SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-3/A
(AMENDMENT NO. 1)
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 13E-3 (Sec.240.13E-3) THEREUNDER)
DELMARVA POWER & LIGHT COMPANY
(NAME OF THE ISSUER AND PERSON(S) FILING STATEMENT)
3.70% Preferred Stock
4% Preferred Stock
4.20% Preferred Stock
4.28% Preferred Stock
4.56% Preferred Stock
5% Preferred Stock
6 3/4% Preferred Stock
7 3/4% Preferred Stock -- $25 Par
Adjustable Rate Preferred Stock, Series A
(TITLE OF CLASS OF SECURITIES)
247109 200 ( 3.70% Preferred Stock)
247109 309 ( 4% Preferred Stock)
247109 408 ( 4.20% Preferred Stock)
247109 507 ( 4.28% Preferred Stock)
247109 606 ( 4.56% Preferred Stock)
247109 705 ( 5% Preferred Stock)
247109 770 (6 3/4% Preferred Stock)
247109 788 (7 3/4% Preferred Stock -- $25 Par)
247109 820 Adjustable Rate Preferred Stock, Series A
(CUSIP NUMBER OF CLASS OF SECURITIES)
Barbara S. Graham
Senior Vice President, Treasurer and Chief Financial Officer
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
(302) 429-3448
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON(S)
FILING STATEMENT)
------------------------------------
This statement is filed in connection with (check the appropriate
box):
a. [ ] The filing of solicitation materials or an information
statement subject to Regulation 14A [17 CFR 240.14a-1
to 240.14b-1], Regulation 14C [17 CFR 240.14c-1 to
240.14c-101] or Rule 13e-3(c) [Sec.240.13e-3(c)] under
the Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the
Securities Act of 1933.
c. [X] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or
information statement referred to in checking box (a)
are preliminary copies: [ ]
<PAGE>
CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE
--------------------- --------------------
$102,585,775 $20,517
* Pursuant to Section 13(e)(3) of the Securities Exchange Act
of 1934, as amended, and Rule 0-11(b)(1) thereunder, the
transaction value was calculated by multiplying 50,000
shares of 3.70% Preferred Stock, 40,000 shares of 4%
Preferred Stock, 50,000 shares of 4.20% Preferred Stock,
50,000 shares of 4.28% Preferred Stock, 50,000 shares of
4.56% Preferred Stock, 80,000 shares of 5% Preferred Stock,
200,000 shares of 6 3/4% Preferred Stock, 1,600,000 shares
of 7 3/4% Preferred Stock -$25 Par and 160,850 shares of
Adjustable Rate Preferred Stock, Series A, by $58.36,
$60.88, $66.25, $67.51, $71.92, $78.86, $104.65, $28.12 and
$91.50, the respective per share purchase prices.
/x/ CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY
RULE 0-11(A)(2) AND IDENTIFY THE FILING WITH WHICH THE
OFFSETTING FEE WAS PREVIOUSLY PAID. IDENTIFY THE PREVIOUS
FILING BY REGISTRATION STATEMENT NUMBER, OR THE FORM OR
SCHEDULE AND THE DATE OF ITS FILING.
Amount Previously Paid: $20,517 Filing Party: Delmarva
Power &
Light
Company
Form or Registration No.: Schedule 13E-4 Date Filed:
August 22, 1996
<PAGE>
This Rule 13e-3 Transaction Statement (the "Statement")
originally filed by Delmarva Power & Light Company on August 22,
1996 is hereby amended as set forth herein:
EXCEPT AS SPECIFIED TO THE CONTRARY IN THIS AMENDMENT, THE
INFORMATION IN THE SCHEDULE 13E-3 REMAINS UNCHANGED
The first four paragraphs of Section 1 of the Offer to
Purchase are hereby amended in their entirety as set forth in
Section I of the Supplement to Offer to Purchase attached hereto
as Exhibit (d)(10).
