 - 0 170,000 155,267 9,478
Vice President
- ------------------------------------------------------------------------------------------------------------------------------------
B.S. Graham, Senior 1998 250,000 - 0 170,000 155,267 5,308
Vice President
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
____________
(1) Base salary is shown as an annualized amount. Other items of compensation
reflect the full calendar 1998 compensation received from Conectiv and
either Delmarva or Atlantic City Electric Company.
(2) The 1998 bonus, which is an annual variable award, has not yet been
determined. The target award is 50% of annualized salary for Mr. Cosgrove
and 40% for Messrs. Harlacher, Elson and Shaw and Mrs. Graham.
(3) During 1998 all restrictions lapsed on the performance-based restricted
stock granted in 1995 and 1996 under the Delmarva LTIP due to the merger
involving Delmarva and Atlantic Energy. Under the "change in control"
provisions, the awards fully vested resulting in a payout to Mr. Cosgrove
of 21,160 shares (11,570 for 1995 and 9,590 for 1996) valued at $454,940;
to Mr. Shaw of 5,450 shares (2,870 for 1995 and 2,580 for 1996) valued at
$117,175; and to Mrs. Graham of 5,450 shares (2,870 for 1995 and 2,580 for
1996) valued at $117,175. Shares were valued at $21.50 at the time of
payout. Dividends on shares of restricted stock and dividend equivalents
are accrued at the same rate as that paid to all holders of Common Stock.
As of December 31, 1998; Mr. Cosgrove held 45,520 shares of restricted
stock (35,520 for 1997 and 10,000 for 1998) and 30,000 Dividend Equivalent
Units ("DEU's"); Mr. Elson held 4,000 shares of restricted stock for 1998
and 10,000 DEU's; Mr. Shaw held 12,010 shares of restricted stock (8,010
for 1997 and 4,000 for 1998) and 10,000 DEU's; Mrs. Graham held 12,010
shares of restricted stock (8,010 for 1997 and 4,000 for 1998) and 10,000
DEU's. Holders of restricted stock are entitled to receive dividends as
declared.
(4) The amount of All Other Compensation for each of the named executive
officers for fiscal year 1998 include the following: Mr. Cosgrove, $2,125
in Company matching contributions to the Company's Savings and Investment
Plan, $10,000 in Company matching contributions to the Company's Deferred
Compensation Plan and $204 in term life insurance premiums paid by the
Company; for Mr. Shaw, $2,630 in Company matching contributions to the
Company's Savings and Investment Plan, $6,644 in Company matching
contributions to the Company's Deferred Compensation Plan and $204 in term
life insurance premiums paid by the Company; for Mrs. Graham, $2,604 in
Company matching contributions to the Company's Savings and Investment
Plan, $2,500 in Company matching contributions to the Company's Deferred
Compensation Plan and $204 in term life insurance premiums paid by the
Company; for Mr. Elson, $2,969 in Company matching contributions to the
Company's Savings and Investment Plan and $1,105 in term life insurance
premiums paid by the Company; and for Mr. Harlacher, $3,300 in Company
matching contributions to the Company's Savings and Investment Plan and
$442 in term life insurance premiums paid by the Company.
<PAGE>
TABLE 2 -- OPTION GRANTS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
NUMBER OF #OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE VALUE (4)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
H.E. Cosgrove 300,000(2) 29% $22.84375 1/2/08 $385,831
60,000(3) 6% $22.84375 1/2/08 $137,063
- ---------------------------------------------------------------------------------------------------------------------
M.I. Harlacher - 0% - - -
- 0% - - -
- ---------------------------------------------------------------------------------------------------------------------
B.R. Elson 150,000(2) 14% $22.84375 1/2/08 $192,915
20,000(3) 2% $22.84375 1/2/08 $ 45,688
- ---------------------------------------------------------------------------------------------------------------------
T.S. Shaw 150,000(2) 14% $22.84375 1/2/08 $192,915
20,000(3) 2% $22.84375 1/2/08 $ 45,688
- ---------------------------------------------------------------------------------------------------------------------
B.S. Graham 150,000(2) 14% $22.84375 1/2/08 $192,915
20,000(2) 2% $22.84375 1/2/08 $ 45,688
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
__________
(1) Currently, the Company does not grant stock appreciation rights.
(2) Denotes Performance Accelerated Stock Options ("PASO's") which were granted
on a one-time basis. PASO's have a ten-year term and vest and are first
exercisable 9 and 1/2 years from date of grant without regard to stock
price performance. Exercise date will accelerate for favorable stock price
performance (i.e., first 1/3, second 1/3 and third 1/3 of PASO's vest after
stock trades at $26, $28 or $30 per share, respectively, for ten
consecutive trading days). There is a minimum holding period of three years
from date of grant during which these options are not exercisable.
(3) Denotes Nonqualified Stock Options. One-half of such Options vest and are
exercisable at end of second year from date of grant. Second one-half vest
and are exercisable at end of third year from date of grant.
(4) Determined using the Black-Scholes model, incorporating the following
material assumptions and adjustments: (a) exercise price of $22.84375,
equal to the Fair Market Value ("FMV") as of date of grant; (b) an option
term of ten years; (c) risk-free rate of return of 6.00%; (d) volatility of
20.00%; and (e) dividend yield of 7.00%. For valuation purposes, PASO's are
valued as a premium-priced stock option as of the date of grant with an
exercise price of $30 on a FMV of $22.84375.
<PAGE>
TABLE 3 -- AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
SHARES VALUE OF UNEXERCISED IN-
ACQUIRED VALUE NUMBER OF SECURITIES UNDERLYING THE-MONEY OPTIONS AT FY-
ON REALIZED UNEXERCISED OPTIONS AT FY-END (2) END(1)
NAME EXERCISE ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNIXERCISABLE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
H.E. Cosgrove 0 0 14,400/360,000 $51,225/$596,250
- -----------------------------------------------------------------------------------------------------------------
M.I. Harlacher 0 0 - $ -
- -----------------------------------------------------------------------------------------------------------------
B.R. Elson 0 0 0/170,000 $ 0/$281,563
- -----------------------------------------------------------------------------------------------------------------
T.S. Shaw 0 0 0/170,000 $ 0/$281,563
- -----------------------------------------------------------------------------------------------------------------
B.S. Graham 0 0 0/170,000 $ 0/$281,563
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
______________
(1) The closing price for the Company's common stock as reported by the New
York Stock Exchange on December 31, 1998 was $24.50. Any value in the
options would be based on the difference between the exercise price of the
options and the value at the time of the exercise (e.g., $24.50 as of close
of business on 12/31/98), which difference would be multiplied by the
number of options exercised.
(2) Only 14,400 stock options of Mr. Cosgrove are currently exercisable. None
of the remaining options may be exercised earlier than two years from date
of grant for regular, non-performance based options and nine and one half
years from date of grant for performance based options (subject to
accelerated vesting for favorable stock price performance).
TABLE 4 -- LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF RESTRICTED PERFORMANCE PERIOD
SHARES/DIVIDEND UNTIL MATURATION
NAME EQUIVALENT UNITS (#)(1) OR PAYOUT(2)
---- ----------------------- ------------
<S> <C> <C>
H. E. Cosgrove.......... 10,000 shs/30,000 units 3/2/05
M. I. Harlacher......... -- --
B. R. Elson............. 4,000 shs/10,000 units 3/2/05
T. S. Shaw.............. 4,000 shs/10,000 units 3/2/05
B. S. Graham............ 4,000 shs/10,000 units 3/2/05
</TABLE>
______________
(1) In addition, Mr. Cosgrove held 35,520 performance shares (valued at
$870,240) and Mr. Shaw and Mrs. Graham held 8,010 performance shares
(valued at $196,245) from a 1997 award with a four year performance cycle
under the Delmarva Power Long Term Incentive Plan.
(2) Awards of Restricted Shares (Performance Accelerated Restricted Stock or
"PARS") and Dividend Equivalent Units ("DEU's") were made to four of the
named executive officers. The payout of shares of PARS may potentially be
"performance accelerated." Restrictions may lapse any time after 3 years
(i.e., after March 1, 2001) upon on achievement of favorable stock price
performance goals. In the absence of such favorable performance,
restrictions lapse after 7 years (i.e., March 2, 2005) provided that at
least a defined level of average, total return to shareholders is achieved.
As of December 31, 1998, Mr. Cosgrove's 10,000 Restricted Shares were
valued at $245,000 and Messrs. Elson and Shaw and Mrs. Graham's 4,000 PARS
were valued at $98,000. These values for both Restricted Shares and
performance shares are based on the December 31, 1998 closing stock price
of $24.50. For Dividend Equivalent Units, one DEU is equal in value to the
regular quarterly dividend paid on one share of Conectiv common stock. The
Dividend Equivalent Units shown are payable in cash for twelve quarters
over a three year period ending with the quarterly dividend equivalent
payable January 31, 2001. At that point, the 1998 DEU award lapses.
<PAGE>
PENSION PLAN
The Conectiv Retirement Plan includes the Cash Balance Pension Plan and
grandfathered provisions relating to the Delmarva Retirement Plan and the
Atlantic Retirement Plan that apply to employees who had either 20 years of
service or were age 50 on the effective date of the Cash Balance Pension Plan
(January 1, 1999). Certain executives whose benefits from the Conectiv
Retirement Plan are limited by the application of Federal tax laws also receive
benefits from the Supplemental Executive Retirement Plan.
CASH BALANCE PENSION PLAN
The named executive officers participate in the Conectiv Retirement Plan
and earn benefits that generally become vested after five years of service. On
an annual basis, a recordkeeping account in a participant's name is credited
with an amount equal to a percentage of the participant's total pay, including
base salary, overtime and bonuses, depending on the employee's age at the end of
the plan year, as follows:
<TABLE>
<CAPTION>
% OF
AGE AT END OF PLAN YEAR PAY
------------------------- ---
<S> <C>
Under 30........... 5
30 to 34........... 6
35 to 39........... 7
40 to 44........... 8
45 to 49........... 9
50 and over......... 10
</TABLE>
These accounts also receive interest credits based on average U.S. Treasury
Bill rates for the year. In addition, certain annuity benefits earned by
participants under the former Delmarva and Atlantic Retirement Plans are fully
protected as of December 31, 1998, and will be converted to an equivalent cash
amount and included in each employee's initial cash balance account. When an
employee terminates employment, the amount credited to his or her account is
converted into an annuity or paid in a lump sum.
SUPPLEMENTAL RETIREMENT BENEFITS
Supplemental retirement benefits are provided to certain employees,
including each executive officer, whose benefits under the Conectiv Retirement
Plan are limited by type of compensation or amount under applicable Federal tax
laws and regulations. Designated employees may also receive an annual benefit at
retirement equal to a percentage of final average compensation multiplied by
years of service reduced by the amount of all benefits received under the
Conectiv Retirement Plan and other nonqualified arrangements.
<PAGE>
ESTIMATED RETIREMENT BENEFITS PAYABLE TO NAMED EXECUTIVE OFFICERS
The following table shows the estimated retirement benefits, including
supplemental retirement benefits under the plans applicable to the named
executive officers, which would be payable if he or she were to retire at normal
retirement age, which is age 65, at 1998 compensation, expressed in the form of
a lump sum payment. Years of service credited to each named executive officer as
of his or her normal retirement date are as follows: Mr. Cosgove, 42; Ms.
Graham, 30; Mr. Shaw, 40; Mr. Elson, 16 (8 of which are additional years of
service for purposes of the supplemental retirement benefits), and Mr.
Harlacher, 43.
ESTIMATED RETIREMENT BENEFITS
<TABLE>
<CAPTION>
NAME YEAR OF 65TH BIRTHDAY LUMP SUM VALUE
---- --------------------- --------------
<S> <C> <C>
H. E. Cosgrove........ 2008 $2,993,000(2)
B. S. Graham.......... 2013 1,540,000(1)
T. S. Shaw............ 2012 1,789,000(2)
B. R. Elson........... 2006 1,213,000(2)
M. I. Harlacher....... 2007 2,323,000(2)
</TABLE>
____________
(1) Amounts include (i) interest credits for cash balances projected to be
5.01% per annum on annual salary credits and prior service balances, if
any, and (ii) accrued benefits as of December 31, 1998 under retirement
plans then applicable to the named executive officer. Benefits are not
subject to any offset for Social Security payments or other offset amounts
and assume no future increases in base salary or total pay.
(2) Under the Conectiv Retirement Plan's grandfather provisions, employees who
participated in the Delmarva or Atlantic Retirement Plans and who met
certain age and service requirements as of December 31, 1998, will have
retirement benefits for all years of service up to retirement calculated
according to their original final pay formula benefit. This benefit will be
compared to the cash balance account and the employee will receive
whichever is greater. Estimated benefits are based on the Delmarva
Retirement Plan for Messrs. Cosgrove, Shaw and Elson, the Cash Balance
Pension Plan for Mrs. Graham and the Atlantic Retirement Plan for Mr.
Harlacher. The amount of benefit under such grandfathering is illustrated
in the following tables applicable to the Delmarva and Atlantic Retirement
Plans, respectively:
DELMARVA RETIREMENT PLAN
PENSION PLAN TABLE
ANNUAL RETIREMENT BENEFITS IN SPECIFIED REMUNERATION AND YEARS OF SERVICE
CLASSIFICATIONS
<TABLE>
<CAPTION>
AVERAGE ANNUAL EARNINGS OR THE 5
CONSECUTIVE YEARS OF EARNINGS THAT
RESULT IN THE HIGHEST AVERAGE 15 YRS. 20 YRS. 25 YRS. 30 YRS. 35 YRS.
- ----------------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$125,000............................ 28,599 38,132 47,665 57,198 66,732
200,000(1)........................ 46,599 62,132 77,665 93,198 108,732
300,000(1)........................ 70,599 94,132 117,665 141,198(2) 4,732(2)
400,000(1)........................ 94,599 126,132 157,665(2) 189,198(2) 220,732(2)
500,000(1)........................ 118,599 158,132(2) 197,665(2) 237,198(2) 276,732(2)
</TABLE>
_____________
(1) Effective January 1, 1998, annual compensation recognized may not exceed
$160,000.
(2) For 1998, the limit on annual benefits is $130,000.
Benefits are payable in the form of a 50% joint and surviving spouse annuity or
lump sum and earnings include base salary, overtime and bonus.
<PAGE>
ATLANTIC RETIREMENT PLAN
PENSION PLAN TABLE
ANNUAL RETIREMENT BENEFITS IN SPECIFIED REMUNERATION AND YEARS OF SERVICE
CLASSIFICATIONS
<TABLE>
<CAPTION>
AVERAGE ANNUAL EARNINGS FOR THE 5
CONSECUTIVE YEARS OF EARNINGS THAT
RESULT IN THE HIGHEST AVERAGE 15 YRS. 20 YRS. 25 YRS. 30 YRS. 35 YRS.
<S> <C> <C> <C> <C> <C>
$125,000.......................................... 30,000 40,000 50,000 60,000 70,000
200,000(1)...................................... 48,000 64,000 80,000 96,000 112,000
300,000(1)...................................... 72,000 96,000 120,000 144,000(2) 168,000(2)
400,000(1)...................................... 96,000 128,000 160,000(2) 192,000(2) 224,000(2)
500,000(1)...................................... 120,000 160,000(2) 200,000(2) 240,000(2) 280,000(2)
</TABLE>
_____________
(1) Effective January 1, 1998, annual compensation recognized may not exceed
$160,000.
(2) For 1998, the limit on annual benefits is $130,000.
Benefits are paid in the form of a life annuity or lump sum and earnings include
base salary and bonus.
CHANGE IN CONTROL SEVERANCE AGREEMENTS AND OTHER PROVISIONS
The Company has entered into change in control severance agreements
with Messrs. Cosgrove, Elson and Shaw and Mrs. Graham and two other senior
executives. The agreements are intended to encourage the continued dedication of
members of the Company's senior management team. These agreements provide
potential benefits for such executives upon actual or constructive termination
of employment (other than for cause) following a change in control of the
Company, as defined in such agreements. Each affected executive would receive a
severance payment equal to three times Base Salary and Bonus and Company-paid
medical, dental, vision, group life and disability benefits during the three
years after termination of employment, and a cash payment equal to the actuarial
equivalent of accrued retirement pension credits equal to 36 months of
additional service.
In the event of a change in control, the Variable Compensation Plan
provides that outstanding options become exercisable in full immediately, all
conditions to the vesting of PARS are deemed satisfied and shares will be fully
vested and nonforfeitable, DEU's will become fully vested and be immediately
payable, variable compensation deferred under the Management Stock Purchase
Program will be immediately distributed, and payment of variable compensation,
if any, for the current year will be decided by the Board's Personnel &
Compensation Committee. For the Deferred Compensation Plan, the Committee may
decide to distribute all deferrals in cash immediately or continue the deferral
elections of participants in which event the Company will fully fund a
"springing rabbi trust" to satisfy the obligations. An independent institutional
trustee will maintain any such trust established by reason of this provision.
DIRECTOR COMPENSATION
With the exception of Mr. Jacobs, directors who are not officers of
the Company receive an annual retainer of $20,000 plus $1,000 for each Board and
Committee meeting attended in person and $500 for each Board and Committee
meeting attended by teleconference. Chairpersons of the Audit, Personnel &
Compensation, Nominating and Nuclear Oversight Committees receive an additional
annual retainer of $2,500. This program of director compensation was established
by the Board of Directors in 1998. Mr. Jacobs provides services to the Company
under a consulting contract with a value of $130,000 per year and receives no
additional compensation as a director.
Directors are eligible to participate in the Director Stock Purchase
Plan and the Conectiv Deferred Compensation Plan. Under these plans, directors
may defer any part of their director compensation into recordkeeping accounts of
stock equivalent units at a 20% discount. These accounts earn at the rate of the
Conectiv dividend.
<PAGE>
Part III(b). SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND
MANAGEMENT.
The following table provides information with respect to the only person who is
known to Conectiv to be the beneficial owner of more than 5% of the outstanding
shares of Common Stock of the Company.
<TABLE>
<CAPTION>
NAME SHARES BENEFICIALLY PERCENT OF CLASS
AND ADDRESS OF BENEFICIAL OWNER OWNED (1) (COMPANY COMMON STOCK)
- ------------------------------- --------- ----------------------
<S> <C> <C>
Franklin Resources, Inc. 6,367,400 6.4%
777 Mariners Island Boulevard
P.O. Box 7777
San Mateo, California 94403
</TABLE>
___________
(1) The share ownership shown above is based on Amendment No. 4 to a Form 13G,
dated December 31, 1998, filed with the Securities and Exchange Commission.
Part III(c). Contracts and transactions.
See Item 6 Part III(a) above.
Part III(d). Indebtedness.
See Item 6 Part III(a) above.
Part III(e). Participation in bonus and profit sharing arrangement.
See Item 6 Part III(a) above.
