<PAGE>
RULE NO. 424(b)(2)
REGISTRATION NO. 33-49805
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED AUGUST 4, 1993)
250,000 SHARES
ROCHESTER GAS AND ELECTRIC CORPORATION
6.60% PREFERRED STOCK, SERIES V
(CUMULATIVE, $100 PAR VALUE)
----------------
The New Preferred Stock offered hereby is not redeemable by the Company prior
to March 1, 2004. The New Preferred Stock offered hereby is redeemable solely
at the option of the Company on or after March 1, 2004 at $100 per share plus
accrued dividends. The New Preferred Stock offered hereby is subject to
redemption pursuant to a mandatory sinking fund sufficient to retire on each
March 1, beginning March 1, 2004 and continuing to and including March 1, 2008,
12,500 shares, and on March 1, 2009, the balance of the shares outstanding, at
$100 per share plus accrued dividends. In addition, the Company has the non-
cumulative right to redeem through the sinking fund up to an additional 12,500
shares on the same terms and dates applicable to the mandatory sinking fund
redemptions. See "Supplemental Description of Preferred Stock" herein.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(2)
- -----------------------------------------------
<S> <C> <C> <C>
Per Share $100.00 $0.875 $99.125
- -----------------------------------------------
Total $25,000,000 $218,750 $24,781,250
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Plus accrued dividends, if any, from date of original issue.
(2) Before deduction of expenses payable by the Company estimated at $145,000.
----------------
It is expected that the shares of New Preferred Stock offered hereby will be
available for delivery at the offices of Smith Barney Shearson Inc., 388
Greenwich Street, New York, New York 10013 on or about March 22, 1994. Such
shares are offered when, as and if issued by the Company and accepted by the
Underwriters and subject to their right to reject orders in whole or in part.
----------------
SMITH BARNEY SHEARSON INC. CS FIRST BOSTON
March 15, 1994
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NEW PREFERRED
STOCK OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET
OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
RECENT FINANCIAL INFORMATION
The following recent consolidated financial information supplements and
should be read in conjunction with the financial statements appearing in the
accompanying Prospectus, including the documents incorporated therein by
reference.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
JANUARY 31, 1994
--------------------------
(THOUSANDS OF DOLLARS)
<S> <C>
Total operating revenues............................ $ 974,615
Net income.......................................... $ 84,952
Dividends on preferred stock........................ $ 7,218
Ratio of earnings to fixed charges and preferred
dividends(a)....................................... 2.53x
Utility plant, net (at end of period)............... $1,672,546
</TABLE>
<TABLE>
<CAPTION>
CAPITALIZATION AT JANUARY 31, 1994
--------------------------------------
(THOUSANDS OF DOLLARS)
ACTUAL AS ADJUSTED(b)
------------------ ------------------
<S> <C> <C> <C> <C>
Long term debt(c)....................... $ 837,118 49.3% $ 837,118 49.1%
Preferred stock(d)...................... 115,000 6.8 122,000 7.2
Common shareholders' equity............. 746,169 43.9 746,169 43.7
----------- ------ ----------- ------
Total capitalization.................. $ 1,698,287 100.0% $ 1,705,287 100.0%
=========== ====== =========== ======
Short term debt......................... $ 68,300 $ 61,300
=========== ===========
Note Payable--Empire (e)................ $ 29,600 $ 29,600
=========== ===========
</TABLE>
- --------
(a) Earnings are defined as pretax income from continuing operations to which
fixed charges have been added. Fixed charges are defined in this ratio as:
(i) interest charges on long term debt, short term debt and Department of
Energy liability for nuclear waste disposal; (ii) amortization of debt
premium and expense; and (iii) interest amounts included in rental
agreements. Preferred Stock dividend requirements are computed by
increasing Preferred Stock dividends by an amount representing the pretax
earnings which would be required to cover such Preferred Stock dividend
requirements.
(b) As adjusted for the New Preferred Stock offered hereby, the redemption on
March 1, 1994 of 180,000 shares of the 8.25% Preferred Stock, Series R
(Cumulative, $100 Par Value), and the repayment of $7,000,000 of short term
debt.
(c) Includes $21.3 million of long term debt due within one year and includes
the long term liability payable to the Department of Energy for nuclear
waste disposal ($68.2 million).
(d) Includes $18.0 million of Preferred Stock redeemable within one year.
(e) Obligation of Energyline Corporation, a wholly owned subsidiary, in
connection with the Empire State Pipeline project.
S-2
<PAGE>
SUPPLEMENTAL DESCRIPTION OF PREFERRED STOCK
The following information concerning the New Preferred Stock offered hereby
supplements and should be read in conjunction with the information under
"Description of Preferred Stock" in the accompanying Prospectus.
Dividend Rights. The payment of dividends on the New Preferred Stock offered
hereby and outstanding Preferred Stock will have preference over the payment of
dividends on the Common Stock. The initial dividend on the New Preferred Stock
offered hereby is expected to be paid on June 1, 1994 for the period from, and
including, the date of first issuance through and including May 31, 1994.
Redemption Provisions. The New Preferred Stock offered hereby is not
redeemable prior to March 1, 2004. On or after March 1, 2004, the New Preferred
Stock offered hereby may be redeemed solely at the option of the Company in
whole, or in part by lot, on at least 30 days' notice at $100 per share plus
dividends accrued thereon to the redemption date.