The paragraph of Section 8 of the Offer to Purchase
entitled "6-3/4% Shares, 7-3/4% Shares and Adjustable Rate
Shares" is hereby amended in its entirety as set forth in Section
II of the Supplement to Offer to Purchase attached hereto as
Exhibit (d)(10).
The third paragraph of Section 9 of the Offer to Purchase
is hereby amended in its entirety as set forth in Section III of
the Supplement to Offer to Purchase attached hereto as Exhibit
(d)(10).
The table entitled "Selected Financial Data" of Section 9 of
the Offer to Purchase is hereby amended in its entirety as set
forth in Section III of the Supplement to Offer to Purchase
attached hereto as Exhibit (d)(10).
The second paragraph of Section 10 of the Offer to Purchase
is hereby amended in its entirety as set forth in Section IV of
the Supplement to Offer to Purchase attached hereto as Exhibit
(d)(10).
Item 17. Material to be Filed as Exhibits.
(d)(10) Supplement to Offer to Purchase, dated September 20,
1996.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
Statement is true, complete and correct.
Dated: September 23, 1996 DELMARVA POWER & LIGHT COMPANY
By: /s/ B.S. Graham
-----------------------------
Name: B.S. Graham
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
(d)(10) Supplement to Offer to Purchase, dated
September 20, 1996.
Exhibit (d)(10)
SUPPLEMENT TO
OFFER TO PURCHASE FOR CASH
BY
DELMARVA POWER & LIGHT COMPANY
ANY AND ALL OF ITS
3.70% Preferred Stock ($100 Par Value) (CUSIP No. 247109 200)
at a Purchase Price of $58.36 Per Share
4% Preferred Stock ($100 Par Value) (CUSIP No. 247109 309)
at a Purchase Price of $60.88 Per Share
4.20% Preferred Stock ($100 Par Value) (CUSIP No. 247109 408)
at a Purchase Price of $66.25 Per Share
4.28% Preferred Stock ($100 Par Value) (CUSIP No. 247109 507)
at a Purchase Price of $67.51 Per Share
4.56% Preferred Stock ($100 Par Value) (CUSIP No. 247109 606)
at a Purchase Price of $71.92 Per Share
5% Preferred Stock ($100 Par Value) (CUSIP No. 247109 705)
at a Purchase Price of $78.86 Per Share
6 3/4% Preferred Stock ($100 Par Value) (CUSIP No. 247109 770)
at a Purchase Price of $104.65 Per Share
7 3/4% Preferred Stock -- $25 Par (CUSIP No. 247109 788)
at a Purchase Price of $28.12 Per Share
Adjustable Rate Preferred Stock, Series A ($100 Par Value)
(CUSIP No. 247109 820) at a Purchase Price of $91.50
Per Share
The following information supplements and amends the Offer to
Purchase for Cash, dated August 21, 1996 (the "Offer to
Purchase"), by Delmarva Power & Light Company (the "Company"),
any and all of the Shares (as defined in the Offer to Purchase).
All capitalized terms not defined herein shall have the meanings
specified in the Offer to Purchase.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, OCTOBER 4, 1996, UNLESS THE
OFFER IS EXTENDED
-------------------
THE OFFER FOR ONE SERIES OF PREFERRED STOCK IS INDEPENDENT
OF THE OFFER FOR ANY OTHER SERIES OF PREFERRED STOCK. THE OFFER
IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES OF THE
APPLICABLE SERIES OF PREFERRED STOCK BEING TENDERED. THE OFFER,
HOWEVER, IS SUBJECT TO CERTAIN OTHER CONDITIONS.
