ML18101B330
| ML18101B330 | |
| Person / Time | |
|---|---|
| Site: | Salem, Hope Creek  |
| Issue date: | 12/31/1995 |
| From: | Huggard E, Jo Jacobs ATLANTIC ENERGY, INC. |
| To: | |
| Shared Package | |
| ML18101B327 | List: |
| References | |
| NUDOCS 9604190178 | |
| Download: ML18101B330 (40) | |
Text
The same power company that turns things on is shaking things up.
ATLANTIC ENERGY EARNINGS AND DIVIDENDS PAID PER SHARE OF COMMON STOCK 2
1.5
.5 0
- 1.80 1.67 1.49 LSI 1.53 l.54 l.55 1.54 1.41*
9 1 92 93 94 95 EARN INGS DIVIDENDS Earnings per share of Common Stock is nee income divided by rhe average number of common shares owsranding.
Dividends paid per share is the si<m of the quarterly dividend payments made m Jamtar)', AIJTil, Jul~ and October.
ATLANTIC ENERGY MARKET PRICE PER SHARE OF COMMON STOCK 25 23.IJ
!US 20.50 20 17.63 19.25 15 10 5
0
- 9 1 92 93 94 95 This is the closing price of Atlantic Energy's Common Stock on the last trading day of each year, as reported by the New York Stock Exchange Composite Transacrions listing.
Financial Highlights Earnings Per Common Share DiviJends Paid Per Common Share Book Value Per Common Share Number of Common Shares Outstanding-Year-end (000)
Average Actual Return on Average Common Equity Electric Operating Revenues (000)
Operating Expenses (000)
Net Income (000)
Utility Cash Construction Expenditures (000)
Total Assets (000)
Sales of Electricity to Ultimate Customers (KWH) (000)
Price Paid Per Kilowatt-hour (Ultimate Customers)
Total Ultimate Electric-Customer Accounts (Year-end)
Number of Shareholders-Common Stock (Year-end)
Number of Atlantic Electric Employees (Year-end) 1995 1.55 1.54 15.48 52,815 52,532 9.88%
$ 953,137
$ 804,600 81,768
$ 100,904
$2,620,896 8,052,865 11.213¢ 473,588 48,683 1,455
% Change 1995-1994 9.93 (0.5)
(2.5)
(3.0) 8.9 4.4 5.9 7.4 (15.9) 2.4 (1.4) 5.7 1.0 (0.3)
( 18.9) 1994 1.41
- 1.54 15.56 54,149 54, 155 9.07%*
$ 913,039
$ 759,499 76,113*
$ 119,961
$2,545,555 8,167,856 10.610¢ 468,7 12 48,850 1,794
% Change 1994-1993 (21.7) 0.7 (0.4) 2.4 1.2 (22.5) 5.5 7.6 (20.l)
(13. l) 2.3 1.3 2.8 1.2 2.1 (2.2) 1993 1.80 1.53 15.62 52,888 53,507 11.71%
$ 865,675 706,091 95,297 138,111
$ 2,487,508 8,066,4 l 2 10.316¢ 463,073 4 7,832 1,835
% Change 1993-1992 7.8 1.3 3.0 2.5 2.5 5.1 6.0 3.9 10.5 l 2. 1 5.4 0.6 1.0 2.8 (9.3)
- rdll'clS 1lJk'-llnlC 1.:haq,:l'S of $0. n per share, primarily for employee :->epar::ltion ClhtS Atlantic Energy, Inc. is the parent holding company for Atlantic C ity Electric Company (Atlantic Electric) and A tlantic Energy Enterprises (A EE). Atlantic Electric, a regulated electric utility, is the company's core business and makes up 94% of total assets. Atlantic Electric serves more than 4 73,000 customers in a 2,700-square-mile area in southern New Jersey. More than 98% of the u~
customers are homes and small businesses. AEE is the holding company for A t~
Energy's non-regulated businesses. Together, the two subsidiaries are carrying out Atlantic Energy's mission to become a competitive energy company that offers customers a full spectrum of products and services.
W~c!11~d
]. L. Jacobs E. D. Huggard President &
Chief Executive Officer Chairman of the Board To you, our shareholders:
Success in today's electric utility industry is all about navigating change and finding smarter ways to run your business. A glance at our cover may have given you some idea that things are indeed changing at Atlantic Energy. In 1995 we continued to move forward with our plans to create an energy company that will compete profitably in the rapidly changing energy industry. Along the way we've met some difficult challenges, but we've also made some hard-earned progress. We're working harder than ever to grow new markets, improve productivity and customer service and cut costs - all important efforts that are preparing us for deregulation and intensi-fied competition.
1995 's Financial Performance Our financial performance during 1995 clearly did not meet our expectations - we earned $1.55 per share, a decline from the $1.78 per share earned from operations last year, before 1994's one-time $0.37 adjustment. Dividends paid, plus share price appre-ciation during 1995, yielded a total return of 18.0%.
Certainly a fair return, but we did not keep pace with many of our peer utilities.
( cont'd) 1995 operation and maintenance (O&M) expenses for our core utility business were reduced by more than $8 million, a 4 percent reduction from last year's mark. The most significant savings were achieved through a utility downsizing program that trimmed the work force by close to 300 employees. Core O&M expenses are expected to remain flat over the next three-to five-year period.
Atlantic Energy
We are not, and will not be satisfied with these kinds of results. A very mild winter and spring held back earnings through the first half of '95 and the summer's air condi-tioning load was not robust enough to help us make up the lost ground. Electric sales in 1995 were 1.4% off 1994 levels. Other factors contributing to the 199 5 earnings decline include the additional expenses related to the prolonged outage at Salem Nuclear Station and the continuation of the economic initiative credit included in our energy clause rates. While the credit helps us make our rates more competitive, it did have a significant effect on earnings in 1995. We do not expect to renew the credit in our next fuel adjustment rate request.
Overall, our nonutility activities resulted in a loss of $0.04 per share in earnings. Included in our nonutility results is a $0.01 per share loss from Atlantic Energy Enterprises, (AEE), reflecting the start-up mode of some of their busi-nesses. Looking to the future, all Atlantic Energy com-panies will play significant roles in our work to expand the number of energy options we can offer our customers as well as broaden our sources of earnings.
Our Competitive Strategy The deregulation of the electric utility industry is and will continue to be the single greatest factor influencing our future. It will be the marketplace - not the regulators
- that will ultimately dictate the pace and extent to which the industry changes. As competition takes hold, we want to be in a position to compete and win The Company continues to take advantage of the 1ower prevailing interest rates by refinancing higher-cost debt. In 1995 two bond issues were redeemed or refinanced, saving the company more than $1 miUion per year in interest expense. Over the 1ast three years more than $430 miUion of the company's 1ong-term debt has been refinanced.
in the new marketplace. Our five-year strategic pla, called AE2000, initiated last year, is setting the course for our transformation. The plan calls for enhancing the efficiency and profitability of our core electric utility business while developing growth and profit opportunities in new energy-related markets. The pages that follow our letter detail some of the strides we've made in carrying out our AE2000 plans.
As we move toward full competition, we anticipate continued pressure and vulnerability with regard to our earnings outlook. We will regularly evaluate the level of our common stock dividends in relation to our finan-cial performance. We are mindful of our shareholders' traditional reliance on steady dividend income.
Competing with that priority, however, is the need to have enough financial flexibility to respond quickly to emerging market opportunities or threats. And as we wrote in last year's letter, one way to gain that fie.
bility is to pay out a relatively smaller portion of our earnings in dividends. We expect to dedicate increasing amounts of resources to new opportunities that will grow our business, and in turn, increase our earnings.
Our intent is to carefully balance our dividend and business growth commitments, creating the greatest value for our shareholders.
Building Strong Customer Relationships To compete in the future, we know we must work now to build stronger relationships with our customers.
A tlantic Generation Inc. (AGI) turned in a solid financial performance in 1.995. The nonutility power producer con-tributed $0.05 per share to consolidated earnings. AGI's business p1ans caU for adding to its current portfolio of thrA co generation plants.
'W
Achieving our vision of becoming a full-service energy compan)' will depend on building excellent relationships with our customers.
Pictured above, Atlancic Electric President and Chief Operating Officer Mike Chesser talks to customer service representatives about some new initiatives that will sup/Jort them in their da)*-to-da)' interactions with customers.
We're assuming our largest business customers will be among the first to have the freedom to choose their energy supplier. We know that will happen, but can't pre-dict exactly when. O ur plan is to be fully prepared for com-petition right around the turn of the century. That's why we're developing new products and services that create new sources of revenue while making Atlantic Energy a much more important factor in our customer's day-to-day lives and businesses. New services like high voltage equip-ment maintenance and efficient lighting design and instal-lation place us on the customers' ide of our meters and demonstrate how we can contribute to their profitability.
Our N ew Gas Marketing Venture We won't always be going it alone as we expand our port-folio of product offerings. We've learned that it can be a great advantage to partner with a business that has proven experience in a new market. For instance, early in 1995 we established a strategic alliance with a subsidiary of orthern States Power of Minnesota - one of the country's most progressive gas and electric utilities. With them, we have created A tlantic CNRG Services, LLC (ACNRG ), and are selling natural gas services to com-mercial and small industrial businesses in several regions of the Northeast. Since our partner already had a foot in the market, we were able to get the business up and run-ning in a remarkably short period of time. We're looking for ACN RG to grow steadily in the coming year.
Our search for smarter work practices and cost-cutting measures led us to partner with our union to create more flexible work rules and broader job descriptions at our poiver plants. Day-to-day tasks that once required the involvement of as many as three employees can now be handled by just one multi-tasked worker.
