ML19206A210

Annual Financial Rept 1968

ML19206A210
Person / Time
Site:	Crane
Issue date:	02/20/1969
From:	Kuhns W GENERAL PUBLIC UTILITIES CORP.
To:
References
NUDOCS 7904180388
Download: ML19206A210 (28)

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30-15G J. Lee Bausher Ilarold V.Bozeil

GENERAL P U E LIC UTILITIES C O R P O R ATIO N AND SUBSIDIARY ELECTRIC POWER COMPANIES 50 Pine Street, New York, N. Y.10005 Telephone : Whitehall 3 5600 e

Officers WILLIA 3I G. KUHNS, President JOSEPH P. PREVITE, Secretary GEORGE J. SCHNEIDER, Tice President ROY ?. 3 FILLER. Assistant Comptroller ROBERT H. SCHUTT, Treasurer HELEN 31. WETHERELL, Assistant Secretary EDWARD J. HOLCO3IBE. Comptroller LILLIAN 3I. NICKL, Assistant trea. surer JA3IES B. LIBER 3IAN, General Counsel Presidents of Subsidiary Operating Companies

( Jersev Central Power & Licht Company } # "

• RALPH F. BOVIER

{ y,y Jersey Power & Light Ccmpany

)

" N. GWYNNE DODSON, Pennsylvania Electric Ccmpany, Johnstown, P2.

FREDERIC COX, 3Ietropolitan Edison Company, Reading, Pa.

• Mr. Bovier f armerly President of Pennsylvania Electric Company, sucecaded Mr. Willia = H. McE! wain who retired on.Tacuary 31,1969.

" Mr. Dodson, former!y a Vice President of Pennsylvania Elee.rie Company, succeeded Mr. Eovier.

Transfer Agent 1968 ANNUAL REPORT First Nstional City Bank February 20, 1069 111 Wall Street New York, N. Y.10015 Contents Registrar President's Letter 2

Registrar & Transfer Company 140 Cedar Street GPL' System Activities 3

New York, N. Y.10006 h__

System 3 tap 12

}/M-,

Analysis of Earnings

. 14 E

Electric Generation and T

Sales Statistics 16 5._._.

E" hO

'_ a Financial Statements and b._-

Auditors' Report 13

_m.

THE COVER The photoeraphs on the cover are The Annual Meettng of stockholders of oe=eral representaUve of on; three major

• '**I"

• * **Id * *

• auditor:nm, ground ccr. One Chase Manhattan a

classes of custorners: Residential, Plaza, New York, N. T. on Monday, Apn 7,1963, Cc==ercial and Industrial at 2:co o'cloer in the arternoon.

30 157

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GENERAL PUBLIC UTILITIES CORPORATION n

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TO THE GPC SHAREHOLDERS One of the important functions of an Annual Report is that it provide an ocemon for con-l templation-to assess the past and appraise the future. We try to do this all the tin e and on a a

continuine basis. Yet the verv act of selecting from the reams of available material that which we think nuld be of greatest interest to you and attempting to organize it in a tay tht wi!! be most useful to you gives the preparation of the Annual Report a special mearmg to vaur Board of Directors and oficers.

For the immediate past, cur assessment is that 1965 was, on ba!ance, a yeer in which satisfactory, I

but not outstanding, rnuits were achieved. Notwithstanding the myriads of dificulties encountered I

durine the year, we were able to achieve a modest gain in earnines and to continue our record of increasing dividends annually. We added = ore than $000 million of new plant investment in this single year, while. a decade azo, our annual plant additions were only one third as great. We were able to :inance this rapid growth in capital required in 1965 and to maintain our strong base for future snancing. The number of our customers and their average usage of electricity continued to grow and this increased utage by r:sidential customers has resulted in a decline in their averace cost per KWH. In short, our customers benested from better service and lower unit cost.

r Our major problem during 196s was the continued delay in bringing the drst Oyster Creek nuclear unit int > service. The unavailability of GPC's drst large scale nuclear plant forced us to rely more heavily on higher cost power purchased from neighboring utilities. As this report goes to prass. fuel loading of the Oyster Creeic unit is scheduled to begin and General Electric Ccmpany, the construction contractor as well as turbine and nuclear steam system supplier, continues to assure us that it expects the unit to be in commercial service by the summer peak periods.

We expect results in 1963 to be better than those for 19?5. We anticipate that sales and revenues will continue to increase at their preen, rapid pace. We anticipate substantial increases in some costs, and particularly in the case of the subsidiaries' cost of debt capital, but we believe that the increased sales and revenues and the economies resulting from inermd elcetric generating capacity will more than ofset these increased costs. We expect to cantinue-and to enlarga-cur research and developmental activities and our participation in e: forts airected at environmental improvement.

On the paces that follow, these matters and others are discussed at greater length. We hcpe that what we say will be effective in comtnunicating our record of the past and the basis of our optimism for the future of the GPU system.

A W. G. KT'HNS February 00. 1969 O

SO-158 2

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s 54 LES AND REVENU~I EARNINGS AND DIVICENDS-CONTINUE TO INCREASI A STEADY GROWTH Durmg 196s the GPU system e ntirued to 52.50,

grow with record. breaking performances in both

)

sales of eieetric energy and revenues. Sales dur-

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unmas sin sme ing 196s ameunted to 15.7 billion KWH-more than double those of 10 years ago, retlectinz an 2.co '

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annual compound grcwth rate of over 59' for that period.

]3 Revenues also reached a new high of aP-i

"'"G5 I'50 proximately $340 million, representing a 6%9 annual compound growth far the last 10 years.

J Electric heat continued to play an impor-

)

tant role in our sales growth in 1965. Average 1.C0 '

I KWH use per residential customer continued on y

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amene, m, its steady upward trend. The cost of fuel, taxes l

and labor, together with interest rates, has risen

't markedly in the past few years whereas the Y

0 price per KWH of electricity has so far with.

stood such rising trends. The average cost for

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residential customers within the GPU system amounted to 2.33e per KWH in 1965, with an

.00 averaea annual residential usage of 5.525 KWH.

1950 1955

'1960 1965 1962

.n-,____.,_

Com:non stock earnings for 1963 amounted to 553.5 million, an increase of $1.6 million over 1967 On a per share basis. earnings were 92.11

-n in 1966 as compared with 92.09 in 1967 re:'ec -

)

ing ir part the issuance of 1.275.164,

icnal i

shares in 1965 and the increased ecsn :f pur.

chased power resultine from the del ty in the 15-j large nudear power plant being constructed at

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j nasiothrin Oyster Creek.

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The Board of Directm s increased ths fourth 5,1 quarter dividend from 39e to 40c per share

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p 'O p - I_ f ceuvrecin makine the current annual dividend rate $1.60 9

per shara. This latest change represents the 15th E

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consecutive year in which the dividend was in-T creased for GPU common stockholders.

5' y

moustain G P U S E'.1 K E A T; E A 1

The continuing growth over the years ts

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primarily attributable to the dynamic, diverse g,--

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J territories ot New Jersey and Pennsylvania 1960 1965 1963 which are served by the GPU system.