The Shares, except the 6 3/4% Shares, the 7 3/4% Shares and
the Adjustable Rate Shares, are listed and traded on the
Philadelphia Stock Exchange, Inc. (the "Philadelphia Stock
Exchange"). The 6 3/4% Shares, the 7 3/4% Shares and the
Adjustable Rate Shares are traded in the over-the-counter market
and are not listed on any national securities exchange or quoted
on the automated quotation system of a registered securities
association. As of August 20, 1996, the last reported sales
prices of the Shares so listed were $50.13 per 3.70% Share,
$52.50 per 4% Share, $55.00 per 4.20% Share, $59.25 per 4.28%
Share, $63.97 per 4.56% Share and $69.38 per 5% Share. For
information concerning the Shares, quarterly sales prices and
bids, see Section II herein and Section 8 "Price Ranges of
Shares; Dividends" in the Offer to Purchase
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR
THE SHARES.
-------------------
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE
ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
-------------------
THE COMPANY, ITS BOARD OF DIRECTORS AND ITS MANAGEMENT MAKE NO
RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER
ANY OR ALL SHARES OF ANY SERIES OF PREFERRED STOCK
PURSUANT TO THE OFFER. STOCKHOLDERS MUST MAKE
THEIR OWN DECISIONS AS TO WHETHER TO TENDER
SHARES OF ANY SERIES OF PREFERRED STOCK
PURSUANT TO THE OFFER AND, IF SO, HOW
MANY SHARES TO TENDER.
-------------------
The Dealer Managers for the Offer are:
MERRILL LYNCH & CO. MORGAN STANLEY & CO.
INCORPORATED
The date of this Supplement is September 20, 1996.
<PAGE>
I. AMENDMENTS TO SECTION 1 OF THE OFFER TO PURCHASE
`
The first four paragraphs of Section 1 of the Offer to
Purchase are hereby amended in their entirety as follows:
The Company is making the Offer because it believes that,
given the current market prices of the Shares and the opportunity
for the Company to replace the Shares with other securities that
in the aggregate have a lower after-tax cost, the purchase of the
Shares pursuant to the Offer is economically attractive to the
Company. See Section 9--"Certain Information Concerning the
Company." With the exception of one non-employee director not
present at the meeting and one non-employee director who
abstained from voting because of the involvement of the law firm
of which he is a member in the offering by Delmarva Power
Financing I, a special purpose business trust controlled by the
Company, of Trust Securities (as defined herein), the proceeds of
which will be used primarily to fund the Offer, each Board
member, including all other non-employee directors of the
Company, voted to authorize the Offer.
The Company believes the Offer is fair to unaffiliated
holders of Shares. In making this determination on August 21,
1996, the Company considered that (a) the Offer would give
holders of Shares the opportunity to sell their Shares at what
the Company believed to be a premium over the expected price at
which such Shares would trade in the market on such date, and (b)
the Offer provides stockholders who are considering a sale of all
or a portion of the Shares the opportunity to sell those Shares
for cash without the usual transaction costs associated with
open-market sales. See Section 8--"Price Ranges of Shares;
Dividends." The Company did not find it practicable to, and did
not, quantify or otherwise assign relative weights to these
factors. Although the Company anticipates that, if successful,
the Offer and the related financing will provide the Company with
a lower after-tax cost of capital, the Company does not believe
that the transactions will result in material change to its net
book value, going concern value or future prospects, and
accordingly the Company did not take these factors into account
in assessing the fairness of the Offer to unaffiliated holders of
Shares. Trading of the Shares of each Series of Preferred has
been limited and sporadic. Therefore, the Company determined the
Offer price for each Series of Preferred with reference to
certain objective factors, including, but not limited to, yields
on U.S. Treasury and municipal securities, yields on comparable
preferred securities, the prior trading characteristics of each
Series of Preferred, as well as certain subjective factors,
including, but not limited to, general industry outlook, general
market supply of securities of similar type and supply and demand
factors in the securities markets generally. Although the
weighting of these factors is a subjective determination, the
Company gave relatively more weight to objective factors, such as
yields on U.S. Treasury and municipal securities and yields on
comparable preferred securities.