Sinking Fund. On March 1, 2004, and on each March 1 thereafter, to and
including March 1, 2008, so long as any shares of the New Preferred Stock
offered hereby remain outstanding, the Company will redeem 12,500 shares of the
New Preferred Stock offered hereby, or, if less than 12,500 shares are then
outstanding, such lesser number of shares, and on March 1, 2009, the Company
will redeem the balance of the shares outstanding, pursuant to a mandatory
sinking fund at a redemption price of $100 per share plus dividends accrued
thereon to the redemption date. At its option, the Company may redeem through
the sinking fund on March 1 in each such year not more than 12,500 additional
shares on the same terms. The right to redeem such additional shares shall not
be cumulative and shall not reduce the sinking fund requirement in any
subsequent year. The sinking fund requirement may be satisfied in whole or in
part by crediting shares of the New Preferred Stock offered hereby purchased by
the Company. In the event that the Company should be in arrears in the
redemption of the New Preferred Stock offered hereby pursuant to the sinking
fund, the Company shall not purchase, redeem or otherwise acquire for value, or
pay dividends on, any stock junior to the New Preferred Stock offered hereby.
The Company shall not have any requirement to redeem shares of the New
Preferred Stock offered hereby unless full cumulative dividends upon the
outstanding Preferred Stock of all series for all past dividend periods and for
the current dividend period shall have been paid or set aside for payment.
Liquidation Rights. The holders of the New Preferred Stock offered hereby are
entitled to receive upon liquidation or dissolution the par value per share of
the New Preferred Stock offered hereby, together with accrued dividends, before
any amount is paid to the holders of the Preference Stock and Common Stock. In
case the assets of the Company are insufficient to pay the holders of all
series of the Preferred Stock in full, such holders will share ratably in such
assets.
S-3
<PAGE>
UNDERWRITING
The Underwriters named below have severally agreed to purchase from the
Company the following respective numbers of shares of the New Preferred Stock
offered hereby:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>
Smith Barney Shearson Inc...................................... 125,000
CS First Boston Corporation.................................... 125,000
-------
Total....................................................... 250,000
=======
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all of the shares of the New Preferred Stock offered
hereby if any are purchased.
The Company has been advised by Smith Barney Shearson Inc. and CS First
Boston Corporation, as Underwriters, that the Underwriters propose to offer the
New Preferred Stock offered hereby to the public initially at the offering
price set forth on the cover page of this Prospectus Supplement and to certain
dealers at such price less a concession not in excess of $.50 per share; that
the Underwriters and such dealers may reallow a concession not in excess of
$.25 per share on sales to certain other dealers; and that after the initial
public offering the public offering price and concessions to dealers may be
changed by the Underwriters.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act of 1933.
S-4
<PAGE>
PROSPECTUS
$270,000,000
ROCHESTER GAS AND ELECTRIC CORPORATION
SECURITIES
----------------
Rochester Gas and Electric Corporation (the "Company") may offer from time to
time its First Mortgage Bonds (the "New Bonds") in one or more series, its
Preferred Stock ($100 Par Value or $25 Par Value) (the "New Preferred Stock")
in one or more series and its Common Stock ($5 Par Value) (the "New Common
Stock", and together with the New Bonds and the New Preferred Stock, the
"Securities"), in amounts, at prices and on terms to be determined at the time
of sale. The aggregate offering price of the Securities will not exceed
$270,000,000.
For each offering of Securities for which this Prospectus is being delivered,
there will be an accompanying Prospectus Supplement (the "Prospectus
Supplement") that sets forth: with respect to the New Bonds, the designation,
principal amount, interest rate, interest payment dates, maturity, public
offering price, any redemption terms or other specific terms of the series of
New Bonds in respect of which this Prospectus is being delivered; with respect
to the New Preferred Stock, the specific number of shares, par value, dividend
rate (or method of calculation thereof), public offering price, any redemption
and sinking fund terms or other specific terms of the series of New Preferred
Stock in respect of which this Prospectus is being delivered; and with respect
to the New Common Stock, the specific number of shares and public offering
price of the New Common Stock in respect of which this Prospectus is being
delivered.
The outstanding shares of Common Stock are, and the New Common Stock will be,
listed on the New York Stock Exchange.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
----------------
The Company may sell the Securities through underwriters, through dealers,
directly to one or more institutional purchasers or through agents. See "Plan
of Distribution." Underwriters may include The First Boston Corporation, Smith
Barney, Harris Upham & Co. Incorporated or such other underwriter or
underwriters as may be designated by the Company, or an underwriting syndicate
represented by one or more of such firms. Such firms may also act as agents.
The Prospectus Supplement sets forth the names of such underwriters, dealers or
agents, if any, any applicable commissions or discounts and the proceeds to the
Company from such sale.
----------------
THE DATE OF THIS PROSPECTUS IS AUGUST 4, 1993.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "1934 Act") and, in accordance therewith, files
reports and other information with the Securities and Exchange Commission (the
"SEC"). Information as of particular dates concerning directors and officers,
their remuneration and any material interest of such persons in transactions
with the Company is disclosed in proxy statements distributed to shareholders
of the Company and filed with the SEC. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities of
the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's
regional offices at Northwestern Atrium Center, 500 W. Madison Street, Suite
1400, Chicago, Illinois 60661 and Seven World Trade Center, New York, New York
10048, and copies of such material can be obtained from the Public Reference
Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Certain securities of the Company are listed on the New York
Stock Exchange, 20 Broad Street, New York, New York 10005 and reports, proxy
material and other information concerning the Company may be inspected at the
office of that Exchange.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this Prospectus the following
documents heretofore filed with the SEC pursuant to the 1934 Act:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1992.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1993.