50 159 3

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Industry of all types has continued to End total of 1.S00.000 KW, of which Jersey Central, V

the GPU ser. ice area an attractive place in which as a one-sixth owner, receives 300.000 KW.

to locate new facilitas and. fcr many, to expand Proeress continued on the 1,250,000 KW their operations. From the highly industrialized Homer City Station, in which Penelee is partici-area of northern New Jersey, with its close pating on an equal basis with another utility proximity to New York City, through the rural company. The tirst of the two units to be in-areas of eastern and central Pennsylvania, t stalled there should be in service in May of the vast expanses of western Pennsylvania, rich this year with the secend expected to be in in both natural and labor resources, industries service about six months later.

of all varieties have found locations suitable to Construction continued also on t.t.e 1,S00,000 their needs.

.in 19te. GPL. welcomed a diverse KW Conemauch Station, in which Met.Ed shares g-oup of new -mdustries with interests ranging g

g g gg.y.g g from electronics to Christmas ornaments to food ggg9 g

f packaging ar.d processing.

spcing 1970 with the second following approri-The construction of many new state and mately one year later. GPU's portion of the total interstate highways has provided rapid and easy capacity of this station will be 296.000 KW.

access to our service area and has been a factor in attracting new industry and people into our Nuclear Generating Stations territory.

In early 1963, a provisional construction The rate of increase in population through-permit for the 340,000 KW Three. Mile Island out the territories of our subsidiaries has, for the Nuclear Station was granted by the Atomie En-last ten years exceeded the population growth ergy Commission and work on.he project has rate of the statcs in which we serve. For the been continuing steadily to meet the 1971 due last dve years, the population growth rate in for commercial operation.

the GPU system service area was almcst double Although the disappointine delays previ-O that of the combined total of the states of Penn-

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ously reported continued to be experienced in sylvania and New Jersey.

the construction of the 640,000 KW Oyster Creek Station, the General Electric Company, construe.

GENERATING CAPACITY ADDITIONS tion contractor and principal supplier for the TO MEET INCREASING DEMANDS plant, has advised us that commercial operation Generating capacity of the GPU System at will begin in mid.1969. Successful operation of

' ear end amounted to 3.139,400 KW. In order the Oyster Creek Station should reduce con-v to meet our growing demand with an adequate siderably the amounts now being spent in pur-supply of reliable electric power we are engaged chasing power from neighboring electric utility in a major construction program including a companies.

wide variety of generating facilities. By 1973, GPU's third nuclear unit, scheduled for the completion of such facilities now under con-commercial operation in 1973, was originally struction, or planned, will increase our capacity planned to be located at Oyster Creek. In late j

to 6.540,000 KW, more than double our present 1968, however, extensive study revealed that the capacity. In 1968, GPU subsidiaries spent ap-likelihood of that unit being completed on sched-proximately $202 million on plant additions and ule would be increased if it were constructed at nuclear fuelin support of this prozram. Follow-Three-Mile Island where the second GPU nu-

,I inz is a brief description of the major generating clear unit is being constructed. The nuclear j

prv,;ects :

components for this unit will be supplied by l

Babcock & Wilcox Company and the Three-Mile Mine-Mouth Generating Stations Island Station will consist, therefore, of two The second 900,000 KW unit at Keystone essentially identical units.

Station went into service in July 1963 bringing Work already begun in preparation for the the total installed capacity up to its planned second unit at Oyster Creek will continue, and 30 160 1

4

another nuclear unit will be placed there in time a fuel. The capital ecsts of cornbustion turbines to =eet an expected in-service date of 1975.

are low, but the operating costs are high. Con.

Study contMued durin: the past year con-sequently, ecebustion tt:rbines are ecst e: fee.

cernine the feasibility of coEstructing a sodium-tivaly employed in a system that has substantir.1

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am nts or base load generating capacity with cooled fast htaeder reactor within the GPU sys-tem sometime in the early 1970's. Under a 1E67 Iw perating costs. The mine-mouth and nuclear agreement with the Atomies International Divi-e pacity that we are adding in the next few sion of North A:rerican Rockwell Corporation, years will put us a that pcsition.

a joint progtam is being conducted aiming at a possible decision in 1970 to cet. truct a 350.000 to GPU INSTALLED CAPACITY 500.000 KW facility. The far breeder holds the 1:

pr< mise of utilizinz approximately 70"c of the potential energy of natural uranium as com-

'O pared to about 3cc

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utilization in present day reactors.

Pumped Storage Stntions a-The 400,000 KW Seneca Pumped Storage Station which we and another utility are build-r

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ing in northwest Pennsylvania, continued on j

f schedule during 1965. Present indicaticas are 6

that this station, utilizing the water from the g

6-Federal Government's Allegheny River Reser-3

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voir, will be placed in service sometime within c

5-g the next few months. The GPU share of this E

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V capacity is 50,000 KW.

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l The Yards Creek Pumped Storage Station, a 330.000 KW installation owned jointly with 3

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another utility company continued to prove a

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valuacle asset to service reliability. We and the 2

other utility have, for some time, been seeking permission to build a companion pumped storage 1-station to Yards Creek and are still awaiting

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clearance by all regulatory bodies involved to

, ',,,l begin construction of the proposed 1,300.000 KW 0

installation.

1965 1968 1973 Further planning continued during 1963 In 1967, we added 35.000 KW of combustion concerning the ccustruction of a combination turbine capacity in Metropolitan Edison Com-water supply and pumped storage station with pany and, late in 1965, we announced plans to the City of Jersey City, N. J. Construction on add an aggregate of 300.000 KW more combus-the project, which will deliver about 130.000 tion turbine capacity in New Jersey and eastern KW of power, will bezin as soon as all requisite Pennsylvania. Part of this additional capacity FPC licenses are received, will be in service in 1970 and the balance in 1971.

Combustion Turbines TRANSMISSION-FROM GENERATING Combustion turbines are a form of peaking zenerating espacity for which we are now dnding The 500,000 volt transmission network which increasine use. A combustion turbine can be delivers power from Keystone Station to the designed to use either naturel gas or kerosane as eastern load centers was completed and available 50~161 5

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i for service in 1965 Enginearing, planning, and our distribution system. In 1963. GPU spent O

securing of right of-way precressed for construe-about i67 million for distribution facilities in.

tion of additional 500.000 volt facilities to carry cluding overhead and underground lines, poles.

powar from the Conemauch Station.

tmnormers. meters, and other related equip-ment.

l GPC's expenditures to improve and increde system transmissien facilities amounted to about We and other utilities are aware of the 134 million in 1965. While the individual proj.

necessity to improve the appearance of our ects are too numerous to mention. one signideant facilities. During 196s. approximately 257e of addition is a 345.000 volt line from Homer City all naw residential s rvices with GPU were to the area west of Erie. Pa. This line is ex-installed undergroand. This represents a signi-pec'ed to be operational by about the end of 1969, Scant increase over just a few years ago when and. along with the increase from 230.000 volts the only underground residential services were l

to 345.000 volts on existing liaes from Erie to found in metropolitan areas.

Ohio. will not only strenzthen our own system but also provide increased capacity for our inter-19M FINAN01.;O e

connections with neighboring utilities.

i In providing funds to meet the 1965 con.

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struction proeram. GPU subsidiaries issued a 300 t tal of 595 million of drst mortgsge bonds and J

received $74.5 million of capital contributions 4

p frem GPU. The additional funds required were 1

i obtained through operations.