Atlantic Energy 3
Competing on Price New products and strong customer relationships will only be part of the competitive solution. We must also make the price of our primary product - electricity - more attractive in order to meet the threat of competition.
We're making excellent headway in getting our internal cost structure in order. By doing things like trimming close to a third of our utility work force over 3 years, renegotiating fuel supply contracts and creating ground-breaking partnerships with our union, we're making electricity a better value for customers. We also expect to offer customers, on a very limited basis, price discounts currently permitted under New Jersey's new flexible ratemaking laws.
Significant cost challenges still lie ahead of us, partic-ularly in the area of power generation and supply. The power purchase contracts we have with our independent power producers (IPPs) are pushing our rates well above prevailing market levels. Serious talks with the project owners continue with the goal of achieving further cost reductions. One positive outcome of our talks has been the restoration of GEON, a chemical manufacturer, as a full customer. An agreement reached with another !PP calls for the return of Monsanto.
New Jersey's utility regulators are working closely with the state's electric utilities to create a smooth transition to a market-driven environment. The Board of Public Utilities' new flexible rate regulations give us the ability to respond to competitive threats by offering business customers, at our discretion, customized or discount rate agreements.
Managing Regulatory Issues The complex process of utility deregulation is expected to occur primarily lll1 a state-by-state basis. States across the U.S., including New Jersey, are taking a hard look at the traditiunal regulations that govern the industry and are devdoping new standards that better reflect the realities of the marketplace. Memhers of our corporate leadership are playing key mks in the New Jersey Board of Public Utilities' (BPU's) ongoing Energy Master Plan Proceeding. One of the most critical questions being addressed in the proceeding is the extent to which New Jersey's utilities will he able to recover long-term investments anJ commitments prudently made and placed into dectric rates under the traditional regulatory compact. We firmly hdieve our regulators and lawmakers must build in a transi-tion period to provide for renJVery of our investments as we move toward open competition. To date, ot' jurisdictions grappling with this same issue, includmg the Federal Energy Regulatory Commission, appear to he in alignment with our position. Whik the BPU hasn't yet made any formal pronouncements, we are pleased with the thoughtful and ddiherate manner in which they are handling this very important process.
Growth In Our Service Territory When we take inventory of the strengths that set us apart from other utilities, the quality of our service territory always tops the list. We're very optimistic Developers and investors continue to show strong interest in Atlantic City. In mid-1995, Steve Wynn of Mirage Resorts announced his intent to build a half-billion-dollar casino and entertainment resort in the city's marina district.
The project could create thousands of new jobs as we1-significant new business for Atlantic Energy.
A Personal Note...
This year I will end my nearly 41 years of service with Atlantic Energy. I am fortunate to have enjoyed both a challenging and rewarding career. The challenges were met, and the rewards derived from the great association I shared with the employees, directors, customers and shareholders of our company.
Now, more than any time in my experience, our industry and our company are facing times requiring exceptional vision and strategic leadership. I believe Atlantic Energy's leadership will successfully guide our corporation gh the vast changes and new opportunities that lie ahead of us.
A tlantic Energy is a fine company, and I am honored to have served as its leader. I urge my fellow shareholders to maintain their steadfast support. I believe A tlantic Energy has always endeavored to fairly reward you for your invest-ment confidence and will continue to do so in the future.
Atlantic Energy gained a new business cus-tomer when Missa Bay moved its operations to southern New Jerse)'* The food distributor built a 50,000-square-foot facility that boasts a state-of-the-art, 30,000-square-foot re-frigeration-freezer area. Factors influencing Missa Bay's move included lower taxes and energy expenses.
about the growth trends we're seeing in several regions of our market. A tlantic C ity is undergoing a renaissance that promises to make the resort a premier tourist and entertainment attraction. A new convention center, numerous casino and hotel expansions and record casino profits are enhancing the city's appeal, as well as our own business opportun ities in the city. Atlantic Thermal Systems, our thermal energy subsidiary, will soon begin constructing a heating and cooling system in Atlantic C ity to serve the burgeoning casino and commercial district. To the west, we continue to experi-ence growth in our industrial and commercial sectors.
Manufacturing and distribution fac ilities are choosing southern New Jersey. They are attracted by ample room to grow and an excellent transportation infrastructure.
Over the next two to three years we will be challenged by the marketplace in ways we never imagined a few short years ago. We're confident we're up for the challenge. Be assured that throughout the process our overriding objective will be the maximization of share-holder value. In the pages that follow you'll see how we're already shaking things up to create just the right blend of innovation, growth and quality service to achieve that objective for you.
Post Script From Jerry Jacobs Our Chairman, Doug Huggard, will retire from our board of directors in April. On behalf of my fellow employees, board members and shareholders, I want to thank Doug for his nearly 41 years of fine service and leadership. His wisdom,
vision and business sense have steadily guided us through periods of tremendous growth and change. We'll miss his valuable contributions and wish him a long and healthy retirement. -
].L. Jacobs
The same power company that lights corridors is blazing new trails.
We're replacing our computerized energy management system (EMS) with state-of-the-art technology that will help us operate our generation and transmission equipment more efficient!)' into the next centur)'. The new EMS will keep a closer watch on the limits of our power system and allow us to better manage our investments in equipment and labor.
Inefficient lighting and pace conditioning systems are energy guzzlers that can hrink a business' bottom line.
We've entered the growing energy services industry and are now marketing compr hensive efficiency solution to business and industry in outhern New Jersey and other regions of the Northeast. We're offering customer top-to-bottom energy efficiency audits, as well as design, construction and retrofit of new lighting and energy systems. We even provide project financing, so busines es don't have to drain their own capital resources. For southern New Jersey firms facing international competi-tion, or even competition from sister facilities in other e states, lower operating costs help secure their future and valuable jobs here. And for Atlantic Energy, the strategic benefits of this initiative are clear: we're competing head-to-head with energy service companies that are already proposing efficiency programs to our own cus-tomers; we're expanding our business relationships with customers and we're creating new revenue streams.
Our new International Procurement group worked to create a market for new and used electrical equipment in several developing regions of the world. In 1996 the team will work to penetrate markets in the Far East.
During 1995 we installed approximately 1,800 NightGuard outdoor lights at our customers' businesses and homes, bringing the total number of lights leased under the program to 23,800. NightGuard lights /)roduce more than $6 million in annual revenue, while providing security and convenience for our customers.
Nighttime in Atlantic C ity i brighter than ever - and it's not just the city's casinos that are creating the inviting glow. We installed thousands of decorative street lights throughout the resort's parks, neighbor-hoods and boulevards. Supported by funding from businesses and public agencies, many of the city's main entranceways have been reb uilt with lush landscaping and new street lighting. To help the projects run smoothly, we've taken the lead in coordinatii;ig the complex job of burying several different utilities' cables underground and out of sight.
idewalks and street com ers in some of the city's oldest neighborhood now shine with ornamental street lamps, making them safer and more inviting for residents and vi itor. The centerpiece of the lighting projects promises to be the 16-square-block gateway corridor that will connect the new conven-tion center with the boardwalk. Sched ul ed fo r completion in 1997, the project will create a grand and spectacularly lighted entranceway to Atlantic C ity.
Our Atlantic City office was hired b)' the Showboat Hotel and Casino to coordinate the installation of all underground utilities needed for a new parking facility. The job was completed in just eight weeks and in time for the busy summer season.
Atlantic Energy
The same power company that cools things down is heating up.
We're constructing a thermal energy production plant in Atlantic City that, under a 30-year contract, will suppl)' heating and cooling services to the city's new convention center. The center is scheduled to open in the.a sj)ring of 1997 and will boast the largest W exhibition hall on the eastern seaboard.
1 t's important to find a good balance between our business priorities and the environment.
That's why in June we donated 114 acres of undeveloped woodlands to the New Jersey chapter of the Nature Conservancy. The tract of land, located near our Cumberland Generating Stat ion, is adjacent to the onservancy's Manumuskin River Preserve and increases its total size to 3,500 acres.
We think it's smart business to stick close to what we do best. That's why a key element of Atlantic Energy's growth strategy is to develop new businesses and products closely aligned with our core electric utility business. Atlantic Thermal System (ATS), our ther-mal energy services subsidiary, i doing just that. ATS offers business customers in southern ew Jersey and across the U.S. a spectrum of options - from operating and maintaining existing thermal energy facilities to selling the customer thermal energy in the form of chilled water and steam for industrial processes or to heat and cool their bu ilding.
Atlantic C ity's thriving hotel and casino industry is ATS' initial focus. We're designing a central energy system that will supply steam and chilled water to the city's mid-town casino and business district.
With major facilities like the Trump Plaza and the Trump Regency already under contract for the service, ATS expects to begin construction on the $88 million electric and natural gas powered proj ect in mid -1996.
A growing number of schools in outhJersey are choosing geothermal heating and cooling systems. Eight schools, including two colleges, are enjoying the comfort and efficienC)' of geothermal. Four more schools are now installing systems. Geothermal systems help us trim power demand at peak times, while increasing year-round electricity consumption.
Atlantic Energy _____ __.
The same power company that connects with you is building new bridges.*
Through a new billing enhancement, our largest customers now have the convenient option of receiving a single monthly bill that summarizes energy consumption for all of their separately metered facilities. During 1996 we will expand the bill consolidation program to include other customer groups.
Every business day more than 25,000 of our cu tamers pay their electric bill or call us with question or requests. In many cases, customers base their opinions about our service quality on these routine connections.