Part III(f). Directors and officers rights to indemnity.
Provisions for indemnification of directors and executive officers are included
in the Certificate of Incorporation or By-Laws in accordance with applicable
laws.
DIRECTORS AND OFFICERS' LIABILITY INSURANCE - Insurance is purchased for all the
Registrant's directors and executive officers, plus the directors and officers
of the subsidiary companies. This insurance also indemnifies the Registrant and
its subsidiary companies against any amounts paid by them as allowed by
Corporate law or By-laws of the Registrant to covered directors and executive
officers.
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS
Part I. Expenditures for any political party, candidate for public office or
holder of such office, or any committee or agent therefor.
None.
<PAGE>
ITEM 7. Continued
Part II. Expenditures for any citizens group or public relations counsel.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
NAME OF ACCOUNTS
COMPANY NAME OF RECIPIENT PURPOSE CHARGED AMOUNT
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
General public
relations Admin. &
Conectiv Stanton Communications consulting Gen. $207,400
- --------------------------------------------------------------------------------------------------
</TABLE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS
Part I. Intercompany Contracts.
Part II. System contracts to purchase goods or services from any affiliate
(other than a System company) or a company in which any director or
executive officer is a partner or owns 5% or more of any class of
equity securities.
None.
Part III. System contracts with others on a continuing basis for management,
supervisory, or financial advisory review.
None.
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES
Currently, Conectiv has one insignificant indirect interest in an
EWG. DCTC-Burney, Inc., an indirect subsidiary of Conectiv, holds a
45% direct and indirect interest in Burney Forest Products, A Joint
Venture, which is an EWG. Due to earnings of the EWG that have not
been distributed, the net book investment in the EWG as of March 31,
1998 was $5.065 million. However, there has been no additional post-
merger investment in this EWG by Conectiv or a subsidiary.
<PAGE>
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS
Page Ref
--------
CONSOLIDATING FINANCIAL STATEMENTS
CONSOLIDATING STATEMENT OF INCOME FOR THE PERIOD ENDED DECEMBER 31, 1998
Conectiv and Subsidiaries F-1A
Delmarva Power and Light Company and Subsidiaries F-1B
Atlantic City Electric Company and Subsidiaries F-1C
Delmarva Capital Investments, Inc. and Subsidiaries F-1D
Conectiv Energy Supply, Inc. and Subsidiary F-1E
Atlantic Energy Enterprises, Inc. and Subsidiaries F-1F
Conectiv Services, Inc. and Subsidiary F-1G
Conectiv Solutions LLC and Subsidiary F-1H
Conectiv Thermal Systems, Inc. and Subsidiaries F-1I
Atlantic Generation, Inc. and Subsidiaries F-1J
Atlantic Energy Technology, Inc. and Subsidiary F-1K
CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 1998
Conectiv and Subsidiaries F-2A
Delmarva Power and Light Company and Subsidiaries F-2B
Atlantic City Electric Company and Subsidiaries F-2C
Delmarva Capital Investments, Inc. and Subsidiaries F-2D
Conectiv Energy Supply, Inc. and Subsidiary F-2E
Atlantic Energy Enterprises, Inc. and Subsidiaries F-2F
Conectiv Services, Inc. and Subsidiary F-2G
Conectiv Solutions LLC and Subsidiary F-2H
Conectiv Thermal Systems, Inc. and Subsidiaries F-2I
Atlantic Generation, Inc. and Subsidiaries F-2J
Atlantic Energy Technology, Inc. and Subsidiary F-2K
CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED DECEMBER 31, 1998
Conectiv and Subsidiaries F-3A
Delmarva Power and Light Company and Subsidiaries F-3B
Atlantic City Electric Company and Subsidiaries F-3C
Delmarva Capital Investments, Inc. and Subsidiaries F-3D
Conectiv Energy Supply, Inc. and Subsidiary F-3E
Atlantic Energy Enterprises, Inc. and Subsidiaries F-3F
Conectiv Services, Inc. and Subsidiary F-3G
Conectiv Solutions LLC and Subsidiary F-3H
Conectiv Thermal Systems, Inc. and Subsidiaries F-3I
Atlantic Generation, Inc. and Subsidiaries F-3J
Atlantic Energy Technology, Inc. and Subsidiary F-3K
CONSOLIDATING STATEMENT OF RETAINED EARNINGS FOR THE PERIOD ENDED DECEMBER
31, 1998
Conectiv and Subsidiaries F-4A
Delmarva Power and Light Company and Subsidiaries F-4B
Atlantic City Electric Company and Subsidiaries F-4C
Delmarva Capital Investments, Inc. and Subsidiaries F-4D
Conectiv Energy Supply, Inc. and Subsidiary F-4E
Atlantic Energy Enterprises, Inc. and Subsidiaries F-4F
Conectiv Services, Inc. and Subsidiary F-4G
Conectiv Solutions LLC and Subsidiary F-4H
Conectiv Thermal Systems, Inc. and Subsidiaries F-4I
Atlantic Generation, Inc. and Subsidiaries F-4J
Atlantic Energy Technology, Inc. and Subsidiary F-4K
<PAGE>
ITEM 10. Continued
Consolidated Notes 1 through 22, pages II-23 through II-55, to the
Consolidated Financial Statements of Conectiv's 1998 Form 10-K filed on
March 26, 1999 is incorporated herein by reference.
Consolidated Notes 1 through 18, pages II-19, through II-37, to the
Consolidated Financial Statements of Atlantic City Electric Company's 1998
Form 10-K filed on March 26, 1999 is incorporated herein by reference.
Consolidated Notes 1through 21, pages II-21 through II-41 to the
Consolidated Financial Statements of Delmarva Power & Light Company's 1998
Form 10-K filed on March 26, 1999 is incorporated herein by reference.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the Registrant has duly caused this annual report to be signed on its
behalf by the undersigned thereunto duly authorized.
Conectiv
/s/ James P. Lavin
-------------------------------
James P. Lavin
Controller
Date: May 3, 1999
<PAGE>
Item 10. Continued
Exhibits filed as part of this report:
A - SEC Act of 1934 Reports incorporated by reference
B - Index to Corporate Organization & By-Laws Exhibits
C - Indentures or Contracts
D - Tax Allocation Agreement for 1998
E - Other Documents Prescribed by Rule or Order
F - Report of Independent Accountants
G - Financial Data Tables
H - Organizational Chart of Exempt Wholesale Generators of Foreign
Utility Holding Companies
I - Audited Financial Statements and Analytical Reviews and
Conclusions Regarding Exempt Wholesale Generators or Foreign
Utility Holding Companies
<PAGE>
EXHIBIT A
Conectiv's 1998 Proxy Statement and Annual Report to Shareholders
filed with the Commission on February 5, 1999 (File No. 1-13895) is
incorporated herein by reference.
<PAGE>
EXHIBIT B
Index to corporate organization and by-laws exhibits filed pursuant to the
Public Utility Holding Company Act of 1935.
<TABLE>
<CAPTION>
-----------------------------------------
Exhibit B Notes
-----------------------------------------
Articles of
Incorporation* By-Laws*
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Conectiv
- -----------------------------------------------------------------------------------------------------------
Atlantic City Electric Company
- -----------------------------------------------------------------------------------------------------------
Atlantic Capital I
- -----------------------------------------------------------------------------------------------------------
Atlantic Capital II
- -----------------------------------------------------------------------------------------------------------
Atlantic Energy Enterprises, Inc.
- -----------------------------------------------------------------------------------------------------------
Atlantic Southern Properties, Inc.
- -----------------------------------------------------------------------------------------------------------
ATE Investments, Inc.
- -----------------------------------------------------------------------------------------------------------
CoastalComm, Inc.
- -----------------------------------------------------------------------------------------------------------
Atlantic Energy Technology, Inc.
- -----------------------------------------------------------------------------------------------------------
The Earth Exchange, Inc.
- -----------------------------------------------------------------------------------------------------------
Conectiv Thermal System, Inc.
- -----------------------------------------------------------------------------------------------------------
ATS Operating Services, Inc.
- -----------------------------------------------------------------------------------------------------------
Atlantic Jersey Thermal Systems, Inc.
- -----------------------------------------------------------------------------------------------------------
Thermal Energy Limited Partnership
- -----------------------------------------------------------------------------------------------------------
Atlantic Generation, Inc.
- -----------------------------------------------------------------------------------------------------------
Pedrick Gen., Inc.
- -----------------------------------------------------------------------------------------------------------
Pedrick Ltd, Inc.
- -----------------------------------------------------------------------------------------------------------
Vineland General, Inc.
- -----------------------------------------------------------------------------------------------------------
Vineland Limited, Inc.
- -----------------------------------------------------------------------------------------------------------
Binghamton General, Inc.
- -----------------------------------------------------------------------------------------------------------
Binghamton Limited, Inc.
- -----------------------------------------------------------------------------------------------------------
Atlantic Energy International
- -----------------------------------------------------------------------------------------------------------
Conectiv Communications, Inc.
- -----------------------------------------------------------------------------------------------------------
Conectiv Energy Supply, Inc.
- -----------------------------------------------------------------------------------------------------------
Petron Oil Corporation
- -----------------------------------------------------------------------------------------------------------
Conectiv Resource Partners, Inc.
- -----------------------------------------------------------------------------------------------------------
Conectiv Services, Inc.
- -----------------------------------------------------------------------------------------------------------
Conectiv Plumbing LLC
- -----------------------------------------------------------------------------------------------------------
Conectiv Solutions, L.L.C.
- -----------------------------------------------------------------------------------------------------------
Power Consulting Group, Inc.
- -----------------------------------------------------------------------------------------------------------
Delmarva Capital Investments, Inc.
- -----------------------------------------------------------------------------------------------------------
DCI I, Inc.
- -----------------------------------------------------------------------------------------------------------
DCI II, Inc.
- -----------------------------------------------------------------------------------------------------------
Christiana Capital Management, Inc.
- -----------------------------------------------------------------------------------------------------------
Delmarva Operating Services Company
- -----------------------------------------------------------------------------------------------------------
DCTC-Burney, Inc.
- -----------------------------------------------------------------------------------------------------------
Delmarva Power & Light
- -----------------------------------------------------------------------------------------------------------
Delmarva Financing I
- -----------------------------------------------------------------------------------------------------------
Delmarva Services Company
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</TABLE>
* To be filed by amendment
<PAGE>
EXHIBIT C
(a) *Reference is made to Delmarva Power & Light Company's 1998 Form 10-K,
page IV-2, filed with the Commission on March 29, 1999 (File No. 1-
1405) and to Atlantic City Electric Company's 1998 Form 10-K, pages
IV-3 through IV-3; for the indentures and other fundamental documents
defining the rights of security holders.
* Incorporated herein by reference.
<PAGE>
EXHIBIT D
A copy of the System Intercompany Income Tax Allocation Agreement
(Agreement) is filed herewith as Exhibit D to Form U-5S (1998).
<PAGE>
EXHIBIT E
Copies of other documents prescribed by rule or order.
<PAGE>
EXHIBIT F
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
<PAGE>
EXHIBIT G
Financial Data Tables are filed herewith as Exhibit 27.
<PAGE>
EXHIBIT H
Reference is made to Item 1, footnote (h) to Connectiv's Form U-5S
(1998) filed herewith.
<PAGE>
EXHIBIT I
Not Applicable
<PAGE>
Conectiv and Subsidiaries
Consolidating Statement of Income for the Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
Conectiv Reclasses and Conectiv DPL
Consolidated Consol Entries Parent CRP Consolidated
------------ -------------- ------ --- ------------
<S> <C> <C> <C> <C> <C>
Operating Revenues
Electric $ 2,203,748 $ 1,025 $ - $ - $ 1,329,393
Gas 535,082 4,463 - - 528,646
Other Services 332,776 (138,912) - 136,562 14,427
--------------- ----------- ----------- ---------- -----------
Total 3,071,606 (133,424) - 136,562 1,872,466
--------------- ----------- ----------- ---------- -----------
Operating Expenses
Electric fuel and purchased power 875,816 (153,323) - - 630,431
Gas purchased 486,411 - - - 486,411
Other services' cost of sales 263,319 - - - 8,010
Purchased electric capacity 182,676 153,323 - - 29,353
Employee separation and other
Merger related costs 27,704 (61,087) - - 27,704
Operation and maintenance 532,419 (159,572) 1,567 135,182 249,761
Depreciation 241,420 6,175 - 611 131,209
Taxes other than income taxes 74,926 1 72 14 38,290
--------------- ----------- ----------- ---------- -----------
2,684,691 (214,483) 1,639 135,807 1,601,169
--------------- ----------- ----------- ---------- -----------
Operating Income 386,915 81,059 (1,639) 755 271,297
--------------- ----------- ----------- ---------- -----------
Other Income
Allowance for equity funds
used during construction 2,609 - - 2,135
Other income 34,251 (151,359) 157,135 48 (263)
--------------- ----------- ----------- ---------- -----------
36,860 (151,359) 157,135 48 1,872
--------------- ----------- ----------- ---------- -----------
Interest Expense
Interest charges 153,644 2 3,958 856 82,415
Allowance for borrowed funds
used during construction and (4,213) (1) (44) (53) (2,020)
capitalized interest --------------- ----------- ----------- ---------- -----------
149,431 1 3,914 803 80,395
--------------- ----------- ----------- ---------- -----------
Preferred Stock Dividend
Requirements of Subsidiaries 15,326 - - - 10,040
--------------- ----------- ----------- ---------- -----------
Income Before Income Taxes 259,018 (70,301) 151,582 - 182,734
Income Taxes 105,817 35,585 (1,619) 26 74,676
--------------- ----------- ----------- ---------- -----------
Net Income $ 153,201 $ (105,886) $153,201 $ (26) $ 108,058
=============== ============ =========== ========== ===========
Earnings Applicable to Common Stock
Comon Stock $ 141,292
Class A common stock 11,909
---------------
$ 153,201
===============
</TABLE>
F-1A Page 1 of 3
<PAGE>
Conectiv and Subsidiaries
Consolidating Statement of Income for the Year Ended December 31, 1998
(Dollars In Thousands)
<TABLE>
<CAPTION>
ACE DCI* CES* AEE*
Consolidated Consolidated Consolidated Consolidated AEI
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Operating Revenues
Electric $ 873,173 $ -
Gas - -
Other Services 2,569 -
----------- ----------
Total 875,742 -
----------- ----------
Operating Expenses
Electric fuel and purchased power 398,708 -
Gas purchased - -
Other services' cost of sales 1,912 -
Purchased electric capacity - -
Employee separation and other
Merger related costs 61,087 -
Operation and maintenance 196,978 18
Depreciation 94,269 -
Taxes other than income taxes 35,687 -
----------- ----------
788,641 18
----------- ----------
Operating Income 87,101 (18)
----------- ----------
Other Income
Allowance for equity funds
used during construction 474 -
Other income 7,095 -
----------- ----------
7,569 -
----------- ----------
Interest Expense
Interest charges 53,014 -
Allowance for borrowed funds
used during construction (749) -
and capitalized interest ----------- ----------
52,265 -
----------- ----------
Preferred Stock Dividend
Requirements of Subsidiaries 5,286 -
----------- ----------
Income Before Income Taxes 37,119 (18)
Income Taxes 13,374 -
----------- -----------
Net Income $ 23,745 $ (18)
=========== =============
Earnings Applicable to Common Stock
Comon Stock
Class A common stock
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-1A Page 2 of 3
<PAGE>
Conectiv and Subsidiaries
Consolidating Statement of Income for the
Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
CSI* Solutions*
DSC Consolidated Consolidated CCI*
------------ ---------------- ---------------- ---------
<S> <C> <C> <C> <C>
Operating Revenues
Electric $ -
Gas -
Other Services -
------------
Total -
------------
Operating Expenses
Electric fuel and purchased power -
Gas purchased -
Other services' cost of sales -
Purchased electric capacity -
Employee separation and other
Merger related costs -
Operation and maintenance (1,589)
Depreciation 412
Taxes other than income taxes 89
------------
(1,088)
------------
Operating Income 1,088
------------
Other Income
Allowance for equity funds
used during construction -
Other income 150
------------
150
------------
Interest Expense
Interest charges 374
Allowance for borrowed funds used during
construction and capitalized interest -
------------
374
------------
Preferred Stock Dividend
Requirements of Subsidiaries -
------------
Income Before Income Taxes 864
Income Taxes 299
------------
------------
Net Income $ 565
============
Earnings Applicable to Common Stock
Common Stock
Class A common stock
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-1A Page 3 of 3
<PAGE>
Delmarva Power and Light Company and Subsidiaries
Consolidating Statement of Income for the Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Eliminations,
Total DPL Reclasses and DPL DPL
Consolidated Consol Entries Parent Fin I
------------ --------------- ------ -----
<S> <C> <C> <C> <C>
Operating Revenues
Electric $ 1,329,393 $ - $ 1,329,393 $ -
Gas 528,646 - 528,646 -
Other Services 14,427 - 14,427 -
------------ ------------- ----------- --------
Total 1,872,466 - 1,872,466 -
------------ ------------- ----------- --------
Operating Expenses
Electric fuel and purchased power 630,431 - 630,431 -
Gas purchased 486,411 - 486,411 -
Other services' cost of sales 8,010 - 8,010 -
Purchased electric capacity 29,353 - 29,353 -
Employee separation and other Merger related costs 27,704 - 27,704 -
Operation and maintenance 249,761 - 249,761 -
Depreciation 131,209 - 131,209 -
Taxes other than income taxes 38,290 - 38,290 -
------------ ------------- ----------- --------
1,601,169 - 1,601,169 -
------------ ------------- ----------- --------
Operating Income 271,297 - 271,297 -
------------ ------------- ----------- --------
Other Income
Allowance for equity funds used during construction 2,135 - 2,135 -
Other income (263) (5,863) (88) 5,688
------------ ------------- ----------- --------
1,872 (5,863) 2,047 5,688
------------ ------------- ----------- --------
Interest Expense
Interest charges 82,415 (11,551) 88,278 5,688
Allowance for borrowed funds used during
construction and capitalized interest (2,020) - (2,020) -
------------ ------------- ----------- --------
80,395 (11,551) 86,258 5,688
------------ ------------- ----------- --------
Preferred Stock Dividend
Requirements of Subsidiaries 10,040 5,688 4,352 -
------------ ------------- ----------- --------
Income Before Income Taxes 182,734 - 182,734 -
Income Taxes 74,676 - 74,676 -
------------ ------------- ----------- --------
------------ ------------- ----------- --------
Net Income $ 108,058 $ - $ 108,058 $ -
============ ============= =========== ========
</TABLE>
F-1B
<PAGE>
Atlantic City Electric Company and Subsidiaries
Consolidating Statement of Income for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Eliminations,
Total ACE Reclasses and
Consolidated Consol Entries ACE Parent ACE Cap I ACE Cap II
---------------- ------------------ -------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Operating Revenues
Electric $ 873,173 $ - $ 873,173 $ - $ -
Gas - - - - -
Other Services 2,569 - 2,569 - -
---------- ------------ ---------- ------------ -------------
Total 875,742 - 875,742 - -
---------- ------------ ---------- ------------ -------------
Operating Expenses
Electric fuel and purchased power 398,708 - 398,708 - -
Gas purchased - - - - -
Other services' cost of sales 1,912 - 1,912 - -
Purchased electric capacity - - - - -