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GPU obtained approximately $31 million of

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the funds with which to make its capital con-(

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p tributions from the sale of 1.256.506 additional shares and the balance from short-term borrow-1

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ings and from operations.

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Interest costs have increased sharply to the C

date of this report. Each of the subsidiaries sold m

i c 150 c0-year drst mortgage bonds in 1965. In August, p

1 Pennsylvania Electric Company sold 535 million

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at a net interest cost of 6.59c'c ; in September, y

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Metropolitan Edison Company sold S26 million

" 100 at a net interest et,st of 6.909 ; and in October.

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Jersey Central Power & Light Company and New

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Jersey Power & Light Company sold 506 million y

and SS million at a net interest cost of 7.21c 7

c 50 and 7.03"c, respectively.

On July 16,1965, additional common shares i

2 were criered to stockholders on a 1-for-20 bas:s.

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The subscription price was $25 per share repre-0 I I I

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I i senting a discount of aboct 10"c from the price

. [,m at which the shares were then selling on the New B

1963 1968*53*70 York Stock Exchange. Of the 1.236.506 shares D ISTR I B U TIO N-F R OI.'

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• Id throuen suoscript:on r:ghts and the balance of CENTER TO CUSTCf/.::

029 ilargely made available by GPU's pur-The continued growth of our service area chase of rights from stockholders) were sold to raquires constant expansion and improvement of security dealers at the market price at the time of O

50-162 6

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the sala The net proceeds realized from the sale groups with ever ree 2 tree seedlines to enhance amounted to $30.965.154. or 921. '4 per share said, the nataral beauty of *he community and its ap-proaches. A quarter of a million trees were planted in 1965. bringing the three-year '.otal to rnore than 500.000.

EN '/lRONf/. ENTAL CONSILER ATIOi45 Air Pollution Contrei We are vitally interested in enhancing the Late in 1965, Monsanto Company, together at ractiveness of the communities we serve. With with Metropolitan Edison Company perfected this in mind, increased emphasis was placed on a new process called the Cat-Ox system to remove the installation of distributica lines underground.

sulfur dioxide from stack gases of coal-tired While underground insta!!at:en is nct yet eco-boilers. A prototype plant at Met-Ed's Port-nomically feasible in all cases. we are conducting land Generating Station removes air-polluting extensive proerams to develop more ef.eient in-

<ulfur dioxide from stack gases, and converts stallation techniq2es. In addition to the under-it into su!furie acid of marketable quality. The ground facilities, the GPl* system is building process is particularly attractive because the operating facilities to blend with the surround.

production and sale of sulfuric acid may even-inz area. An example of such contribution :s tually cover the cost of equipment required for shown below in the picture of our Edgewood the process. At the same time, it would help Substation in Mar-Ed's territory.

ceet the requirements of public agencies to main-For the past thee years, one of our s6 tain clean air, and would stimulate the expan-sion ot. caal markets.

sidiaria has been engaged in a program to :,:nd means to reduce the cost, and thereby increase the feasibility, of installing electric distribution Tree Seedi.mg Progrcm facilities underground. New machirery has been In keeping with its role as a partner in the developed, new uses have been found for exist-growth and progress of the communities it ing equipment and new rraterials have been serves. GPF, through its subsidiary, Pennsyl.

employed. Other utilities in various parts of

.vania Electric Company, has been sponscring for the country are enzaged in similar e fort; and.

the past three years an Evergreen Tree hedline as this experience is pooled, we are hopeful that Program to help local groups beautify their many of the economic barriers to underground communities. The procram provides interested irstallation can be overcome.

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-" b-6-smen-w.:: M K -:: g One of the popular boating, dshing and Station near the beautiful Delaware Water Gap.

campine areas for central Pennsylvania is on the On a 59. acre recreational area surroundine Susquehanna River at the three mile river. lake formed by the York Haven Hydro Station dam.

our Piney Hydro Station in Clarion County. in western Pennsylvania, visitors will now dnd a The river-lake is spotted with naturally beautiful Islands on whien can be found 230 camping sites.

large play sector, including swings, volleyball die public picnic areaswach provided with courts and a ball Seld. H:xine trails lead throuch tables. gru.,ls ana rest rooms. The Company pro-the woods, along the reservoir bank, ar.d oFer a vides caretaker and refuse removal service for all panoramic view of the power station and lake.

_Ln t.tstanding feature is a picnic grove ecm.

of the picnic areas. Thoueh two boat ramps have been constructed. many anelers seem to prefer pletely surrounded by large evergreen tres Eshing from a protected platform built aloneside which form a gigantic canop; over.the area.

the power plant.

This is only one of three picnie areas capable Similar recreational facilities are under con.

of accommodatine up to 450 people. Electrie sideration for the area around our Portland dreplaces have been instal!ed so vishors can O

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,N enjoy the same convenient push.bu: ton cooking lands, lakes. rivers and streams makes the area in the woods as they do at beme.

one of the most popular for outdoor recreation.

Keystone Lake, with 15.4 miles of shore In the past questions were rai:,ed in some quar.

line in.irmstrong County, is the latest addition ters as to whether it was appropriate for a public to public recreation facilities in western Penn.

utility to assist in the development and utiliza.

sylvania. The lake and shore area have been tion of receational resources. It has recentiy leased for a token fee to the Pennsylvania Fish become clear that a great many public acencies Commission by the seven owners < including (including most utility regulatory bodies ' wel.

GPC) of the r.earby Keystone Station. Fishing come such participation by utilities so lung as it and boating were available free to the public in is responsible and in keeping with the utility's 1%s Other recreational faedities are planned own primarv role. We are. therefore. expanding for the future.

our erforts in this direction and, in experation The section of the United States served with loerl, county state and Federal acene:es, by GPU encompasses.ome of the =ost beautiful expect that a great deal can be accorupiished in a cout.Irv in the world.in abundance of wood.

short time.

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GPU and its subsidiaries are continually evaluating new and improved products for the electric industry. Products concerned not only with ths supply and distribution of electrie power, but also more edicient and economical ways of utilizing that power once it has reached its ultimate goal-the consumer.

The following products represent a small sampling of the many new innavations which appeared during 1963 2imed at making " electric living*' an even more enjoyable way of life.

O)

E:ectronic Otens C <t Ccaking Time to just f'

, ; W g.-- q.c :' > - a minutes! Althouzh the electronic oven has been

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around for man.y years. the cost factors, both c

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initial and maintenanc, have been somewhat r.1. "

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prohibitive until now. The age of cooking a het dog and baked beans in just four minutes, or,1 1

J.; _.. '.. l3

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12 pound turkey in 50 minutes tcith no defrost.

j ing time,is here! No less than four major appli-ance mar.uf eturers are including electronic ovens in their regular lines of appliances.

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Ne:c Electric Indoor Barbecue-with a built-kn.C f 5 6 E. ? _?.*.st.~ -

'2'.(Ku.jdi 'E.E;'Q'r; _.

in ventilation system to vent smoke and fumes E

outdoors produces authentic, char-broiled davor.

l This new innovat:an m. electric cookm.g converts

. ~ -

.m in seconds to a non. stick griddle, rotisterie. shish-kebob or French trier. Since no hood is needed.