During 1995 we created several programs that improve our efficiency and convenience. Cu tamers can now pay their bills using a credit card or by giving us approval to automatically debit their bank account. And they'll soon be able to use our convenient pay-by-phone service to pay their monthly electric bill - for less than the cost of a postage stamp. These new options can save us, as well as our customers, time and money. We've also made
- it easier for customers to contact us by phone. Phone representatives who "tele-commute" from their homes offer quicker service during peak calling times and can staff their phones in a matter of minutes during night-time torms and other emergencies. And our new voice-automated system lets customers handle routine requests without assistance 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> a day.
Utility field personnel are testing a new mobile com/JUter system that schedules and tracks their daily work activities. It cuts down on time-consuming paper work and "talks" with our customer information system to give e our phone representatives up-to-the-minute status re/Jorts on service requests and repair work.
Our new environmental partnering program is helping business customers address and solve complex regulatory issues. Our expert assistance has proven to be of great value to customers that are expanding their facilities and are unsure of how to comply with New Jersey's environmental laws.
Increased competition means we can't let our power lines be the only direct tie with our largest customers.
We're building bridges to our large business customers that pave the way for high-quality service and strong-er customer partnerships. For instance, when Sony Music came to us with a request to build a new power line to serve its compact disc manufacturing plant, our account executive Nathan Berk saw a golden opportunity to show a key customer the kind of top-notch service we deliver. "Sony's specifications challenged our project team to come up with some innovative engineering and construction solutions,"
Berk explained. "We completed a major piece of the job during a single 24-hour period to minimize disrup-tions at the plant." Three AE crews worked around the clock to meet the deadline and completed the job in time for Sony to begin its morning shift. "Executing jobs like this proves to our customers that we can bridge the gap between what they expect from a traditional electric utility, and what Atlantic Energy can deliver to the competitive marketplace."
A late-summer drought led to severe ocean salt build-up on critical power lines serving our seashore communities. To prevent costly equipment damage and keep our customers' power on, we used truck-and helicopter-mounted power washers to remove salt from more than 25 miles of line.
Atlantic Energy 11
The same power company that controls the spark is lighting your fire.
Our new bulk power marketing team seeks out the most competitively priced power available in the market. During 1995 the group negotiated power-related sales and purchases tha t saved us approximately
$5.4 million in capacity and energy cos ts.
New computerized equipment installed at our Deepwater G enerating Station is making the job of unloading and handling coal more cost-effective. A remote-controlled locomo-tive and a video system that monitors the coal e as it's transferred to the boiler fuel system are saving the plant an estimated $200,000 each year in operations costs.
One way we're making the rates we charge our customers more competitive is by renegotiating our coal supply contracts.
During 1995 we renegotiated our five largest coal-related contracts, saving us and our customers approximately $3.4 million on an annual basis.
Atlantic Energy has broken out of the electric-only business and is selling natural gas services to commercial and industrial customers. In early 1995 we created Atlantic CNRG Services, LLC (ACNRG), a joint venture with Minnesota-based orthern States Power. ACNRG hit the ground running and immediately won a contract to supply natural gas to Atlantic ity's hotel-casino industry.
A RG' customer portfolio has been growing at a steady pace, with 80% of its business now located outside southern New Jersey. "We're growing our customer base by targeting small to medium-sized businesses that don't have the internal resources needed to capture the significant savings available on the open gas market," said AC RG Executive Ron Scheirer. "In many cases we can save a customer who is still relying on their local distribution company as much as 30% on their natural gas bill." ACNRG is also a natural strategic fit with other Atlantic Energy businesses like Atlantic Generation Inc. and ATS, that use large volumes of natural gas in their businesses. They can enjoy the competitive benefits of lower natural gas prices obtained for them by ACNRG.
We're trimming capital expenses and controlling our electric rates by increasing the efficiency of our power delivery system.
Our new planning and operation strategy has increased the capacity of our existing delivery system by an average of I 0% and will save us an estimated $ I 6 million in capital construction expenditures over the next five years.
Atlantic Energy ______
--1
The same power company that keeps the cocoa flowing is making waves.
- Our commercial sector turned in the strongest growth trends in 1995, which is typically a sign of a strengthening economy.
Close to 1,000 new commercial accounts were added to our system.
Our economic development incentive rate provides discounts to expanding or new commercial and industrial customers. The 4 5 businesses now on that rate account for
$6. 6 million in new annual electric revenue e and have created more than 1,500 full-time jobs in South Jersey.
Atlantic City is experiencing a building boom, led by the construction of more than 3, 600 new casino hotel rooms. All signs indicate that the growth will continue, pro-viding a significant boost to our projected sales levels to the seaside resort.
outhern New Jersey's boat building industry does more than simply provide jobs. It's also a piece of our unique seashore history. Boats have been built here for more than 300 years, and some family-run businesses have been in operation for generations. So when a 10% federal luxury tax nearly drove the industry to extinction, the community felt a great loss. In August 1993, the tax was repealed, and today the industry is back on an even keel. Companies like Viking Yachts have rehired more than 500 skilled workers to meet a renewed demand. Last yea r Viking built 7 5 luxury yachts valued at $50 million and expects to increase production by more than 25% in 1996. A tlantic Energy is actively involved in a public-private part-nership that is fueling the growth of ew Jersey's boat building and marine industries. The partnership is developing national and international marketing strategies and working to find new financing solu-tions for the industry. The group is also developing relationships with area school and colleges to secure a new generat ion of highly skilled craftspeople.
An $8.4 million expansion nears completion at the Atlantic City International Airport that will more than double the size of its terminal. The airport will also be the home of Raytheon's new regional aircraft mainte-nance facility. Raytheon's growth will be supported by our economic development discount rate.
Atlantic Energ)'-------1
The same power company that generates current is energizing the future.
In 1995 our power plant maintenance crews hit the road. They now move from plant to plant, depending on where overhaul work is being done. This new fl.exibility trims labor costs, reduces the need for contractors, and cuts costly plant down-time. T he mobile crews are also creating a new source of revenue by performing similar work for other businesses in the region.
One of our most critical objectives in 1995 was to find ways to cut the cost of operating Atlantic Electric's utility business. In 1995, we reduced core utility opera-tion and maintenance costs by over 4%. One way we did this was to create a new job category at our power plants that combines three previously separate jobs. The idea for an O&M Technician position first surfaced as we were working with our union to find the most cost-effective way to run our new desulfurization
("scrubber") plant at B.L. England Station. By training one worker to operate and maintain the system, plus do electrical work, we found we could dramatically.
reduce plant down-time and operating costs. Also, since the O&M Techs have complete responsibility for all facets of plant operations, they're constantly looking for ways to improve processes and take full advantage of the new flexibility they've gained in their jobs. The program has worked so well at the scrubber, it's been expanded to our large generating stations.
The new scrubber at B.L. England Station converts sulfur dioxide emissions into calcium sulfate dihydrate, more commonly known as gypsum. During 1995, more than 48,000 tons of gypsum were produced by the scrub-e ber. This valuable by-product is being sold to a New ] ersey wallboard maker, avoiding the cost and environmental impact of placing it in a landfill.
Grants from Atlantic Energy, the US EPA, and others helped the Richard Stockton College of New Jersey install the state's largest photo-voltaic system in a new academic building. The system converts solar energ)' into 18 kilowatts of power and will he//) us learn more about the business and environmental benefits of this technology.
We know we must continue to create new, and some-times radically different, ways to run our business if we are to be successful in the 21st century - the market-place will demand it! O ur vision is to become a growing, competitive company that delivers a steady stream of innovative energy solutions to the marketplace. New energies are at work to make that transformation happen, and we're beginning to see some promising results. We're cutting costs, and with the help of our employee, finding creative ways to be more competi-tive in our core electric business. Throughout 1996 we will continue to make our power a better value for cus-tomers. The development of new products and services is another key priority in 1996. We have created a disci-plined process that helps us assess market opportunities and then align the internal resources needed to bring profitable product and service offers to our customers.
The idea is to become a key partner in our customers' lives and bu inesses, delivering more and more value to them and ultimately our shareholders. That's our charge for the future and that's where we'll be focu ing our energies.
CoastalComm, Inc. has joined a venture that is entering the /)ersonal communications systems (PCS) market. PCS is considered the next generation of wireless communication technology and offers users high-quality digital, voice and data transmission capabilities.
Atlantic Energy 17
0 Matthew Holden, Jr.
Mr. Hok/en, a director since 198 1, is the Henry L. and Grace M. Doheny Professor of Government and Foreign Affairs at the University of Virginia. He is a former commissioner of the Federal Energy Regulatory Commission and the Wisconsin Public Service Commission,
and a f onner member of the President's Air Quality Advisory Board. He holds a doctorate in political science from Northwestern University. Age: 64.
Professional Experience: regulatory affairs, energy consultation, arbitra-tion. Committee Chairman: Audit.
Committee Membership: Personnel &
Benefits; Wholesale.
Gerald A. Hale Mr. Hale, a director since 1983, is president of Hale Resoiirces, Inc., a health care, industrial/natural resource investment and management company.
He is a director of New Jersey Manufacturers Insurance Company, New Jersey Business and Industry Association and Hoke, Inc. He is a grad-uate of Western Michigan Universit)'*
Age : 68.
Professional Experience:
industrial minerals, chemicals and f abri-cated O.E.M. products. Committee Membershi/J:
Personnel & Benefits; Retail. Chairman of Atlantic Energ)'
Enterprises, Inc.
Jerrold L. Jacobs Mr. Jacobs is president and chief executive officer of the Company and chairman and chief executive officer of Atlantic City Electric Com/Jany. He has been with the Company for 34 years. He is a graduate of the Newark College of Engineering (New Jerse)'
Institute of Technology). Age: 56. Pro-fessional Experience: utility operations.
Committee Membership: Ex-officio member of all committees except Audit and Personnel & Benefits. Director of Atlantic Energy Enterprises, Inc.