Employee separation and other
Merger related costs 61,087 - 61,087 - -
Operation and maintenance 196,978 - 196,978 - -
Depreciation 94,269 - 94,269 - -
Taxes other than income taxes 35,687 - 35,687 - -
---------- ------------ ---------- ------------ -------------
788,641 - 788,641 - -
---------- ------------ ---------- ------------ -------------
Operating Income 87,101 - 87,101 - -
---------- ------------ ---------- ------------ -------------
Other Income
Allowance for equity funds used
during construction 474 - 474 - -
Other income 7,095 5,247 7,253 4,812 277
---------- ------------ ---------- ------------ -------------
7,569 5,247 7,727 4,812 277
---------- ------------ ---------- ------------ -------------
Interest Expense
Interest charges 53,014 (5,247) 58,261 - -
Allowance for borrowed funds used
during construction and capitalized -
interest (749) - (749) - -
---------- ------------ ---------- ------------ -------------
52,265 (5,247) 57,512 - -
---------- ------------ ---------- ------------ -------------
Preferred Stock Dividend
Requirements of Subsidiaries 5,286 - 197 4,812 277
---------- ------------ ---------- ------------ -------------
Income Before Income Taxes 37,119 - 37,119 - -
Income Taxes 13,374 - 13,374 - -
---------- ------------ ---------- ------------ -------------
---------- ------------ ---------- ------------ -------------
Net Income $ 23,745 $ - $ 23,745 $ - $ -
========== ============ ========== =========== ============
</TABLE>
F-1C
<PAGE>
Delmarva Capital Investments, Inc. and Subsidiaries*
Consolidating Statement of Income for the Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Eliminations,
Total DCI Reclasses and
Consolidated Consol Entries DCI Parent DCI I DCI II
---------------- ------------------ -------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Operating Revenues
Electric
Gas
Other Services
Total
Operating Expenses
Electric fuel and purchased power
Gas purchased
Other services' cost of sales
Purchased electric capacity
Employee separation and other
Merger related costs
Operation and maintenance
Depreciation
Taxes other than income taxes
Operating Income
Other Income
Allowance for equity funds used
during construction
Other income
Interest Expense
Interest charges
Allowance for borrowed funds used during
construction and capitalized interest
Preferred Stock Dividend
Requirements of Subsidiaries
Income Before Income Taxes
Income Taxes
Net Income
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-1D Page 1 of 2
<PAGE>
Delmarva Capital Investments, Inc. and Subsidiaries*
Consolidating Statement of Income for the Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
CCM DOSC DCTC
-------------- --------------- ---------------
<S> <C> <C> <C>
Operating Revenues
Electric
Gas
Other Services
Total
Operating Expenses
Electric fuel and purchased power
Gas purchased
Other services' cost of sales
Purchased electric capacity
Employee separation and other
Merger related costs
Operation and maintenance
Depreciation
Taxes other than income taxes
Operating Income
Other Income
Allowance for equity funds used
during construction
Other income
Interest Expense
Interest charges
Allowance for borrowed funds used during
construction and capitalized interest
Preferred Stock Dividend
Requirements of Subsidiaries
Income Before Income Taxes
Income Taxes
Net Income
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-1D Page 2 of 2
<PAGE>
Conectiv Energy Supply, Inc. and Subsidiary*
Consolidating Statement of Income for the Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Eliminations,
Total CES Reclasses and
Consolidated Consol Entries CES Parent Petron
------------ -------------- ---------- ------
Operating Revenues
Electric
Gas
Other Services
Total
Operating Expenses
Electric fuel and purchased power
Gas purchased
Other services' cost of sales
Purchased electric capacity
Employee separation and other Merger related costs
Operation and maintenance
Depreciation
Taxes other than income taxes
Operating Income
Other Income
Allowance for equity funds used during construction
Other income
Interest Expense
Interest charges
Allowance for borrowed funds used during
construction and capitalized interest
Preferred Stock Dividend
Requirements of Subsidiaries
Income Before Income Taxes
Income Taxes
Net Income
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-1E
<PAGE>
Atlantic Energy Enterprises, Inc. and Subsidiaries*
Consolidating Statement of Income for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Eliminations,
Total AEE Reclasses and
Consolidated Consol Entries AEE Parent ASP ATE
---------------- ------------------ -------------- ------- --------
<S> <C> <C> <C> <C> <C>
Operating Revenues
Electric
Gas
Other Services
Total
Operating Expenses
Electric fuel and purchased power
Gas purchased
Other services' cost of sales
Purchased electric capacity
Employee separation and other Merger
related costs
Operation and maintenance
Depreciation
Taxes other than income taxes
Operating Income
Other Income
Allowance for equity funds used
during construction
Other income
Interest Expense
Interest charges
Allowance for borrowed funds used during
construction and capitalized interest
Preferred Stock Dividend
Requirements of Subsidiaries
Income Before Income Taxes
Income Taxes
Net Income
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-1F Page 1 of 2
<PAGE>
Atlantic Energy Enterprises, Inc. and Subsidiaries*
Consolidating Statement of Income for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
CTS AGI AET
Consolidated CI Consolidated Consolidated
----------------- --------- ----------------- ----------------
<S> <C> <C> <C> <C>
Operating Revenues
Electric
Gas
Other Services
Total
Operating Expenses
Electric fuel and purchased power
Gas purchased
Other services' cost of sales
Purchased electric capacity
Employee separation and other Merger
related costs
Operation and maintenance
Depreciation
Taxes other than income taxes
Operating Income
Other Income
Allowance for equity funds used
during construction
Other income
Interest Expense
Interest charges
Allowance for borrowed funds used during
construction and capitalized interest
Preferred Stock Dividend
Requirements of Subsidiaries
Income Before Income Taxes
Income Taxes
Net Income
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-1F Page 2 of 2
<PAGE>
Conectiv Services, Inc. and Subsidiary*
Consolidating Statement of Income for the Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Eliminations,
Total CSI Reclasses and
Consolidated Consol Entries CSI Parent Plumbing
---------------- ------------------ -------------- ------------
<S> <C> <C> <C> <C>
Operating Revenues
Electric
Gas
Other Services
Total
Operating Expenses
Electric fuel and purchased power
Gas purchased
Other services' cost of sales
Purchased electric capacity
Employee separation and other Merger related costs
Operation and maintenance
Depreciation
Taxes other than income taxes
Operating Income
Other Income
Allowance for equity funds used during construction
Other income
Interest Expense
Interest charges
Allowance for borrowed funds used during
construction and capitalized interest
Preferred Stock Dividend
Requirements of Subsidiaries
Income Before Income Taxes
Income Taxes
Net Income
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-1G
<PAGE>
Conectiv Solutions LLC and Subsidiary*
Consolidating Statement of Income for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Eliminations,
Total Solutions Reclasses and Solutions Power
Consolidated Consol Entries Parent Consulting
--------------- -------------- --------- ----------
<S> <C> <C> <C> <C>
Operating Revenues
Electric
Gas
Other Services
Total
Operating Expenses
Electric fuel and purchased power
Gas purchased
Other services' cost of sales
Purchased electric capacity
Employee separation and other Merger related costs
Operation and maintenance
Depreciation
Taxes other than income taxes
Operating Income
Other Income
Allowance for equity funds used during construction
Other income
Interest Expense
Interest charges
Allowance for borrowed funds used during
construction and capitalized interest
Preferred Stock Dividend
Requirements of Subsidiaries
Income Before Income Taxes
Income Taxes
Net Income
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-1H
<PAGE>
Conectiv Thermal Systems, Inc. and Subsidiaries*
Consolidating Statement of Income for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Eliminations,
Total CTS Reclasses and
Consolidated Consol Entries CTS Parent AJTS AOS TELP
------------ -------------- ---------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
Electric
Gas
Other Services
Total
Operating Expenses
Electric fuel and purchased power
Gas purchased
Other services' cost of sales
Purchased electric capacity
Employee separation and other Merger related costs
Operation and maintenance
Depreciation
Taxes other than income taxes
Operating Income
Other Income
Allowance for equity funds used during construction
Other income
Interest Expense
Interest charges
Allowance for borrowed funds used during
construction and capitalized interest
Preferred Stock Dividend
Requirements of Subsidiaries
Income Before Income Taxes
Income Taxes
Net Income
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-1I
<PAGE>
Atlantic Generation, Inc. and Subsidiaries*
Consolidating Statement of Income for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Eliminations,
Total AGI Reclasses and
Consolidated Consol Entries AGI Parent PED GEN PED LTD
---------------- ------------------ -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Operating Revenues
Electric
Gas
Other Services
Total
Operating Expenses
Electric fuel and purchased power
Gas purchased
Other services' cost of sales
Purchased electric capacity
Employee separation and other
Merger related costs
Operation and maintenance
Depreciation
Taxes other than income taxes
Operating Income
Other Income
Allowance for equity funds used
during construction
Other income
Interest Expense
Interest charges
Allowance for borrowed funds used during
construction and capitalized interest
Preferred Stock Dividend
Requirements of Subsidiaries
Income Before Income Taxes
Income Taxes
Net Income
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-1J Page 1 of 2
<PAGE>
Atlantic Generation, Inc. and Subsidiaries*
Consolidating Statement of Income for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
VINE GEN VINE LTD BING GEN BING LTD
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
Operating Revenues
Electric
Gas
Other Services
Total
Operating Expenses
Electric fuel and purchased power
Gas purchased
Other services' cost of sales
Purchased electric capacity
Employee separation and other
Merger related costs
Operation and maintenance
Depreciation
Taxes other than income taxes
Operating Income
Other Income
Allowance for equity funds used
during construction
Other income
Interest Expense
Interest charges
Allowance for borrowed funds used during
construction and capitalized interest
Preferred Stock Dividend
Requirements of Subsidiaries
Income Before Income Taxes
Income Taxes
Net Income
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-1J Page 2 of 2
<PAGE>
Atlantic Energy Technology, Inc. and Subsidiary*
Consolidating Statement of Income for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Eliminations,*
Total AET* Reclasses and
Consolidated Consol Entries AET Parent* TEE*
------------ ------------- ------------ ---------
<S> <C> <C> <C> <C>
Operating Revenues
Electric
Gas
Other Services
Total
Operating Expenses
Electric fuel and purchased power
Gas purchased
Other services' cost of sales
Purchased electric capacity
Employee separation and other Merger related costs
Operation and maintenance
Depreciation
Taxes other than income taxes
Operating Income
Other Income
Allowance for equity funds used during construction
Other income
Interest Expense
Interest charges
Allowance for borrowed funds used during
construction and capitalized interest
Preferred Stock Dividend
Requirements of Subsidiaries
Income Before Income Taxes
Income Taxes
Net Income
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-1K
<PAGE>
Conectiv and Subsidiaries
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
Conectiv Reclasses and Conectiv DPL
Consolidated Consol. Entries Parent CRP Consolidated
------------ --------------- ------------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents $ 65,884 $ - $ 18,691 $ (114) $ 1,761
Accounts receivable 455,088 (43,953) 212,400 9,716 261,060
Inventories, at average cost
Fuel (coal, oil and gas) 71,701 - - - 44,212
Material and supplies 73,047 - - - 39,323
Prepaid New Jersey sales/excise taxes 20,078 - - - -
Prepayments 17,278 - - 930 10,735
Deferred income taxes, net 20,796 - - - 13,061
----------------------------------------------------------------------------
723,872 (43,953) 231,091 10,532 370,152
----------------------------------------------------------------------------
Investments
Investment in leveraged leases 122,256 - - - -
Funds held by trustee 174,509 - - - 60,208
Other investments 90,913 (1,968,181) 1,965,577 - 1,103
----------------------------------------------------------------------------
387,678 (1,968,181) 1,965,577 - 61,311
----------------------------------------------------------------------------
Property, Plant, and Equipment
Electric utility plant 5,649,827 - 29 - 3,049,099
Gas utility plant 249,383 - - - 249,383
Common utility plant 169,883 - 11,774 158,109
----------------------------------------------------------------------------
6,069,093 - 29 11,774 3,456,591
Less: Accumulated depreciation (2,499,915) - (16) (611) (1,492,183)
----------------------------------------------------------------------------
Net utility plant in service 3,569,178 - 13 11,163 1,964,408
Utility construction work-in-progress 236,830 - - 379 138,496
Leased nuclear fuel, at amortized cost 63,328 - - - 28,325
Nonutility property, net 208,215 (3,000) - 5,796 4,561
Goodwill, net 402,836 282,866 - - 71,914
----------------------------------------------------------------------------
4,480,387 279,866 13 17,338 2,207,704
----------------------------------------------------------------------------
Deferred Charges & Other Assets
Unrecovered purchased power costs 48,274 - - - -
Deferred recoverable income taxes 184,434 - - - 82,211
Unrecovered state excise taxes 35,594 - - - -
Deferred debt refinancing costs 44,223 - - - 16,181
Unrecovered OPEB costs 34,978 - - - -
Prepaid employee benefits costs 16,132 (61,781) - - 88,390
Unamortized debt expense 27,375 - - - 12,141
License fees 24,706 - - - -
Other 80,021 - 226 157 45,999
----------------------------------------------------------------------------
495,737 (61,781) 226 157 244,922
----------------------------------------------------------------------------
Total Assets $ 6,087,674 $ (1,794,049) $ 2,196,907 $ 28,027 $ 2,884,089
============================================================================
</TABLE>
F-2A Page 1 of 6
<PAGE>
Conectiv and Subsidiaries
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
ACE DCI* CES* AEE*
Consolidated Consolidated Consolidated Consolidated AEI
-------------- -------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents $ 28,766 $ -
Accounts receivable 116,034 (18)
Inventories, at average cost
Fuel (coal, oil and gas) 27,233 -
Material and supplies 21,297 -
Prepaid New Jersey sales/excise taxes 20,078 -
Prepayments 4,420 -
Deferred income taxes, net 7,735 -
-------------- -------------
225,563 (18)
-------------- -------------
Investments
Investment in leveraged leases - -
Funds held by trustee 102,765 -
Other investments 112 -
-------------- -------------
102,877 -
-------------- -------------
Property, Plant, and Equipment
Electric utility plant 2,600,699 -
Gas utility plant - -
Common utility plant - -
-------------- -------------
2,600,699 -
Less :Accumulated depreciation (1,007,105) -
-------------- -------------
Net utility plant in service 1,593,594 -
Utility construction work-in-progress 97,955 -
Leased nuclear fuel, at amortized cost 35,003 -
Nonutility property, net 8,208 -
Goodwill, net - -
-------------- -------------
1,734,760 -
-------------- -------------
Deferred Charges & Other Assets
Unrecovered purchased power costs 48,274 -
Deferred recoverable income taxes 102,223 -
Unrecovered state excise taxes 35,594 -
Deferred debt refinancing costs 28,042 -
Unrecovered OPEB costs 34,978 -
Prepaid employee benefits costs (10,477) -
Unamortized debt expense 14,141 -
License fees - -
Other 30,156 -
-------------- -------------
282,931 -
-------------- -------------
Total Assets $ 2,346,131 $ (18)
============== ============
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2A Page 2 of 6
<PAGE>
Conectiv and Subsidiaries
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
CSI* Solutions*
DSC Consolidated Consolidated CCI*
----------- -------------- ------------- -----------
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents $ -
Accounts receivable (80)
Inventories, at average cost
Fuel (coal, oil and gas) -
Material and supplies -
Prepaid New Jersey sales/excise taxes -
Prepayments -
Deferred income taxes, net -
-----------
(80)
-----------
Investments
Investment in leveraged leases -
Funds held by trustee -
Other investments 1,571
-----------
1,571
-----------
Property, Plant, and Equipment
Electric utility plant -
Gas utility plant -
Common utility plant -
-----------
-
Less: Accumulated depreciation -
-----------
Net utility plant in service -
Utility construction work-in-progress -
Leased nuclear fuel, at amortized cost -
Nonutility property, net 10,744
Goodwill, net -
-----------
10,744
-----------
Deferred Charges & Other Assets
Unrecovered purchased power costs -
Deferred recoverable income taxes -
Unrecovered state excise taxes -
Deferred debt refinancing costs -
Unrecovered OPEB costs -
Prepaid employee benefits costs -
Unamortized debt expense 43
License fees -
Other 11
-----------
54
-----------
Total Assets $ 12,289
===========
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2A Page 3 of 6
<PAGE>
Conectiv and Subsidiaries
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
Conectiv Reclasses and Conectiv DPL
Consolidated Consol. Entries Parent CRP Consolidated
---------------- ------------------- -------------- --------- ----------------
<S> <C> <C> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt $ 376,061 $ - $ 339,000 $ - $ 21,700
Long-term debt due within one year 80,822 - - - 31,287
Variable rate demand bonds 125,100 - - - 71,500
Accounts payable 240,775 - - 19,493 177,915
Taxes accrued 41,299 - (45,408) (1,123) 16,257
Interest accrued 37,346 - 12,707 450 5,751
Dividends payable 47,743 (43,954) 1,015 - 23,616
Deferred energy costs 15,990 - 45,845 - 413
Current capital lease obligation 28,314 - - - 12,479
Accrued employee separation and - - - - -
other merger-related costs 12,173 - 50 - 2,509
Other 76,168 - 416 7,884 27,587
-----------------------------------------------------------------------------------
1,081,791 (43,954) 353,625 28,704 391,014
-----------------------------------------------------------------------------------
Deferred Credits and Other Liabilities
Other postretirement benefits obligation 102,268 63,625 - - (5,964)
Deferred income taxes, net 862,179 (56,832) 121 1,345 461,799
Deferred investment tax credits 79,525 - - - 37,383
Long-term capital lease obligation 36,603 - - - 17,003
Other 50,702 - - 3 19,747
-----------------------------------------------------------------------------------
1,131,277 6,793 121 1,348 529,968
-----------------------------------------------------------------------------------
Capitalization
Common Stock 1,007 (103,742) 1,007 1 2
Class A common stock 66 - 66 - -
Additional paid-in-capital common 1,462,675 (1,195,875) 1,462,675 - 528,893
Additional paid-in-capital--Class A common 107,095 - 107,095 - -
Retained Earnings 276,939 (457,271) 276,939 (26) 322,599
-----------------------------------------------------------------------------------
1,847,782 (1,756,888) 1,847,782 (25) 851,494
Treasury stock (3,797) - (3,797) - -
Unearned Compensation (824) - (824) - -
-----------------------------------------------------------------------------------
Total common stockholders' equity 1,843,161 (1,756,888) 1,843,161 (25) 851,494
Preferred stock of subsidiaries:
Not subject to mandatory redemption 95,933 - - - 89,702
Subject to mandatory redemption 188,950 - - - 70,000
Long-term debt 1,746,562 - - - 951,911
-----------------------------------------------------------------------------------
3,874,606 (1,756,888) 1,843,161 (25) 1,963,107
-----------------------------------------------------------------------------------
Total Capitalization &
Liabilities $ 6,087,674 $ (1,794,049) $ 2,196,907 $ 28,027 $ 2,884,089
===================================================================================
</TABLE>
F-2A Page 4 of 6
<PAGE>
Conectiv and Subsidiaries
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
ACE DCI* CES* AEE*
Consolidated Consolidated Consolidated Consolidated AEI*
---------------- ----------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt $ - $ -
Long-term debt due within one year 30,075 -
Variable rate demand bonds 22,600 -
Accounts payable 28,848 -
Taxes accrued 22,916 -
Interest accrued 29,627 -
Dividends payable 22,236 -
Deferred energy costs 15,577 -
Current capital lease obligation 15,729 -
Accrued employee separation and - -
other merger-related costs 9,554 -
Other 28,770 -
--------------- ---------------
225,932 -
--------------- ---------------
Deferred Credits and Other Liabilities
Other postretirement benefits obligation 44,607 -
Deferred income taxes, net 343,430 -
Deferred investment tax credits 42,142 -
Long-term capital lease obligation 19,523 -
Other 24,096 -
--------------- ---------------
473,798 -
--------------- ---------------
Capitalization
Common Stock 54,963 -
Class A common stock - -
Additional paid-in-capital common 493,007 1,043
Additional paid-in-capital-Class A common - -
Retained Earnings 182,123 (1,061)
--------------- ---------------
730,093 (18)
Treasury stock - -
Unearned Compensation - -
--------------- ---------------
Total common stockholders' equity 730,093 (18)
Preferred stock subsidiaries:
Not subject to mandatory redemption 6,231 -
Subject to mandatory redemption 118,950 -
Long-term debt 791,127 -
--------------- ---------------
1,646,401 (18)
--------------- ---------------
Total Capitalization & Liabilities $ 2,346,131 $ (18)
=============== ===============
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2A Page 5 of 6
<PAGE>
Conectiv and Subsidiaries
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
CSI* Solution*
DSC Consolidated Consolidated CCI*
-------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt $ -
Long-term debt within one year 998
Variable rate demand bonds -
Accounts payable (2,385)
Taxes accrued (116)
Interest accrued -
Dividends payable -
Deferred energy costs -
Current capital lease obligation -
Accrued employee seperation and -
other merger-related costs -
Other -
--------------
(1,503)
--------------
Deferred Credits and Other Liabilities
Other postretirement benefits obligation -
Deferred income taxes, net 2,599
Deferred investment tax credits -
Long-term capital lease obligation -
Other -
--------------
2,599
--------------
Capitalization
Common Stock 1
Class A common stock -
Additional paid-in-capital common 5,097
Additional paid-in-capital--Class A common -
Retained Earnings 2,652
--------------
7,750
Treasury stock -
Unearned Compensation -
--------------
Total common stockholders' equity 7,750
Preferred stock of subsidiaries:
Not subject to mandatory redemption -
Subject to mandatory redemption -
Long-term debt 3,443
--------------
11,193
--------------
Total Capitalization & Liabilities $ 12,289
==============
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2A Page 6 of 6
<PAGE>
Delmarva Power and Light Company and Subsidiaries
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
DPL Reclasses and DPL DPL
Consolidated Consol. Entries Parent Fin I
------------- --------------- --------------- -----------
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents $ 1,761 $ - $ 1,761 $ -
Accounts receivable 261,060 - 261,060 -
Inventories, at average cost
Fuel (coal, oil and gas) 44,212 - 44,212 -
Material and supplies 39,323 - 39,323 -
Prepaid New Jersey sales and excise taxes - - - -
Prepayments 10,735 - 10,735 -
Deferred income taxes, net 13,061 - 13,061 -
----------------------------------------------------------------
370,152 - 370,152 -
----------------------------------------------------------------
Investments
Investment in leveraged leases - - - -
Funds held by trustee 60,208 - 60,208 -
Other investments 1,103 (74,330) 3,268 72,165
----------------------------------------------------------------
61,311 (74,330) 63,476 72,165
----------------------------------------------------------------
Property, Plant, and Equipment
Electric utility plant 3,049,099 - 3,049,099 -
Gas utility plant 249,383 - 249,383 -
Common utility plant 158,109 - 158,109 -
----------------------------------------------------------------
3,456,591 - 3,456,591 -
Less: Accumulated depreciation (1,492,183) - (1,492,183)
----------------------------------------------------------------
Net utility plant in service 1,964,408 - 1,964,408 -
Utility construction work-in-progress 138,496 - 138,496 -
Leased nuclear fuel, at amortized cost 28,325 - 28,325 -
Nonutility property, net 4,561 - 4,561 -
Goodwill, net 71,914 - 71,914 -
----------------------------------------------------------------
2,207,704 - 2,207,704 -
----------------------------------------------------------------
Deferred Charges & Other Assets
Unrecovered purchased power costs - - - -
Deferred recoverable income taxes 82,211 - 82,211 -
Unrecovered state excise taxes - - - -
Deferred debt refinancing costs 16,181 - 16,181 -
Unrecovered OPEB costs - - - -
Prepaid employee benefits costs 88,390 - 88,390 -
Unamortized debt expense 12,141 - 12,141 -
License fees - - - -
Other 45,999 - 45,999 -
----------------------------------------------------------------
244,922 - 244,922 -
----------------------------------------------------------------
Total Assets $ 2,884,089 $ (74,330) $ 2,886,254 $ 72,165
================================================================
</TABLE>
F-2B Page 1 of 2
<PAGE>
Deimarva Power and Light Company and Subsidiaries
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
DPL Reclasses and DPL DPL
Consolidated Consol. Entries Parent Fin I
------------ --------------- ------------ -----------
<S> <C> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt $ 21,700 $ - $ 21,700 $ -
Long-term debt due within one year 31,287 - 31,287 -
Variable rate demand bonds 71,500 - 71,500 -
Accounts payable 177,915 - 177,915 -
Taxes accrued 16,257 - 16,257 -
Interest accrued 5,751 - 5,751 -
Dividends payable 23,616 - 23,616 -
Deferred energy costs 413 - 413 -
Current capital lease obligation 12,479 - 12,479 -
Accrued employee seperation and - - - -
other merger-related costs 2,509 - 2,509 -
Other 27,587 - 27,587 -
---------------------------------------------------------------
391,014 - 391,014 -
---------------------------------------------------------------
Deferred Credits and Other Liabilities
Other postretirement benefits obligation (5,964) - (5,964) -
Deferred income taxes, net 461,799 - 461,799 -
Deferred investment tax credits 37,383 - 37,383 -
Long-term capital lease obligation 17,003 - 17,003 -
Other 19,747 - 19,747 -
---------------------------------------------------------------
529,968 - 529,968 -
---------------------------------------------------------------
Capitalization
Common Stock 2 (2,165) 2 2,165
Class A common stock - - - -
Additional paid-in-capital common 528,893 - 528,893 -
Additional paid-in-capital--Class A common - - - -
Retained Earnings 322,599 - 322,599 -
---------------------------------------------------------------
851,494 (2,165) 851,494 2,165
Treasury stock - - - -
Unearned Compensation - - - -
---------------------------------------------------------------
Total common stockholders' equity 851,494 (2,165) 851,494 2,165
Preferred stock of subsidiaries :
Not subject to mandatory redemption 89,702 - 89,702 -
Subject to mandatory redemption 70,000 - - 70,000
Advances from associated company - (72,165) 72,165 -
Long-term debt 951,911 - 951,911 -
---------------------------------------------------------------
1,963,107 (74,330) 1,965,272 72,165
---------------------------------------------------------------
Total Capitalization & Liabilities $2,884,089 $ (74,330) $ 2,886,254 $ 72,165
===============================================================
</TABLE>
F-2B Page 2 of 2
<PAGE>
Atlantic City Electric Company and Subsidiaries
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
ACE Reclasses and ACE ACE ACE
Consolidated Consol. Entries Parent Cap I Cap II
------------ --------------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents $ 28,766 $ - $ 28,766 $ - $ -
Accounts receivable 116,034 - 116,034 - -
Inventories, at average cost
Fuel (coal, oil and gas) 27,233 - 27,233 - -
Material and supplies 21,297 - 21,297 - -
Prepaid New Jersey sales and excise taxes 20,078 - 20,078 - -
Prepayments 4,420 - 4,420 - -
Deferred income taxes, net 7,735 - 7,735 - -
----------------------------------------------------------------------------
225,563 - 225,563 - -
----------------------------------------------------------------------------
Investments
Investment in leveraged leases - - - - -
Funds held by trustee 102,765 - 102,765 - -
Other investments 112 (100,876) 3,050 72,165 25,773
----------------------------------------------------------------------------
102,877 (100,876) 105,815 72,165 25,773
----------------------------------------------------------------------------
Property, Plant, and Equipment
Electric utility plant 2,600,699 - 2,600,699 - -
Gas utility plant - - - - -
Common utility plant - - - - -
---------------------------------------------------------------------------
2,600,699 - 2,600,699 - -
Less: Accumulated depreciation (1,007,105) - (1,007,105) - -
---------------------------------------------------------------------------
Net utility plant in service 1,593,594 - 1,593,594 - -
Utility construction work-in-progress 97,955 - 97,955 - -
Leased nuclear fuel, at amortized cost 35,003 - 35,003 - -
Nonutility property, net 8,208 - 8,208 - -
Goodwill, net - - - - -
----------------------------------------------------------------------------
1,734,760 - 1,734,760 - -
----------------------------------------------------------------------------
Deferred Charges & Other Assets
Unrecovered purchased power costs 48,274 - 48,274 - -
Deferred recoverable income taxes 102,223 - 102,223 - -
Unrecovered state excise taxes 35,594 - 35,594 - -
Deferred debt refinancing costs 28,042 - 28,042 - -
Unrecovered OPEB costs 34,978 - 34,978 - -
Prepaid employee benefits costs (10,477) - (10,477) - -
Unamortized debt expense 14,141 - 14,141 - -
License fees - - - - -
Other 30,156 - 30,156 - -
----------------------------------------------------------------------------
282,931 - 282,931 - -
----------------------------------------------------------------------------
Total Assets $ 2,346,131 $ (100,876) $ 2,349,069 $ 72,165 $ 25,773
============================================================================
</TABLE>
F-2C Page 1 of 2
<PAGE>
<TABLE>
<CAPTION>
Atlantic City Electric Company and Subsidiaries
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
Total Eliminations,
ACE Reclasses and ACE ACE ACE
Consolidated Consol. Entries Parent Cap I Cap II
------------ --------------- ------ ----- ------
<S> <C> <C> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt $ - $ - $ - $ - $ -
Long-term debt due within one year 30,075 - 30,075 - -
Variable rate demand bonds 22,600 - 22,600 - -
Accounts payable 28,848 - 28,848 - -
Taxes accrued 22,916 - 22,916 - -
Interest accrued 29,627 - 29,627 - -
Dividends payable 22,236 - 22,236 - -
Deferred energy costs 15,577 - 15,577 - -
Current capital lease obligation 15,729 - 15,729 - -
Accrued employee seperation and - - - - -
other merger-related costs 9,554 - 9,554 - -
Other 28,770 - 28,770 - -
--------------------------------------------------------------------------
225,932 - 225,932 - -
--------------------------------------------------------------------------
Deferred Credits and Other Liabilities
Other postretirement benefits obligation 44,607 - 44,607 - -
Deferred income taxes, net 343,430 - 343,430 - -
Deferred investment tax credits 42,142 - 42,142 - -
Long-term capital lease obligation 19,523 - 19,523 - -
Other 24,096 - 24,096 - -
--------------------------------------------------------------------------
473,798 - 473,798 - -
--------------------------------------------------------------------------
Capitalization
Common Stock 54,963 (2,938) 54,963 2,165 773
Class A common stock - - - - -
Additional paid-in-capital common 493,007 - 493,007 - -
Additional paid-in-capital--Class A common - - - - -
Retained Earnings 182,123 - 182,123 - -
--------------------------------------------------------------------------
730,093 (2,938) 730,083 2,165 773
Treasury stock - - - -
Unearned Compensation - - - - -
--------------------------------------------------------------------------
Total common stockholders' equity 730,093 (2,938) 730,093 2,165 773
Preferred stock of subsidiares :
Not subject to mandatory redemption 6,231 - 6,231 - -
Subject to mandatory redemption 118,950 - 23,950 70,000 25,000
Advances from associated company - (97,938) 97,938 - -
Long-term debt 791,127 - 791,127 - -
--------------------------------------------------------------------------
1,646,401 (100,876) 1,649,339 72,165 25,773
--------------------------------------------------------------------------
Total Capitalization & Liabilities $2,346,131 $(100,876) $2,349,069 $72,165 $25,773
==========================================================================
</TABLE>
F-2C Page 2 of 2
<PAGE>
Delmarva Capital Investments, Inc. and Subsidiaries*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total* Eliminations,*
DCI Reclasses and DCI* DCI* DCI*
Consolidated Consol. Entries Parent I II
------------- ----------------- --------- -------- -------
<S> <C> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents
Accounts receivable
Inventories, at average cost
Fuel (coal, oil and gas)
Material and supplies
Prepaid New Jersey sales and excise taxes
Prepayments
Deferred income taxes, net
Investments
Investment in leveraged leases
Funds held by trustee
Other investments
Property, Plant, and Equipment
Electric utility plant
Gas utility plant
Common utility plant
Less: Accumulated depreciation
Net utility plant in service
Utility construction work-in-progress
Leased nuclear fuel, at amortized cost
Nonutility property, net
Goodwill, net
Deferred Charges & Other Assets
Unrecovered purchased power costs
Deferred recoverable income taxes
Unrecovered state excise taxes
Deferred debt refinancing costs
Unrecovered OPEB costs
Prepaid employee benefits costs
Unamortized debt expense
License fees
Other
Total Assets
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2D Page 1 of 4
<PAGE>
Delmarva Capital Investments, Inc. and Subsidiaries*
Consolidating Balance Sheet as of December 31, 1998
D (Dollars in Thousands)
<TABLE>
<CAPTION>
CCM DOSC DCTC
----------- ----------- ------------
<S> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents
Accounts receivable
Inventories, at average cost
Fuel (coal, oil and gas)
Material and supplies
Prepaid New Jersey sales and excise taxes
Prepayments
Deferred income taxes, net
Investments
Investment in leveraged leases
Funds held by trustee
Other investments
Property, Plant, and Equipment
Electric utility plant
Gas utility plant
Common utility plant
Less: Accumulated depreciation
Net utility plant in service
Utility construction work-in-progress
Leased nuclear fuel, at amortized cost
Nonutility property, net
Goodwill, net
Deferred Charges & Other Assets
Unrecovered purchased power costs
Deferred recoverable income taxes
Unrecovered state excise taxes
Deferred debt refinancing costs
Unrecovered OPEB costs
Prepaid employee benefits costs
Unamortized debt expense
License fees
Other
Total Assets
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2D Page 2 of 4
<PAGE>
Delmarva Capital Investments, Inc. and Subsidiaries*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
DCI Reclasses and DCI DCI DCI
Consolidated Consol. Entries Parent I II
------------ --------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt
Long-term debt due within one year
Variable rate demand bonds
Accounts payable
Taxes accrued
Interest accrued
Dividends payable
Deferred energy costs
Current capital lease obligation
Accrued employee seperation and
other merger-related costs
Other
Deferred Credits and Other Liabilities
Other postretirement benefits obligation
Deferred income taxes, net
Deferred investment tax credits
Long-term capital lease obligation
Other
Capitalization
Common Stock
Class A common stock
Additional paid-in-capital common
Additional paid-in-capital--Class A common
Retained Earnings
Treasury stock
Unearned Compensation
Total common stockholders' equity
Preferred stock of subsidiares:
Not subject to mandatory redemption
Subject to mandatory redemption
Long-term debt
Total Capitalization & Liabilities
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2D Page 3 of 4
<PAGE>
Delmarva Capital Investments, Inc. and Subsidiaries*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
CCM* DOSC* DCTC*
------- -------- --------
<S> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt
Long-term debt due within one year
Variable rate demand bonds
Accounts payable
Taxes accrued
Interest accrued
Dividends payable
Deferred energy costs
Current capital lease obligation
Accrued employee separation and
other merger-related costs
Other
Deferred Credits and Other Liabilities
Other postretirement benefits obligation
Deferred income taxes, net
Deferred investment tax credits
Long-term capital lease obligation
Other
Capitalization
Common Stock
Class A common stock
Additional paid-in-capital common
Additional paid-in-capital--Class A common
Retained Earnings
Treasury stock
Unearned Compensation
Total common stockholders' equity
Preferred stock of subsidiares:
Not subject to mandatory redemption
Subject to mandatory redemption
Long-term debt
Total Capitalization & Liabilities
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2D Page 4 of 4
<PAGE>
<TABLE>
<CAPTION>
Conectiv Energy Supply, Inc. and Subsidiary*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
Total Eliminations,
CES Reclasses and CES
Consolidated Consol. Entries Parent Petron
------------ --------------- ------ ------
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents
Accounts receivable
Inventories, at average cost
Fuel (coal, oil and gas)
Material and supplies
Prepayments
Deferred income taxes, net
Investments
Investment in leveraged leases
Funds held by trustee
Other investments
Property, Plant, and Equipment
Electric utility plant
Gas utility plant
Common utility plant
Less: Accumulated depreciation
Net utility plant in service
Utility construction work-in-progress
Leased nuclear fuel, at amortized cost
Nonutility property, net
Goodwill, net
Deferred Charges & Other Assets
Unrecovered purchased power costs
Deferred recoverable income taxes
Unrecovered state excise taxes
Deferred debt refinancing costs
Unrecovered OPEB costs
Prepaid employee benefits costs
Unamortized debt expense
License fees
Other
Total Assets
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2E Page 1 of 2
<PAGE>
Conectiv Energy Supply, Inc. and Subsidiary*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Total Eliminations,
CES Reclasses and CES
Consolidated Consol. Entries Parent Petron
------------ --------------- ------ ------
Capitalization & Liabilities
Current Liabilities
Short-term debt
Long-term debt due within one year
Variable rate demand bonds
Accounts payable
Taxes accrued
Interest accrued
Dividends payable
Deferred energy costs
Current capital lease obligation
Accrued employee separation and
other merger-related costs
Other
Deferred Credits and Other Liabilities
Other postretirement benefits obligation
Deferred income taxes, net
Deferred investment tax credits
Long-term capital lease obligation
Other
Capitalization
Common Stock
Class A common stock
Additional paid-in-capital common
Additional paid-in-capital--Class A common
Retained Earnings
Treasury stock
Unearned Compensation
Total common stockholders' equity
Preferred stock of subsidiaries:
Not subject to mandatory redemption
Subject to mandatory redemption
Advances from associated company
Long-term debt
Total Capitalization & Liabilities
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2E Page 2 of 2
<PAGE>
Atlantic Energy Enterprises, Inc. and Subsidiaries*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
AEE Reclasses and AEE
Consolidated Consol. Entries Parent ASP ATE
-------------- ---------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents
Accounts receivable
Inventories, at average cost
Fuel (coal, oil and gas)
Material and supplies
Prepayments
Deferred income taxes, net
Investments
Investment in leveraged leases
Funds held by trustee
Other investments
Property, Plant, and Equipment
Electric utility plant
Gas utility plant
Common utility plant
Less: Accumulated depreciation
Net utility plant in service
Utility construction work-in-progress
Leased nuclear fuel, at amortized cost
Nonutility property, net
Goodwill, net
Deferred Charges & Other Assets
Unrecovered purchased power costs
Deferred recoverable income taxes
Unrecovered NJ state excise taxes
Deferred debt refinancing costs
Unrecovered OPEB costs
Prepaid employee benefits costs
Unamortized debt expense
License fees
Other
Total Assets
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2F Page 1 of 4
<PAGE>
Atlantic Energy Enterprises, Inc. and Subsidiaries*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
CTS AGI AET
Consolidated CI Consolidated Consolidated
---------------- ------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents
Accounts receivable
Inventories, at average cost
Fuel (coal, oil and gas)