3. The Company's Current Report on Form 8-K dated July 15, 1993.
All documents filed by the Company pursuant to Sections 13 or 14 of the 1934
Act after the date of this Prospectus and prior to the termination of the
offering of the securities offered hereby shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN
DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR
ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED
BY REFERENCE IN THIS PROSPECTUS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS (UNLESS
SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS).
REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO MR. DAVID C. HEILIGMAN, VICE
PRESIDENT, SECRETARY AND TREASURER, ROCHESTER GAS AND ELECTRIC CORPORATION, 89
EAST AVENUE, ROCHESTER, NEW YORK 14649 AT TELEPHONE NUMBER (716) 546-2700.
2
<PAGE>
SELECTED INFORMATION
The following material is qualified in its entirety by the detailed
information and financial statements appearing elsewhere in this Prospectus,
including the documents incorporated herein by reference.
<TABLE>
<S> <C>
Company............................. Rochester Gas and Electric Corporation
Common Stock Price Range:
1992............................... 20 7/8-25 1/4
1993 (through July 16, 1993)....... 24 1/8-28 3/8
Shares Outstanding at May 31, 1993.. 35,090,222
Listed.............................. New York Stock Exchange (Symbol: RGS)
Book Value of Common Stock at May
31, 1993........................... $19.43 per share
Indicated Annual Dividend Rate on
Common Stock....................... $1.72 per share
THE COMPANY
Business............................ Electric and gas utility.
Service area........................ Approximately 2,700 square miles in
western New York State, including the City
of Rochester.
Revenue distribution (12 months
ended May 31, 1993)................ Electric 69%; Gas 31%
Sources of electricity generated and
purchased Nuclear 57%; Coal 22%; Oil 2%; Hydro 3%;
(12 months ended May 31, 1993)..... Purchased Power 16%
</TABLE>
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
TWELVE MONTHS YEAR ENDED DECEMBER 31,
ENDED MAY 31, ----------------------------------------------------------
1993 1992 1991 1990 1989 1988
------------- ---------- ---------- ---------- ---------- ----------
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
Total operating
revenues(a)............ $ 913,998 $ 895,532 $ 853,270 $ 830,891 $ 845,697 $ 775,820
Net income.............. $ 75,157 $ 70,439 $ 57,997 $ 59,881 $ 71,444 $ 76,114
Earnings applicable to
Common Stock........... $ 67,280 $ 62,149 $ 51,034 $ 53,856 $ 65,419 $ 68,766
Earnings per share of
Common Stock........... $ 1.97 $ 1.86 $ 1.60 $ 1.72 $ 2.10 $ 2.25
Cash dividends per share
of Common Stock........ $ 1.70 $ 1.68 $ 1.62 $ 1.56 $ 1.50 $ 1.50
Dividends on Preferred
Stock.................. $ 7,878 $ 8,290 $ 6,963 $ 6,025 $ 6,025 $ 7,348
Ratio of earnings to
fixed charges(b)....... 2.70x 2.55x 2.16x 2.23x 2.40x 2.46x
Ratio of earnings to
fixed charges and
preferred dividends(c). 2.30x 2.16x 1.90x 1.99x 2.15x 2.16x
Utility plant, net (at
end of period)......... $1,640,675 $1,629,296 $1,604,753 $1,579,963 $1,546,321 $1,510,090
</TABLE>
- --------
See following page for footnotes.
3
<PAGE>
FINANCIAL INFORMATION--(CONTINUED)
<TABLE>
<CAPTION>
CAPITALIZATION AT
MAY 31, 1993
-----------------------
(THOUSANDS OF DOLLARS)
(ACTUAL)
<S> <C> <C>
Long term debt(d)....................................... $ 833,210 51.1%
Preferred stock(e)...................................... 115,000 7.1
Common shareholders' equity............................. 681,724 41.8
------------- --------
Total capitalization................................ $1,629,934 100.0%
============= ========
Short term debt......................................... $ 56,300
=============
</TABLE>
- --------
(a) For comparative purposes, operating revenues prior to 1989 have been
reclassified to reflect the recognition of deferred fuel expenses.
(b) Earnings are defined as pretax income from continuing operations to which
fixed charges have been added. Fixed charges are defined in this ratio as:
(i) interest charges on long term debt, short term debt and Department of
Energy liability for nuclear waste disposal; (ii) amortization of debt
premium and expense; and (iii) interest amounts included in rental
agreements. Excluding the effect of disallowed plant costs charged to the
current period, the Ratio of Earnings to Fixed Charges would be 2.43x for
1989.
(c) Earnings are defined as pretax income from continuing operations to which
fixed charges have been added. Fixed charges are defined in this ratio as:
(i) interest charges on long term debt, short term debt and Department of
Energy liability for nuclear waste disposal; (ii) amortization of debt
premium and expense; and (iii) interest amounts included in rental
agreements. Preferred Stock dividend requirements are computed by
increasing Preferred Stock dividends by an amount representing the pretax
earnings which would be required to cover such Preferred Stock dividend
requirements. Excluding the effect of disallowed plant costs charged to the
current period, the Ratio of Earnings to Fixed Charges and Preferred
Dividends would be 2.17x for 1989.
(d) Includes $80.3 million of long term debt due within one year and includes
the long term liability payable to the Department of Energy for nuclear
waste disposal ($66.9 million).