Countertop Cooking With no Burners to the unit is ideal for island and peninsula type Clean-promises to be one of the most eneiting iocations.

developments in electric cooking for several years. In the pasc, gas and electric range tops E:ectric Heat for Outdoor Patios-is now have had one drawback--cleaning caposed coils readily available and easily installed. Infra-red of food accidentally spilled or cooked oser. The rays from radiant quartz heaters warm every-introduction of a perfectly dat, easily-eleanea thing in their range, even when used outdoors cooking surface should bring afghs and smiles on porches and patios.

from all housewives.

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MANAGEMENT CHANGES of 4.450x00 KW in 1970 ar.d 4.s00.000 KW 3Ir.. Albert F. Tegen, who serv d as Pres:.

5" 19II-dent of GPU from January 1.1946 to. ipr:! 3-Financing 1967 when ne became Chairman ei the Board.

resizned as Chairman e:fective as of February 2r.

During 1963, it is ant;cipated that approxi.

1969. Ha will remain as a hraetor to that GPU~

mately 5060 million will ce required to meet our will continue to have the benedt of his counsel construction plans. Of this we expe:t to raise and expertene.

about 5106 million by the subsidiar:es' sale of additional lone. term debt securities.

31r, William H. 31eElwain retired as Presi-The balance will comr from capital contr:bu.

dent of New Jersey Power & Lezht CompanT tions by GPU to the subsidiar:ts. eash generated and Jersey Central Power 1-Light Company on from operat:ons. and short term borrowinzs. It January 31. 1969. Mr. SleElwain served tbe is expected that GPU will make a permn of its GPC systetr for 43 years the last 7 as Prest-dent of'the New Jersey Companies.

capital centributions with the proc ~ds from thr sale of additional common stock d' iring 1969.

3Ir. Ralph F. Bovier, President of Pennsyl-In 1970 and 1971 we expect the amounts vania Electric Company sur.. 1967. has b-n

r. quired to support tha construction pro 2 ram

-leewd to succeed 31. 31eElwain as Prrsident of to be about $250 million in each year. I: :s actie:

New Jersey Power i Light Company and Jersey pared that th se expendituras will require the Central Power & Light Company.

sale of lone term debt secur: ties of about *135 Mr. N. Gwynne Dodsca. formerly a Vice milli n in each year and the sale of addit:onal President of Pennsylvania Electrie Company.

common stocP.

has been elected President to succeed Mr. Bovier.

Revenues

.is our sales of electricity grow, so do our

_A (V

LOOKING TOWARD THE FUTURE revenues. We presentiv estimate revenues of $360 nullion in 1969. t N nu.lliun in 1970 and t41.-)

Capaciy

• IIII " I" 19Il-

.is may be noted on page 4. GPU has Sales planned a va.st construction program to meet the We at GPU are con:idant that future sairs growing demands of its cus.omers. Year end in.

of electric power will continue increasinst along stalled :apacity for 1969 will amount to 4.570.000 its current trend. Predictions for 1969 show a KW to meet an anticipated peak demand of sales zrowth of about 99 over 196s with a total 4.100.000 KW. For 1970 and 1971. installed of 20.3 billion KWH. T' e outlook for 1970 and capacity will amount to 4.550.000 KW and 1971 is equally brient with expected sales of 5,550.000 KW. respectively with expected p-aks 22 and 24 billion KWH. raspectively.

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Jersey Central Power & Lignt C:mcany C Vetr: chtan E:ison Com;any and New Jersey P 6er & Lignt Comnany Or: vices sersite :: ?."e eas:ern and central sect: ens serse secticns of New Jersey with a 00 u!st:cn of about of Penns' <ania with a :::ulat.cn of a:Out 83C.0C0 1.5 milucn :ee:le and ::m r:s;ng a:Oreximately 3.3C0 pe :ie an: ::m; rising a :reximate!y 3.300 scuate s:uare miles cr accut 43'i f the ::tal area Of the State.

miles :r ateut 7'a cf tre area of tne State.

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ANALYSIS OF EARNING 5

/3

%)

u :not: SANDS) 1963 1967 1966 OPERATING REVENUES

$339,506

$309.911

$255.310 E'cetrie Steam and Wa er 1.003 1.074 1.043

$339,509

$310.955 5259,360 Totals OPERATING EXPEN3ES Operation

$141,590

$124.998

$111,593 Maintenance 27,703 24.109 25,0S7 40,526 37,520 34,053.

Depreciation Federal Income Tax 12,75S 13,632 1S,314 Investment Credit, less Amortization 1,017 3,452 1,576 Other Taxes 24.970 23,232 20.574 Totals

$249,199 5227.203

$211.507 OPERATING INCOME

$ 90,310

$ S3,692

$ 77,553 Other Income..

372 176 101 GROSS INCOME

$ 90,652

., 53.365

$ 77,654 INCOME DEDUCTIONS Interest on First Mortgage Bonds and Debentures

$ 37,342

$ 31,525

$25,Q Other Interest 2,556 2,431 2,251 Interest Charged to Construction.

(11,646)

(7,545)

(5,776)

Preferred Dividends 3,163 3,163 3,190 433 94 121 Other Totals

$ 32,15S

$ 29,373

$ 25,636 EXPENSES, TAXES AND INTEREST, NET-GPU $ 5,024

$ 2,619

$ 3,272 BARNCE FOR COLDION STOCK

. S 53 170 S 51,376

$ 45,746 CASH DIVIDENDS PAID DURING YEAR

$ 39.447

$ 37,550

$ 33.966.

RETAINED EARNINGS

$ 14,023

$ 14,296

$ 14,750 SHARES OUTSTANDING Average During Year 25,354 24,505 23.3:3 Year End 26,050 24,505 21,505 PE'c SHARE

$20.61

$13.31

$13.::

Boolc Talue Earnings leerage Shares

$2.11

$2.03

$2.01 Year End Shares

$2.05

$2.03

$1.37

$1.57

$1.52 Divide.nds Paid

( ) Indicates red dr.tc 50~170 u

r 1965 1964 1963 1962 1961 1960 1959

$269.062

$252.266

$233,927

$226,170

$213.24~

$203,734

$194.963 1.000 1.019 1,061 1,061 1,069 1,079 1.06S

$270.054

$253.255

$239,955

$227,231

$214,3 6

$204.513

$196,0J1

$100,710

$ 53,999 2 54.943

$ 82,600

$ 74,634

$ 70,333

$ 69.611 24,757 22,50S 22,32S 23,787 20,749 00,492 13.963 32,371 2?.997 2S,029 26,405 02,505 02,515 21,252 15.104 21.505 20.007 16,995 23,757 23,374 23.172 2.226 1,435 1.~70 1,423 19.272 13,267 16.429 15.067 14,714 13,419 12.504

$197.470

$154.014

$174,006

$166.252

$156,659

$150,136

$145,502

$ 72,614

> 69.2~!