Neither the Company nor the Board received any report,
opinion or appraisal from an outside party which is materially
related to the Offer, including, but not limited to, any report,
opinion or appraisal relating to the consideration or the
fairness of the consideration to be offered to the holders of the
Shares or the fairness of such Offer to the Company or the
unaffiliated holders of Shares. Neither the Board nor any
director has retained an unaffiliated representative to act
solely on behalf of unaffiliated holders of Shares for the
purposes of negotiating the terms of the Offer or preparing a
report concerning the fairness of the Offer. Neither the Company
nor the Board believed these measures were necessary to ensure
fairness in light of the fact that the Offer will not result in a
liquidation or change in control in the Company.
THE COMPANY, ITS BOARD OF DIRECTORS AND ITS MANAGEMENT MAKE
NO RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ANY
OR ALL SHARES OF ANY SERIES OF PREFERRED STOCK PURSUANT TO THE
OFFER. STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS AS TO WHETHER
TO TENDER SHARES OF ANY SERIES OF PREFERRED STOCK PURSUANT TO THE
OFFER AND, IF SO, HOW MANY SHARES TO TENDER.
Except as set forth in Section 9--"Certain Information
Concerning the Company," following the consummation of the Offer,
the business and operations of the Company will be continued by
the Company substantially as they are currently being conducted.
On August 12, 1996, the Company and Atlantic Energy, Inc.
announced a proposed merger transaction. The holders of Shares
will not have a right to approve or disapprove of the proposed
merger transaction. The Company's outstanding preferred stock,
including Shares not tendered in connection with the Offer, will
remain outstanding preferred stock of the Company (other than
those shares with respect to which appraisal rights are duly
exercised in the proposed merger as discussed in Section III of
this Supplement) after the consummation of the proposed merger,
and the rights and designations of such preferred stock will not
<PAGE>
be affected thereby. The proposed merger transaction with AE did
not form any part of the basis for the Offer, nor did it
otherwise affect the structure of the Offer. The determination
to launch the Offer was made independently of the decision to
merge with AE, and the pricing of the Offer was made without
regard to, or consideration of, such proposed merger. The
Company is unable to predict whether the expectation or
consummation of the proposed merger transaction will affect the
market prices of the Shares. See Section 9--"Certain Information
Concerning the Company."
The Company has no other plans or proposals which relate to
or would result in: (a) the acquisition by any Person of
additional securities of the Company or the disposition of
securities of the Company, other than in the ordinary course of
business; (b) an extraordinary corporate transaction, such as a
merger, reorganization or liquidation involving the Company; (c)
a sale or transfer of a material amount of assets of the Company;
(d) any change in the present Board or management of the Company;
(e) any material change in the present dividend rate or policy or
indebtedness or capitalization of the Company; (f) any other
material change in the Company's corporate structure or business;
(g) a change in the Company's Restated Certificate and Articles
of Incorporation, as amended, or By-laws, as amended; (h) except
as otherwise described in this Offer to Purchase, a class of
equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
or (i) except as otherwise described in this Offer to Purchase,
the suspension of the Company's obligation to file reports
pursuant to Section 15(d) of the Exchange Act.
II. AMENDMENTS TO SECTION 8 OF THE OFFER TO PURCHASE
The paragraph of Section 8 of the Offer to Purchase entitled
"6 3/4% SHARES, 7 3/4% SHARES AND ADJUSTABLE RATE SHARES" is
hereby amended in its entirety as follows:
The 6 3/4% Shares, 7 3/4% Shares and the Adjustable Rate
Shares trade in the over-the-counter market, to the extent
trading occurs. Trading of the 6 3/4% Shares, 7 3/4% Shares and
the Adjustable Rate Shares has been limited and sporadic, and
information concerning trading prices and volumes is difficult to
obtain. The information set forth below has been obtained from
the National Association of Securities Dealers. The Company
makes no representation as to the accuracy of this information.
The Company believes that the last reported sale price set forth
below with respect to each Series of Preferred may not be
indicative of the current market value of the Shares of such
Series of Preferred. Depending on the number of Shares of 6 3/4%
Shares, 7 3/4% Shares and the Adjustable Rate Shares outstanding
after the Offer, the liquidity of such Shares may be affected
adversely.