0 Atlantic Energy's Board of Directors Jos. Michael Galvin, Jr.
Mr. Galvin, a director since 1978, is president and chief executive officer of the South Jersey Health Corporation -
The Memorial Hospital of Salem County. He is a director of Woodstown National Bank and the Center for Health A ff airs. He is a graduate of the University of Scranton and holds a master's degree in business administration from Xavier University. Age: 50. Professional Experience:
/Jersonnel, health care manage ment.
Committee Chairman: Personnel & Benefits.
Committee Membership: Wholesale. Director of Atlantic Energy Enterprises, Inc.
Richard B. McGlynn Mr. McGlynn, vice /JTesident and general counsel of United Water Resources, Inc., has been a director since 1986. A practicing lawyer for over 30 years, he is a former commis-sioner of the New Jersey Board of Public Utilities and a former judge. '*- Essex County, New Jersey. He is 1uate of Rutgers Law School and - ' ceton University. Age: 57. Professional Ex-perience: law, utility regulation.
Committee Membership: Finance & Public Policy; Personnel & Benefits, Retail.
Cyrus H. Holley Mr. Holley, a director since 1990, is president of Management Consulting Services. He was formerly chief operat-ing officer, executive vice president and a director of Engelhard Cor/Joration.
He is a graduate of Texas A&M iversity.
Age: 59. Professional
)erience :
industrial
- minerals, emicals and precious metals.
Committee C hairman:
Wholesale.
Committee Membershi/J:
Personnel &
Benefits. Director of Atlantic Energy Enterprises, Inc.
E. Douglas Huggard Mr. Huggard, a director since 1984, is chainnan uf the board of the Compan)'* He served as chairman and chief executive officer of the Company and Atlantic City Electric Company from 1989 until 1993, when he retired after com/Jleting 38 years of service.
Prior to that, he was director, president and chief executive officer of the Company and Atlantic City Electric Com/Jany. He holds a master 's degree in mechanical engineering from the University of Delaware. Age: 62.
Professional Experience: utility operations.
Committee Membership: Finance & Public Policy; Retail; Wholesale.
Bernard ]. Morgan Mr. Morgan, a banking industry executive, was elected as a director in 1988. He holds a master's degree in business administration from the Wharton School of the University of Pennsylvania. Age: 59. Profession-al Ex/Jerience:
banking, finance.
Committee Chairman:
Finance Public Polic)'. Committee Membership:
Audit. Director of Atlantic Energy Enterprises, Inc.
Kathleen MacDonneLl Ms. Mac Donnell was elected as a director in 1993. She is a corporate vice
/Jresident of Cam/Jbell Soup Company and president of its Frozen Foods Group. She is a member of the board of directors of the Campbell/Nakano Joint Venture, a member of the board of directors of the American Frozen Food Institute and a trustee of the Campbell Sou/J Com/Jany Foundation.
She is a gradiwte of the Universit)' of Massachusetts and holds a master's degree in international management from the American Graduate School of International Management. Age: 47 Professional Experience:
consumer
/Jroducts, marl<eting and international management. Committee C hairwoman:
Retail. Committee Membership: Audit; Personnel & Benefits.
Harold J. Raveche Or. Raveche, who became a director in 1990, is president of the Stevens lnsritiae of Technology. He was formerly the dean of science of the Rensselaer Polytechnic Institute. He is a director of National Westminster Bancor/J, Inc., and a member of the U.S. Council on Competitiveness and Business Executives for National Security. He holds a doctorate in physical chemistry from the University of California.
Age: 52. Professional Experience: higher educarion, science and technology policy.
Committee Membership: Audit; Finance
& Public Policy; Retail, Wholesale.
Atlantic Energy _______
-1
A closer look at the companies of Atlantic Energy (A ll 1nformarion a; of 12/3 1/95)
Atlantic Electric Atlantic Electric, Atlantic Energy's primary subsidiary, is a regulated electric utility, serving more than 4 70,000 homes and businesses across southern New Jersey. With $2.4 billion in assets and
$954 million in annual revenue, Atlantic Electric is acti vely developing new energy-related product and ervices to expand its sources of revenue and become the energy provider of choice fo r its customers.
Atlantic Energy Enterprises, Inc. (AEE)
AEE was established as a holding com-pany for Atlantic Energy's non-regulated subsidiaries in January 1995. AEE has assets totaling $175 million and through its various business entities expects to inve t an additional 400 million over the next five years. These companies will pursue growth opportunities in energy-related fields, particularly those that will leverage Atlantic Energy's existing busi-nesses and customer relationships.
Table of Contents Report of Management and Independent Auditors' Report
.- Page 22 Condensed Consolidated Statement of Income ----------------------.- Page 23 Condensed Consolidated Balance Sheet -----------------------------.- Page 23 Condensed Consolidated Statement of Cash Flows ------------------.- Page 24 Consolidated Statement of Changes in Common Shareholders' Equity ---------* Page 25 Notes to Condensed Consolidated Financial Statements -------.- Page 26 Management's Discussion and Analysis of Financial Condition and Results of Operations ------- -- --* Pages 2 7-31 Financial and Statistical Review 1995-1985 --------------------.- Pages 32-33 Investor Information -----------------------.- Page 34 Officers ---------------------------------.- Pages 35-36 We've carried our "shake-up" theme all the way into the financial section of this report. The traditional 40-plus page document has been trimmed down to a 16-page summary. All the essential information is still here, presented in a more u er friendly form. For those of you who require the details, our full financial disclosure is included in the proxy statement for the 1996 annual meeting of shareholders.
Atlantic Energy ____ __,
The management of Atlantic Energy, Inc. and its subsidiaries (the Company) is responsible for the financial statement and related information presented in this Summary Annual Report.
These statements and information are derived from the complete set of financial statements and related information contained in the 1995 Annual Report on Form 10-K and accompanying the 1996 proxy statement for the annual meeting of shareholders, both of which are filed with the Securities and Exchange Commission. Those financial statements are prepared in conformity with generally accepted accounting principles and have been audited by Deloitte &
Touche LLP, Certified Public Accountants. For more complete details regarding financial information on the Company, refer to the Form 10-K or the Proxy Statement.
J. L. Jacobs Pre ident and Chief Executive Officer
/i~_jJfJ~
M. J. Barron Vice President and Chief Financial Officer February 2, 1996 Independent
- Auditors' Report Deloitte &
Touche11P 0 Deloitte & Touche LLP Certified Public Accountants Two Hilton Court Parsippany, New Jersey 07054 To the Shareholders and the Board of Directors of Atlantic Energy, Inc.:
We have audited the consolidated balance sheets of Atlantic Energy, Inc. and its subsidiarie as of December 31, 1995 and 1994, and the related consolidated statements of income, changes in common shareholders' equity and cash flows for each of the three year in the period ended December 31, 1995. Such consolidated financial statements and our report thereon dated February 2, 1996, expressing an unqualified opinion (which are not included herein) are included in Appendix A to the 1996 proxy statement for the annual meeting of shareholders. The accompanying condensed consolidated financial statements are the responsibility of the Company's management. Our responsibility is to expre an opinion on such conden ed consolidated financial statements in relation to the complete consolidated financial statements.
In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1995 and 1994 and the related condensed consolidated statements of income and cash flows and changes in common shareholders' equity for each of the three years in the period ended December 31, 1995, i fairly stated in all material respects in relation to the basic consolidated financial statements from which it.
been derived.
~.F~ LL /-'
February 2, 1996
Condensed Consolidated Statement of Income e
For the Years Ended December 31,
(Thousands of Dollars) 1995 Operating Revenues - Electric
$953,137 Operating Expen es:
This expense includes---* Energy and Purchased Capacity 382,336 the cost of fuel and Operations and Maintenance 186,439 power purchased from utility and nonutility Depreciation and Amortization 78,461 sources, including IPPs.
Taxes 157,364 The increase in 199 5 's expense reflects the Total Operating Expenses 804,600 first time all 4 of Operating Income 148,537 ACE's IPP contracts were in fuU operation. r-.- Other Income and (Expense) - Net 9,058 I
I Interest Charges - Net 61,200 I
I I
Less Preferred Stock Dividend Requirements I
This is the net of in-.J of Subsidiary 14,627 come and expenses from a number of Net Income
$ 81,768 diverse activities. The results of nonregulated Average Number of Shares of Common Stock bu.sinesses are reflected Outstanding (In Thousands) 52,815 here, and in 1994 this line-item included the Per Common Share:
cost of ACE's down-Earnings 1.55 sizing program.
Dividends Declared 1.54 Dividends Paid 1.54 (Thousands of Dollars)
Assets Electric Utility Plant (Net of accumulated depreciation:
1995 - $794,479; 1994 - $725,999)
Investments the com- ------
pany makes in its nonutility activities Total Investments and Nonutility Property Total Current Assets are accounted for here. The 14% in-crease over last year primarily reflects investments made by ATS for the Atlantic City thermal energy project.
,. *.._ Recoverable Future Federal Income Taxes
[
Unrecovered Purchased Power Costs Unrecovered State Excise Taxes Other Regulatory Assets I
I I
I I
I I
I These regulawry assets -"
represent costs incurred by ACE that under BPU regulation may be collected from customers in the
,Ae. As they are
'Wered these costs are recognized as an expense in the income statement.