$ 65,952

$ 60,949

$ 57,657

$ 54,67~

$ 50,029 000 113 105 34 SS

~6 79

$ 72,514 S 69.390

$ 66,0S7

$ 60,983

$ 57,745

$ 54,~53

$ 50,30s h.903

$ 19.236

$ 13,333

$ 1~,1~7

$ 16,655

$ 15,501

$ 14,055 1,376 1.576 1,179 923 1.094 197 559 (3.425)

(2,004)

(1.213)

(2,4~4)

(1,956)

(1,494)

(2.511) 3,416 3,450 3,450 3,450 3,450 3,450 3,450 343 493 520 435 242 323 195

$ 23,610

$ 22,571

$ 22.274

$ 19,511

$ 19,455

$ 15,277

$ 15,451

$ 2.750

$ 2,411

$ 2,210 771

$ 1,777

$ 1,333

$ 1,705

$ 46.454

$ 44,105

$ 41.603

$ 40,701

$ 36,453

$ 35,135

$ 33,119

$ 32,656

$ 30.957

$ 29,050

$ 27,504

$ 26.769

$ 05,507

$ 23,695

$ 13,~93

$ 13,101

$ 12,523

$ 13,197

$ 9,~14

$ 9,331

$ 9,421 23,336 23,336 23,336 23,336 23,734 23,752 22,611 23,s36 23,336 23,336 23,336 23,336 23,752 22,611

$13.22

$17.63

$17.03

$16.56

$14.23

$13.77

$12.31 S1.35

$1.25

$1.75

$1.71

$1.33

$1.43

$1.46 S1.25 31.55

$1.75

$1.71

$1.52

$1.49 S1.16 1.37

$1.30

$1.22

$1.15

$1.13

$1.03

$1.05 50 1'?1

-- _ 3 -..-,-- -

.w.-,.

. y --,

7..n.-- -- ~.c ELECTRIC GENERATION AND SALES STATISTICS 1268 dietropolitan Pennsylvania New Jersev Edison Electr:c Subsidiaries Company Company JENERATING CAPACITIES AND PEAKS:

Installed Capacity-KW 1,054.200 894.300 1,190 300 Firm Power Purchases Totals 1.054.200 s94.300 1.190.900 Annual Peak Load 1.455.000 1.021.000 1.29 4.0e0 NET SYSTE31 LOAD (megawatt hours) :

Net Generation 4.462.619 5.223.030 7,590.797 Purchased.

75.157 99.333 9.665 Net Interchange.

2.s29.534 603.266 (250.311' Net System Load 7.370.340 5327.629 7.319.151 STEA31 PRODUCTION DATA:

Avera:re Btu (per net KWU) 10.750 10.377 10,630 Fuel Cost (e per million btuT 30.2 32.2 21.9 Cost of Fuel (mills per KWU) 3.25 3.34 2.33 Total Production Costs (mills per KWH) 4 44 4.47 3.34 ENERGY SALES (megawatt hours):

Residential 2,592.101 1.471,444 2,006.30 >

Commercial 1,345.914 636,976 1.211.1, Industrial 2.352.94i 2.647,637 3,030/h 220.342 397.933 345.266 All Other Totals 6.711.304 5.354.010 6.593.722 Gain Over Prior Year 10.2 9 9.79, 10.6 < c OPERATING REVENUES:

Residential

$ 65.255.445 5 30,519,474

$ 45.523.063 Commereial 36,613,77i 16.273.935 26.395.036 Industrial 25,737.505 28,773,457 35.956.755 Other 4.6s3.709 5.022.523 4.533.916 Total, from KWH Sales

$135.322,442 S so,5e9,422

$112.70s.970 Other Revenues.

1.373.253 2.715.569 6.190.630 Totals S136.695.695 3 53.307.991 S118.539.600 Gain Over Prior Year 9.2'7c 9.59 9.0 ' c CUSTOMERS-YEAR.EId):

Residential 466.977 254,996 357.576 Commercial 51,731 31.555 47.126 Industrial 2,314 2,474 5.155 All Other 612 2.175 620 Totals 521.634 291.233 440.477 AVERAGE USE, BILL AND PRICE:

Residential Customers:

ETH I'se Per Custcmer 5,623 5,323 5.213 Annual Bill S141.61 S120.77

$119.05 i

Price Per KWH 2.52c 2.079 2M l

V

( ) Indica:es red f!gure

. n - a r/.70 i

dU

.1.

16

V Consolidated 1968 1967 1968 1965 1964 3,139.400 2.957,600 2,502.600 2.754.600 2.729.500 165.000 165.000 112.000 3.139.100 2.957.600 2.970.600 2.952.600 2.541.500_

3.634.u00 3,256.000 3.071.000 2.593,400 2.657.400 17.276.446 16.069.550 15.566.349 15.092.106 14.545.462 156.155 295.545 1.753.305 331.310 153.552 3.134.459 2.352.345 259.973 459.274 35.217 20.617 120 15.721.073 17.609.600 16.112.6?O 14.740.561 10.596 10,494 10.435 10.355 10,269 27.1 26.5 25.5 25.4 24.9 2.57 2.51 2.71 2.63 2.56 3.97 3.56 3.69 3.61 3.55 6.069.550 5,452.022 4.954,391 4.550,093 4.232,102 0.:.594.055 3.222,396 2.945,550 2 645.546 2.417,691 5.001.570 7.403,493 7.004,340 6,296,750 5.657,419 963.561 523.299 913,009 957.259 556.715 15.659.036 16.931.210 15.547.320 14.449.675 13.223.930 10.2"c 6.

'~c 9.7 Fo 9.3 Ce 5.6 Pc

$141.625.155

$130.303.017

$100,764.954

$112.260,191

$105,795.473 79.252.751 72,773,337 67.560,002 62,934.030 55.554.550 93,467.750 57,564,757 53.710,321 77,721,562 72,779.900 14.242.145 12,596.793 13.265.121 13.400.965 12.575.592 5325.620.534

$203,535,534

$255.300,445 S266.317,051

$250.041.545 9.554.575 6.372.752 3.011.545 2,744.564 2.224.040 S335.505.709 5309.911.256

$255.311.996 5269.061.915 S232.2f5.555 a.2(~c 7.5 To 7.2ro 6.7 Tc 5.6 Ec 1,109.549 1,053,459 1,059,295 1.032,496 1,007,791 130.445 128.207 126,363 124,144 121,691 9.943 9,964 S ~59 9.909 9,774 3.407 3,359 3.275 3.154 3.113 1.253.344 1.224.959 1.195.:95 1.169.733 1.142.369 5.505 5.107 4.755 4.452 4.235

$125.91

$121.35

$115.00

$119.54

$105.94 2.33c 2.35e 2.42c

'.:.47 e 2.50c i

4 W}

(30-

.t <.;

i7

.. __ _ -. = _

.7 e

i i

r t

I f.......

r... -

T

-s s. I w..;

v To the Board of Directors and Stockholders, Grst: tat. Puauc C tur:ts CORPORATtON, New York. New York.

We have examinad th corsolidated balanca sheet of General Public Utilities Corpora-tion and Subsidiary Companies as of December 31. 1965 and the related consolidated staten.ents of income and unappropriated earned surplus and the consolidated statement of source and application of funds for the year then ended. Our examination was made in accordance with generally accepted auditing standards. and accordingly included such tests of the accountine records and sach other auditing procedures as we considered necessary in the circumstances. We previously examined and reported upon the consolidated financial statements for the year 1967 and the consolidated statements of source and application of funds for the years 1964 through 1966.

s In our opinion, the accompanying statements (pages 19 through 24) present fairly the consolidated Snancial position of General Public Utilities Corporation a.d Subsidiary Companies at December 31.1965 and 1967 and the consolidated results of their operations for the years than ended and the consolidated source and application of funds for the years 1964 through 1965 in conformity with generally accepted accounting principles applied on a consistent basis.