(e) Includes $6.0 million of preferred stock redeemable within one year.
4
<PAGE>
THE COMPANY
Incorporated in 1904 in the State of New York, the Company supplies electric
and gas service wholly within that State. It produces and distributes
electricity and distributes gas in parts of nine counties centering about the
City of Rochester. Of the Company's total operating revenues for the twelve
months ended May 31, 1993, approximately 69% was derived from its electric
department and 31% from its gas department.
The Company's service area has a population of approximately 920,000 and is
well diversified among residential, commercial and industrial consumers. In
addition to the City of Rochester, which is the third largest city and a major
industrial center in the State, the service area includes a large and
prosperous farming area. A majority of the industrial firms in the Company's
service area manufacture consumer goods. Many of them are nationally known,
such as Eastman Kodak Company, Xerox Corporation, General Motors Corporation
and Bausch & Lomb Inc. The mailing address of the Company's executive office is
89 East Avenue, Rochester, New York 14649 and the telephone number is (716)
546-2700.
APPLICATION OF PROCEEDS
The net proceeds from the sale of the Securities will be used to finance a
portion of the Company's capital requirements or to discharge or refund certain
outstanding indebtedness or preferred stock of the Company, or to satisfy
certain sinking fund obligations, or for general corporate purposes, or for any
or all of the foregoing purposes.
CAPITAL REQUIREMENTS AND FINANCING
The Company is engaged in a continuous construction program to maintain
reliable and safe electric and natural gas service and to meet future customer
service requirements. For the period 1993 to 1995, the Company anticipates
construction requirements to total approximately $450 million of which an
average of $4 million per year is for allowance for funds used during
construction and other carrying costs.
In addition to its construction requirements, the Company has security
maturities and sinking fund obligations, which currently total approximately
$111 million over the three years 1993 to 1995.
The Company's construction program is under continuous review and will be
revised depending upon business and economic conditions, rate relief,
government mandates, and other factors.
The Company believes that an average of approximately 80% to 85% of the funds
required per year for its 1993 to 1995 construction program will be generated
internally and the balance will be obtained through the sale of securities and
short term borrowings. The Company also anticipates that the sale of securities
and short term borrowings will be required to satisfy security maturities and
sinking fund obligations over the three years 1993 to 1995. In addition, the
Company may, from time to time, as conditions warrant, issue securities to
permit the early redemption of higher cost senior securities.
DESCRIPTION OF THE NEW BONDS
General. The New Bonds in respect of which the accompanying Prospectus
Supplement is being delivered are to be issued under a General Mortgage, dated
September 1, 1918, between the Company and Bankers Trust Company, as Trustee
(the "Trustee"), as previously amended and supplemented and as further to be
amended and supplemented by a supplemental indenture relating to such New Bonds
(herein collectively called the "Mortgage"). All of the bonds issued and to be
issued under the Mortgage, including any bonds designated as secured medium-
term notes, are hereinafter referred to as the "bonds."
The New Bonds in respect of which the accompanying Prospectus Supplement is
being delivered will be in a principal amount, mature, bear interest and have
other specific terms as set forth in such accompanying
5
<PAGE>
Prospectus Supplement. Interest on such New Bonds will accrue from, and be
payable semi-annually on, the dates set forth in such accompanying Prospectus
Supplement.
The following statements are summaries and are in all respects subject to and
qualified by the Mortgage.
Redemption Provisions. Redemption provisions for the New Bonds in respect of
which the accompanying Prospectus Supplement is being delivered will be set
forth in such accompanying Prospectus Supplement.
Form and Exchange. The New Bonds will be in fully registered form in the
denominations of $1,000 and any multiple thereof, without coupons, and may be
exchanged for other New Bonds of the same series of other authorized
denominations with the same interest rate, maturity and other terms in each
case for a like aggregate principal amount, without charge to the holders
thereof other than for any tax or taxes or other governmental charges.
Security and Priority. The New Bonds will be secured equally and ratably with
other bonds issued under the Mortgage by a valid and direct first mortgage on
substantially all the property of the Company (except accounts receivable and
cash), subject to excepted encumbrances, reservations, contracts and exceptions
which the Company does not consider material to the operations of the property.
The Mortgage provides for the subjection of after-acquired property (subject to
pre-existing liens) to the lien thereof.
Sinking and Improvement Fund. While any bonds issued under the Mortgage are
outstanding, the Company will, on or before June 30 of each year, deposit
$333,540 with the Trustee. Instead of depositing cash, the Company may certify
bondable value of property additions (on the basis of 60% thereof) or apply the
principal amount of prior liens or charges and bonds issued under the Mortgage
which might then be made the basis for the issuance of bonds under the
Mortgage. Cash so deposited with the Trustee may be withdrawn or used as
provided in the Mortgage to purchase or redeem bonds, or to reimburse the
Company for up to 60% of the cost or fair value of property which might
otherwise be made the basis of issuance of bonds or withdrawal of cash. If on
any December 31 the Trustee holds $250,000 or more so deposited, such cash must
be used to purchase or redeem bonds.
