Post-Effective Amendment No. 3 to
SEC File No. 70-7670
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-1
DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
GPU, Inc. ("GPU")
300 Madison Avenue
Morristown, New Jersey 07960
(Name of company filing this statement and address
of principal executive offices)
GPU, Inc.
(Name of top registered holding company parent of Declarant)
T. G. Howson, Douglas E. Davidson, Esq.
Vice President and Treasurer Thelen Reid & Priest LLP
M. J. Connolly, 40 West 57th Street
Vice President - Law New York, New York 10019
S. L. Guibord, Secretary
GPU Service, Inc.
300 Madison Avenue
Morristown, New Jersey 07960
W. Edwin Ogden, Esq.
Ryan, Russell, Ogden & Seltzer LLP
1100 Berkshire Boulevard
P.O. Box 6219
Reading, Pennsylvania 19601-0219
(Names and addresses of agents for service)
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GPU hereby post-effectively amends its declaration on Form U-1, docketed in
SEC File No. 70-7670, as follows:
A. By orders dated October 23, 1989 (HCAR No. 24971) and December 8, 1995
(HCAR No. 26425) (the "Orders"), the Commission authorized GPU to issue and
sell, from time to time through December 31, 2000, pursuant to a Dividend
Reinvestment and Stock Purchase Plan (the "Plan"), up to 2,500,000 shares of its
common stock, $2.50 par value ("Common Stock").
B. Under the Plan, holders of GPU Common Stock may automatically reinvest
their cash dividends in additional shares of GPU Common Stock and purchase
additional Common Stock by making optional cash payments on a monthly basis in
amounts of not less than $50 nor more than $6,000 each quarter.
C. Common Stock is purchased under the Plan either on the open market or
directly from GPU in the form of authorized but unissued shares or previously
reacquired shares, as GPU may direct, by the Plan Administrator. Open market
purchases are priced at the average price of such shares purchased with respect
to a dividend payment date, excluding any related brokerage fees or commissions
which are paid by GPU. Shares issued directly by GPU under the Plan are priced
at the average of the daily high and low sales prices of Common Stock as
reported in The Wall Street Journal for New York Stock Exchange Composite
Transactions for the 10 trading days immediately preceding the relevant dividend
payment date.
D. GPU uses the net proceeds from the sale of additional Common Stock
issued directly by GPU under the Plan to make cash capital contributions to its
subsidiaries, for working capital, to repay outstanding indebtedness and for
other corporate purposes.
E. Pursuant to the Orders, at June 30, 2000, GPU had sold a total of
1,353,045 previously reacquired shares of Common Stock pursuant to the Plan. GPU
has 350 million authorized shares of common stock, of which 121,392,938 were
issued and outstanding at June 30, 2000. At September 14, 2000, the reported
closing price of GPU Common Stock on the New York Stock Exchange Composite Tape
was $32.38.
F. GPU now requests an extension of the time during which it may issue and
sell authorized but unissued and reacquired shares of Common Stock under the
Plan to December 31, 2010. In all other respects, the transactions as heretofore
authorized by the Commission in this docket would remain unchanged.
G. Rule 54 Analysis.
(a) As described below, GPU meets all of the conditions of Rule 53,
except for Rule 53(a)(1). By Order dated November 5, 1997 (HCAR No. 35-26773)
(the "November 5 Order"), the Commission
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authorized GPU to increase to 100% of its "average consolidated retained
earnings," as defined in Rule 53, the aggregate amount which it may invest in
EWGs and FUCOs. At June 30, 2000, GPU's average consolidated retained earnings
was approximately $2.4 billion and GPU's aggregate investment in EWGs and FUCOs
was approximately $1.8 billion. Accordingly, under the November 5 Order, GPU may
invest up to an additional $614 million in FUCOs and EWGs as of June 30, 2000.
(i) GPU maintains books and records to identify investments
in, and earnings from, each EWG and FUCO in which it directly or
indirectly holds an interest.
(A) For each United States EWG in which GPU directly or
indirectly holds an interest:
(1) the books and records for such EWG will be
kept in conformity with United States generally accepted
accounting principles ("GAAP");
(2) the financial statements will be prepared
in accordance with GAAP; and
(3) GPU directly or through its subsidiaries
undertakes to provide the Commission access to such
books and records and financial statements as the
Commission may request.
(B) For each FUCO or foreign EWG which is a majority
owned subsidiary of GPU:
(1) the books and records for such subsidiary
will be kept in accordance with GAAP;
(2) the financial statements for such subsidiary
will be prepared in accordance with GAAP; and
(3) GPU directly or through its subsidiaries
undertakes to provide the Commission access to such
books and records and financial statements, or copies
thereof in English, as the Commission may request.