LYBRAND, ROSS BROS. & 310NTGO31ERY 2 Broadway New York. N. Y.

February 7,1963.

50 174 13

._ m GENERAL PU C UTILITIES CORPORATION AND SUBSIDIARY COMPANIZS 7)

CONSOLIDATED STATEMENTS OF SOURCE AND 1

APPLICATION OF FUNDS Years 1968 1967 SOURCE OF FUNDS:

1966 1965 1964 Consolidated net income (see page 22)

$ 53,470.471 S 51,576,074 S 45,745.552 $ 46,454.295 $ 44,107.971 Dapreciation (Note 2) 40,526.317 37,519 963 34,057,451 32,371,055 29,996,771 Investment credit, less amortization (Note 5) 1,016.759 3.451,400 1,575,700 2.225,900 1,435,000 Totals

$ 95,313.577 $ 93.147,437 $ 54,675,733 $ 51,051,250 $ 75,542,742 Sale of bond.s and debentures 95,000.000 111,000.000 70.000,000 72,000,000 49,000,000 Sale of com:ron rock of the Corporation 30.965,154 27,327,204 Bank borrowings and commercial paper 5,700.000 27,750,000 10,350.000 Installm-nt proceeds frcm sale of 3Iantla Electric Company (Note 6) 5.645,223 5,624,317 5,613.147 5,595,350 5,624,121 Price hicg settlements, net (a;.

938,417 519,762 145,00.'

4,227,456 Prr.ceeds from sale of pl.mt (al.

11,703,317 5,000,000 lk Other, net 15,104.557 e.057,515 4,063,355 3,255,704

'lotal Funds Received $253.729.541 S235.460.171 s206.551.661 $174.561,363 $142.650.023 APPLICATION OF FUNDS:

.iddit;ons to utility plant (a)

$200,509 369 $167,641,531 $162,654,096 $126,193,758 $ 95,263,516 Nuclear fuel investment (Note 3 ).

1,944.139 S,524.235 125,973 Cash dividends on tb Corpo-

• ation's common stock 39,446,723 37,550,140 33,966,407 32,655,564 30,957,317 Payment of bank borrowings Payment of serial bank loans 4,400,000 9,340,000 (Note 6) 5,555,555 5,555,556 5,555,555 5,555.556 5,555,555 Retirement of tirst mortgage bonds and dtbentures 2,554.000 4.268,000 2,147,000 1,350,000 1,070,000 Reacquisition and cancella.

tion of preferred stock.

Loans to non-a2iliated coal 1,799,630 3,iS6,155 463,635 companies (Note 5).

3,6 9,755 950,000 Other, net.

13,640,409 Total Funds Applied $253.729.541 $235,460.171 $"06.91.661 S174.561.363 $142.650,023 (a) Plant additions shown are before credits ansing froci price dx:ng sett!cntents and t'.e sale of interests i projec ts.

n certais The accoc2panying notes are an integra: part of the duancial statemect,.

r-

,9 m t" db3 -,A. ( 019

GENERAL PUELIC UT! LIT:::. r'C".? DEATIO!

AND SUBSIDIAF,Y CO:~I * 'I CONSOLIDATED BALANCE SHEETS

]

December 31,1963 and 1967 1968 1967 ASSETS:

PROPERTY, PLANT AND EQUIPMENT (at original cost) :

Utility plant in service and under construction (Note 1)

$1,941.270,990

$1,653,401,311 Less. reserve for depreciation (Note 2) 319.928,26S 239,456,950 Net property, plant and equipment

$1,522,342.712

$1,363.94J 361 INVESTMENT IF NUCLEAR FUEL (Note 3)

$ 10,897,347 S,953,00S EXCESS of investn'ents in subsidiaries over related net assats

$ 30,635,159

$ 30/33,159 INVESTMENTS:

Letters of credit (Note 6)

$ 10,963,672

$ 16,143,440 Other physical property, at original cost.

1,137,320 1,065,752 Loans to non a.51iated coal companies (Note S),

4,639,755 950,000 Other, at cost 1.535,699 1.191,089 Totals.

$ 13,281,946 19,650,231 CURRENT ASSETS:

Cash

$ 15,269,797

$ 19,315,066 Letters of credit (Note 6) 5,945,338 6,116,993 Tcmporary cash investment 750,000 Accounts receivable 23,714,275 27,083,797 Materials and supplies (including construction materials), at average ecst or less 17,613,717 20,605,721 Other.

2,651,928 1,505,30S Totals.

$ 70,195,553

$ 75,377,405 DEFERRED DEBITS:

Capital stock expense of the Corporation 2,990,418 2,410,418 Other...

3,377,197 3,620,357 Totals.

6,367,615 6,030,775 Total Assets.

$1,653,723,337

$1,509,594.159 The accompanying notes are an integral part of the ricaucial statements.

V 2o 30-176

.:.=.7,.-,...

3.=

_.-. nna.

GENERAL pub.C UTILITIES CORPORATION AND SUBSIDIARY COMPANIES ft)

CONSOLIDATED BALANCE SHEETS December 31,1068 and 1967 LIABILITIES AND CAPITAL:

LONG. TERM DEBT, CAPITAL STOCK AND BURPLU3:

osi.

1968 1967 Su.. diary companies:

First mortgage bonds and debentures

$ 552,719.000

$ 755,329,000 Notes payable to banks due within one year to be rednanced 15.500.000 37.000.000 Totals.

S 901.519.000

$ 525.309.000 Cumulative preferred stock

$ 76.591.200 S 76.591.200 Premium on cumulative preferred stock 654.596 654.596 Totals.

$ 77.545.796 s 77.545.796 General Public Utilities Corporation:

Serial bank loans (Note 6) s 11.111.111

$ 16.666.667 Bank borrowines and commercial paper due within one year to be re:inanced.

S 46.900.000

$ 20.000.000 Capital stock and consolidated surplus:

Common stock (Note 4)

$ 65.270.510

$ 62,125,795 Consolidated capital surplus (Note 4) 255,023,315 226,193,420 Consolidated unappropriated earned surplus (see statement on page 23) 217.299,469 203.275.721 Totals.

$ 537,593,597

$ 491,597,936 Less, reacquired common stock (Note 4) 70,160 116.055 Totals.

$ 537.523.437

$ 491.451.551

,r Totals.

i(I

$1.574.599.344

$1.431.023.344 CURRENT LIABILITIES:

First mortgage bonds and debentures due within one year 2,501.000 1.175,000 Serial bank loans (Note 6) 5.555.556 5,555.555 Accounts payable 24.302.535 17,104,296 Customer deposits 2.169,753 2,014.335 Taxes accrued.

6,217.777 9,095,962 Interest accrued 10,533.536 9,041,514 Other.

6.527,705 6.342.179 Totals.

S 57.505.165

$ 50.629.141 DEFERRED CREDITS:

Unamortized premium on debt S

3.490.107 3.462,542 Other.