6 3/4% SHARES
The following table sets forth the high and low sale prices
of the 6 3/4% Shares as obtained from the National Association of
Securities Dealers and the cash dividends per 6 3/4% Share for
the fiscal quarters indicated.
CASH
DIVIDENDS
HIGH LOW PER SHARE
---- --- ---------
1994: 1st Quarter . . . . . . . * * $1.69
2nd Quarter . . . . . . . $87.50 $85.57 $1.69
3rd Quarter . . . . . . . * * $1.69
4th Quarter . . . . . . . $82.29 $82.29 $1.69
1995: 1st Quarter . . . . . . . $84.62 $83.00 $1.69
2nd Quarter . . . . . . . $96.50 $93.00 $1.69
3rd Quarter . . . . . . . * * $1.69
4th Quarter . . . . . . . $103.00$101.86 $1.69
1996: 1st Quarter . . . . . . . $98.55 $97.25 $1.69
2nd Quarter . . . . . . . * * $1.69
3rd Quarter (through
August 30, 1996) . . $96.54 $96.54 $1.69
-------------------
*No trades.
<PAGE>
The last reported sale of 6 3/4% Shares as reported by the
National Association of Securities Dealers prior to the date
hereof occurred on July 15, 1996 at a price of $96.54 per 6 3/4%
Share.
7 3/4% SHARES
The following table sets forth the high and low sale prices
of the 7 3/4% Shares as obtained from the National Association of
Securities Dealers and the cash dividends per 7 3/4% Share for
the fiscal quarters indicated.
CASH
DIVIDENDS
HIGH LOW PER SHARE
---- --- ---------
1994: 1st Quarter . . . . . . . $26.625 $24.25 $0.48
2nd Quarter . . . . . . . $25.75 $23.25 $0.48
3rd Quarter . . . . . . . $25.125 $23.00 $0.48
4th Quarter . . . . . . . $23.65 $21.375 $0.48
1995: 1st Quarter . . . . . . . $25.05 $21.125 $0.48
2nd Quarter . . . . . . . $26.50 $23.25 $0.48
3rd Quarter . . . . . . . $26.375 $24.00 $0.48
4th Quarter . . . . . . . $26.75 $24.50 $0.48
1996: 1st Quarter . . . . . . . $26.25 $23.00 $0.48
2nd Quarter . . . . . . . $26.25 $24.00 $0.48
3rd Quarter (through
August 30, 1996) . . $27.75 $24.00 $0.48
The last reported sale of 7 3/4% Shares as reported by the
National Association of Securities Dealers prior to the date
hereof occurred on August 13, 1996 at a price of $25.00 per 7
3/4% Share.
ADJUSTABLE RATE SHARES
The following table sets forth the high and low sale prices
of the Adjustable Rate Shares as obtained from the National
Association of Securities Dealers and the cash dividends per
Adjustable Rate Shares for the fiscal quarters indicated.
CASH
DIVIDENDS
HIGH LOW PER SHARE
---- --- ---------
1994: 1st Quarter . . . . . . . . * * $1.38
2nd Quarter . . . . . . . . * * $1.38
3rd Quarter . . . . . . . . * * $1.38
4th Quarter . . . . . . . . * * $1.41
1995: 1st Quarter . . . . . . . . * * $1.44
2nd Quarter . . . . . . . . $91.25 $84.00 $1.38
3rd Quarter . . . . . . . . * * $1.38
4th Quarter . . . . . . . . * * $1.38
1996: 1st Quarter . . . . . . . . $95.50 $95.02 $1.38
2nd Quarter . . . . . . . . * * $1.38
3rd Quarter (through August
30, 1996) . . . . . . . * * $1.38
-------------------
*No trades.