(C) For each FUCO or foreign EWG in which GPU owns 50%
or less of the voting securities, GPU directly or through its
subsidiaries will proceed in good faith, to the extent reasonable
under the circumstances, to cause
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(1) such entity to maintain books and
records in accordance with GAAP;
(2) the financial statements of such entity to
be prepared in accordance with GAAP; and
(3) access by the Commission to such books and
records and financial statements (or copies thereof) in
English as the Commission may request and, in any event,
GPU will provide the Commission on request copies of
such materials as are made available to GPU and its
subsidiaries. If and to the extent that such entity's
books, records or financial statements are not
maintained in accordance with GAAP, GPU will, upon
request of the Commission, describe and quantify each
material variation therefrom as and to the extent
required by subparagraphs (a) (2) (iii) (A) and (a) (2)
(iii) (B) of Rule 53.
(ii) No more than 2% of GPU's domestic public utility
subsidiary employees will render any services, directly or
indirectly, to any EWG and FUCO in which GPU directly or indirectly
holds an interest.
(iii) Copies of this Declaration on Form U-1 are being
provided to the New Jersey Board of Public Utilities and the
Pennsylvania Public Utility Commission, the only federal, state or
local regulatory agencies having jurisdiction over the retail rates
of GPU's electric utility subsidiaries.(1) In addition, GPU will
submit to each such commission copies of any amendments to this
Declaration and a copy of Item 9 of GPU's Form U5S and Exhibits H
and I thereof (commencing with the Form U5S to be filed for the
calendar year in which the authorization herein requested is
granted).
(iv) None of the provisions of paragraph (b) of Rule 53 render
paragraph (a) of that Rule unavailable for the proposed
transactions.
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1 One of GPU's operating subsidiaries, the Pennsylvania Electric Company
("Penelec"), is also subject to retail rate regulation by the New York Public
Service Commission with respect to retail service to approximately 3,700
customers in Waverly, New York served by Waverly Electric Power & Light Company,
a Penelec subsidiary. Waverly Electric's revenues are immaterial, accounting for
less than 1% of Penelec's total operating revenues.
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(A) Neither GPU nor any subsidiary of GPU having a book
value exceeding 10% of GPU's consolidated retained earnings is the
subject of any pending bankruptcy or similar proceeding.
(B) GPU's average consolidated retained earnings for the
four most recent quarterly periods (approximately $2.44 billion)
represented a decrease of approximately $13.7 million (or
approximately .5%) compared to the average consolidated retained
earnings for the previous four quarterly periods (approximately
$2.45 billion). The decrease in retained earnings results primarily
from a non-recurring loss of $295 million, after tax, from the sale
during the second quarter of 2000 of GPU PowerNet, which provides
transmission services in the State of Victoria, Australia.
(C) GPU did not incur operating losses from direct or
indirect investments in EWGs and FUCOs in 1999 in excess of 5% of
GPU's December 31, 1999 consolidated retained earnings.
As described above, GPU meets all the conditions of Rule 53(a), except for
clause (1). With respect to clause (1), the Commission determined in the
November 5 Order that GPU's financing of investments in EWGs and FUCOs in an
amount greater than 50% of GPU's average consolidated retained earnings as
otherwise permitted by Rule 53(a)(1) would not have either of the adverse
effects set forth in Rule 53(c).
Moreover, even if the effect of the capitalization and earnings of
subsidiary EWGs and FUCOs were considered, there is no basis for the Commission
to withhold or deny approval for the transactions proposed in this Declaration.
The transactions would not, by themselves, or even considered in conjunction
with the effect of the capitalization and earnings of GPU's subsidiary EWGs and
FUCOs, have a material adverse effect on the financial integrity of the GPU
system, or an adverse impact on GPU's public utility subsidiaries, their
customers, or the ability of State commissions to protect such public utility
customers.
The November 5 Order was predicated, in part, upon the assessment of GPU's
overall financial condition which took into account, among other factors, GPU's
consolidated capitalization ratio and the recent growth trend in GPU's retained
earnings. As of June 30, 1997, the most recent quarterly period for which
financial statement information was evaluated in the November 5 Order, GPU's
consolidated capitalization consisted of 49.2% equity and 50.8% debt. As stated
in the November 5 Order, GPU's June 30, 1997 pro forma capitalization,
reflecting the November
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6, 1997 acquisition of PowerNet Victoria, was 39.3% equity and 61.7% debt.