Maintenance Fund. If the aggregate amount applied by the Company subsequent
to December 31, 1948 for property additions does not, as of the end of each
year, equal the aggregate of the minimum provision for depreciation for the
years since that date, the Company is required to deposit cash with the Trustee
to make up any deficiency (less certain optional credits). Any cash thus
deposited may be used, among other things, to redeem bonds. The minimum
provision for depreciation for each year is 2 1/4% of the depreciable utility
property at the beginning of the year. As of December 31, 1992, property
additions acquired after 1948 exceeded the aggregate of the minimum provision
for depreciation by approximately $1.82 billion. This excess, even if not
increased by future property additions and assuming a maximum life of 30 years
for any given series of New Bonds, could not be exhausted during the life of
such series of New Bonds and thus the Company cannot deposit cash for this Fund
during such period.
Issuance of Additional Bonds. Additional bonds may be issued under the
Mortgage: (1) to pay for not to exceed 60% of the cost of additional property
constructed or acquired on or after January 1, 1949; (2) to reimburse the
Company for not to exceed 60% of its expenditures made on or after January 1,
1949, from income or surplus for any of the purposes for which bonds may be
issued under (1) above; or (3) to refund or replace any bonds issued under the
Mortgage.
Whenever property subject to a prior lien is subjected to the lien of the
Mortgage, an amount of bonds or moneys equal to such prior lien shall be
reserved to pay such prior lien and thereafter bonds may be issued or moneys
withdrawn up to the amount remaining after deducting the amount of such lien
from 60% of the aggregate of the expenditures for such property and the amount
of such lien. As expenditures are made to pay or acquire such lien, moneys or
bonds so reserved equal to such expenditures (but not more than the
6
<PAGE>
amount of such lien) are to be paid or authenticated and delivered to the
Company. The Company will not certify to the Trustee property additions subject
to a prior lien if thereby the principal amount of prior liens to be then
outstanding will exceed 15% of the principal amount of all bonds then
outstanding and which might then be issued.
No additional bonds shall be issued for (1) or (2) above unless earnings for
a period of 12 months ending not earlier than 60 days prior to the application
for such bonds, after deducting operating expenses, including taxes other than
income and similar taxes, rentals, insurance, actual charges for current
repairs and maintenance and an amount equal to the minimum provision for
depreciation (see "Maintenance Fund") but excluding bond interest, sinking fund
charges and amortization of utility plant account, all as set forth in the
Mortgage, shall equal at least two times the total annual interest on bonds
outstanding and to be outstanding. The ratio for the twelve months ended May
31, 1993 was 4.30x.
At May 31, 1993 the unbonded bondable value of property additions available
for use as the basis for the issuance of bonds was approximately $645 million.
In addition, at May 31, 1993 approximately $83 million of bonds could be issued
against bonds which have matured or have been redeemed. The Company intends to
issue the New Bonds against bonds which have been retired or against property
additions or a combination of both.
Release and Substitution of Property. Release of property is permitted upon
the sale or exchange thereof, if, among other conditions, it has ceased to be
useful or profitable to the Company, by deposit of not less than the fair value
thereof with the Trustee or, if exchanged, by subjecting to the lien of the
Mortgage the property received in exchange.
The Company may under certain conditions without release sell certain disused
or undesirable personal property, and surrender or assent to the modification
of any franchise and certain easements for distribution purposes. The Company
may under certain conditions without release (1) abandon, terminate, release or
change any leases and rights of way, (2) surrender or assent to the
modification of any right, franchise, license or governmental permit, and (3)
dispose of interests in poles and electric lines to certain other utilities.
Modification or Amendment of Mortgage. The Company and the Trustee may enter
into supplemental indentures to (1) subject to the Mortgage after-acquired
property, (2) limit the amount, issue and purposes of the issue of bonds, (3)
provide that bonds of any particular series may be converted into stock, (4)
provide for the issue of bonds in certain denominations, (5) retire or redeem
bonds, and (6) make necessary or desirable provisions not inconsistent with the
Mortgage.
The Mortgage may be modified with the consent of the holders of not less than
75% in principal amount of all bonds, or in case the rights of the holders of
one or more, but less than all, series shall be affected, then with the consent
of the holders of 75% in principal amount of all series affected, provided that
in no event shall such action affecting less than all series be effective
unless approved by the majority holders of all the bonds, and provided that no
supplemental indenture shall (a) extend the fixed maturity of the bonds, or
reduce the rate or extend the time of payment of interest, or reduce the
principal amount, or limit the right of a bondholder to institute suit for
payment of principal or interest without the consent of the holder of each bond
so affected, or (b) reduce the aforesaid percentages which are required to
approve any such supplemental indenture without the consent of the holders of
all the bonds then outstanding, or (c) permit the creation of any lien prior to
or equal with the lien of the Mortgage without the consent of the holders of
all the bonds.
Defaults. Events of default are defined as: default in the payment of
principal; default for 90 days in the payment of interest; default beyond any
grace period in payment of principal or interest on any outstanding prior lien
bonds; certain events of bankruptcy, insolvency, reorganization, or arrangement
of the Company; and default by the Company for 90 days after notice in the
performance of any other covenant or condition in the Mortgage. The Mortgage
requires the Company to file annually with the Trustee a Treasurer's
certificate stating that the Company is not, to the knowledge of the signers,
in default under any of the provisions of the Mortgage.
7
<PAGE>
Upon the happening of any event of default, the holders of not less than a
majority in aggregate principal amount of the bonds secured by the Mortgage
then outstanding may require the Trustee to accelerate the maturity of all such
bonds and to take all steps necessary to enforce the rights granted by the
Mortgage. The holders of not less than seventy-six percent of the aggregate
principal amount of bonds then outstanding may direct and control the Trustee's
actions in such event and, in the event of any proposed judicial sale, the
holders of not less than a majority of such principal amount may cause the
Trustee to sell the mortgaged property in parcels, rather than as a whole.