Other Noncurrent Assets Total Assets Liabilities and Capitalization Common Shareholders' Equity Preferred Stock of Atlantic City Electric Company Long-Term Debt Total Capitalization (excluding current portion)
Current Debt and Preferred Stock Maturities Other Current Liabilities Deferred Income Taxes and Investment Tax Credits Other Noncurrent Credits Total Liabilities and Capitalization 1994 1993
$913,039
$865,675 341,820 270,219 193,977 207,511 73,344 67,950 150,358 160,411 759,499 706,091 153,540 159,584 (5,023) 12,688 55,688 59,570 16,716 17,405
$ 76,113
$ 95,297 54,149 52,888 1.41 1.80 1.54 1.535 1.54 1.53 December 31,
1995 1994
$1,801,786
$1,781,923 216,284 177,323 248,322 207,979 99,817 115,538 85,858 85,854 64,274 73,834 87,678 79,282 16,877 23,822
$ 2,620,896
$ 2,545,555 813,177
$ 842,656 154,750 189,250 829,856 778,288 1,797,783 1,810,194 118,042 21,850 138,724 166,751 474,987 464,220 91,360 82,540
$ 2,620,896
$ 2,545,555 Atlantic Energy
For Years Ended December 31,
19-I I I
(ThousanJs of Dollars) 1995 1994 This statement re-Cash Flows of Operating Activities:
conciles the cash bal-Net Income
$ 81,768
$ 76,113
$ 95,297 ance at the start of the Deferred Energy and Purchased Power Costs (4,714) 11,101 (21,319) year with the year-end cash balance. It also Depreciation and Amortization 78,461 73,344 67,950 shows how the com-Deferred Income Taxes - Net 25,946 17,863 20,901 pany generates and Unrecovered State Excise Taxes 9,560 (40,128)
(33,706) uses cash, categorizing sources and disburse-Employee Separation Costs (19,112) 26,600 menis of cash into Other - Net (23,548)
(7,213) 49,027 3 major activities -
Net Cash Provided by Operating Activities 148,361 157,680 178,150 operations, investment and financing.
Cash Flows of Investing Activities:
This line includes Utility Cash Construction Expenditures (100,904)
(119,961)
( 138, 111) energy costs that were Other - Net (39,466)
(28,413)
(26,202) def erred - or not recog-Net Cash Used by Investing Activities (140,370)
(148,374)
(164,313) nized as an expense - in our income statement Cash Flows of Financing Activitie :
to adjust for an Debt Issued, Retired and Matured - Net 133,360 20,508 79,492 underrecovery of fuel and energy costs from Stock Issued, Repurchased and Redeemed - Net (54,126)
(18,120) 10,739 our customers. This Dividends Declared (95,715)
(92,545)
(84,664) expense is subtracted Other - Net 9,067 12,330 8,584 from net income here w account for the cash Net Cash (Used) Provided by Financing Activities (7,414)
(77,827) 14,151 used to purchase the fuel and energy.
Net lncrea e (Decrease) in Cash and Temporary Investments 577 (68,521) 27,988 Cash and Temporary Investments, beginning of year 5,114 73,635 45,6-Cash an~
Temporary Investments, end of year 5,691 5,114
$ 73,635
Consolidated Statement of Changes in Common Shareholders' Equity (Thousands of Dollar>)
Shares Balance, December 31, 1992 52,198,624 Common Stock Issued 1,308,162 Net Income Capital Stock Expense of Subsidiary Dividends Declared Balance, December 31, 1993 53,506,786 Common Stock Issued 870,159 Common Stock Repurchased (221,700)
Net Income Dividends Declared Balance, December 31, 1994 54,155,245 Common Stock I sued*
1,633 Common Stock Repurchased (1,625,000)
Net Income Dividends Declared Balance, December 31, 1995 52,531,878 Common Stock
$ 549,147 30,296 579,443 17,941 (3,909) 593,475 (413)
(29,626)
$563,436
- Included in Common Stock lsoued are amounts associated w1th adjustments made for employee stock plan>.
Retained Earnings
$ 242,768 95,297 (169)
(81,347) 256,549 76,113 (83,481) 249,181 81,768 (81,208)
$249,741 Atlantic Energy ____ -1
Notes to Condensed Consolidated Financial Statements NOTE 1. SIGNIFICANT ACCOUNTING POLICIES Atlantic Energy, Inc. (the Company, AEI or parent) is the parent of Atlantic City Electric Company (ACE) and Atlantic Energy Enterprises, Inc. (AEE), which are wholly-owned subsidiaries.
Principles of Consolidation - In the consolidated financial statements presented for the Company and its subsidiaries, all significant intercompany accounts and transactions have been eliminated.
Regulation - The accounting policies and rates of ACE are ubject to the regulations of the New )er ey Board of Public Utilities (BPU) and in certain respects to the Federal Energy Regulatory Commission (FERC). ACE follows generally accepted accounting principles and financial reporting requirements employed by all industries as specified by the Financial Accounting Standards Board and the Securities and Exchange Commission. However, certain economic effects of the ratemaking process are permitted special accounting treatment regarding the timing and recognition of expenses and revenues.
Earnings Per Common Share - This is computed based upon the weighted average number of common shares outstanding during the year.
NOTE 2. RATE MATTERS OF ACE ACE has not filed for an increase in base rates since 1990, but recovers its fuel and energy costs through its Levelized Energy Clause (LEC). Change in LEC rates are shown in the table below.
Date Filed 3/93 2/94 4/95 Changes in Levelized Energy Clause Rates 1993-1995 Amount Amount Requested Granted Date (millions)
(millions)
Effective
$14.2
$10.9 10/93 63.0 55.0 7/94 37.0 37.0 7/95 ACE's LEC is subject to annual review by the BPU and sets June 1 through May 31 as the LEC period.
In the 1994 and 1995 LEC filings, ACE initiated the Southern New Jersey Economic Initiative (SNJEI) which forgoes the recovery of a portion of fuel and energy costs as incurred. The SNJEI was de igned to keep ACE's rates competitive with neighboring utilities and has reduced the LEC recovery by $28 million in 1994 and $10 million in 1995. In the 1995 LEC filing, ACE deferred the recovery of
$20.6 million of costs incurred during the 1995/1996 LEC period to a future period.
In other rate proceedings, the BPU is investigating the potential double recovery of capacity costs by New Jersey utilities based on a claim by the Ratepayer Advocate
- certain capacity costs are being recovered through b base rates and LEC rates. The Ratepayer Advocate claims that the amount which ACE has overrecovered is $46 million over the period June 1991 through May 1995.
ACE has filed rebuttal testimony and plans to litigate this matter fully.
NOTE 3. COMMITMENTS AND CONTINGENCIES ACE has arrangements with various providers of bulk energy to satisfy existing and future capacity and energy requirements.
Following is information regarding these arrangements relative to ACE.
1995 1994 1993 As a % of Capacity (year-end) 30%
29 %
23%
As a % of Generation 52%
48%
46%
Capacity Charges (millions) $190.6
$130.9
$110.8 Energy Charges (millions)
$135.4
$128.6
$98.3 ACE owns 7.41 % of the Salem Nuclear Generating Station and 5% of the Hope Creek Station, both operated by Public Service Electric & Gas Company (PS). PS removed Salem Units 1 and 2 from service in May and June 1995, respectively. Unit 2 is expected to return to service in the third quarter of 1996 after the equipment A management issues that have affected the operation h.
been resolved and corrected. Unit 1 is undergoing extended testing of its steam generation equipment and its return has been delayed for an indefinite period. ACE estimates that expenditures associated with restart activities in 1996 will approximate $5.6 million. Hope Creek was taken out of ervice in November 1995 for a scheduled refueling outage which has been extended to correct maintenance and performance problems. The Hope Creek unit is scheduled to return to service in March 1996. The incremental cost of replacement power during the outage is approximately $1.8 million per month.
Recovery of replacement power costs are limited by a BPU-imposed nuclear performance penalty. Nuclear performance must attain a target capacity factor, with penalties or rewards above or below the band of reasonable performance. ACE expects to incur a penalty of $845 thousand, after tax, for 1995 performance.
ACE has a trust to fund co ts of decommissioning each of the five nuclear units in which it has an ownership interest.
The current annual funding is equal to the amount being collected from customers through rates as authorized by the BPU. The funding amount is based on costs estimated by the BPU for decommissioning activities,
- dates the decommi sioning activities are expected to be and the expected return on trust assets. In accordance with BPU requirements, updated site specific studies are underway. Amounts to be recognized and recovered in rates ba ed on the updated studies are not presently determinable.
Management's Discussion and Analysis of Financial Condition and Results of Operations
~ANCIAL
SUMMARY
~nsolidated operating revenues for 1995, 1994 and 1993 were $953.l million, $913.0 million and $865.7 million, respectively. The increase in 1995 revenue over 1994 largely reflects a provisional increase in annual LEC revenues of
$37.0 million granted in July 1995 and an increase in unbilled revenues. The increase in 1994 revenue from 1993 wa primarily due to an increase of $55.0 million in LEC revenues effective July 1994, accompanied by an increase in sales of energy.
Con olidated earnings per share for 1995 were $1.55 on net income of$81.8 million, compared with $1.41 on net income of $76.l million in 1994 and $1.80 on net income of $95.3 million in 1993. The 1994 and 1993 earnings include reductions of $.3 7 and $.10 for special charges, respectively.
Excluding the 1994 special charges, 1995 earnings per share decreased from 1994 primarily due to reduced sales of energy.
Contributions to consolidated earnings per share were as follows:
Utility Nonutility 1995
$1.59
(.04) 1994
$1.41 1993
$1.73
.07 e quarterly dividend paid on Common Stock was $.385 share, or an annual rate of $1.54 per share. Information with respect to Common Stock is as follows:
1995 1994 1993 Dividend Paid Per Share
$ 1.54
$ 1.54
$ 1.53 Book Value Per Share
$15.48
$15.56
$15.62 Annualized Dividend Yield 8.0%
8.7%
7.0%
Return on Average Common Equity 9.9%
9.1%
11.7%
Total Return (Dividends paid plus change in share price) 18.0%
(11.9)%
0.6%
Market to Book Value 124%
113%
139%
Price/Earnings Ratio 12 13 12 Year-End Closing Price - NYSE $19.25
$17.63
$21.75 LIQUIDITY AND CAPITAL RESOURCES Atlantic Energy, Inc.