1.119.004 550.475 Totals.

S 4.609.111 4.313.320 RESERVES:

Future income taxes (Note 5)

S 6.109,496 6.623.930 Unamortized investment credit (Note 5) 13.204.959

.J,155.000 Other.

104.075 100.675 Totals.

$ 19.415.560 s 15.912.505 CONTRIBUTIONS IN AID OF CONSTRUCTION 2.255.157 3

4,715,579 Total Liabilities and Capital

$1,655,723.337 51.509,554.159 The aceo=panying notes are an integral part of the inancial state =ents.

30 177 21

__- -, - m m__, m.,m __. - _

.m_

. G'ENIE AL PUELIC UTILITII CORPOR ATION AND SUESIDIARY CO:.:PANia CONSOLIDATED STATEMENTS OF INCOME 7

For the Years Inded December 31,1968 and 1967 1963 1967 OPERATING REVENUES

$339,505,523

$310,955,050 OPERATING EXPENSES of Subsidiaries:

Operation

$110,705,704

$101,573.590 Power purchased and interchanged 31,151.152 23.121.642 3Iaintenance 27,707,976 24.109.304 Depreciation of utility plant (Note 2) 40.526.317 37,519.963 Federal income tax (Note 5) 13.253,447 14,094.716 Deferred income taxes (Note 5'i (514,434)

(455,600)

= Amount equivalent to current investment credit (Note 5) 2.493,413 3.536.900 Amortization of accumulated investment credit (Note 5)

(1,476,624)

(355.5C0)

Other taxes 25,015.554 23,274.673 Totals

$249,195,565

$227,292.655 OPERATING INCOME

$ 90,309,655

• 23,692.392 OTHER INCOME of Subsidiaries 372,520 176.057 GROSS INCOME S 90,652.175 3 53.565.449 A

INCOME DEDUCTIONS of Subsidiaries:

h Interest on Srst mortgage bonds and debentures s 37,342.295

$ 31.525,401 Other interest 2,556,202 2.431.002 Interer charged to construction (Note 7?

(11,646,130)

(7,545.643)

Dividends on cumulative preferred stock 3,165,299 3,165,299 Oth ir.

437,335 93.935 Totals

$ 32.155,004

$ 29.373.194 BALANCE

$ 55,494.174 S 54,495.255 EXPENSES. TAXES AND INTEREST of the Corporatica :

General expenses

$ 1,501.124

$ 1,676,145 Taxes (Note 5) 297,552 (44.525)

Interest on serial beak loans, net (Note 6) 126.552 565,659 Other interest, net 2,495.105 421,599 Tota!s.

S 5,023.703

$ 2,619,151 NET INCOME.

S 53.470.471 3 51.576.074 EARNINGS PER SHARE.

52.11

$2.09 Average number of shares outstanding during.vear f5JJJ 13S f1,505,096

( ) Indicates red igure ne accompanying notes are an :ntegral part of the.'. nan: ai statements.

50-178 22

x

~

GENERAL PU"!C UTILITIES CORPORATION 3

MD SUBSIDIARY COMPANIES

]

CONSOLIDATED STATEMENTS OF UNAPPROPRIATED EARNED SURPLUS For the Years Ended December 31,1968 snd 1967 1968 1067 BALANCE, Beginning of year

$203,275,721

$155.979,757 ADD, Net income (see statement on page 22) 53,470,471 51.576.074 Totals

$256,746,192

$240,555,561 DEDUCT, Dividend: on common stock 39,446,723 37.550.140 BALANCE, End of year

$217,299.469

$203.275.721 NOTES TO FINANCIAL STATEMENTS 1 Utuity Plant be su:"leient to amorti2e the orig:nal cost of depre-On September 27, 1964, the Federal Power Com-ciable property on a systematic basis over estimated serv:ee lives, which are gener:1;y longer th.in mission :ssued an order presenbitg a general method those et' ployed for tax pu rposes. The subsid:ary for the determination of " net investment" in hydro-eieetne projects licensed as such urder P2rt I of the e mpaniec use depree:ation rates based on. unction 21 see unt groupc which, on in aggre gate composge Federal Power Act, The methed so presenbed had been oppued by virtually all :icensees (including the basis, resa.ted in apprnximate annus! rates of. 50.c Co poratien inIl its subsidiaries), a number of state

""" ;. 33 cc for the years 1963 and 196., respectively.

public utt'ity ecmmissions and others. The order re-I7,3;=,3; in 33g;,3; 73,g; quires the reporting by heensees to the Comm:ss on

'O of " net iarestment" as calculated i. accordance with A!though the uniform gratems of accoutits of the the prescr:tei method but makes no provision for regulatory agencies having jurisdie: ion over the Corpo-re'*ect:rg such es!cula: ions in the accounts ma:ntained ration's subsidiaries have not been scended to make by lic=*isees. The orrier states that it provision therefer, proposals to exclude nuclear fuel

"* *

• shoui t not have any efect on rate determina-inventory from current assets and to accord separate tion by the various states, since no state regulates classi$ cation thereto (analogous to that of ut;!!ty on a ' net investment' basts. As for our wholesale piant in service and under construe

• cn) are under rate regulat:on, our action does not decide the e nsiderati n by si.ch agencies in aght of the fact issue cf w the ' net in-he usetul Hm and methods of Snane:ng the at vestmen.,,hethe,r, we should utilize nuclear fuel inventerv =ake elassi5catic:1 thereo.

gure.

assa's in[ppropriate. Under these cir-t 1

However, the order states that, unless the Commission cumstances. the sueltar fuel inventory has been I

orders otherwise, the " net investment' so calculated accorded separate clasaidestion and interest dunng sha;l be emploved in determimne the price to be corist ructio n (amountinx to 5750.6N st December pa:d by the United States or another licensee in the

31. 1963, of which $137 900 ie applicab!< to 193D avent of the take-over of a licensed project, has been acerned thereo;t in a manner essentially simt!ar to that emplovec for uti ity plant under The Corporst:.on and its three subsidiaries owning construction.

hydroeleetne projects and a number of other interested part:es !neluding several state public utility commis-Capital Stock and Capital Surplus:

sio n s, other licensees and the Investment Bankers Assoc:stion have Sled petitions for rehesnng of Of the 30,000.000 authonzed shares of 80.30 par the order. On November 20,1963 a rei earing was value commen stock. 06,050.060 shares were issued 2nd granted for the limited purpose of enabling the Com.

outstanding at ';ecember 31,19Cd exclusive of 28,J64 mission to give the matter further considcration. The eacquired shares recorded as reacquired comtnen stock Corporation and its subsidiaries believe that no appro-at 80.50 per sh2re. Dunng 1963 espital surplus pnate basis exists for reducing the investment in increased $23,309 SH of which (1) 809,403,169 repre-the subsidiaries' hydroelectric projects, but the Corpo-eerts the excess of proceeds over par value from the ration estimates that,.s at December 31, 1963 the sa!c in July 1963 of 1,056,306 saares of common maximum reduction in such investment of the sub.

stoe.t of the Corporation (0) 8409.118 represents the sidianes that might be asserted by the Commission ex ceis of the market value over par value of based on the September 27, 1968 order is approxi.