At June 30, 2000, GPU's common equity and debt represented 31.4% and
68.6%, respectively, of its consolidated capitalization, as set forth in Exhibit
H hereto. Thus, since the date of the November 5 Order, there has been no
material adverse change in GPU's consolidated capitalization ratio, which
remains within acceptable ranges and limits as evidenced by the credit ratings
of GPU's electric utility subsidiaries.(2)
GPU's consolidated retained earnings grew on average approximately 6.5%
per year from 1994 through 1999. Earnings attributable to GPU's investments in
EWGs and FUCOs have contributed positively to consolidated earnings.
Accordingly, since the date of the November 5 Order, the capitalization
and earnings attributable to GPU's investments in EWGs and FUCOs have not had
any adverse impact on GPU's financial integrity.
Reference is made to Exhibit H which sets forth GPU's consolidated
capitalization at June 30, 2000 and after giving effect to the transactions
proposed herein. As set forth in such exhibit, the proposed transactions will
not have a material impact on GPU's capitalization or earnings.
H. GPU's estimated fees, commissions and expenses in connection with the
proposed transactions will be filed by further post-effective amendment.
I. GPU believes that Sections 6(a) and 7 of the Act and Rule 54 thereunder
are applicable to the proposed transactions.
J. No Federal or State commission, other than your Commission, has
jurisdiction with respect to the proposed transactions.
K. It is requested that the Commission issue an order with respect to the
transactions proposed herein at the earliest practicable date but, in any event,
not later than December 1, 2000. It is further requested that (iii) there not be
a recommended decision by an Administrative Law Judge or other responsible
officer of the Commission, (iv) the Office of Public Utility Regulation be
permitted to assist in the preparation of the Commission's decision, and (v)
there be no waiting period between issuance of the Commission's order and the
date on which it is to become effective.
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2 The first mortgage bonds of GPU's operating subsidiaries, Jersey Central Power
& Light Company, Metropolitan Edison Company and Penelec are rated A+ by
Standard & Poors Corporation, and A2 by Moody's Investors Service, Inc.
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L. The following exhibits and financial statements are filed in item 6.
(a) Exhibits:
A-1 - Articles of Incorporation of GPU, as amended
through March 27, 1990 - Incorporated by reference
to Exhibit 3-A of the 1989 Annual Report on Form
10-K, File No. 1-6047.
A-1(a)- Amendment to Articles of Incorporation of GPU
dated May 5, 1995 - Incorporated by reference to
Exhibit A-4, Certificate Pursuant to Rule 24, File
No. 70-8569.
A-1(b)- Articles of Incorporation of GPU, Inc., as amended
August 1, 1996 - Incorporated by reference to
Exhibit 3-A-2, 1996 Annual Report on Form 10-K,
SEC File No. 1-6047.
A-2 - By-laws of GPU, as amended May 6, 1999 -
Incorporated by reference to Exhibit 3-B of the
1999 Annual Report on Form 10-K, File No. 1-6047.
A-3 - Form of Stock Certificate representing Common
Stock - Incorporated by reference to Exhibit 4,
Registration Statement on Form S-3, Registration
No. 33-30765.
C - Registration Statement on Form S-3 under the
Securities Act of 1933 relating to the Common
Stock and all amendments and exhibits thereto -
Incorporated by reference to the SEC Registration
No. 33-30765.
F-1 - Opinion of Thelen Reid & Priest LLP - To be filed
by amendment.
F-2 - Opinion of Ryan, Russell, Ogden & Seltzer LLP - To
be filed by amendment.
G - Financial Data Schedule.
H - Capitalization and Capitalization Ratios as at
June 30, 2000, actual and pro forma.
I - Proposed form of public notice.
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(b) Financial Statements:
1(a)- GPU (corporate) Balance Sheets, actual and pro
forma, as of June 30, 2000, Statements of Income
and Retained Earnings, actual and pro forma, for
the twelve months ended June 30, 2000; pro forma
journal entries.
1(b)- GPU Consolidated Balance Sheets, actual and pro
forma, as of June 30, 2000, Consolidated
Statements of Income and Retained Earnings, actual
and pro forma, for the twelve months ended June
30, 2000; pro forma journal entries.
M. The issuance of an order by your Commission with respect to the
transaction contemplated herein is not a major Federal action significantly
affecting the quality of the human environment.
(b) No Federal agency has prepared or is preparing an environmental impact
statement with respect to the various proposed transactions which are the
subject hereof. Reference is made to Paragraph J hereof regarding regulatory
approvals with respect to the proposed transactions.
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SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF
1935, THE UNDERSIGNED COMPANY HAS DULY CAUSED THIS STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
GPU, INC.
By:/s/ T. G. Howson
---------------------------------
T. G. Howson,
Vice President and Treasurer
Date: September 18, 2000
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