Material and supplies
Prepayments
Deferred income taxes, net
Investments
Investment in leveraged leases
Funds held by trustee
Other investments
Property, Plant, and Equipment
Electric utility plant
Gas utility plant
Common utility plant
Less: Accumulated depreciation
Net utility plant in service
Utility construction work-in-progress
Leased nuclear fuel, at amortized cost
Nonutility property, net
Goodwill, net
Deferred Charges & Other Assets
Unrecovered purchased power costs
Deferred recoverable income taxes
Unrecovered NJ state excise taxes
Deferred debt refinancing costs
Unrecovered OPEB costs
Prepaid employee benefits costs
Unamortized debt expense
License fees
Other
Total Assets
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2F Page 2 of 4
<PAGE>
Atlantic Energy Enterprises, Inc. and Subsidiaries*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
AEE Reclasses and AEE
Consolidated Consol. Entries Parent ASP ATE
-------------- ----------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt
Long-term debt due within one year
Variable rate demand bonds
Accounts payable
Taxes accrued
Interest accrued
Dividends payable
Deferred energy costs
Current capital lease obligation
Accrued employee seperation and
other merger-related costs
Other
Deferred Credits and Other Liabilities
Other postretirement benefits obligation
Deferred income taxes, net
Deferred investment tax credits
Long-term capital lease obligation
Other
Capitalization
Common Stock
Class A common stock
Additional paid-in-capital common
Additional paid-in-capital--Class A common
Retained Earnings
Treasury stock
Unearned Compensation
Total common stockholders' equity
Preferred stock of subsidiares:
Not subject to mandatory redemption
Subject to mandatory redemption
Long-term debt
Total Capitalization & Liabilities
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2F Page 3 of 4
<PAGE>
Atlantic Energy Enterprises, Inc. and Subsidiaries*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
CTS AGI AET
Consolidated CI Consolidated Consolidated
--------------- ------- --------------- ---------------
<S> <C> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt
Long-term debt due within one year
Variable rate demand bonds
Accounts payable
Taxes accrued
Interest accrued
Dividends payable
Deferred energy costs
Current capital lease obligation
Accrued employee separation and
other merger-related costs
Other
Deferred Credits and Other Liabilities
Other postretirement benefits obligation
Deferred income taxes, net
Deferred investment tax credits
Long-term capital lease obligation
Other
Capitalization
Common Stock
Class A common stock
Additional paid-in-capital common
Additional paid-in-capital--Class A common
Retained Earnings
Treasury stock
Unearned Compensation
Total common stockholders' equity
Preferred stock of subsidiaries:
Not subject to mandatory redemption
Subject to mandatory redemption
Long-term debt
Total Capitalization & Liabilities
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2F Page 4 of 4
<PAGE>
Conectiv Services, Inc. and Subsidiary*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
CSI Reclasses and CSI
Consolidated Consol. Entries Parent Plumbing
-------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents
Accounts receivable
Inventories, at average cost
Fuel (coal, oil and gas)
Material and supplies
Prepayments
Deferred income taxes, net
Investments
Investment in leveraged leases
Funds held by trustee
Other investments
Property, Plant, and Equipment
Electric utility plant
Gas utility plant
Common utility plant
Less: Accumulated depreciation
Net utility plant in service
Utility construction work-in-progress
Leased nuclear fuel, at amortized cost
Nonutility property, net
Goodwill, net
Deferred Charges & Other Assets
Unrecovered purchased power costs
Deferred recoverable income taxes
Unrecovered NJ state excise taxes
Deferred debt refinancing costs
Unrecovered OPEB costs
Prepaid employee benefits costs
Unamortized debt expense
License fees
Other
Total Assets
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2G Page 1 of 2
<PAGE>
<TABLE>
<CAPTION>
Conectiv Services, Inc., and Subsidiary*
Consolidating Balance sheet as of December 31, 1998
(Dollars in Thousands)
Total Eliminations,
CSI Reclasses and CSI
Consolidated Consol. Entries Parent Plumbing
---------------- ------------------- ---------- -------------
<S> <C> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt
Long-term debt due within one year
Variable rate demand bonds
Accounts payable
Taxes accrued
Interest accrued
Dividends payable
Deferred energy costs
Current capital lease obligation
Accrued employee separation and
other merger-related costs
Other
Deferred Credits and Other Liabilities
Other postretirement benefits obligation
Deferred income taxes, net
Deferred investment tax credits
Long-term capital lease obligation
Other
Capitalization
Common Stock
Class A common stock
Additional paid-in-capital common
Additional paid-in-capital--Class A common
Retained Earnings
Treasury stock
Unearned Compensation
Total common stockholders' equity
Preferred stock of subsidiaries:
Not subject to mandatory redemption
Subject to mandatory redemption
Long-term debt
Total Capitalization & Liabilities
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2G Page 2 of 2
<PAGE>
Conectiv Solutions LLC and Subsidiary*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
Solutions Reclasses and Solutions Power
Consolidated Consol. Entries Parent Consulting
--------------- ---------------- ------ ----------
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents
Accounts receivable
Inventories, at average cost
Fuel (coal, oil and gas)
Material and supplies
Prepayments
Deferred income taxes, net
Investments
Investment in leveraged leases
Funds held by trustee
Other investments
Property, Plant, and Equipment
Electric utility plant
Gas utility plant
Common utility plant
Less: Accumulated depreciation
Net utility plant in service
Utility construction work-in-progress
Leased nuclear fuel, at amortized cost
Nonutility property, net
Goodwill, net
Deferred Charges & Other Assets
Unrecovered purchased power costs
Deferred recoverable income taxes
Unrecovered state excise taxes
Deferred debt refinancing costs
Unrecovered OPEB costs
Prepaid employee benefits costs
Unamortized debt expense
License fees
Other
Total Assets
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2H Page 1 of 2
<PAGE>
Conectiv Solutions LLC and Subsidiary*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
Solutions Reclasses and Solutions Power
Consolidated Consol. Entries Parent Consulting
-------------- ----------------- ------------ ---------------
<S> <C> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt
Long-term debt due within one year
Variable rate demand bonds
Accounts payable
Taxes accrued
Interest accrued
Dividends payable
Deferred energy costs
Current capital lease obligation
Accrued employee separation and
other merger-related costs
Other
Deferred Credits and Other Liabilities
Other postretirement benefits obligation
Deferred income taxes, net
Deferred investment tax credits
Long-term capital lease obligation
Other
Capitalization
Common Stock
Class A common stock
Additional paid-in-capital common
Additional paid-in-capital--Class A common
Retained Earnings
Treasury stock
Unearned Compensation
Total common stockholders' equity
Preferred stock of subsidiares:
Not subject to mandatory redemption
Subject to mandatory redemption
Advances from associated company
Long-term debt
Total Capitalization & Liabilities
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2H Page 2 of 2
<PAGE>
Conectiv Thermal Systems, Inc. and Subsidiaries*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
CTS Reclasses and CTS
Consolidated Consol. Entries Parent AJTS AOS TELP
--------------- ----------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents
Accounts receivable
Inventories, at average cost
Fuel (coal, oil and gas)
Material and supplies
Prepayments
Deferred income taxes, net
Investments
Investment in leveraged leases
Funds held by trustee
Other investments
Property, Plant, and Equipment
Electric utility plant
Gas utility plant
Common utility plant
Less: Accumulated depreciation
Net utility plant in service
Utility construction work-in-progress
Leased nuclear fuel, at amortized cost
Nonutility property, net
Goodwill, net
Deferred Charges & Other Assets
Unrecovered purchased power costs
Deferred recoverable income taxes
Unrecovered NJ state excise taxes
Deferred debt refinancing costs
Unrecovered OPEB costs
Prepaid employee benefits costs
Unamortized debt expense
License fees
Other
Total Assets
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2I Page 1 of 2
<PAGE>
Conectiv Thermal Systems, Inc. and Subsidiaries*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
CTS Reclasses and CTS
Consolidated Consol. Entries Parent AJTS AOS TELP
---------------- ------------------- ---------- --------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt
Long-term debt due within one year
Variable rate demand bonds
Accounts payable
Taxes accrued
Interest accrued
Dividends payable
Deferred energy costs
Current capital lease obligation
Accrued employee seperation and
other merger-related costs
Other
Deferred Credits and Other Liabilities
Other postretirement benefits obligation
Deferred income taxes, net
Deferred investment tax credits
Long-term capital lease obligation
Other
Capitalization
Common Stock
Class A common stock
Additional paid-in-capital common
Additional paid-in-capital--Class A common
Retained Earnings
Treasury stock
Unearned Compensation
Total common stockholders' equity
Preferred stock of subsidiares :
Not subject to mandatory redemption
Subject to mandatory redemption
Long-term Debt
Total Capitalization & Liabilities
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2I Page 2 of 2
<PAGE>
Atlantic Generation, Inc. and Subsidiaries*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
AGI Reclasses and AGI PED PED
Consolidated Consol. Entries Parent GEN LTD
------------ --------------- ------ --- ---
<S> <C> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents
Accounts receivable
Inventories, at average cost
Fuel (coal, oil and gas)
Material and supplies
Prepayments
Deferred income taxes, net
Investments
Investment in leveraged leases
Funds held by trustee
Other investments
Property, Plant, and Equipment
Electric utility plant
Gas utility plant
Common utility plant
Less: Accumulated depreciation
Net utility plant in service
Utility construction work-in-progress
Leased nuclear fuel, at amortized cost
Nonutility property, net
Goodwill, net
Deferred Charges & Other Assets
Unrecovered purchased power costs
Deferred recoverable income taxes
Unrecovered NJ state excise taxes
Deferred debt refinancing costs
Unrecovered OPEB costs
Prepaid employee benefits costs
Unamortized debt expense
License fees
Other
Total Assets
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2J Page 1 of 4
<PAGE>
Atlantic Generation, Inc. and subsidiaries*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
VINE VINE BING BING
GEN LTD GEN LTD
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents
Accounts receivable
Inventories, at average cost
Fuel (coal, oil and gas)
Material and supplies
Prepayments
Deferred income taxes, net
Investments
Investment in leveraged leases
Funds held by trustee
Other investments
Property, Plant, and Equipment
Electric utility plant
Gas utility plant
Common utility plant
Less: Accumulated depreciation
Net utility plant in service
Utility construction work-in-progress
Leased nuclear fuel, at amortized cost
Nonutility property, net
Goodwill, net
Deferred Charges & Other Assets
Unrecovered purchased power costs
Deferred recoverable income taxes
Unrecovered NJ state excise taxes
Deferred debt refinancing costs
Unrecovered OPEB costs
Prepaid employee benefits costs
Unamortized debt expense
License fees
Other
Total Assets
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2J Page 2 of 4
<PAGE>
Atlantic Generation, Inc. and Subsidiaries*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
AGI Reclasses and AGI PED PED
Consolidated Consol. Entries Parent GEN LTD
------------ --------------- ------ --- ---
<S> <C> <C> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt
Long-term debt due within one year
Variable rate demand bonds
Accounts payable
Taxes accrued
Interest accrued
Dividends payable
Deferred energy costs
Current capital lease obligation
Accrued employee seperation and
other merger-related costs
Other
Deferred Credits and Other Liabilities
Other postretirement benefits obligation
Deferred income taxes, net
Deferred investment tax credits
Long-term capital lease obligation
Other
Capitalization
Common Stock
Class A common stock
Additional paid-in-capital common
Additional paid-in-capital--Class A common
Retained Earnings
Treasury stock
Unearned Compensation
Total common stockholders' equity
Preferred stock of subsidiares :
Not subject to mandatory redemption
Subject to mandatory redemption
Long-term Debt
Total Capitalization & Liabilities
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2J Page 3 of 4
<PAGE>
Atlantic Generation, Inc. and Subsidiaries*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
VINE VINE BING BING
GEN LTD GEN LTD
---- ---- ---- ----
<S> <C> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt
Long-term debt due within one year
Variable rate demand bonds
Accounts payable
Taxes accrued
Interest accrued
Dividends payable
Deferred energy costs
Current capital lease obligation
Accrued employee seperation and
other merger-related costs
Other
Deferred Credits and Other Liabilities
Other postretirement benefits obligation
Deferred income taxes, net
Deferred investment tax credits
Long-term capital lease obligation
Other
Capitalization
Common Stock
Class A common stock
Additional paid-in-capital common
Additional paid-in-capital--Class A common
Retained Earnings
Treasury stock
Unearned Compensation
Total common stockholders' equity
Preferred stock of subsidiares:
Not subject to mandatory redemption
Subject to mandatory redemption
Long-term Debt
Total Capitalization & Liabilities
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2J Page 4 of 4
<PAGE>
Atlantic Energy Technology, Inc. and Subsidiary*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
AET Reclasses and AET
Consolidated Consol. Entries Parent TEE
------------ --------------- ------ ---
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash & cash equivalents
Accounts receivable
Inventories, at average cost
Fuel (coal, oil and gas)
Material and supplies
Prepayments
Deferred income taxes, net
Investments
Investment in leveraged leases
Funds held by trustee
Other investments
Property, Plant, and Equipment
Electric utility plant
Gas utility plant
Common utility plant
Less :Accumulated depreciation
Net utility plant in service
Utility construction work-in-progress
Leased nuclear fuel, at amortized cost
Nonutility property, net
Goodwill, net
Deferred Charges & Other Assets
Unrecovered purchased power costs
Deferred recoverable income taxes
Unrecovered NJ state excise taxes
Deferred debt refinancing costs
Unrecovered OPEB costs
Prepaid employee benefits costs
Unamortized debt expense
License fees
Other
Total Assets
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2K Page 1 of 2
<PAGE>
Atlantic Energy Technology, Inc. and Subsidiary*
Consolidating Balance Sheet as of December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
AET Reclasses and AET
Consolidated Consol. Entries Parent TEE
---------------- ------------------- ---------- -------
<S> <C> <C> <C> <C>
Capitalization & Liabilities
Current Liabilities
Short-term debt
Long-term debt due within one year
Variable rate demand bonds
Accounts payable
Taxes accrued
Interest accrued
Dividends payable
Deferred energy costs
Current capital lease obligation
Accrued employee separation and
other merger-related costs
Other
Deferred Credits and Other Liabilities
Other postretirement benefits obligation
Deferred income taxes, net
Deferred investment tax credits
Long-term capital lease obligation
Other
Capitalization
Common Stock
Class A common stock
Additional paid-in-capital common
Additional paid-in-capital--Class A common
Retained Earnings
Treasury stock
Unearned Compensation
Total common stockholders' equity
Preferred stock of subsidiaries:
Not subject to mandatory redemption
Subject to mandatory redemption
Long-term debt
Total Capitalization & Liabilities
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-2K Page 2 of 2
<PAGE>
Conectiv and Subsidiaries
Consolidating Statement of Cash Flows for the Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
Conectiv Reclasses and Conectiv DPL
Consolidated Consol. Entries Parent CRP Consolidated
------------ ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income $ 153,201 $(105,886) $ 153,201 $ (26) $ 108,058
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization 261,457 6,174 - 611 140,936
Allowance for equity funds used during construction (2,609) - - - (2,135)
Investment tax credit adjustments, net (4,002) - - - (2,560)
Deferred income taxes, net 4,620 35,583 121 1,345 5,796
Net change in:
Accounts receivable (118,578) 43,953 (208,443) (9,714) (68,300)
Inventories (9,691) - - - (6,876)
Prepaid New Jersey sales and excise taxes (20,078) - - - -
Accounts payable 107,005 8,236 (45,452) 19,493 78,291
Other current assets & liabilities 26,996 (117,893) 6,674 6,279 34,324
Gains on sales of assets (2,795) - - - (1,549)
Other, net (23,217) (38,081) 19,646 - (27,888)
------------ ------------- ------------ ------------ ------------
Net cash provided by operating activities 372,309 (167,914) (74,253) 17,988 258,097
------------ ------------ ------------- ------------ ------------
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired (2,590) 26,310 - - (5,272)
Capital expenditures (224,831) - - (17,957) (112,924)
Investments in partnerships (28,594) - - - (103)
Sales of nonutility assets 5,617 - - - -
Sales of utility assets 3,804 - - - 3,804
Deposits to nuclear decommissioning trust funds (10,676) - - - (4,238)
Other, net 2,082 - (293) (145) 2,003
------------ ------------- ------------ ------------ ------------
Net cash used by investing activities (259,352) 26,310 (293) (18,102) (116,730)
------------ ------------ ------------- ------------ ------------
Cash Flows From Financing Activities
Common dividends paid (154,101) 176,150 (154,101) - (94,700)
Capital contributions - - (27,496) - (23,660)
Issuances:
Long-term debt 33,000 - - - 33,000
Common stock 63 - - - 63
Preferred stock 25,000 - - - -
Redemptions:
Long-term debt (200,078) - (53,500) - (32,054)
Common stock (13,232) - (11,249) - (1,983)
Preferred stock (33,769) - - - -
Principal portion of capital lease payments (20,037) - - - (9,724)
Net change in short-term debt 282,889 - 339,000 - (26,974)
Cost of issuances and refinancings (2,147) - (390) - (259)
------------ ------------- ------------ ------------ ------------
Net cash used by financing activities (82,412) 176,150 92,264 - (156,291)
------------ ------------- ------------ ------------ ------------
Net change in cash and cash equivalents 30,545 34,546 17,718 (114) (14,924)
Beginning of year cash and cash equivalents 35,339 (34,546) 973 - 16,685
------------ ------------- ------------ ------------ ------------
End of year cash and cash equivalents $ 65,884 $ - $ 18,691 $ (114) $1,761
=========== ============ ============ =========== ===========
</TABLE>
F-3A Page 1 of 3
<PAGE>
Conectiv and Subsidiaries
Consolidating Statement of Cash Flows for the Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
ACE DCI* CES* AEE*
Consolidated Consolidated Consolidated Consolidated AEI
------------ ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income $ 23,745 $ (18)
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization 104,582 -
Allowance for equity funds used during construction (474) -
Investment tax credit adjustments, net (1,442) -
Deferred income taxes, net (40,128) -
Net change in:
Accounts receivable (7,233) 18
Inventories 3,292 -
Prepaid New Jersey sales and excise taxes (20,078) -
Accounts payable 8,947 -
Other current assets & liabilities 112,488 -
Gains on sales of assets - -
Other, net 23,402 -
---------------- ----------
Net cash provided by operating activities 207,101 -
---------------- ----------
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired - -
Capital expenditures (58,955) -
Investments in partnerships (102) -
Sales of nonutility assets - -
Sales of utility assets - -
Deposits to nuclear decommissioning trust funds (6,438) -
Other, net (423) -
---------------- ----------
Net cash used by investing activities (65,918) -
---------------- ----------
Cash Flows From Financing Activities
Common dividends paid (81,450) -
Capital contributions - -
Issuances:
Long-term debt - -
Common stock - -
Preferred stock 25,000 -
Redemptions:
Long-term debt (8,575) -
Common stock - -
Preferred stock (33,769) -
Principal portion of capital lease payments (10,313) -
Net change in short-term debt (30,200) -
Cost of issuances and refinancings (1,269) -
