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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTIONS 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 22, 2000
Commission Registrant, State of Incorporation I.R. S. Employer
File Number Address and Telephone Number Identification Number
- ----------- ---------------------------------- ---------------------
1-13895 Conectiv (a Delaware Corporation) 51-0377417
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
Telephone (302) 429-3114
1-1405 Delmarva Power & Light Company 51-0084283
(a Delaware and Virginia Corporation)
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
Telephone (302) 429-3114
1 - 3559 Atlantic City Electric Company 21-0398280
(a New Jersey Corporation)
800 King Street
P.O. Box 231
Wilmington, Delaware 19899
Telephone (302) 429-3114
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Item 5. OTHER EVENTS
The following was released by the Company on March 22, 2000:
FOR IMMEDIATE RELEASE
MARCH 22, 2000
For information, contact:
TIM BROWN, CONECTIV, (302) 452-6496
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Investor Contact:
Bob Marshall, Conectiv (302) 429-3114
CONECTIV AIMS TO SPUR GROWTH
BY INCREASING FOCUS ON ENERGY BUSINESSES
Company Taking Steps to Maximize Value of
Telecommunications Investment & to Exit Non-Core Businesses
WILMINGTON, DE - Conectiv (NYSE:CIV) today announced that it plans to further
focus on its energy and power delivery businesses. First, the company is
accelerating plans to expand its mid-merit generation business by increasing its
position in the mid-merit market within the PJM power-pool area of Delaware,
Pennsylvania, New Jersey, and Maryland. "Mid-merit" power plants are
environmentally friendly, fuel-flexible facilities with modern technology that
allows them to ramp up quickly in response to increases in the demand for power.
Second, Conectiv is taking steps to maximize the value of its telecommunications
investments by actively pursuing a strategic partner and placing greater focus
on business markets and Internet related data services. Third, Conectiv
officials said they will seek to sell two non-core businesses--Conectiv Services
and Conectiv Thermal--as part of the effort to concentrate on businesses with
higher returns.
Conectiv Chairman and CEO Howard E. Cosgrove said, "Today's announcement is part
of a continuing effort to position Conectiv to succeed in an increasingly
competitive marketplace. The actions we are taking will allow us to put our
capital in businesses that provide the best opportunities to leverage our
knowledge base and competitive advantage. Our shareholders are better rewarded
if we invest in our core businesses. We know the deregulated energy business, we
have a proven track record in it, and we are investing in the type of generating
assets we need in order to succeed in this fast-growing market segment."
Cosgrove said Conectiv will continue to focus on two complementary energy
businesses. First, Conectiv will manage its transmission and delivery assets to
provide efficient and reliable service to its one million customers. Second, the
company will concentrate on driving higher returns to shareholders by making new
investments in its mid-merit energy business and optimizing the performance of
those assets.
Conectiv Executive Vice President Tom Shaw said, "This announcement represents
the next steps in the evolution of our energy strategy. We have grown our
competitive energy business from zero
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to more than $1.5 billion in revenue in just three years. We are in the top
three among companies that sell competitive energy in our region and are one of
the few organizations with the ability to sell all energy commodities, including
electricity, natural gas, fuel oil, gasoline and propane. Our successful track
record in energy marketing and generation-asset optimization should enable us to
minimize risk and enhance returns for shareholders. Expanding our investments in
this business should allow us to make a significant contribution to the
company's bottom line in the coming years." In the fall of 1999, Conectiv
announced it would build a $300 million, 550-megawatt, mid-merit addition to its
Hay Road power plant. Conectiv's Board of Directors has since authorized the
purchase of additional equipment needed to build a similar plant. The second
plant could be built at one of a number of existing company sites or one of the
new sites that Conectiv is developing within PJM.
Officials stressed that Conectiv is also taking steps to increase the visibility
of the substantial value it has already created for shareholders through its
telecommunications business. Conectiv is seeking a strategic partner in order to
create the size and scope needed to take the business to the next level.
