Text

Annual Financial Rept,1981
	ML20042C648
Person / Time
Site:	Peach Bottom, Salem, 05000000
Issue date:	04/06/1982
From:	Feehan J, Linkletter A; ATLANTIC CITY ELECTRIC CO.
To:	;
Shared Package
ML20042C647	List: ML20042C646; ML20042C648; ML20042C649; ML20050C839; ML20050C857;
References
	NUDOCS 8204090421
	Download: ML20042C648 (40)
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Resulto of Opsrations 1981 - 1980 1981 1980

% Change Electric Operating Revenues S 469,683,000

$ 358,391,000 31.1 g

Operating Expenses S 396,172,000

$ 302,158,000 31.1 Fuel Costs.

S 154,652,000 S 131,894,000 17.3 Net income S

46,988,000 S

38,538,000 21.9 Earnings Per Common Share S

3.03 2.62 15.6 Dividends Paid Per Common Share S

2.04 S

1.90 7.4 Total Assets S1,013,789,000

$ 879,795,000 15.2 Cash Construction Expenditures S

113,221,000 S

88,791,000 27.5 Sales of Electricity (KWH) 5,675,367,000 5,633,904,000

.7 Total Customer Service Installations (Year-end) 386,046 379,242 1.8 Number of Shareholders (Common Stock) (Year-end) 48,424 47,762 1.4 Number of Employees (Year-end) 2,035 1,968 3.4 Book Value S

22.40 S

22.22

.8 The Corporate Name and Trade Name Atlantic City Electric Company,1600 Pacific Avenue, Atlantic City, New Jersey 08404, is the official name of the Company as it appears in the Articles of Incorporation. The Company also uses the registered trade name Atlantic Electric in various publications to shareholders and customers, and in its day-to-day operations.

Notice of Annual Meeting g

The 1982 Annual Meeting of Shareholders will be held Tuesday, April 27,1982, at Quail 7

Hill Inn, Route 9, Smithville, New Jersey. A Notice ct Meeting will be mailed in March to those shareholders entitled to vote,