---------------- ----------
Net cash used by financing activities (140,576) -
---------------- ----------
Net change in cash and cash equivalents 607 -
Beginning of year cash and cash equivalents 28,159 -
---------------- ----------
End of year cash and cash equivalents $ 28,766 $ -
=============== ==========
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-3A Page 2 of 3
<PAGE>
Conectiv and Subsidiaries
Consolidating Statement of Cash Flows for the Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION> CSI* Solutions*
DSC Consolidated Consolidated CCI*
-------- ------------ ------------ -----
<S> <C>
Cash Flows From Operating Activities
Net income $ 565
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization 412
Allowance for equity funds used during construction -
Investment tax credit adjustments, net -
Deferred income taxes, net 113
Net change in:
Accounts receivable 191
Inventories -
Prepaid New Jersey sales and excise taxes -
Accounts payable (2,385)
Other current assets & liabilities 42
Gains on sales of assets -
Other, net 11
-------------
Net cash provided by operating activities (1,051)
-------------
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired -
Capital expenditures -
Investments in partnerships -
Sales of nonutility assets -
Sales of utility assets -
Deposits to nuclear decommissioning trust funds -
Other, net 1
-------------
Net cash used by investing activities 1
-------------
Cash Flows From Financing Activities
Common dividends paid -
Capital contributions -
Issuances:
Long-term debt -
Common stock -
Preferred stock -
Redemptions:
Long-term debt (913)
Common stock -
Preferred stock -
Principal portion of capital lease payments -
Net change in short-term debt -
Cost of issuances and refinancings -
-------------
Net cash used by financing activities (913)
-------------
Net change in cash and cash equivalents (1,963)
Beginning of year cash and cash equivalents 1,963
-------------
End of year cash and cash equivalents $ -
=============
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-3A Page 3 of 3
<PAGE>
Delmarva Power and Light Company and Subsidiaries
Consolidating Statement of Cash Flows for the Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
DPL Reclasses and DPL DPL
Consolidated Consol. Entries Parent Fin I
------------ --------------- ------------- ----------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income $ 108,058 $ - $ 108,058 $ -
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization 140,936 - 140,936 -
Allowance for equity funds used during construction (2,135) - (2,135) -
Investment tax credit adjustments, net (2,560) - (2,560) -
Deferred income taxes, net 5,796 - 5,796 -
Net change in:
Accounts receivable (68,300) - (68,300) -
Inventories (6,876) - (6,876) -
Prepaid New Jersey sales and excise taxes - - - -
Accounts payable 78,291 - 78,291 -
Other current assets & liabilities 34,324 - 34,324 -
Gains on sales of assets (1,549) - (1,549) -
Other, net (27,888) - (27,888) -
------------ ------------ ------------ ---------
Net cash provided by operating activities 258,097 - 258,097 -
------------ ------------ ------------ ---------
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired (5,272) - (5,272) -
Capital expenditures (112,924) - (112,924) -
Investments in partnerships (103) - (103) -
Sales of nonutility assets - - - -
Sales of utility assets 3,804 - 3,804 -
Deposits to nuclear decommissioning trust funds (4,238) - (4,238) -
Other, net 2,003 - 2,003 -
------------ ------------ ------------ ---------
Net cash used by investing activities (116,730) - (116,730) -
------------ ------------ ------------ ---------
Cash Flows From Financing Activities
Common dividends paid (94,700) - (94,700) -
Capital contributions (23,660) - (23,660) -
Issuances:
Long-term debt 33,000 - 33,000 -
Common stock 63 - 63 -
Preferred stock - - - -
Redemptions:
Long-term debt (32,054) - (32,054) -
Common stock (1,983) - (1,983) -
Preferred stock - - - -
Principal portion of capital lease payments (9,724) - (9,724) -
Net change in short-term debt (26,974) - (26,974) -
Cost of issuances and refinancings (259) - (259) -
------------ ------------ ------------ ---------
Net cash used by financing activities (156,291) - (156,291) -
------------ ------------ ------------ ---------
Net change in cash and cash equivalents (14,924) - (14,924) -
Beginning of year cash and cash equivalents 16,685 - 16,685 -
------------ ------------ ------------ ---------
End of year cash and cash equivalents $1,761 $ - $ 1,761 $ -
============ ============ ============ =========
</TABLE>
F-3B
<PAGE>
Atlantic City Electric Company and Subsidiaries
Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
ACE Reclasses and ACE ACE ACE
Consolidated Consol. Entries Parent Cap I Cap II
------------ --------------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income $ 23,745 $ - $ 23,745 $ - $ -
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization 104,582 - 104,582 - -
Allowance for equity funds used during construction (474) - (474) - -
Investment tax credit adjustments, net (1,442) - (1,442) - -
Deferred income taxes, net (40,128) - (40,128) - -
Net change in:
Accounts receivable (7,233) - (7,233) - -
Inventories 3,292 - 3,292 - -
Prepaid New Jersey sales and excise taxes (20,078) - (20,078) - -
Accounts payable 8,947 - 8,947 - -
Other current assets & liabilities 112,488 - 112,488 - -
Gains on sales of assets - - - - -
Other, net 23,402 - 23,402 - -
----------- --------------- ------------ ---------- ------------
Net cash provided by operating activities 207,101 - 207,101 - -
----------- --------------- ------------ ---------- ------------
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired - - - - -
Capital expenditures (58,955) - (58,955) - -
Investments in partnerships (102) - (102) - -
Sales of nonutility assets - - - - -
Sales of utility assets - - - - -
Deposits to nuclear decommissioning trust funds (6,438) - (6,438) - -
Other, net (423) 773 24,577 - (25,773)
----------- --------------- ------------ ---------- ------------
Net cash used by investing activities (65,918) 773 (40,918) - (25,773)
----------- --------------- ------------ ---------- ------------
Cash Flows From Financing Activities
Common dividends paid (81,450) - (81,450) - -
Capital contributions - - - - -
Issuances:
Long-term debt - - - - -
Common stock - (773) - - 773
Preferred stock 25,000 - - - 25,000
Redemptions:
Long-term debt (8,575) - (8,575) - -
Common stock - - - - -
Preferred stock (33,769) - (33,769) - -
Principal portion of capital lease payments (10,313) - (10,313) - -
Net change in short-term debt (30,200) - (30,200) - -
Cost of issuances and refinancings (1,269) - (1,269) - -
----------- --------------- ------------ ---------- ------------
Net cash used by financing activities (140,576) (773) (165,576) - 25,773
----------- --------------- ------------ ---------- ------------
Net change in cash and cash equivalents 607 - 607 - -
Beginning of year cash and cash equivalents 28,159 - 28,159 - -
=========== =============== ============ ========== ============
End of year cash and cash equivalents $ 28,766 $ - $ 28,766 $ - $ -
=========== =============== ============ ========== ============
</TABLE>
F-3C
<PAGE>
Delmarva Capital Investments, Inc. and Subsidiaries*
Consolidating Statement of Cash Flows for the Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
DCI Reclasses and DCI DCI DCI
Consolidated Consol. Entries Parent I II
------------ ------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization
Allowance for equity funds used during construction
Investment tax credit adjustments, net
Deferred income taxes, net
Net change in:
Accounts receivable
Inventories
Prepaid New Jersey sales and excise taxes
Accounts payable
Other current assets & liabilities
Gains on sales of assets
Other, net
Net cash provided by operating activities
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired
Capital expenditures
Investments in partnerships
Sales of nonutility assets
Sales of utility assets
Deposits to nuclear decommissioning trust funds
Other, net
Net cash used by investing activities
Cash Flows From Financing Activities
Common dividends paid
Capital contributions
Issuances:
Long-term debt
Common stock
Preferred stock
Redemptions:
Long-term debt
Common stock
Preferred stock
Principal portion of capital lease payments
Net change in short-term debt
Cost of issuances and refinancings
Net cash used by financing activities
Net change in cash and cash equivalents
Beginning of year cash and cash equivalents
End of year cash and cash equivalents
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-3D Page 1 of 2
<PAGE>
Delmarva Capital Investments, Inc. and Subsidiaries*
Consolidating Statement of Cash Flows for the Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
CCM DOSC DCTC
------------ ------------- -----------
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net income
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization
Allowance for equity funds used during construction
Investment tax credit adjustments, net
Deferred income taxes, net
Net change in:
Accounts receivable
Inventories
Prepaid New Jersey sales and excise taxes
Accounts payable
Other current assets & liabilities
Gains on sales of assets
Other, net
Net cash provided by operating activities
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired
Capital expenditures
Investments in partnerships
Sales of nonutility assets
Sales of utility assets
Deposits to nuclear decommissioning trust funds
Other, net
Net cash used by investing activities
Cash Flows From Financing Activities
Common dividends paid
Capital contributions
Issuances:
Long-term debt
Common stock
Preferred stock
Redemptions:
Long-term debt
Common stock
Preferred stock
Principal portion of capital lease payments
Net change in short-term debt
Cost of issuances and refinancings
Net cash used by financing activities
Net change in cash and cash equivalents
Beginning of year cash and cash equivalents
End of year cash and cash equivalents
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-3D Page 2 of 2
<PAGE>
Conectiv Energy Supply, Inc. and Subsidiary*
Consolidating Statement of Cash Flows for the Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
CES Reclasses and CES
Consolidated Consol. Entries Parent Petron
------------ ------------- ----------- ----------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization
Allowance for equity funds used during construction
Investment tax credit adjustments, net
Deferred income taxes, net
Net change in:
Accounts receivable
Inventories
Prepaid New Jersey sales and excise taxes
Accounts payable
Other current assets & liabilities
Gains on sales of assets
Other, net
Net cash provided by operating activities
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired
Capital expenditures
Investments in partnerships
Sales of nonutility assets
Sales of utility assets
Deposits to nuclear decommissioning trust funds
Other, net
Net cash used by investing activities
Cash Flows From Financing Activities
Common dividends paid
Capital contributions
Issuances:
Long-term debt
Common stock
Preferred stock
Redemptions:
Long-term debt
Common stock
Preferred stock
Principal portion of capital lease payments
Net change in short-term debt
Cost of issuances and refinancings
Net cash used by financing activities
Net change in cash and cash equivalents
Beginning of year cash and cash equivalents
End of year cash and cash equivalents
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-3E
<PAGE>
Atlantic Energy Enterprises, Inc. and Subsidiaries*
Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
AEE Reclasses and AEE
Consolidated Consol. Entries Parent ASP ATE
------------ --------------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization
Allowance for equity funds used during construction
Investment tax credit adjustments, net
Deferred income taxes, net
Net change in:
Accounts receivable
Inventories
Prepaid New Jersey sales and excise taxes
Accounts payable
Other current assets & liabilities
Gains on sales of assets
Other, net
Net cash provided by operating activities
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired
Capital expenditures
Investments in partnerships
Sales of nonutility assets
Sales of utility assets
Deposits to nuclear decommissioning trust funds
Other, net
Net cash used by investing activities
Cash Flows From Financing Activities
Common dividends paid
Capital contributions
Issuances:
Long-term debt
Common stock
Preferred stock
Redemptions:
Long-term debt
Common stock
Preferred stock
Principal portion of capital lease payments
Net change in short-term debt
Cost of issuances and refinancings
Net cash used by financing activities
Net change in cash and cash equivalents
Beginning of year cash and cash equivalents
End of year cash and cash equivalents
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-3F Page 1 of 2
<PAGE>
Atlantic Energy Enterprises, Inc. and Subsidiaries*
Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
CTS AGI AET
Consolidated CI Consolidated Consolidated
------------ --------- ------------ ------------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization
Allowance for equity funds used during construction
Investment tax credit adjustments, net
Deferred income taxes, net
Net change in:
Accounts receivable
Inventories
Prepaid New Jersey sales and excise taxes
Accounts payable
Other current assets & liabilities
Gains on sales of assets
Other, net
Net cash provided by operating activities
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired
Capital expenditures
Investments in partnerships
Sales of nonutility assets
Sales of utility assets
Deposits to nuclear decommissioning trust funds
Other, net
Net cash used by investing activities
Cash Flows From Financing Activities
Common dividends paid
Capital contributions
Issuances:
Long-term debt
Common stock
Preferred stock
Redemptions:
Long-term debt
Common stock
Preferred stock
Principal portion of capital lease payments
Net change in short-term debt
Cost of issuances and refinancings
Net cash used by financing activities
Net change in cash and cash equivalents
Beginning of year cash and cash equivalents
End of year cash and cash equivalents
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-3F Page 2 of 2
<PAGE>
Conectiv Services, Inc. and Subsidiary*
Consolidating Statement of Cash Flows for the Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
CSI Reclasses and CSI
Consolidated Consol. Entries Parent Plumbing
------------ ------------- ----------- ----------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization
Allowance for equity funds used during construction
Investment tax credit adjustments, net
Deferred income taxes, net
Net change in:
Accounts receivable
Inventories
Prepaid New Jersey sales and excise taxes
Accounts payable
Other current assets & liabilities
Gains on sales of assets
Other, net
Net cash provided by operating activities
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired
Capital expenditures
Investments in partnerships
Sales of nonutility assets
Sales of utility assets
Deposits to nuclear decommissioning trust funds
Other, net
Net cash used by investing activities
Cash Flows From Financing Activities
Common dividends paid
Capital contributions
Issuances:
Long-term debt
Common stock
Preferred stock
Redemptions:
Long-term debt
Common stock
Preferred stock
Principal portion of capital lease payments
Net change in short-term debt
Cost of issuances and refinancings
Net cash used by financing activities
Net change in cash and cash equivalents
Beginning of year cash and cash equivalents
End of year cash and cash equivalents
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-3G
<PAGE>
Conectiv Solutions LLC and Subsidiary*
Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
Solutions Reclasses and Solutions Power
Consolidated Consol. Entries Parent Consulting
------------ ------------- ----------- ----------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization
Allowance for equity funds used during construction
Investment tax credit adjustments, net
Deferred income taxes, net
Net change in:
Accounts receivable
Inventories
Prepaid New Jersey sales and excise taxes
Accounts payable
Other current assets & liabilities
Gains on sales of assets
Other, net
Net cash provided by operating activities
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired
Capital expenditures
Investments in partnerships
Sales of nonutility assets
Sales of utility assets
Deposits to nuclear decommissioning trust funds
Other, net
Net cash used by investing activities
Cash Flows From Financing Activities
Common dividends paid
Capital contributions
Issuances:
Long-term debt
Common stock
Preferred stock
Redemptions:
Long-term debt
Common stock
Preferred stock
Principal portion of capital lease payments
Net change in short-term debt
Cost of issuances and refinancings
Net cash used by financing activities
Net change in cash and cash equivalents
Beginning of year cash and cash equivalents
End of year cash and cash equivalents
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-3H
<PAGE>
Conectiv Thermal Systems, Inc. and Subsidiaries*
Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
CTS Reclasses and CTS
Consolidated Consol. Entries Parent AJTS AOS TELP
------------ --------------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization
Allowance for equity funds used during construction
Investment tax credit adjustments, net
Deferred income taxes, net
Net change in:
Accounts receivable
Inventories
Prepaid New Jersey sales and excise taxes
Accounts payable
Other current assets & liabilities
Gains on sales of assets
Other, net
Net cash provided by operating activities
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired
Capital expenditures
Investments in partnerships
Sales of nonutility assets
Sales of utility assets
Deposits to nuclear decommissioning trust funds
Other, net
Net cash used by investing activities
Cash Flows From Financing Activities
Common dividends paid
Capital contributions
Issuances:
Long-term debt
Common stock
Preferred stock
Redemptions:
Long-term debt
Common stock
Preferred stock
Principal portion of capital lease payments
Net change in short-term debt
Cost of issuances and refinancings
Net cash used by financing activities
Net change in cash and cash equivalents
Beginning of year cash and cash equivalents
End of year cash and cash equivalents
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-3I
<PAGE>
Atlantic Generation, Inc. and Subsidiaries*
Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
AGI Reclasses and AGI PED PED
Consolidated Consol. Entries Parent GEN LTD
------------ --------------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization
Allowance for equity funds used during construction
Investment tax credit adjustments, net
Deferred income taxes, net
Net change in:
Accounts receivable
Inventories
Prepaid New Jersey sales and excise taxes
Accounts payable
Other current assets & liabilities
Gains on sales of assets
Other, net
Net cash provided by operating activities
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired
Capital expenditures
Investments in partnerships
Sales of nonutility assets
Sales of utility assets
Deposits to nuclear decommissioning trust funds
Other, net
Net cash used by investing activities
Cash Flows From Financing Activities
Common dividends paid
Capital contributions
Issuances:
Long-term debt
Common stock
Preferred stock
Redemptions:
Long-term debt
Common stock
Preferred stock
Principal portion of capital lease payments
Net change in short-term debt
Cost of issuances and refinancings
Net cash used by financing activities
Net change in cash and cash equivalents
Beginning of year cash and cash equivalents
End of year cash and cash equivalents
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-3J Page 1 of 2
<PAGE>
Atlantic Generation, Inc. and Subsidiaries*
Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
VINE VINE BING BING
GEN LTD GEN LTD
-------- ------- ------ ------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization
Allowance for equity funds used during construction
Investment tax credit adjustments, net
Deferred income taxes, net
Net change in:
Accounts receivable
Inventories
Prepaid New Jersey sales and excise taxes
Accounts payable
Other current assets & liabilities
Gains on sales of assets
Other, net
Net cash provided by operating activities
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired
Capital expenditures
Investments in partnerships
Sales of nonutility assets
Sales of utility assets
Deposits to nuclear decommissioning trust funds
Other, net
Net cash used by investing activities
Cash Flows From Financing Activities
Common dividends paid
Capital contributions
Issuances:
Long-term debt
Common stock
Preferred stock
Redemptions:
Long-term debt
Common stock
Preferred stock
Principal portion of capital lease payments
Net change in short-term debt
Cost of issuances and refinancings
Net cash used by financing activities
Net change in cash and cash equivalents