13.353 shares of common stock of, the Corporation mately $3,000.000.

exchanged for th e common stoes of Waterford Eleetne Company and (3) 20.359 represents other misceUaneous debits.

For rate-mak:ng and anancial accounting purposes In:m Taxes:

the Corporation's subsidiaries provide for depreciation The 10e-Federal corporate surtar efective Janu.

at annual rates dete mir:ed and rev: sed perwiicsuy ary. 194 deeressed 1964 consol: dated net income on the basis of studies by independent engmeers to by approzmately 81,400,000.

r aT-4 %

aPJ

.L f a2 13

s

^%

NOTES TO FINANCIAL STATEMENTS-(Con:inued) v ne Cor;craticn and :ta subsidianes ile consolidated

- In:eres: e e.eu to Ce - :.

Federa! inec=e tax returns. Ex2=in2 tan of, retu s The acrl: cable reri.2 tort uniform systems of through 1964.as been comp;e:ed and 2d en::encies paid...e consolidated Federal income tax {aamty :s m

, g,,3, g gu

.uSn n in-clu ding the net cos: dur:ng *he per:od of cen-a ocated among the partic pants in the censo:idate3 struction, cf borrowel funds used for construct:an returns pursuantfo ag*eemen9 generally cesigned to ms W 2 nasonn ate a odu M The 12ccate s2ch liabt.m m proportion to the participants, y,M respective ecn:nbunons to such liability.

h m d m M M M.;b m m m

,f g,

g,g g gggg 1969. the Corpora:icn's subsidiar:es increasel the As public utc:t:es,,,e revenues of the Corporst:en.

. s suestdis *:es in any penod are dependent to a signid' rate employed for the secrual af interest durtrg cant ertent upon t e :cs:s which 1:e recognized and construction (from 63 to 6:p", per annum fer the Pennsvirania sub,iliaries and from 60 to 70 for a2cwed in dat period for rate-making purposes..It the few Jersev sub sidiaries ) and in add. tion the is the ;o: icy of de Corporatien and its rubs:d:2nes subs: lianes reined the me* hods used in determining in conne:: ion with the dnancial statements contained in registration statements pursuant to wnich secur; :es such interest charges. These enanzes increased 1963 are ofered and in -eports of ::nancial em:non 2nd y,gg.d net ime by apmmdy HME of de rescits of opera: ions to the holders of such secunties, to fol'ow the basie accounting principle of

C:mmecenes.i d Can'.uic-L2t.*a^

matching costs 2nd revenues, taking into co:: sideration ti:s aspect yf the rate-mak:ng process. In acecrdance ne s ibs: diaries expect to make expenditures of so.

W 00?00J00 for plant additions durini t erew::, tne Cerperati:n s su.sidiaries have employed 1969 and is that connection had incurred substantial yme.o. lowing po.:::es:

ce mitments at December 31, 1963 The subsidiar:es Liberalized Depreciation and Guidelines and hies.

Y**'*i**'"***i'

Ii U!

N=*"

• • 'h e natruction.

The provisions for inecme tales in the ac ompanr:ng inco=e statements were diree:17 reduced by amounta In orde to obtair the necessary consent of the equal to the reduction in inco=e taxes a:!nbutabie Export.I= port Bank of Washington to :he sa:e by to the emp;or=ent of lib:rilized de;reciation and the Corpora:io2 of its invest =ent in Mani:a Electne the " Guidelines and P.u!es?

Company, referred to in Note 6. the Corporu:en was required to guarantee the payment of the insta2ments Jccelersted.biortization. Provisions for future of principal and Interest of loans (payable through income taxes equal :o the reductions in income taxes 1970) made ty that bank to Mani's Electr:: Com-att-ibutable to accelerated amortization (which pany. At December 31,1969, the outstanding balance ended in 1959) were made through 1959 2nd the of such loans was appron=ately $3,600.000.

aceumulated ba:ance (ciassided in the accomp2nvi::g balance sheets as a reserve but as a deferred credit A subsidiary of the Corporstion is par *.cipat:ng in in reports to regulat:ry agencies) is being amorti:ed the guarantets of certs:n indebtedness being incurred over the lives of *he related facilities.

by a non.a5uate in connection wjth the dere;opment of mines fcr coal to supply ite aeystone m=e. mouth hrestment C ed.r.

Charges to income equal to the genna*:ng stadon in which such subs:liary is 1, co-

"2

D'*

3c investment credit are made and the accumulated is approxima% *$1.i..u tjuaranteed by the subsid:arv c

talances (classided in the accompanying balance te:y 00,;00. In addition, another sub-sheets as a reserve but as deferred credi:s :n reports si!!ary tcgether with the non a..siated co-owner of. e to regulat:ry agencies) were be:ng amortized pr:or Homer City zeneratiuz s{2 den, wnieh is under :en-to 1965 over the esti=ated seriice ;ives of the related strueden, hare agreed wua non.2_iated minmz com-f acilities. Efective January 1.1969. the amortiza.

panies to assis them rt:h the Snancinz required for tion pened was reduced to ten years. This change 2e terMcpment 2nd *quipment of de ninn wMen m ineressed 1963 consolidated net income by ap.

to sudy coal for that s:stion. Pursuant

• h e reto.

proximately $1,000,000.

de subsidiary and such oder nomaL2Nd ca. owner have entered into agreements w:th the mining com-

anies which provide for uiter

m l cans by the st..

n wners, p n t:me to Mme,throuzh 1970 to the 6.

Letters of Cred t and Ser:21 Bank Loans; mtn:rg ro= pan:et Such interim.oans are to matare in ne Letters of Credit aggregating $16,914.510 at 1372 and the maximum amount of su:5 interim : cans Dececiber 31,1969 represent :he balance of !!4.419.000 which may be made by 9e subsidiarv is $13.X0,000.

of proceeds (in the form of Letters of Credit) from such loans are to bear an interest rate which is the sale by the Corporation of i:s investment in Mantla 1%"e above the prime rate for comme cial borrowinz E:ectne Company in January 1962. The Letters of 2nd 2re to be prepayab:e by the mining companies Credit, issued by a syndicate of 16 Phi;ippine banks, at any *ime without premium. No arranzements have and eendrmed by a svndicate of ten U. S. banks, yet been =ade for the permanent snanctog of these provide that pavsent of this ba:ance, plus interest mines.

at 3ce per annuni, sha2 be =ade in th.ee anproxi-

=ately equal annual insta2=enta crcugh 1971.

3 peny:n 2,2; ne serial bank : cans outs *anding at December 31 De Corporntion 2::d each of its subsidiaries hara 1963 agg egating $16,066.667 represent the ta:ance estatushed pensica p;ans for their employees 2::3 of borrowngs frem a group of U. S. banks n 1962 have made pror:sfon to fund the cost of 2M suen under an agreement rhereby such borrowr:gs mature plans. ne past service costs of the pians are ful:7 seri "y in three annual instanments through 1971 funded. De annual current service costs and the a.:1 are secured by draf ts drawn :nder the Leners of contnbuticcs br the Corcoration 2ni subsidianes Credit, in an aggrega:e amount substantia;:7 eq2ir2 for such costs here '4.100.000 and 54.!00.000 for

!ent to the bor owings.

1968 and 1967 respeettrely.

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