The last reported sale of Adjustable Rate Shares as reported
by the National Association of Securities Dealers prior to the
date hereof occurred on February 7, 1996 at a price of $95.50 per
Adjustable Rate Share.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS
FOR THE SHARES.
<PAGE>
III. AMENDMENTS TO SECTION 9 OF THE OFFER TO PURCHASE
The third paragraph of Section 9 of the Offer to Purchase is
hereby amended in its entirety as follows:
PROPOSED MERGER TRANSACTION. On August 12, 1996, the
Company and Atlantic Energy, Inc. ("AE") announced they had
signed a merger agreement pursuant to which the Company and AE's
electric utility subsidiary, Atlantic City Electric Company,
would become subsidiaries of a new holding company ("Newco") to
be registered under the Public Utility Holding Company Act of
1935, as amended. In the proposed merger transaction: (a) AE
will merge with and into Newco, with Newco being the surviving
corporation, and AE's common stock will be exchanged for common
stock of Newco (the "AE Merger"); (b) as a result of the AE
Merger, Atlantic City Electric Company will be a wholly-owned
subsidiary of Newco; (c) a subsidiary of Newco will merge with
and into the Company, with the Company being the surviving
corporation, and the Company's common stock will be exchanged for
common stock of Newco (the "Delmarva Merger"); and (d) as a
result of the Delmarva Merger, the Company will be a wholly-owned
subsidiary of Newco.
The Company's outstanding preferred stock, including Shares
not tendered in connection with the Offer, will remain
outstanding preferred stock of the Company (other than those
shares with respect to which appraisal rights are duly exercised
in the proposed merger as discussed below) after the consummation
of the proposed merger, and the rights and designations of such
preferred stock will not be affected thereby. The transaction
has been approved unanimously by the board of directors of each
company and is subject to the approval of the holders of common
stock of each company. Holders of preferred stock of the Company
will not have a right to approve or disapprove of the proposed
merger transaction, although the holders of 6 3/4% Shares, 7 3/4%
Shares and Adjustable Rate Shares, and holders of other series of
preferred stock of the Company that are not listed on a national
exchange may have appraisal rights at the time of merger, which
could result in a requirement that the Company purchase such
shares at a value different from the price offered upon tender
pursuant to the Offer. The proposed transaction also is subject
to approval by various regulatory agencies, principally state
public utility commissions, the Federal Energy Regulatory
Commission, the Nuclear Regulatory Commission and the Commission.
A filing also must be made with the Department of Justice and the
Federal Trade Commission and the waiting period with respect
thereto must have expired before the merger may be consummated.
Although the Company cannot predict when all regulatory approvals
will be obtained, both the Company and AE hope that the review
process can be completed within 12 to 18 months.
<PAGE>
The table entitled "SELECTED FINANCIAL DATA" is hereby
amended in its entirety as follows:
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT RATIOS)
TWELVE
MONTHS
ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
------------------------------------ 1996
1993 1994 1995 (UNAUDITED)
---- ---- ---- -----------
Operating Revenues . $970,607 $991,021 $995,103 $1,067,498
Net Income . . . . . $111,076 $108,310(1) $117,488 $120,106
Earnings Applicable to
Common Stock . . . $101,074 $098,940(1) $107,546 $110,302
Earnings per share of
Common Stock . . . $1.76 $1.67(1) $1.79 $1.82
Pro Forma Earnings per
Share of Common
Stock(2) . . . . . $1.84
Ratio of Earnings to
Fixed Charges(3) . 3.47 3.49 3.54 3.47
Ratio of Earnings to
Fixed Charges and
Preferred
Dividends(3) . . . 2.88 2.85 2.92 2.89
PRO-FORMA
AS OF JUNE 30, 1996 AS OF JUNE 30, 1996
(UNAUDITED) (UNAUDITED)(4)
------------------- -------------------
AMOUNT PERCENTAGE AMOUNT PERCENTAGE
------ ---------- ------ ----------
Common
Stockholders'
Equity . . . . . $928,642 45.6% $928,642 45.6%
Preferred Stock Not
Subject to
Mandatory
Redemption . . . 168,085 8.3% 97,710 4.8%
Company Obligated
Mandatorily
Redeemable
Preferred
Securities
of Subsidiary
Trust(5) . . . . - - 70,000 3.4%
Long-Term Debt(6) . 939,769 46.1% 939,769 46.2%
---------- ------ ---------- ------
Total
Capitalization . $2,036,496 100.0% $2,036,121 100.0%
-------------------
(1) An early retirement offer decreased earnings net of income taxes and
earnings per share by $10.7 million and $0.18, respectively.