If, prior to any sale of the mortgaged property, all defaults have been
remedied, the holders of a majority in aggregate principal amount of all bonds
then outstanding may waive and rescind the default and its consequences.
Furthermore, the holders of not less than seventy-five percent in aggregate
principal amount of all the bonds (or if only certain series are affected, of
such series, together with the consent of the holders of at least a majority in
aggregate principal amount of all the bonds) then outstanding may waive events
of default (whether or not cured) other than the failure to pay any interest or
principal due or the granting of a lien ranking equal to or prior to that
granted by the Mortgage.
The holder of any bond secured by the Mortgage may not institute any action
to enforce the rights granted by the Mortgage unless the Trustee shall have
failed to take action after request by the holders of twenty-five percent of
such bonds and provided such holders have offered the Trustee security and
indemnity satisfactory to it. Any bondholder, however, shall have at any time
the right to bring an action to enforce the payments of principal and interest
due on his bonds.
The Trustee may not be compelled to take any action to enforce the rights
granted by the Mortgage unless the bondholders requesting the Trustee to take
such action have offered to it security and indemnity satisfactory to it
against the cost, expenses and liabilities to be incurred thereby.
Trustee. The Company, in the normal course of its business, utilizes banking
services offered by the Trustee, Bankers Trust Company, P.O. Box 318, Church
Street Station, New York, New York 10015. Among such services may be the making
of short term loans.
DESCRIPTION OF PREFERRED STOCK
The Company's authorized Preferred Stock consists of 4,000,000 shares of
Preferred Stock ($25 Par Value), none of which is outstanding, and 2,000,000
shares of Preferred Stock ($100 Par Value) of which 1,150,000 shares are
outstanding.
The following statements with respect to the Company's Preferred Stock are
summaries of certain provisions of the Company's Restated Certificate of
Incorporation (the "Certificate"), including, as regards the New Preferred
Stock in respect of which the accompanying Prospectus Supplement is being
delivered, the related "Certificate of Amendment of the Certificate of
Incorporation of Rochester Gas and Electric Corporation under Section 805 of
the Business Corporation Law" (the "805 Certificate"), setting forth the
designation, relative rights, preferences and limitations of the shares of such
New Preferred Stock, and are in all respects subject to and qualified by the
Certificate and the 805 Certificate.
Dividend Rights. The holders of the New Preferred Stock in respect of which
the accompanying Prospectus Supplement is being delivered will be entitled to
receive, when and as declared by the Board of Directors, out of retained
earnings, cumulative preferential dividends in cash, as specified in such
accompanying Prospectus Supplement, and no more, payable quarterly on the first
days of March, June, September and December, cumulative from the date of first
issuance. The date that the initial dividend on such New Preferred Stock is
expected to be payable is set forth in such accompanying Prospectus Supplement.
In case the moneys available for distribution, as dividends, shall not be
sufficient to pay in full the dividends for any quarterly dividend payment
period, at the rate to which they are entitled, on all of the then
8
<PAGE>
outstanding Preferred Stock, the shares of all series of the Preferred Stock
will share ratably in the payment of dividends, including accumulations, if
any, in accordance with the sums which would be payable on the shares if all
dividends were declared and paid in full.
There are no limitations in any indentures or other agreements on the payment
of dividends on the Preferred Stock.
Voting Rights. With respect to any proposal upon which any series of the
Preferred Stock is entitled, as a series, to any vote, the holders of the
shares of such series of the Preferred Stock are entitled to one vote for each
share so held. With respect to any proposal upon which the Preferred Stock is
entitled, as a class, to any vote, the holders of the shares of Preferred Stock
shall be entitled to cast one vote for each share of Preferred Stock of the par
value of $100 per share, and one-quarter vote for each share of Preferred Stock
of the par value of $25 per share, held by them, respectively.
If and when dividends payable on the Preferred Stock shall be in default in
an amount equivalent to four full quarter-yearly dividends and until all such
dividends in default have been paid, the holders of the Preferred Stock, voting
separately as a class, and without regard to series, will be entitled to elect
the smallest number of directors necessary to constitute a majority of the full
Board of Directors and the holders of the shares of the Preference Stock (to
the extent provided in the Certificate) and the Common Stock voting separately
as a class or classes will be entitled to elect the remaining directors. The
holders of Preferred Stock are not entitled to vote in respect of any other
matters except those, if any, in respect of which voting rights cannot be
denied or waived under some mandatory provision of law, and except that the
Certificate contains provisions to the general effect that so long as any
shares of Preferred Stock are outstanding such shares shall be entitled to vote
on certain matters affecting the rights and preferences of such Preferred Stock
relating to (1) an increase in the authorized number of shares of Preferred
Stock; (2) the issuance or assumption of any unsecured indebtedness in excess
of 15% of the aggregate of secured indebtedness, capital and retained earnings
of the Company; (3) consolidation with any other corporation or corporations
unless ordered or approved by the Securities and Exchange Commission or any
successor Federal regulatory authority; (4) creation or authorization of any
new stock ranking prior to or on a parity with the Preferred Stock as to assets
or dividends; (5) changes in the provisions of the Preferred Stock in a manner
prejudicial to the holders thereof; and (6) the issuance of any shares of
Preferred Stock unless in a 12-month period within the preceding 15 months (a)
net earnings applicable to payment of dividends on Preferred Stock, after
taxes, shall have been at least two times the annual dividend requirements on
all Preferred Stock including that proposed to be issued and (b) net earnings
available for interest on indebtedness, after taxes, shall have been at least 1
1/2 times the annual interest requirements on indebtedness and annual dividend
requirements on all Preferred Stock including that proposed to be issued. A
majority vote of the Preferred Stock is required with respect to 1, 2 and 3
above and a two-thirds vote with respect to 4, 5 and 6 above except that as to
5 the two-thirds vote requirement applies only to the series adversely
affected.