Beginning of year cash and cash equivalents
End of year cash and cash equivalents
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-3J Page 2 of 2
<PAGE>
Atlantic Energy Technology, Inc. and Subsidiary*
Consolidating Statement of Cash Flows for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
AET Reclasses and AET
Consolidated Consol. Entries Parent TEE
------------ --------------- ------ ---
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization
Allowance for equity funds used during construction
Investment tax credit adjustments, net
Deferred income taxes, net
Net change in:
Accounts receivable
Inventories
Prepaid New Jersey sales and excise taxes
Accounts payable
Other current assets & liabilities
Gains on sales of assets
Other, net
Net cash provided by operating activities
Cash Flows From Investing Activities
Acquisition of businesses, net of cash acquired
Capital expenditures
Investments in partnerships
Sales of nonutility assets
Sales of utility assets
Deposits to nuclear decommissioning trust funds
Other, net
Net cash used by investing activities
Cash Flows From Financing Activities
Common dividends paid
Capital contributions
Issuances:
Long-term debt
Common stock
Preferred stock
Redemptions:
Long-term debt
Common stock
Preferred stock
Principal portion of capital lease payments
Net change in short-term debt
Cost of issuances and refinancings
Net cash used by financing activities
Net change in cash and cash equivalents
Beginning of year cash and cash equivalents
End of year cash and cash equivalents
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-3K
<PAGE>
Conectiv and Subsidiaries
Consolidating Statement of Retained Earnings for the Year
Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
Conectiv Reclasses and Conectiv DPL
Consolidated Consol. Entries Parent CRP Consolidated
------------- --------------- ----------- -------- --------------
<S> <C> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year $ 300,757 $ 5,143 $ - $ - $ 300,757
Transfer of DPL's nonutility subsidiaries
to Connectiv Parent - - (8,644) - 8,644
Connectiv's initial investment in DPL - (309,401) 309,401 - -
Acquisition of Atlantic subsidiaries - (224,160) - - -
Net Income 153,201 (105,886) 153,201 (26) 108,058
Common stock dividends (155,302) 176,310 (155,302) - (94,860)
Class A common stock dividends (20,994) - (20,994) - -
Redemption of preferred stock (723) 723 (723) - -
------------- ------------- ---------- --------- -------------
Balance at end of year $ 276,939 $ (457,271) $ 276,939 $ (26) $ 322,599
============= ============= ========== ========= =============
</TABLE>
F-4A Page 1 of 3
<PAGE>
Conectiv and Subsidiaries
Consolidating Statement of Retained Earnings for the Year
Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
ACE DCI* CES* AEE*
Consolidated Consolidated Consolidated Consolidated AEI
------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year $ - $ -
Transfer of DPL's nonutility subsidiaries
to Conectiv Parent - -
Conectiv's initial investment in DPL - -
Acquisition of Atlantic subsidiaries 240,551 (1,043)
Net Income 23,745 (18)
Common stock dividends (81,450) -
Class A common stock dividends - -
Redemption of preferred stock (723) -
------------- ------------
Balance at end of year $182,123 $(1,061)
============= ============
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-4A Page 2 of 3
<PAGE>
Conectiv and Subsidiaries
Consolidating Statement of Retained Earnings for the Year Ended
December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
CSI* Solutions*
DSC Consolidated Consolidated CCI*
---------- ----------------- ---------------- -----------
<S> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year $2,087
Transfer of DPL's nonutility subsidiaries
to Conectiv Parent -
Conectiv's initial investment in DPL -
Acquisition of Atlantic subsidiaries -
Net Income 565
Common stock dividends -
Class A common stock dividends -
Redemption of preferred stock -
------
Balance at end of year $2,652
======
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-4A Page 3 of 3
<PAGE>
Delmarva Power and Light Company and Subsidiaries
Consolidating Statement of Retained Earnings for the Year
Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
DPL Reclasses and DPL DPL
Consolidated Consol. Entries Parent Fin I
------------ ------------- ------------ ----------
<S> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year $300,757 $ - $300,757 $ -
Transfer of DPL's nonutility subsidiaries
to Conectiv Parent 8,644 - 8,644 -
Conectiv's initial investment in DPL - - - -
Acquisition of Atlantic subsidiaries - - - -
Net Income 108,058 - 108,058 -
Common stock dividends (94,860) - (94,860) -
Class A common stock dividends - - - -
Redemption of preferred stock - - - -
----------- ------------ ------------ ----------
Balance at end of year $322,599 $ - $322,599 $ -
=========== ============ =========== =========
</TABLE>
F-4B
<PAGE>
Atlantic City Electric Company and Subsidiaries
Consolidating Statement of Retained Earnings for the Ten Months
Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
ACE Reclasses and ACE ACE ACE
Consolidated Consol. Entries Parent Cap I Cap II
------------ --------------- ------ ----- ------
<S> <C> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year $ - $ - $ - $ - $ -
Transfer of DPL's nonutility subsidiaries
to Conectiv Parent - - - - -
Conectiv's initial investment in DPL - - - - -
Acquisition of Atlantic subsidiaries 240,551 - 240,551 - -
Net Income 23,745 - 23,745 - -
Common stock dividends (81,450) - (81,450) - -
Class A common stock dividends - - - - -
Redemption of preferred stock (723) - (723) - -
----------- ------------- -------- --------- --------
Balance at end of year $182,123 $ - $182,123 $ - $ -
=========== ============= ======== ========= ========
</TABLE>
F-4C
<PAGE>
Delmarva Capital investments, Inc. and Subsidiaries*
Consolidating Statement of Retained Earnings for the Year
Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
DCI Reclasses and DCI DCI DCI
Consolidated Consol. Entries Parent I II
------------ --------------- ----------- -------- --------
<S> <C> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year
Transfer of DPL's nonutility subsidiaries
to Conectiv Parent
Conectiv's initial investment in DPL
Acquisition of Atlantic subsidiaries
Net Income
Common stock dividends
Class A common stock dividends
Redemption of preferred stock
Balance at end of year
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-4D Page 1 of 2
<PAGE>
Delmarva Capital Investments, Inc. and Subsidiaries*
Consolidating Statement of Retained Earnings for the Year Ended
December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
CCM DOSC DCTC
--------- ---------- -----------
<S> <C> <C> <C>
Retained Earnings
Balance at beginning of year
Transfer of DPL's nonutility subsidiaries
to Conectiv Parent
Conectiv's initial investment in DPL
Acquisition of Atlantic subsidiaries
Net Income
Common stock dividends
Class A common stock dividends
Redemption of preferred stock
Balance at end of year
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-4D Page 2 of 2
<PAGE>
Conectiv Energy Supply, Inc. and Subsidiary*
Consolidating Statement of Retained Earnings for the
Year Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
CES Reclasses and CES
Consolidated Consol. Entries Parent Petron
------------ --------------- ------ ------
<S> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year
Transfer of DPL's nonutility subsidiaries
to Conectiv Parent
Conectiv's initial investment in DPL
Acquisition of Atlantic subsidiaries
Net Income
Common stock dividends
Class A common stock dividends
Redemption of preferred stock
Balance at end of year
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-4E
<PAGE>
Atlantic Energy Enterprises, Inc. and Subsidiaries*
Consolidating Statement of Related Earnings for the Ten Months
Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
AEE Reclasses and AEE
Consolidated Consol. Entries Parent ASP ATE
---------------- ------------------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year
Transfer of DPL's nonutility subsidiaries
to Conectiv Parent
Conectiv's initial investment in DPL
Acquisition of Atlantic subsidiaries
Net Income
Common stock dividends
Class A common stock dividends
Redemption of preferred stock
Balance at end of year
</TABLE>
[CAPTION]
* CONFIDENTIAL TREATMENT REQUESTED
F-4F Page 1 of 2
<PAGE>
Atlantic Energy Enterprises, Inc. and Subsidiaries*
Consolidating Statement of Retained Earnings for the Ten Months
Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
CTS AGI AET
Consolidated CI Consolidated Consolidated
-------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year
Transfer of DPL's nonutility subsidiaries
to Conectiv Parent
Conectiv's initial investment in DPL
Acquisition of Atlantic subsidiaries
Net Income
Common stock dividends
Class A common stock dividends
Redemption of preferred stock
Balance at end of year
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-4F Page 2 of 2
<PAGE>
Conectiv Services, Inc. and Subsidiary*
Consolidating Statement of Retained Earnings for the Year
Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
CSI Reclasses and CSI
Consolidated Consol. Entries Parent Plumbing
------------ --------------- ---------- ----------
<S> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year
Transfer of DPL's nonutility subsidiaries
to Conectiv Parent
Conectiv's initial investment in DPL
Acquisition of Atlantic subsidiaries
Net Income
Common stock dividends
Class A common stock dividends
Redemption of preferred stock
Balance at end of year
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-4G
<PAGE>
Conectiv Solutions LLC and Subsidiary*
Consolidating Statement of Retained Earnings for the
Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
Solutions Reclasses and Solutions Power
Consolidated Consol. Entries Parent Consulting
---------------- ------------------- ------------- --------------
<S> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year
Transfer of DPL's nonutility subsidiaries
to Conectiv Parent
Conectiv's initial investment in DPL
Acquisition of Atlantic subsidiaries
Net Income
Common stock dividends
Class A common stock dividends
Redemption of preferred stock
Balance at end of year
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-4H
<PAGE>
Conectiv Thermal Systems, Inc. and Subsidiaries*
Consolidating Statement of Retained Earnings for the
Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
CTS Reclasses and CTS
Consolidated Consol. Entries Parent AJTS AOS TELP
------------ --------------- ------ ---- --- ----
<S> <C> <C> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year
Transfer of DPL's nonutility
subsidiaries to Conectiv Parent
Conectiv's initial investment in DPL
Acquisition of Atlantic subsidiaries
Net Income
Common stock dividends
Class A common stock dividends
Redemption of preferred stock
Balance at end of year
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-4I
<PAGE>
Atlantic Generation, Inc. and Subsidiaries*
Consolidating Statement of Retained Earnings for the
Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
AGI Reclasses and AGI PED PED
Consolidated Consol. Entries Parent GEN LTD
------------ --------------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year
Transfer of DPL's nonutility subsidiaries
to Conectiv Parent
Conectiv's initial investment in DPL
Acquisition of Atlantic subsidiaries
Net Income
Common stock dividends
Class A common stock dividends
Redemption of preferred stock
Balance at end of year
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-4J Page 1 of 2
<PAGE>
Atlantic Generation, Inc. and Subsidiaries*
Consolidating Statement of Retained Earnings
for the Ten Months Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
VINE VINE BING BING
GEN LTD GEN LTD
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year
Transfer of DPL's nonutility subsidiaries
to Conectiv Parent
Conectiv's initial investment in DPL
Acquisition of Atlantic subsidiaries
Net Income
Common stock dividends
Class A common stock dividends
Redemption of preferred stock
Balance at end of year
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-4J Page 2 of 2
<PAGE>
Atlantic Energy Technology, Inc. and Subsidiary*
Consolidating Statement of Retained Earnings for the Ten Months
Ended December 31, 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total Eliminations,
AET Reclasses and AET
Consolidated Consol. Entries Parent TEE
---------- ------------- ---------- ----------
<S> <C> <C> <C> <C>
Retained Earnings
Balance at beginning of year
Transfer of DPL's nonutility subsidiaries
to Conectiv Parent
Conectiv's initial investment in DPL
Acquisition of Atlantic subsidiaries
Net Income
Common stock dividends
Class A common stock dividends
Redemption of preferred stock
Balance at end of year
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED
F-4JK
<PAGE>
EXHIBIT D
CONECTIV AND SUBSIDIARY COMPANIES
---------------------------------
INTERCOMPANY INCOME TAX ALLOCATION AGREEMENT
--------------------------------------------
PURSUANT TO TITLE 17, CHAPTER 11 OF THE CODE OF FEDERAL
REGULATIONS PARAGRAPH (c) OF SECTION 250.45 ("RULE 45(c)")
WHEREAS, CONECTIV, a corporation organized under the laws of the State
of Delaware ("Conectiv") and a registered holding company under the Public
Utility Holding Company Act of 1935 ("Act"), together with its subsidiary
companies, direct and indirect, listed as parties hereto, comprise the members
of the Conectiv consolidated group which will join annually in the filing of a
consolidated Federal income tax return, and it is now the intention of Conectiv
and its subsidiaries, direct and indirect, (hereinafter collectively referred to
as the "Conectiv Group"), to enter into an agreement for the allocation of
current federal income taxes; and
WHEREAS, certain members of the Conectiv Group will join annually in
the filing of certain consolidated state income tax returns (to the extent
permitted or required under applicable state income tax laws), and it is now the
intention of the Conectiv Group to enter into an agreement for the allocation of
current state income taxes; and
WHEREAS, Rule 45(c) has been adopted by the Securities and Exchange
Commission with the specific intention of providing methods of allocating
current income taxes by a registered holding company and its subsidiaries; and
NOW, THEREFORE, each member of the Conectiv Group does hereby covenant
and agree with one another that the current consolidated income tax liabilities
of the Conectiv Group shall be allocated pursuant to Rule 45(c), so that each
member of the Conectiv Group will benefit mutually from the application of Rule
45(c) as follows:
<PAGE>
I
Definitions and Interpretation
------------------------------
Section 1.1 Definitions. For all purposes of this Agreement, except
-----------
as otherwise expressly provided, the following terms shall have the following
respective meanings:
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Conectiv" means Conectiv, a corporation, which is a registered
--------
holding company under the Public Utility Holding Company Act of 1935.
"Conectiv Resources" means Conectiv Resource Partners, Inc., a
------------------
Delaware corporation and a wholly-owned subsidiary of Conectiv.
"Consolidated Group" means Conectiv and all of its subsidiaries which,
------------------
from time to time, may be included in any (i) federal income tax return filed by
Conectiv in accordance with sections 1501 and 1502 of the Code or (ii) Other
Return.
"Consolidated Return" means any consolidated federal income tax return
-------------------
or Other Return filed by Conectiv, whether before or after the date hereof,
which includes one or more members of the Conectiv Group in a consolidated,
combined or unitary group of which Conectiv is the common parent.
"Consolidated Return Year" means any period during which Conectiv
------------------------
files a consolidated federal income tax return or Other Return that includes one
or more members of the Conectiv Group in a consolidated, combined or unitary
group of which Conectiv is the common parent.
"Consolidated Taxable Income" is the taxable income of the
---------------------------
Consolidated Group.
"Consolidated Tax Liability" means, with reference to any taxable
--------------------------
period, the consolidated, combined or unitary tax liability (including any
interest, additions to tax and penalties) of the Consolidated Group for such
taxable period (including the consolidated federal income tax liability and any
other consolidated, combined or unitary liability for Other Taxes).
"Other Return" means any consolidated, combined or unitary return of
------------
Other Taxes filed by Conectiv or another member of the Conectiv Group, whether
before or after the date hereof, which covers the operations of one or more
members of the Conectiv Group.
-2-
<PAGE>
"Other Taxes" means any taxes (including any interest and penalties)
-----------
payable to the government of any state, municipal or other political
subdivision, including all agencies and instrumentalities of such government.
"Person" means any individual, partnership, form, corporation, limited
------
liability company, joint stock company, unincorporated association, joint
venture, trust or other entity or enterprise, or any government or political
subdivision or agency, department or instrumentality thereof.
"Regulations" means the Treasury Regulations promulgated under the
-----------
Code.
Section 1.2 References, Etc. The words "hereof", "herein" and
--------------- ------ ------
"hereunder" and words of similar import when used in this Agreement shall refer
---------
to this Agreement as a whole and not to any particular provision of this
Agreement. All terms defined herein in the singular shall have the same
meanings in the plural and vice versa. All References herein to any Person
includes such Person's successors and assigns. All references herein to
Articles and Sections shall, unless the context requires a different
construction, be deemed to be references to the Articles and Sections of this
Agreement. In this Agreement, unless a clear contrary intention appears the
word "including" (and with correlative meaning "include") means "including but
--------- -------
not limited to."
II
Preparation and Filing of Tax Returns
-------------------------------------
Section 2. 1 Federal Returns.
---------------
(a) A U.S. consolidated federal income tax return shall be filed by
Conectiv for the taxable year ended December 31, 1998 and for each subsequent
taxable year in respect of which this Agreement is in effect and for which the
Consolidated Group is required or permitted to file a consolidated federal
income tax return. Conectiv and all its subsidiaries shall execute and file
such consents, elections and other documents that may be required or appropriate
for the proper filing of such returns. Conectiv Resources shall be responsible
for the preparation of such income tax returns.
(b) Inasmuch as the federal Consolidated Return for the year ended
December 31, 1998 will be the first consolidated federal income tax return of
the Consolidated Group, the Consolidated Group will elect, on a timely basis, in
accordance with Code Section 1552(b) and Section 1.1552-1(c)(2) of the
Regulations and in accordance with Revenue Procedure 90-39 to allocate its
consolidated tax liability (other than alternative minimum tax and its related
credits) among its members under the method described in Sections 1.1502-
33(d)(3) and 1.1552-1(a)(1) commencing with its first consolidated taxable year
ended December 31, 1998. The general effect of such method is to first allocate
the consolidated tax liability among the members of the Consolidated Group on
the basis of the percentage of Consolidated Taxable Income (but not less than
zero) which the taxable income of each member, if computed on a separate return,
would bear to the
-3-
<PAGE>
total amount of the taxable income for all members of the Consolidated Group so
computed. Then such method allocates an additional amount (the "Tax Benefit
Amount") to each member up to, but not greater than, the excess, if any, of its
separate return tax liability over the amount allocated to such member in the
previous sentence. The total of the Tax Benefit Amounts allocated to members
shall result in payments to, and an increase in the earnings and profits of, the
members who had items of deduction, loss or credits to which such Tax Benefit
Amount is attributable. The allocation of the alternative minimum tax liability
and the minimum tax credit, however, shall be allocated in the manner set forth
in Proposed Treasury Regulation Section 1.1502-55. This method generally
allocates (i) the alternative minimum tax based on the incremental resulting
from the inclusion of the member in the consolidated return based on its
relative separate adjusted alternative minimum tax and (ii) the minimum tax
credit on the basis of the relative alternative minimum tax previously assigned
to such member.