(2) Assumes, with respect to each Series of Preferred, success rates which
vary from 30% to 100%.
(3) For purposes of computing these ratios, earnings have been computed by
adding income taxes and fixed charges to net income. Fixed charges
include gross interest expense and the estimated interest component of
rentals. For the ratio of earnings to fixed charges and preferred
dividends, preferred dividends represent annualized preferred dividend
requirements multiplied by the ratio that pre-tax income bears to net
income. For 1994, the exclusion of an early retirement offer charge
results in an adjusted ratio of earnings to fixed charges of 3.74 and
an adjusted ratio of earnings to fixed charges and preferred dividends
of 3.05.
(4) Assumes the purchase by the Company of any and all Shares of each
Series of Preferred and the issuance of $70,000,000 aggregate
liquidation amount of Trust Securities.
(5) The sole assets of the subsidiary trust will be the Company's Junior
Subordinated Debentures.
(6) Excludes $1,522,000 of long-term debt due within one year and includes
$86,500,000 of variable rate demand bonds which the Company intends to
use as a source of long-term financing.
<PAGE>
IV. AMENDMENTS TO SECTION 10 OF THE OFFER TO PURCHASE
The second paragraph of Section 10 of the Offer to Purchase
is hereby amended in its entirety as follows:
As described under Section 9--"Certain Information
Concerning the Company," a Registration Statement has been filed
with the Commission with respect to the proposed offering of $70
million of Trust Securities by Delmarva Power Financing I, the
proceeds of which will be invested in the Junior Subordinated
Debentures issued by the Company. The Company intends to finance
the Offer with the proceeds from the sale of the Trust
Securities, which will be loaned by Delmarva Power Financing I to
the Company. To the extent the proceeds of the sale of the Trust
Securities are not sufficient to finance the Offer, the Company
intends to issue commercial paper and/or draw on its existing
revolving credit agreements and/or issue medium-term notes
pursuant to an effective shelf registration statement to finance
the Offer. The Company fully intends and has the ability to meet
its obligation to make prompt payment of the Shares tendered and
accepted for payment pursuant to the Offer.
<PAGE>
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail: Facsimile By Hand or By
Tenders & Exchanges Transmission: Overnight Courier:
P.O. Box 2569--Suite (201) 222-4720 Tenders & Exchange
4660--DPL or 14 Wall Street
Jersey City, New (201) 222-4721 Suite 4680--8th
Jersey Floor--DPL
07303-2569 Confirm Receipt New York, New York
of Notice of 10005
Guaranteed Delivery
by Telephone:
(201) 222-4707
Any questions or requests for assistance may be directed to
the Information Agent or the Dealer Managers at the respective
telephone numbers and addresses listed below. Requests for
additional copies of this Offer to Purchase, any Letter of
Transmittal or other tender offer materials may be directed to
the Information Agent, and such copies will be furnished promptly
at the Company's expense. Each stockholder may also contact its
local broker, dealer, commercial bank or trust company for
assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (800) 431-9646
THE DEALER MANAGERS FOR THE OFFER ARE:
MERRILL LYNCH & CO. MORGAN STANLEY & CO.
World Financial Center INCORPORATED
250 Vesey Street 1585 Broadway
New York, New York 10281 New York, New York 10036
(212) 449-4914 (call collect) (800) 223-2440, ext. 1965