Conectiv Communications has shifted its emphasis to the business-to-business
market, expanded the Internet-related data services it offers, and strengthened
its ability to add new customers by more than doubling the capability of its
provisioning process through the use of new systems. Conectiv Communications
President Richard Robertson said, "These aggressive steps will position Conectiv
Communications to better meet the needs of our customers and to participate in
the tremendous growth potential of the telecommunications market." The company
has engaged Credit Suisse First Boston to assist in efforts to maximize
shareholder value in its telecommunications business.
Cosgrove said Conectiv's HVAC and thermal businesses no longer fit the company's
strategic direction. "For a variety of reasons," he said, "these markets have
evolved differently than expected. Given those developments, this move gives us
an opportunity to focus capital on our core businesses where we have more of a
competitive advantage. Additionally, we will stay abreast of technological
developments and new business opportunities in our core businesses through our
very successful venture capital fund, Enertech Capital Partners (ECP). " ECP was
founded in 1996 as a joint venture of Conectiv and Safeguard Scientifics, Inc.
to exploit business opportunities created from utility deregulation. It has made
successful investments in VerticalNet, Essential.com, Capstone Turbine, Inc and
PACWEST.
In May of 1999, Conectiv outlined a series of strategic and financial steps
designed to increase shareholder value and provide for improved earnings growth.
A key initiative was the sale of non-strategic fossil fuel and nuclear baseload
generating assets. The sales and securitization are expected to net about $1
billion in proceeds for the company when they close later this year. Conectiv
CFO John van Roden said, "The actions we took in May set the stage for today's
announcement. The $1 billion gives us resources to invest in our core businesses
as well as to optimize our capital structure. Through our share-buyback program,
we have repurchased 16.7 million shares, allowing us to spread the returns we
expect to capture over fewer shares. Today's announcement represents the next
logical step in the evolution of a disciplined but flexible business strategy
that will enable us to succeed."
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Cosgrove said, "Our announcement today is the next step toward achieving success
in a dynamic and exciting energy marketplace. We have a leadership position in
our region's mid-merit energy market, a strong presence as a well-established
transmission and distribution company within the region, and will have a stake
in a winning telecommunications business. Now, we will execute these strategies
with the goal of delivering solid financial returns for our shareholders."
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Conectiv, a Fortune 500 company headquartered in Wilmington, DE, provides
regulated electric and natural-gas utility services and is also engaged in
telecommunications and other non-regulated activities. Conectiv serves more than
one million customers in New Jersey, Delaware, Maryland, Virginia, and
Pennsylvania.
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 (the "Litigation
Reform Act") provides a "safe harbor" for forward-looking statements to
encourage such disclosures without the threat of litigation, provided those
statements are identified as forward-looking and are accompanied by meaningful,
cautionary statements identifying important factors that could cause the actual
results to differ materially from those projected in the statement.
Forward-looking statements have been made in this Press Release. Such statements
are based on beliefs of Conectiv's (the "Company's") management ("Management")
as well as assumptions made by and information currently available to
Management. When used herein, the words "will," "anticipate," "estimate,"
"expect," "objective," and similar expressions are intended to identify
forward-looking statements. In addition to any assumptions and other factors
referred to specifically in connection with such forward-looking statements,
factors that could cause actual results to differ materially from those
contemplated in any forward-looking statements include, among others, the
following: deregulation of energy supply and telecommunications; the unbundling
of delivery services; and increasingly competitive energy and telecommunications
marketplace; results of any asset dispositions; sales retention and growth;
federal and state regulatory actions; future litigation results; cost of
construction; operating restrictions; increased costs and construction delays
attributable to environmental regulations; nuclear decommissioning and the
availability of reprocessing and storage facilities for spent nuclear fuel; and
credit market concerns. The Company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. The foregoing list of factors pursuant
to the Litigation Reform Act should not be construed as exhaustive or as
admission regarding the adequacy of disclosures made prior to the effective date
of the Litigation Reform Act.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONECTIV
Delmarva Power & Light Company
Atlantic City Electric Company
Date: March 22, 2000 /s/ Philip S. Reese
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Treasurer