(c) Each member's allocable share of the consolidated income tax
liability as determined in Section 2.1(b) hereof shall be used in both (i) the
determination of each Member's earnings and profits and (ii) determining the
amounts to be paid (as provided in Section 3.4 of this Agreement) by Members to
Conectiv with respect to each member's share of the Consolidated Group's Tax
liability and payments from Conectiv to members with respect to the use of a
member's tax attributes
(d) The aggregate of all amounts paid by members of the Consolidated
Group (the "Paying Members") as a result of the excess of each members separate
return liability (as determined under Section 1.1552-1(a)(2)(ii) of the
Regulations) over the amount allocated to such member as its share of the
Consolidated Tax Liability under Code Section 1552 (i.e., the Tax Benefit
Amount) shall be paid by Conectiv to the other members (the "Loss Members")
which had tax deductions, losses and credits to which such payment by the Paying
Members is attributable. The apportionment of such payments among Loss Members
shall be in a manner that reflects the Consolidated Group's absorption of such
tax attributes in the manner described in 2.1(e) below. The payments to the
Loss Members for their tax attributes shall be pursuant to a consistent method
which reasonably reflects such items of loss or credit (such consistency and
reasonableness to be determined by the party charged with the administration of
this Agreement in accordance with Section 3.5 of this Agreement). However, for
this purpose, the amounts paid to Loss Members will generally be deemed
consistent and reasonable if paid on a basis equal to maximum effective federal
corporate income tax rate (currently 35 percent) of the tax losses utilized and
100 percent of tax credits utilized.
(e) In apportioning the payments to Loss Members for the Tax Benefit
Amount pursuant to Section 2.1(d) hereof:
(i) any consolidated net operating loss shall ("NOL") be
allocated among the group members pursuant to Regulations Section 1.1502-
79(a)(3). To the extent the consolidated NOL is carried back, any member's
individually allocable NOL shall be deemed carried back and utilized in
proportion to the amount that the member's NOL bears to the consolidated NOL.
Analogous principles shall apply in the case of NOL carryforwards;
-4-
<PAGE>
(ii) with respect to each type of credit used to offset all or a
portion of the Consolidated Tax Liability otherwise payable, such credit shall
be allocated among the members by crediting to each member an amount of credit
which that member would have available to utilize on a separate return basis in
a manner consistent with the method set forth in Section 2.1(e)(i) above.
(iii) the cost of any credit recapture which results in the
payment of tax shall be specifically allocated to the member whose credit is
recaptured determined in a manner consistent wit the provisions of Section
2.1(e)(i) above.
Section 2.2 Other Returns. (a) Conectiv will prepare, and Conectiv
-------------
will file, all returns of Other Taxes which are required to be filed with
respect to the operations of Conectiv and its subsidiaries. In the event any
taxing authority requires or permits that a combined, consolidated or unitary
return be filed for Other Taxes, which return includes both Conectiv and a
subsidiary, Conectiv may elect to file such return and shall have the right to
require any member to be included in such return. Conectiv will advise each of
its subsidiaries included in each Other Return and of each governmental office
in which any Other Return is filed. Other Taxes shall be allocated among the
Conectiv Group in a manner that is consistent with the method set forth in
Article II hereof. Furthermore, amounts due to Conectiv, or from Conectiv, with
respect to Other Taxes shall be determined in a manner consistent with Sections
2.1(b) and 2.1(d).
(b) Conectiv Resources shall prepare the Other Tax Returns of each
member of the Conectiv Group that is obligated to file an Other Return that does
not include any other member of the Conectiv Group. Such member shall be solely
responsible and obligated to file such Other Return on its own behalf and to pay
the tax liability with respect to such return from its own funds.
(c) If any member of the Conectiv Group is required to file a
combined, consolidated or unitary return for Other Taxes with another member of
the Conectiv Group, but not with Conectiv (an "Other Taxes Subgroup"), then the
member to be included in such return which is required to file such tax return
for the Other Taxes Subgroup shall have the rights, powers and obligations to
file such tax returns and apportion among and, collect and remit from, the other
applicable members such Other Taxes as the rights, powers and obligations given
to Conectiv under this Agreement with respect to the Consolidated Tax Liability.
If the right to file a combined, consolidated or unitary return for Other Taxes
is optional, then Conectiv shall decide which of its subsidiaries should, to the
extent permitted by law, join in filing of such return. Conectiv Resources
shall prepare all of such Other Tax Returns.
Section 2. 3 Member Tax Information. The members of the Consolidated
----------------------
Group shall submit the tax information requested by Conectiv, in the manner and
by the date requested, in order to enable the Treasurer to calculate the amounts
payable by the members pursuant to Article III hereof.
-5-
<PAGE>
III
Responsibility for Tax; Intercompany Payments
---------------------------------------------
Section 3.1 Responsibility. Assuming the members of the
--------------
Consolidated Group have fulfilled their obligations pursuant to Sections 3.2 and
3.3 below, then Conectiv will be solely responsible for, and will indemnify and
hold each member of the Consolidated Group harmless with respect to, the payment
of: (a) the Consolidated Tax Liability for each taxable period for which, as
determined under Section 2.1 hereof, Conectiv filed a Consolidated Return; and
(b) any and all Other Taxes due or payable with respect to any Other Return.
Section 3.2 Federal Tax Payments. (a) With respect to each
--------------------
Consolidated Return Year, the Treasurer of Conectiv shall have the right to
assess members of the Consolidated Group their share of estimated tax payments
to be made on a projected consolidated federal income tax return for each year.
Such members will pay, to Conectiv, such estimates not later than the 15th day
of the 4th, 6th, 9th and 12th months of such Consolidated Return Year. The
difference between a member's estimated tax payments used for computation of the
quarterly estimated payments and such member's estimated Tax Liability for any
Consolidated Return Year as determined under Section 2.1(b) hereof calculated
for purposes of determining the Tax payment to be made together with a request
for an extension of the due date for filing the Consolidated Return shall be
paid to Conectiv no later than March 15th. Furthermore, any payments for the
difference between a member's total estimated payments and such member's actual
Tax Liability for any Consolidated Tax Return Year as determined under Section
2.1(b) hereof or any payments by Conectiv to a member pursuant to Section 2.1(d)
hereof shall be made no later than the 10th day following the filing of the
Consolidated Return for such Consolidated Return Year.
(b) Conectiv shall have sole authority, to the exclusion of all other
members of the Consolidated Group, to agree to any adjustment proposed by the
Internal Revenue Service or any other taxing authority with respect to items of
income, deductions or credits, as well as interest or penalties, attributable to
any member of the Consolidated Group notwithstanding that such adjustment may
increase the amounts payable by members of the Consolidated Group under this
Section 3.2 or Section 3.3 hereof. In the event of any adjustment to the
Consolidated Tax Liability relating to items of income, deductions or credit, as
well as interest or penalties, attributable to any member of the Consolidated
Group by reason of an amended return, claim for refund or audit by the Internal
Revenue Service or any other taxing authority, the liability of all other
members of the Consolidated Group under paragraphs (a) of this Section 3.2 or
Section 3.3 hereof shall be redetermined to give effect to such adjustment as if
such adjustment had been made as a part of the original computation of such
liability, and payment from a member to Conectiv, or by Conectiv to a member, as
the case may be, shall be promptly made after any payments are made to the
Internal Revenue Service or any other taxing authority, refunds received or
final determination of the matter in the case of contested proceedings. In such
event, any payments between the parties shall bear interest at the then
prevailing rate or rates on deficiencies assessed by the Internal Revenue
Service or any other relevant taxing authority, during the period from the due
date of the Consolidated Return (determined without regard to extensions of time
for the filing thereof) for the Consolidated Return Year to which the
adjustments were made to the date of payment.
-6-
<PAGE>
Section 3.3 Other Tax Payments. Payments with respect to Other Taxes
------------------
and required estimates thereof for which any subsidiary of Conectiv has joint
and several liability shall be calculated and made by or to such subsidiary in
the same manner as that provided in Section 3.2. The principles set forth in
Section 3.2 governing the determination and adjustment of payments as well as
the method of payment to or from such subsidiary with respect to federal income
taxes shall be equally applicable in determining and adjusting the amount of and
due date of payments to be made to or from such subsidiary with respect to Other
Taxes and estimates thereof. Each subsidiary of Conectiv shall pay, directly to
the appropriate taxing authority, all taxes for which such subsidiary is liable
and for which Conectiv does not have joint or several liability.
Section 3.4 Conectiv. (a) Any payments to be made by a subsidiary of
--------
Conectiv pursuant to Section 2.1, 2.2, 3.2 or 3.3 hereof shall be made by such
subsidiary to Conectiv, in the form of cash payments to Conectiv. To the extent
any payments are to be made to a subsidiary with respect to the use of such
subsidiary's tax attributes by the Consolidated Group pursuant to Section
2.1(d), 2.2, 3.2(b) or 3.3 hereof, Conectiv shall make such payment to such
subsidiary in the form of cash payments to the Member.
(b) Tax payments by Conectiv with respect to any Consolidated Tax
Liability shall be paid by Conectiv and shall be debited to the Member of the
Consolidated Group for their respective shares of such Consolidated Tax
Liability as determined pursuant to Article II hereof.
Section 3.5 Administration. The provisions of this Agreement shall
--------------
be administered by the Treasurer of Conectiv. Conectiv shall be responsible for
maintaining the books and records reflecting the intercompany accounts
reflecting the amounts owned, collected and paid with respect to Taxes pursuant
to this Agreement. Conectiv will not be obligated to keep such funds in
segregated accounts. Any actions to be taken by Conectiv under this Agreement
may be delegated to, and performed by Conectiv Resources.
IV
Miscellaneous Provisions
------------------------
Section 4.1 Effect. The provisions hereof shall fix the rights and
------
obligations of the parties as to the matters covered hereby whether or not such
are followed for federal income tax or other purposes by the Consolidated Group,
including the computation of earnings and profits for federal income tax
purposes.
Section 4.2 Effective Date and Termination of Affiliation. This
---------------------------------------------
Agreement shall be effective with respect to all taxable years ending on or
after the date hereof, in which any subsidiary of Conectiv is a member of the
Consolidated Group for any portion of the tax year. In the event that a party
to this Agreement ceases to be a member of the Consolidated Group, the rights
and obligations of such party and each other party to this Agreement shall
survive, but only with respect
-7-
<PAGE>
to taxable years including or ending before the date such party ceases to be a
member of the Consolidated Group.
Section 4.3 Notices. Any and all notices, requests or other
-------
communications hereunder shall be given in writing (a) if to Conectiv, to
Attention: Manager of Taxes, Facsimile Number: (302) 429-3017 and (b) if to
any other person, at such other address as shall be furnished by such person by
like notice to the other parties.
Section 4.4 Expenses. Each party hereto shall pay its own expenses
--------
incident to this Agreement and the transactions contemplated hereby, including
all legal and accounting fees and disbursements.
Section 4.5 Benefit and Burden. This Agreement shall inure to the
------------------
benefit of, and shall be binding upon, the parties hereto and their respective
successors.
Section 4.6 Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties with respect to the matters covered hereby and
supersedes all prior agreements and understandings, oral and written, with
respect to such matters.
Section 4.7 Amendments and Waiver. No amendment, modification,
---------------------
change or cancellation of this Agreement shall be valid unless the same is in
writing and signed by the parties hereto. No waiver of any provision of this
Agreement shall be valid unless in writing and signed by the person against whom
that waiver is sought to be enforced. The failure of any party at any time to
insist upon strict performance of any condition, promise, agreement or
understanding set forth herein shall not be construed as a waiver or
relinquishment of the right to insist upon strict performance of the same or any
other condition, promise, agreement or understanding at a future time.
Section 4.8 Assignments. Neither this Agreement nor any right,
-----------
interest or obligation hereunder may be assigned by any party hereto and any
attempt to do so shall be null and void.
Section 4.9 Severability. The invalidity or unenforceability of any
------------
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted.
-8-
<PAGE>
Section 4.10 Entire Agreement. THIS AGREEMENT SETS FORTH ALL OF THE
----------------
PROMISES, AGREEMENTS, CONDITIONS, UNDERSTANDINGS, WARRANTIES AND REPRESENTATIONS
AMONG THE PARTIES WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY, AND
SUPERSEDES ALL PRIOR AGREEMENTS, ARRANGEMENTS AND UNDERSTANDINGS BETWEEN THE
PARTIES HERETO, WHETHER WRITTEN, ORAL OR OTHERWISE. THERE ARE NO PROMISES,
AGREEMENTS, CONDITIONS, UNDERSTANDINGS, WARRANTIES OR REPRESENTATIONS, ORAL OR
WRITTEN, EXPRESS OR IMPLIED, AMONG THE PARTIES EXCEPT AS SET FORTH HEREIN.
Section 4.11 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
--------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
Section 4.12 Counterparts. This Agreement may be executed in one or
------------
more counterparts, each of which shall constitute an original and together which
shall constitute one instrument. The parties hereto specifically recognize that
from time to time other corporations may become members of the Consolidated
Group and hereby agree that such new members may become members to this
Agreement by executing a copy of this Agreement and it will be effective as if
all the members had resigned.
Section 4.13 Attorneys' Fees. If either party hereto commences an
---------------
action against the other party to enforce any of the terms, covenants,
conditions or provisions of this Agreement, or because of a default by a party
under this Agreement, the prevailing party in any such action shall be entitled
to recover its costs, expenses and losses, including attorneys' fees, incurred
in connection with the prosecution or defense of such action from the losing
party.
Section 4.14 No Third Party Rights. Nothing in this Agreement shall
---------------------
be deemed to create any right in any creditor or other person or entity not a
party hereto and this Agreement shall not be construed in any respect to be a
contract in whole or in part for the benefit of any third party.
Section 4.15 Further Documents. The parties agree to execute any and
-----------------
all documents, and to perform any and all other acts, reasonably necessary to
accomplish the purposes of this Agreement.
Section 4.16 Headings and Captions. The headings and captions
---------------------
contained in this Agreement are inserted and included solely for convenience and
shall not be considered or given any effect in construing the provisions hereof
if any question of intent should arise.
-9-
<PAGE>
Section 4.17 Construction. The parties acknowledge that each of them
------------
has had the benefit of legal counsel of its own choice and has been afforded an
opportunity to review this Agreement with its legal counsel and that this
Agreement shall be construed as if jointly drafted by the parties hereto.
EXECUTED as of the date and year first above written.
CONECTIV
By: s/ John C. van Roden, Jr.
----------------------------------
Printed Name: John C. van Roden Jr.
------------------------
Title: Senior Vice President & CFO
-------------------------------
ACE REIT, Inc. s/ Charles A. Mannix
ATE Investments, Inc. s/ Louis M. Walters
Atlantic City Electric Company s/ Louis M. Walters
Atlantic Generation, Inc. s/ Louis M. Walters
Atlantic Jersey Thermal Systems, Inc. s/ Louis M. Walters
Atlantic Southern Properties s/ Louis M. Walters
ATS Operating Services, Inc. s/ Louis M. Walters
Binghamton General, Inc. s/ Louis M. Walters
Binghamton Limited, Inc. s/ Louis M. Walters
Pedrick Limited, Inc. s/ Louis M. Walters
Conectiv Communications, Inc. s/ Louis M. Walters
Conectiv Energy Supply, Inc. s/ Louis M. Walters
Conectiv Operating Services Company s/ Louis M. Walters
Conectiv Plumbing, LLC s/ Louis M. Walters
Conectiv Resource Partners, Inc. s/ Louis M. Walters
Conectiv Services, Inc. s/ Louis M. Walters
Conectiv Solutions, LLC s/ Louis M. Walters
Conectiv Thermal Systems, Inc. s/ Louis M. Walters
DCI I, Inc. s/ Louis M. Walters
DCTC Burney, Inc. s/ Louis M. Walters
Delmarva Capital Investments, Inc. s/ Louis M. Walters
Delmarva Power & Light Company s/ Louis M. Walters
Delmarva Services Company s/ Louis M. Walters
DPL REIT, Inc. s/ Charles A. Mannix
Enerval LLC s/ Louis M. Walters
Pedrick General, Inc. s/ Louis M. Walters
The Earth Exchange, Inc. s/ Louis M. Walters
ACE REIT Holding Co. s/ Charles A. Mannix
Vineland General, Inc. s/ Louis M. Walters
Vineland General, Inc. II s/ Louis M. Walters
Vineland Limited, Inc. Louis M. Walters
Vineland Limited, Inc. II Louis M. Walters
Atlantic Paxton Cogeneration Louis M. Walters
Geotech of Capital Region Louis M. Walters
DPL REIT Holding Co. Charles A. Mannix
-10-
<PAGE>
Delmarva Capital Technology Co s/ Louis M. Walters
Delmarva Capital Realty Co. s/ Louis M. Walters
Post & Rail Farms, Inc. s/ Louis M. Walters
Christiana Capital Management, Inc. s/ Louis M. Walters
Delstar Operating Company s/ Louis M. Walters
Delwest Operating Company s/ Louis M. Walters
Delcal Operating Company s/ Louis M. Walters
Power Consulting Group s/ Louis M. Walters
Petron Oil Corporation s/ Louis M. Walters
Atlantic Energy Technology, Inc. s/ Louis M. Walters
Coastal Communications, Inc. s/ Louis M. Walters
Atlantic Energy Enterprises s/ Louis M. Walters
Atlantic Energy International, Inc. s/ Louis M. Walters
Abcool, Inc. s/ Louis M. Walters
Altemp Energy Systems, Inc. s/ Louis M. Walters
Luppold Heating and Air Conditioning s/ Louis M. Walters
Luppold Fuels, Inc. s/ Louis M. Walters
Babcock and Brandt, Inc. s/ Louis M. Walters
Berkshire Mechanical, Inc. s/ Louis M. Walters
Jones Refrigeration & Air Conditioning, Inc. s/ Louis M. Walters
-11-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,569,178
<OTHER-PROPERTY-AND-INVEST> 595,893
<TOTAL-CURRENT-ASSETS> 723,872
<TOTAL-DEFERRED-CHARGES> 495,737
<OTHER-ASSETS> 702,994
<TOTAL-ASSETS> 6,087,674
<COMMON> 1,073
<CAPITAL-SURPLUS-PAID-IN> 1,569,770
<RETAINED-EARNINGS> 276,939
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,843,161
188,950
95,933
<LONG-TERM-DEBT-NET> 1,746,562
<SHORT-TERM-NOTES> 376,061
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
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70,000
89,703
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<NAME> ATLANTIC CITY ELECTRIC COMPANY
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118,950
6,231
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