Redemption Provisions. Redemption provisions for the New Preferred Stock in
respect of which the accompanying Prospectus Supplement is being delivered will
be set forth in such accompanying Prospectus Supplement.
Liquidation Rights. The holders of the New Preferred Stock in respect of
which the accompanying Prospectus Supplement is being delivered are entitled to
receive upon voluntary liquidation or dissolution the then current redemption
price (other than through a sinking fund) as set forth in such accompanying
Prospectus Supplement and upon involuntary liquidation or dissolution the par
value per share of such New Preferred Stock, together in each case with accrued
dividends, before any amount is paid to the holders of the Preference Stock and
Common Stock. In case the assets of the Company are insufficient to pay the
holders of all series of the Preferred Stock in full, such holders will share
ratably in such assets.
9
<PAGE>
Miscellaneous. Holders of the New Preferred Stock will not have any
conversion rights or any preemptive rights to share in or subscribe for any
further issue of stock or other securities of the Company. The New Preferred
Stock, when duly issued, will be fully paid and nonassessable.
Transfer Agent and Registrar. The Transfer Agent and Registrar for the
Preferred Stock is The First National Bank of Boston, Shareholder Services
Division, Mail Stop: 45-02-09, P.O. Box 644, Boston, MA 02102-0644.
COMMON STOCK PRICE RANGE AND DIVIDENDS
The following table sets forth the high and low sale prices of the Common
Stock of the Company as reported in The Wall Street Journal through July 16,
1993:
<TABLE>
<CAPTION>
1991 1992 1993
------------- ------------- -------------
HIGH LOW HIGH LOW HIGH LOW
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
1st Quarter........................... 20 3/4 17 3/4 23 1/4 20 7/8 28 3/8 24 1/8
2nd Quarter........................... 20 1/2 19 24 21 1/4 28 25 1/2
3rd Quarter (through July 16, 1993)... 20 7/8 19 24 3/4 22 3/4 28 27 1/2
4th Quarter........................... 23 7/8 20 1/8 25 1/4 23 1/8
</TABLE>
The reported last sale price on the New York Stock Exchange on July 16, 1993
was $28 per share. The book value per share of Common Stock of the Company was
$19.43 at May 31, 1993.
The Company has paid cash dividends quarterly on its Common Stock without
interruption since it became publicly held in 1949. Dividends per share paid on
the Common Stock during the last five years were as follows:
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Cash dividends per share...................... $1.50 $1.50 $1.56 $1.62 $1.68
</TABLE>
The Company increased the quarterly cash dividend rate on its Common Stock to
$.43 per share or an indicated annual rate of $1.72 per share, effective with
the January 1993 dividend payment. Dividend payment dates ordinarily are the
25th day of January, April, July and October.
The Company has an Automatic Dividend Reinvestment and Stock Purchase Plan
(Plan) offered by separate prospectus that permits shareholders to
automatically reinvest their dividends, and invest optional cash payments of up
to $5,000 each month, in shares of Common Stock. The Company absorbs all
expenses of the Plan, except for certain charges incurred in connection with
selling shares held in a Plan account.
DESCRIPTION OF COMMON STOCK
The Company has four classes of authorized capital stock: Preferred Stock,
Par Value $100 Per Share; Preferred Stock, Par Value $25 Per Share; Preference
Stock, Par Value $1 Per Share and Common Stock, Par Value $5 Per Share. As of
the date of this Prospectus no shares of Preferred Stock, Par Value $25 Per
Share or Preference Stock are outstanding. The Preference Stock ranks junior to
the Preferred Stock with respect to the payment of dividends and in
liquidation.
The following statements are brief summaries of certain provisions of the
Restated Certificate of Incorporation of the Company. Such statements are
qualified in their entirety by reference to that Restated Certificate.
DIVIDEND RIGHTS. Subject to the preferential rights of Preferred and
Preference Stock, dividends may be declared on the Common Stock out of retained
earnings.
10
<PAGE>
No dividends can be paid on the Common Stock if any sinking fund requirements
on Preferred or Preference Stock are not met. At present, four series of
Preferred Stock have sinking fund requirements. The Board of Directors has the
power to establish sinking fund requirements with respect to any future series
of Preferred or Preference Stock.
LIMITATIONS ON PAYMENT OF DIVIDENDS. There is no restriction upon the payment
of dividends from the Company's retained earnings.
VOTING RIGHTS. Each holder of Common Stock is entitled to one vote for each
share held of record on the books of the Company.
The Company's Board of Directors is divided into three classes serving
staggered three-year terms. The provision for classification does not apply in
the event that the holders of Preferred Stock become entitled to elect
directors, as described below.