The Company's cash flows are dependent on the cash flows of its subsidiaries, primarily ACE. Principal cash inflows of the Company were as follows:
(m1ll1ons) 1995 1994 1993 Dividends from ACE
$81.2
$83.2
$81.3 Credit Facility 34.5 Dividend Reinvestment and Stock Purchase Plan 6.7 16.2 AEI established a $75 million revolving credit and term loan facility to be used to fund further acqui itions of Company Common Stock and for other general corporate purposes. As of December 31, 1995, AEI had $34.5 million outstanding.
Agreements between the Company and its subsidiaries provide for allocation of tax liabilities and benefits generated by the respective sub idiaries. A separate credit support agreement exists between the Company and ATE Investment, Inc. (ATE).
Principal cash outflows of the Company were as follows:
(Mil\\1un; )
1995 1994 1993 Dividends to Shareholders
$81.2
$83.2
$81.3 Advances and Capital Contributions to Subsidiaries*
(6. 7) 25.6 29.8 Common Stock Reacquisitions 29.6 3.9 Loans to Subsidiaries 7.5
- Net o( Repaymen t!;
Current year Dividends Declared as presented on the Consolidated Statement of Ca h Flows includes the effects of market purchases of Common Stock with reinvested dividends as instituted since July 1994. Prior to this, funds were available to the Company from the issuance of original shares.
The Company has a program to reacquire up to three million shares of the Company's Common Stock. There is no schedule or specific share price target associated with the reacqui itions. At December 31, 1995, the Company had reacquired and cancelled 1,846, 700 shares.
Atlantic Energy _____ _
Management's Discussion and Analysis of Financial Condition and Results of Operations Atlantic City Electric Company Cash construction expenditure for 1993-1995 were $359.0 million and included expenditures for upgrades to existing transmi sion and distribution facilities and compliance with provisions of the Clean Air Act Amendments (CAAA) of 1990. ACE's current estimate of cash construction expenditures for 1996-1998 is $255 million. These estimated expenditures reflect necessary improvements to generation, transmission and distribution facilities.
ACE also utilizes cash for mandatory redemption of Preferred Stock and maturities and redemption of long-term debt. Optional redemptions of securities are reviewed on an ongoing basis with a view toward reducing the overall cost of capital.
For 1993-1995, the redemption and maturity of ACE's securities were as follows:
(mtllions)
Preferred Stock First Mortgage Bonds 1995
$24.5 57.7 1994
$24.5 41.6 1993
$ 5.3 344.7 Scheduled debt maturities and sinking fund requirements aggregate $113.8 million for 1996-1998.
On or before April 1 of each year, ACE and other New Jersey utilities are required to pay excise taxes to the State of New Jersey. In March 1995, ACE paid $98.7 million, funded through the issuance of short-term debt. In 1994 and 1993, ACE paid an additional $50 million and $45 million, respectively, for the accelerated payment of one year's tax due as required by amended state law. These accelerated payments are being recovered through rates.
On an interim basis, ACE finances construction costs and other capital requirements in excess of internally generated funds through the issuance of unsecured short-term debt consisting of commercial paper and borrowings from banks.
A of December 31, 1995, ACE has arranged for lines of credit of $150 million of which $119.5 million was available. ACE's nuclear fuel requirements associated with it jointly-owned units have been financed through arrangements with a third party.
I Management's Discussion and Analysis of Financial Condition and Results of Operations ummary of the issue and sale of ACE's long-term t for 1993-1995 is as follows:
(millions) 1995 First Mortgage Bonds Medium Term Notes
$105 Pollution Control Bonds 1994
$ 55 1993
$ 22 240 4
The proceeds from these financings were used to refund higher-cost debt and for construction purposes. During 1996-1998, ACE may issue up to $150 million in new long-term debt to be used for funding of construction and repayment of short-term debt. The provisions of ACE's charter, mortgage and debenture agreements can limit, in certain cases, the amount and type of additional financing which may be used. At December 31, 1995, ACE estimates additional funding capacities of $288 million of First Mortgage Bonds, or $490 million of Preferred Stock, or $413 million of unsecured debt. These amounts are not necessarily additive.
Atlantic Energy Enterprises, Inc. and Subsidiaries Funds for investment in activities of AEE subsidiaries have been obtained through capital contributions from AEI and borrowings under loan agreements with ATE and AEI.
Jliiii..E's business strategy reflects the potential investment of roximately $400 million over the next five years.
ATE provides funds management and financing to affiliates.
ATE obtained a portion of the funds for its business activities and loans through external borrowings. These borrowings include $15 million principal amount of 7.44%
Senior Notes due 1999 and a $25 million revolving credit and term loan agreement. At December 31, 1995, $18.5 million were outstanding under the revolver. ATE had loans outstanding with affiliates totaling $19.4 million as of December 31, 1995. ATE's cash flow are provided from lease rental receipts and realization of tax benefits generated by its leveraged leases.
RESULTS OF OPERATIONS Operating results are primarily dependent upon the performance of ACE.
Revenues Operating Revenues - Electric increased 4.4% and 5.5% in 1995 and 1994, respectively. Components of the overall changes are shown as follows:
(m1ll1ons) 1995 1994 Levelized Energy Clause
$ 49.2
$ 30.3 Kilowatt-hour Sales (10.0) 9.6 Unbilled Revenues 16.6 (7.3)
Sales for Resale (11.9) 17.8 Other (3.8)
(3.0)
Total
$40.1
$ 47.4 Billed Sales to Ultimate Utility Customers Change in kilowatt-hour sales are generally due to changes in the average number of customers and average customer use, which is affected by economic and weather conditions. Energy sales statistics, stated as percentage changes from the previous year, are shown as follows:
1995 1994 Avg.
Avg.#
Avg.
Avg.#
Customer Class Sales Use of Cust.
Sales Use of Cust.
Residential (2.0)% (3.1)% 1.2%
1.5%.4%
1.1 %
Commercial 1.4
(.1) 1.5 1.5 2.6 2.1 Industrial (7.4)
(9.0) 1.7 (2.9) (3.8)
.9 Total (1.4)
(2.6) 1.2 1.3 1.2 Costs and Expense Total Operating Expenses increased 5.9% and 7.6% in 1995 and 1994, respectively. Included in these expenses are the costs of energy, purchased capacity, operations, maintenance, depreciation and taxes. lncrea ed expenses are attributable to additional purchased capacity costs and, in 1994, the costs of increased generation. ACE's workforce reduction, which began in March 1995, resulted in savings of $8 million net of tax in 1995. The original estimate of $10 million savings was based on a full year's assessment.
Atlantic Energy _____ _
Managetnent's Discussion and Analysis of Financial Condition and Results of Operations
- Long;rerm nonuciltry contracts.
Manage1nent's Discussion and Analysis of Financial Condition and Results of Operations look
~er the next five years, Atlantic Energy will devote considerable resources to the development of energy-related businesses and markets. Atlantic Energy Enterprises' business plan calls for additional investments of $400 million. AEE's investment strategy will further its long-term objectives of becoming a wholesale energy supplier and aggregator as well as a provider of energy services while continuing to pursue strategic business alliances and services for its customers. AEE also expects to make additional investments in energy-related technologies and services that will support its growth and financial performance. AEE's business plan indicates a positive contribution to earnings in 1996.
Throughout this period, however, ACE's utility business will continue to be the primary factor influencing the Company's overall financial performance. Factors such a regional economic trends, abnormal weather conditions and inflation will continue to be important determinants of ACE's financial performance. However, continued competition from independent power producers and anticipated deregulation of the electric utility industry are becoming the most critical strategic factors for ACE.
Fundamental changes in the industry have led to the rgence of significant competitive issues for ACE, uding heightened competition in the wholesale bulk power market, the growth of the independent power industry and the pre sure to offer more competitive rates to customers.
ACE is closely monitoring deregulation of the industry on both a state and federal level. FERC's ongoing rulemaking proceeding is proposing changes to rules governing transmission access and pricing. FERC is also establishing guidelines for recovery of tranded costs and investments stemming from wholesale transactions. In response to FERC's initiative, the power pool in which ACE participates has proposed significant changes to its structure and operation.
State jurisdictions across the country, including New Jersey, are closely examining the issues surrounding deregulation or are creating new regulations designed to foster a more competitive industry. ACE is playing an active role in the BPU's ongoing Energy Master Plan proceeding. Among other things, the proceeding is investigating the extent to which utilities, in a competitive environment, may be threatened with the inability to recover investments or long-term commitments prudently made and placed into rates under traditional ratemaking a
ulations. To date, the BPU has made no formal policy nouncement regarding deregulation or the recovery of stranded commitments.
In anticipation of heightened competition in energy markets, ACE is pursuing a number of initiatives designed to strengthen its position in the marketplace. The cost of ACE's power supply, including the cost of power purchased from independent power producers, along with its retail prices are expected to be critical success factors in a competitive marketplace. ACE is focusing on cost and rate control measures as well as the development of new energy-related products and services. To allow for more flexibility and clo er cost control, ACE transferred its production operations to its subsidiary, Deepwater Operating Company, in January, 1996.
Alternate pricing mechanisms and long-term discount power contracts are being explored as means of retaining key customers that are at risk of leaving ACE's system. While any such discounts are intended to have a long-term beneficial impact, they could have a detrimental effect on ACE's operating revenues and net income in the short term.