If any dividends payable on Preferred Stock should ever be in default in an
amount equivalent to four full quarter-yearly dividends and thereafter until
all such dividends in default have been paid, the holders of Preferred Stock,
voting as a class, would be entitled to elect the smallest number of directors
necessary to constitute a majority of the full Board of Directors and the
holders of the Common Stock, voting separately as a class, would be entitled to
elect the remaining directors. The holders of Preferred Stock are not entitled
to vote on other matters except those, if any, in respect of which voting
rights cannot be denied or waived under some mandatory provision of law, and
except with respect to certain matters having a fundamental effect on the
holders of the Preferred Stock. In addition, if at any time any of the
authorized shares of Preference Stock are issued, the Board of Directors is
authorized to establish voting rights for the Preference Stock, in addition to
any voting rights provided by law, which do not derogate from those of the
Preferred Stock but may otherwise be similar to the voting rights of the
Preferred Stock.
LIQUIDATION RIGHTS. After satisfaction of the preferential liquidation rights
of any outstanding Preferred and Preference Stock that may be issued and all
prior claims, the holders of the Common Stock are entitled to share ratably in
the distribution of all remaining assets.
PREEMPTIVE RIGHTS. The holders of Common Stock have no preemptive rights
except in the event shares of Common Stock or securities convertible into
Common Stock are issued for cash other than as part of a public offering.
LIABILITY FOR FURTHER CALLS OR ASSESSMENTS. The outstanding shares of Common
Stock are, and the New Common Stock when issued and paid for as provided herein
will be, fully paid and nonassessable.
LISTING. The Company's Common Stock is listed on the New York Stock Exchange.
TRANSFER AGENT AND REGISTRAR. The Transfer Agent and Registrar for the Common
Stock is The First National Bank of Boston, Shareholder Services Division, Mail
Stop: 45-02-09, P.O. Box 644, Boston, MA 02102-0644.
LEGAL OPINIONS
The validity of the Securities will be passed upon for the Company by Nixon,
Hargrave, Devans & Doyle, One Thomas Circle, Washington, D.C. 20005 and for any
underwriters by Sullivan & Cromwell, 125 Broad Street, New York, New York
10004.
11
<PAGE>
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1992 have
been so incorporated in reliance on the report of Price Waterhouse, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
PLAN OF DISTRIBUTION
The Company may sell the Securities (i) through underwriters; (ii) through
dealers; (iii) directly to one or more institutional purchasers; or (iv)
through agents. The Prospectus Supplement sets forth the terms of the offering
of the Securities offered thereby, including the name or names of any
underwriters, dealers, purchasers or agents, the purchase price of such
Securities and the proceeds to the Company from such sale, any underwriting
discounts and other items constituting underwriters' compensation, any initial
public offering price, any discounts or concessions allowed or reallowed or
paid to dealers and any securities exchange on which such Securities may be
listed. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time. Only
firms named in the Prospectus Supplement are deemed to be underwriters, dealers
or agents in connection with the Securities offered thereby, and if any of the
firms expressly referred to below is not named in such Prospectus Supplement,
then such firm will not be a party to the underwriting agreement in respect of
such Securities, will not be purchasing any such Securities from the Company
and will have no direct or indirect participation in the underwriting of such
Securities, although it may participate in the distribution of such Securities
under circumstances entitling it to a dealer's commission.
If underwriters are used in the sale, the Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
Securities may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters (which may include The First
Boston Corporation, Smith Barney, Harris Upham & Co. Incorporated or such other
underwriter or underwriters as may be designated by the Company) or directly by
one or more underwriters. Unless otherwise set forth in the Prospectus
Supplement, the obligations of the underwriters to purchase the Securities
offered thereby will be subject to certain conditions precedent, and the
underwriters will be obligated to purchase all such Securities if any are
purchased.
Securities may be sold directly by the Company or through any firm designated
by the Company from time to time, acting as principal or as agent. The
Prospectus Supplement sets forth the name of any dealer or agent involved in
the offer or sale of the Securities in respect of which the Prospectus
Supplement is delivered and the price payable to the Company by such dealer or
any commissions payable by the Company to such agent. Unless otherwise
indicated in the Prospectus Supplement, any such agent is acting on a best
efforts basis for the period of its appointment.
Underwriters, dealers and agents may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act of 1933.
Underwriters, dealers and agents may engage in transactions with or perform
services for the Company in the ordinary course of business.
12
<PAGE>
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMA-
TION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH IN-
FORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR BY ANY OTHER PERSON, UNDERWRITER, DEALER OR AGENT. THIS PRO-
SPECTUS SUPPLEMENT OR THE PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY OR THEREBY
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN
SUCH JURISDICTION. THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
AND ANY SALES MADE HEREUNDER OR THEREUNDER SHALL NOT UNDER ANY CIRCUMSTANCES
CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFER-
ENCE HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE OR THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Recent Financial Information............................................... S-2
Supplemental Description of Preferred Stock................................ S-3
Underwriting............................................................... S-4
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Selected Information....................................................... 3
The Company................................................................ 5
Application of Proceeds.................................................... 5
Capital Requirements and Financing......................................... 5
Description of the New Bonds............................................... 5
Description of Preferred Stock............................................. 8
Common Stock Price Range and Dividends..................................... 10
Description of Common Stock................................................ 10
Legal Opinions............................................................. 11
Experts.................................................................... 12
Plan of Distribution....................................................... 12
</TABLE>
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250,000 SHARES
ROCHESTER GAS AND ELECTRIC CORPORATION
6.60% PREFERRED STOCK, SERIES V
(CUMULATIVE, $100 PAR VALUE)
LOGO
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PROSPECTUS SUPPLEMENT
MARCH 15, 1994
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SMITH BARNEY SHEARSON INC.
CS FIRST BOSTON
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