The electric utility industry continues to be capital inten ive.
ACE has lowered its planned construction budget to $398 million for 1996-2000, with an expected reduction in its external cash requirements. ACE's ability to generate cash flows or access the capital markets to fund capital requirements will be affected by competitive pressures on revenues and net income as well as regulatory initiatives and rate developments.
ACE's net income and the level of its LEC rates may be affected by the operational performance of nuclear generating facilities and a BPU-mandated nuclear unit performance standard. Net income may also be affected by significant changes in the decommissioning costs associated with the nuclear units. At this time, it is not known what impact there may be on future operations and financial condition associated with the uncertain status of Salem Station Unit 1.
Atlantic Energy _____
---1
Financial &Statistical Review 1995--1985 1995 1994 1993 Atlantic Energy, Inc. - Investor Information Operating Revenues (000) 953,137
$ 913,039
$ 865,675
$ 816,825 Net Income (000) 81,768 76,113
- 95,297 86,210 Average Number of Common Shares Outstanding (000) 52,815 54,149 52,888 51,592 Earnings per Average Common Share 1.55 1.41
- 1.80 1.67 Total Assets (Year-end) (000)
$ 2,620,896
$ 2,545,555
$ 2,487,508
$ 2,219,338 Long-Term Debt and Cumulative Preferred Stock Subject to Mandatory Redemption (Year-end) (000)
$ 1,019,603
$ 940,788
$ 952,101
$ 842,236 Capital Lease Obligations (Year-end) (000) 40,886 42,030 45,268 49,303 Dividends Declared on Common Stock 1.54 1.54 1.535 1.515 Dividend Payout Ratio 99%
109 %
85 %
90 %
Book Value per Share (Year-end) 15.48 15.56 15.62 15.17 Price/Earnings Ratio (Year-end) 12 13 12 14 Times Fixed Charges Earned (pre-tax, Atlantic Electric) 3.34 3.21 3.54 3.76 Common Shareholders (Year-end) 48,683 48,850 47,832 46,524 Atlantic City Electric Company (Principal Subsidiary)
Employees (Year-end) 1,455 1,794 1,835 2,023 Facilities for Service Total Utility Plant (000)
$ 2,596,265
$ 2,507,922
$ 2,402,415
$ 2,279,107 Additions to Utility Plant (000) 103,399
$ 126,367
$ 141,927
$ 134,326 Generating Capacity (Kilowatts) (Year-end) (a) (b) 2,351,700 2,327,700 2,307,700 2,160,700 Maximum Utility System Demand (Kilowatts) 2,042,000 1,834,000 1,962,000 1,796,000 Capacity Reserve at Time of Peak
(% of Installed Generation) 12.8 %
19.4 %
11.2 %
16.9 %
Energy Supply (mwh):
A Net Generation 5,698,996 6,081,778 6,025,861 Purchased and Interchanged 4,723,701 4,439,228 3,753,433 Total System Load 10,422,697 10,521,006 9,779,294 Electric Sales to Ultimate Customers (mwh):
Residential 3,476,540 3,546,789 3,495,722 3,276,330 Commercial 3,391,319 3,344,675 3,259,541 3,100,133 Industrial 1,133,788 1,224,721 1,261,069 1,229,211 All Others 51,218 51,671 50,080 49,464 Total (c) 8,052,865 8,167,856 8,066,412 7,655,138 Residential Electric Service (Average per Customer)
Amount of Electricity Used During the Year (kwh) 8,368 8,638 8,608 8,131 Revenue for a Year's Service
$ 1,037.88
$ 1,003.30 969.86 903.91 Revenue per Kilowatt-hour 12.40 ¢ 11.62 ¢ 11.27 ¢ 11.12 ¢ Ultimate Customer Data (Average Customers)
Residential With Electric Heating 82,759 82,612 82,385 82,206 Residential Without Electric Heating 332,695 327,985 323,722 320,744 Total Residential 415,454 410,597 406,107 402,950 Commercial 54,883 54,094 52,988 51,996 Industrial 997 980 971 990 All Others 517 518 522 524 Total Ultimate Customers (c) 471,851 466,189 460,588 456,460 Operating Revenues (000)
Electric Service:
Re idential 431,206
$ 411,954
$ 393,866
$ 364,232 Commercial 352,432 332,145 315,089 299,866 Industrial 99,074 101,093 100,812 97,475 All Others 11,163 10,905 10,575 8
Total from Electric Service 893,875 856,097 820,342 Unbilled Revenues - Net 9,445 (7,239) 28 Sales for Resale 42,438 54,370 36,576 Other Electric Revenues 8,021 9,998 8,853 Total Operating Revenues (c) 953,779
$ 913,226
$ 865,799
$ 816,931 Reflect-; special charge!!, primarily for employee separation costs. (a) Excludes capactty allocated to a Luge industrial cuscomer prior co 1994.
(b) lncluJ es unit purchase~ and !i.1le!i of capacity under contracts with certain other uti lities and nonunhues. (c) Includes 'ale:-. to an affiliate within che Atlantic Energy consoltdaced group.
1990
$ 808 374
$ 740 894 85,635 68,879 49,008 45,590 1.75 1.51
$ 2,151,416
$ 2,006,010
$ 807,347
$ 747,877 53,093 57,971 1.495 1.4 7 85 %
97 %
14.84 14.36 12 11 3.68 2.94 43 802 42 295 2,032 2,055
$ 2,175,601
$ 2,027,138 177,298
$ 170,772 2,090,700 1,959,700 1,911,000 1,741,000 5.2 %
10.9 %
6,300,891 6,267,559
_3
. 024 2,606,067
,915 8,873,626 3,370,327 3,267,606 3,147,318 3,063,069 1,368,329 1,376,423 49,626 49,769 7,935,600 7,756,867 8,440 8,251 906.66 844.37 10.74 ¢ 10.23 ¢ 81,838 81,479 317,486 314,529 399,324 396,008 51,077 50,274 998 1,002 524 537 451,923 447,821
$ 362,050
$ 334,375 292,349 271,688 102,202 96,766
,136 9,668 766,737 712,497 3,229 (4,055) 30,404 24,115 8,112 8,448
$ 741,005 1989 1988 1987 1986 1985 723 216 687 335 635 657 604 716
$ 612,035 80,964 72,171 73,765 54,946 46,150 43,268 39,186 36,622 36,532 36,138 1.87 1.84 2.01 1.50 1.28
$ 1,864,461
$ 1,660,286
$ 1,499,381
$ 1,401,064
$1,319,027 725,329 594,461 522,815 534,822
$ 521,612 33,146 32,880 37,694 37,603 38,857 1.425 1.37 1.3575 1.305 1.2775 75 %
75 %
66%
87 %
99 %
14.27 13.58 12.86 12.18 11.98 10 9
8 12 11 3.19 3.06 3.68 2.99 3.06 43 383 44 473 45 586 47 133 48 635 2,021 2,092 2,148 2,168 2,099
$ 1,846,122
$ 1,712,614
$ 1,602,801
$ 1,503,010
$1,438,643 147,886 130,281 105,521 109,303
$ 105,213 1,879,700 1,807,700 1,660,700 1,660,700 1,605,700 1,700,000 1,636,000 1,609,000 1,459,000 1,432,000 9.6 %
9.5 %
3.1 %
12.1 %
10.8 %
6,260,942 5,863,119 6,157,938 5,966,600 5,817,254 2,597,623 2,567,871 1,773,837 1,454,491 1,333,174 8,858,565 8,430,990 7,931,775 7,421,091 7,150,428 3,265,918 3,213,010 3,040,410 2,839,114 2,638,121 2,917,162
(
2,741,976 2,592,232 2,401, 199 2,298,895 1,380,832 1,339,005 1,323,567 1,222,981 1,204,971 53,872 56,289 58,191 58,120 57,685 7,617,784 7,350,280 7,014,400 6,521,414 6,199,672 8,382 8,460 8,281 7,982 7,643 840.34 838.70 808.14 791.09 799.29 10.03 ¢ 80,409 309,245 389,654 49,509 1,008 549 440,720 9.91 ¢ 78,805 300,974 379,779 48,398 1,014 552 429,743 9.76 ¢ 75,900 291,253 367,153 46,775 1,015 554 415,497 9.91 ¢ 10.46 ¢ 72,640 68,871 283,062 276,305 355,702 345,176 45,359 44,256 1,022 1,020 554 554 402,637 391,006 327,443 281,393
$ 275,897 318,520 296,712 256,199 214,230 216,052 240,890 222,129 94,634 80,037 83,628 91,661 84,476 9,901 10,230 10,470 9,935 10, 199 688,177 585,890 586,047 661,006 613,516 7,215 (1,813) 3,076 6,716 385 11,476 12,840 8,137 8,916 723,353 604,716
$ 612,035 687,335 635,657 1~:~~~
l~:~~~
1~:~~~ _j
===================================="=============================
Atlantic Energy
$ 808,482
Investor Information (As of December 31, 1995)
Where should I send inquiries concerning my investment in Atlantic Energy or Atlantic Electric?
The company serves as recordkeeping agent, dividend disbursing agent and also as transfer agent for common stock and Atlantic Electric's preferred stock. Correspondence concerning such matters as the replacement of dividend checks or stock certificates, address changes, dividend reinvestment and stock purchase plan inquiries or any general information about the company should be addressed to:
Atlantic Energy, Inc.
Investor Records 6801 Black Horse Pike P.O. Box 1334 Pleasantville, New Jersey 08232 Telephone (609) 645-4506 or (609) 645-4507 Effective February 1, 1996, the role of transfer agent for common stock will be shared with Continental Stock Transfer & Trust Company. Requests for the transfer of common stock certificates should be forwarded to:
Continental Stock Transfer & Trust Company 2 Broadway, 19th Floor New York, NY 10004 Telephone (212) 509-4000 Preferred stockholders should continue to contact Atlantic Energy with regard to the transfer of their stock.
When are dividends paid?
The proposed record date and payable dates are as follows:
Record Dates March 25, 1996 June 24, 1996 September 23, 1996 December 23, 1996 Payable Dates April 15, 1996 July 15, 1996 October 15, 1996 January 15, 1997 The following table indicates dividends paid per share in 1995 and 1994 on common stock:
1995 1994 First Quarter
$.385
$.385 Second Quarter
.385
.385 Third Quarter
.385
.385 Fourth Quarter
.385
.385 Annual Total
$1.54
$1.54 Dividend checks are mailed to reach shareholders approximately on the payment date. If a dividend check is not received within 10 days of the payment date, or if one is lost or stolen, contact Investor Records.
Dividends paid on common stock in 1995 and 1994 were fully taxable. Some state and local governments may impose personal property taxes on shares held in certain corporations.
Shareholders residing in those states should consult their tax advisors with regard to personal prop.
tax liability.
Who is the trustee and interest paying agent for Atlantic Electric's bonds and debentures?
First mortgage bond recordkeeping and intere t disbursing are performed by The Bank of New York, 101 Barclay Street, New York, New York 10286. Debenture recordkeeping and interest disbursing are performed by First Fidelity Bank, N.A., 765 Broad Street, Newark, New Jersey 07102.
Does the company have a Dividend Reinvestment and Stock Purchase Plan ("Plan")?
Yes. The Plan allows shareholders of record and interested investors to automatically invest their cash dividend and/or optional cash payments in hares of the company's common stock. Other services available to Plan participants include certificate safekeeping and automatic investment. Holders of record of common stock or interested investors wishing to enroll in the Plan should contact Investor Record at the address listed. In addition, shareholders whose stock is held in a brokerage account may be able to participate in the Plan.
These shareholders should contact their broker or Investor Records for more information.
Where is the company's stock listed?
Common stock is listed on the New York Stock Exchange.
The trading symbol of the company's common stock is ATE; however, newspaper listings generally use AtlEnrg or AtlanEngy.
The high and low sale prices of the common stock reported in the Wall Street Journal as New York Stock Exchange-Composite Transactions for the periods indicated were as follows:
1995 1994 High Low High Low First Quarter $19.000
$17.750 $21.750
$19.875 Second Quarter 19.625 17.875 21.500 16.375 Third Quarter 19.875 18.125 19.625 16.125 Fourth Quarter 20.125 19.000 18.250 16.000 Is additional information about the company available?
A full set of financial statements is included in Atlantic Energy's 1996 Proxy Statement. The annual report to the Securities and Exchange Commission on Form 10-K and other reports containing financial data are available to shareholders. Specific requests should be addressed.
Atlantic Electric Financial Services Department 6801 Black Horse Pike Egg Harbor Township, New Jer ey 08234-4130 Telephone (609) 645-4483 or (609) 645-4150 FAX ( 609) 645-4132
Officers Of Atlantic Energy, Inc. and Subsidiaries
/Year> of Service) As of December 31, 1995 rold L. Jacobs (56/34)
President and Chief Executive Officer of Atlantic Energy Director of Atlantic Energy, Atlantic Electric and Atlantic Energy Enterprises Chairman and Chief Executive Officer of Atlantic Electric Mr. Jacobs was elected president & chief executive officer of Atlantic Energy in 1993 and has also held the position of chairman & chief executive officer of Atlantic Electric since 1993. He has also held the positions of president, chief operating officer and executive vice president of Atlantic Electric. Mr. Jacobs joined Atlantic Electric in 1961 as an engineer.
Michael J. Chesser ( 4 7 /2)
Senior Vice President of Atlantic Energy President and Chief Operating Officer of Atlantic Electric Director of Atlantic Electric and Atlantic Energy Enterprises Mr. Cheser was elected to his current position in 1995.
He joined Atlantic Energy in 1994 as vice president as well as executive vice president and chief operating officer of Atlantic Electric. Prior to joining Atlantic Energy, he was an executive with Baltimore Gas & Electric, where he served as vice president-marketing & gas operations.
chael J. Barron (46/1)
Vice President and Chief Financial Officer of Atlantic Energy Senior Vice President and Chief Financial Officer of Atlantic Electric Mr. Barron joined Atlantic Energy in 1995. He previously served as vice president and treasurer of Maxus Energy Corporation, Dallas, Texas.
James E. Franklin II (49/2)
Vice President, Secretary and General Counsel of Atlantic Energy Secretary of Atlantic Energy Enterprises Director, Senior Vice President, Secretary and General Counsel of Atlantic Electric Mr. Franklin joined Atlantic Energy in 1994 as general counsel and was named to his current positions in 1995. He was previously a senior partner with the law firm of Megargee, Youngblood, Franklin & Corcoran, P.A. where he represented Atlantic Energy in the capacity of external legal counsel.
Meredith I. Harlacher, Jr. (53/30)
Vice President of Atlantic Energy Director of Atlantic Electric
...lt.nior Vice Pre ident-Power System of Atlantic Electric
. Harlacher has served as vice president of Atlantic Energy and senior vice president of Atlantic Electric since 1987. He was named senior vice president-power system in 1995. He most recently served as senior vice president-energy supply. He joined Atlantic Electric in 1965 as an engineer.
Henry K. Levari, Jr. ( 4 7 /24)
Vice President of Atlantic Energy Director of Atlantic Electric Senior Vice President-External Affairs of Atlantic Electric Mr. Levari has served as vice president of Atlantic Energy and senior vice president of Atlantic Electric since 1991.
Mr. Levari was named senior vice president-external affairs in 1995. Prior to his current position he served as senior vice president-customer operations. He joined Atlantic Electric in 1971 as an engineer.
Marilyn T. Powell (48/2)
Vice President of Atlantic Energy Senior Vice President-Marketing of Atlantic Electric Mrs. Powell was elected to her current po ition in 1995.
She joined Atlantic Electric in 1994 as vice president-marketing. She previously erved as IBM's director of marketing process for its U.S. unit.
Scott B. Ungerer (36/14)
Vice President of Atlantic Energy Director of Atlantic Energy Enterprises (AEE) and all AEE subsidiaries President and Chief Operating Officer of Atlantic Energy Enterprises President of ATE Investment, Atlantic Energy Technology, Atlantic Southern Properties and Coa talComm Member of the operating committee for Atlantic CNRG Services, LLC Mr. Ungerer was named vice president of Atlantic Energy in 1994, and president and chief operating officer of Atlantic Energy Enterprises in 1995. He previously served in various executive positions in Atlantic Energy's nonutility companies and held various management positions at Atlantic Electric. He joined Atlantic Electric in 1980 as an engineer.
Louis M. Walters (43/17)
Treasurer of Atlantic Energy Vice President, Treasurer and Assistant Secretary of Atlantic Electric Certified Public Accountant Mr. Walters was named to his current position in 1995. He has served as vice president-treasurer of Atlantic Electric since 1993. He previously served as general manager-treasury and finance of Atlantic Electric. He joined Atlantic Electric in 1978 as an accountant.
Atlantic Energy _____
--1
Officers Of Atlantic Energy, Inc. and Subsidiaries (continued)
(Age{Years of Service) As of December 31, 1995 Frank E. Di Cola ( 48/2)
Vice President and Treasurer of Atlantic Energy Enterprises (AEE)
Director of all AEE subsidiaries President of Atlantic Thermal Systems Treasurer of ATE Investment, Atlantic Energy Technology, Atlantic Generation, Atlantic Southern Properties and CoastalComm Member of the operating committee for Atlantic CNRG Services, LLC Secretary of Atlantic Generation Mr. DiCola was named to his position in 1995. He joined Atlantic Thermal Systems as president in 1994. He was previously with Cogeneration Partners of America where he served as president.
Ernest L. Jolly (43/15)
Vice President-Atlantic Transformation of Atlantic Electric Mr. Jolly was elected vice president of Atlantic Electric in 1992 and was named to his current position in 1994. He previously served as vice president-external affairs. He joined Atlantic Electric in 1980 as an engineer.
J. David McCann ( 44/23)
Vice President-Strategic Cu tomer Support of Atlantic Electric Mr. McCann was named to his current position in 1994. He ha served as a vice president of Atlantic Electric since 1985.
Prior to his current assignment, he served as vice president-engineering & construction service of Atlantic Electric. He joined Atlantic Electric in 1972 as an engineer.
Henry C. Schwemm, Jr. (54/26)
Vice President-Power Generation & Fuels Management of Atlantic Electric Mr. Schwemm was named to his current position in 1993.
He previously served as vice president-production of Atlantic Electric. He joined Atlantic Electric in 1969 a an engineer.
James C. Weller (46/2)
Vice President and Assistant Secretary of Atlantic Energy Enterprises (AEE) and Director of all AEE subsidiaries President of Atlantic Generation ecretary of ATE Investment, Atlantic Energy Technology, Atlantic Southern Properties, Atlantic Thermal Systems and CoastalComm Treasurer of Atlantic Thermal Systems Mr. Weller was named to his current position in 1995. He joined Atlantic Generation, Inc. as president in 1994. He previously held the position of vice president-engineering and project development for Cogeneration Partners of America.
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ENERCY FIRST CLASS MAIL l U.S. POSTAGE PAID PERMIT NO. 2A PLEASANTVl.LL?9' NEW JERSEY 08232-4130 6801 Black Horse Pike, Egg Harbor Township, New Jersey 08234-4130