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To Our Shareholders:
1981 was a successful year for your Company. Atlantic Electric had a successful year making l
substantial progress in the face of major challenges and adversities. These successes oc-curred in a number of areas:
Earnings increased by more than 15% to $3.03 per share, representing the fourth con-secutive year of growth in earnings for the Company. Dividends paid in 1981 were increased to $2.04 per share, compared to $1.90 in 1980, an increase of over 7%. This represents the 29th consecutive year that the Company has increased its dividend payment-a truly j
remarkable record. The current annual dividend rate established in July 1981 is $2.12 per share.
q Atlantic Electric made further progress in reducing its dependence on overseas oil. Only l
l 20% of the kilowatt-hours our customers used were produced with oil, compared to 24% in r
1980 and 32% in 1979. We are moving away from oil by means of greater use of coal and uranium; and are converting more units back to coal as well as importing coal-produced elec-(
tricity from the Midwest. With the commercial operation of Salem Nuclear Unit No. 2 in Oc-I tober 1981, nuclear's contribution to our electric energy supply is growing.
By the end of 1981, Atlantic Electric was successfulin reducing its 5-year forecast of con-struction expenditures by some $362 million. As a result, cash expenditures for 1982-1986 i
will drop from $970 million to a much-more-manageable $608 million. We have been able j
to lower our forecast of load growth and to reschedule major capacity additions because of the greater conservation and energy efficiency of our customers. These developments are consistent with our "New Direction" program announced at the Annual Meeting last year.
r This New Direction recognizes that growth in electrical demand is extremely costly to serve I
i in these days of high inflation and high interest rates, and that all our efforts should be directed toward reducing our capital expenditures. We made real progress in that direction in 1981.
as evidenced by this reduction
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in 1981, Atlantic Electric was successfulin attaining one of its long term goals. Some years l
l back, we set a five-year goal to achieve a level of excellence that would warrant national
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recognition in the form of the Electric Light & Power Magazine's annual award. We are pleased that your Company was selected by this prominent trade magazine (through a panel of judges) l as the Outstanding Electric Utility of the Year 1981! We are doubly pleased that the Com-pany achieved this high level of excellence and that this excellence has been recognized.
i But most of all, we are grateful that the management and personnel of Atlantic Electric set such a challenging goal for themselves and then made it happen.
Truly,1981 was a successful year for your Company. However, Atlantic Electric f aces ma-i jor challenges in 1982 in order to continue its successful performance. Our major challenge is to maintain good earnings and to finance our planned heavy construction program. Both l
l problems are more severe in 1982 because we are in a transition period in which many measures taken in 1981 will bear fruit beyond 1982.
For example, major cuts made in our five-year capital expenditure program will result in sizable reductions in our capital outlays in 1983, '84, '85 and '86. But our capital expenditures will still be at a high levelin 1982-some S160 million compared to approximately S98 million in 1983 and $91 million in 1984. These capital expenditures remain high in 1982 because we have major ongoing programs to convert units from oil back to coal and to rebuild major furnace components in our existing coal-burning units. These measures will ultimately lower costs and ;mprove performance and efficiency in our system. but involve sizable outlays in 1982.
Earnings performance in 1982 hinges to a large degree on the timing and adequacy of i
a rate increase in our base rates. We filed a rate increase request in the amount of S172
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million on February 19,1982 and will be aggressively pursuing speedy rate relief.
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Once we are beyond 1982, the benefits of our New Direction program will be more dramatic in terms of lowered capital expenditures and improved financial parameters. We are con-vinced that the New Direction program will be in the best interest of the shareholder, the customer and the Nation's efforts to contain inflation and lower interest rates.
Your Company faces the challenges of 1982 and beyond with a great deal of confidence.
This confidence comes from our successes over many years and is highlighted by some record successes in 1981. We have a strong Company a Company which gets its strength from its diversity. We are strong because of the diversity of our service area. We are strong because of the diversity of our fuels. We are strong because of the diversity of our generating capa-city. We are strong because of the oiversity of our management team.
We appreciate the confidence the shareholders have placed in this Company and this management We intend to continue to advance the interest of the shareholders while fulfill-4 ing our obligations to surve the customer. Our goal is to continue to be successful so that we may continue to warrant the confidence of our shareholders.
I For the Board of Directors, h.O.
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Tha N w Dir cti:n We are pleased that we made substantial progress in 1981 by achieving the Company's basic goal of effecting a reduction in growth of the peak demand for electricity and a reduc-tion of estimated construction expenditures for the next five years. However, we face a major challenge of reducing projected major cash construction requirements beyond that period into the 1990s. For that reason we will be expanding the "New Direction Program" in 1982 and in future years as we aggressively pursue energy efficiency and conservation.
We believe that the letter we received from Mrs. Mary Owen, and the comments of Mr.
Joseph Muldoon (see page 13), describe the recognition we hope the "New Direction Pro-gram" will receive throughout our service area and that our present customers, and future customers, will adopt the energy efficiency measures which are becoming available.
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"You and your Company are to be most heartily congratulated for the wisdom of your ap-proach to energy conservation and growth limitation.
Would that other utilities, businesses and corporations would follow your prudent example!
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Mrs. Robert 1. Owen West Long Branch, New Jersey 1
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l Atlantic City Eler'tric has followed a prudent expansion program and this decision to reduce future expenditures should eliminate the possibility of excess capacity later in the eighuar '
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Boird Of Dir:ct:ra Souted fett to nght-Richard M. Wilson, Renred. Formerly Senior Vice President of the Company; John D. Feehan President and Ch:ef Exocutive Officer of thr> Company: Alfred C. Linkletter, Consultant. Cnairman of the Board of Directors of the Company:
Mack C. Jones, Engineer, Retired: Eleanor S. Daniel, Self-employed. Vice President and Director of severalreal estate corporations.
Stanctnq. !ett to r,ght. Irving K. Kessler. Executrie Vice President. RCA Corporabon: Matthew Holden, Jr., Professor of Govemment and Foreign AHa>rs. UniverMy of Virginia: Richard M. Dicke, Counselor at law. Partner of the law firm of Simoson Thacher and Bartlett' Jos. Mschnel Galvin, Jr., President and Executive Director of Salem County Memonal Hospital; Frank H. Wheaton, Jr., President of Wheaton Industnes. f.fanufacturer of glass and plast:c products: John M. Miner, Senior Vice President of Crocher National Bank.
C:mmittee Listings Mr Lmkletter. Chairman of the Board, serves as an ex officio member of a;I committees and Mr. Feehan, President serves as an ex offic:o member of all committees except the Aud,t Committee.
Audit Committee Personnel Committee John M M4ner. Cha rman Jos. Michael Galvin. Jr., Chairman E'eanor S Daniel Eleanor S. Daniel Jos M chael Galvin, Jr.
Richard M. Dicke Mack C. Jones Irving K. Kessler Irv:ng K. Kessier Frank H. Wheaton, Jr.
Corporate Development Committee Shareholder, Community and Government Relations Committee 5
Frank H Wneaton. Jr.. Cha:rman Eleanor S. Daniel. Chairman Eleanor S. Daniel Jos. Michael Galvin. Jr.
Matthew Holden. Jr Matthew Holden. Jr.
Mack C Jones Frank H. Wheaton, Jr.
John M. Miner R: chard M. W:Ison Energy. Operations ard Resecrch Committee Mack C Jones, Chairman R< chard M Dicke Jos. Michael Galvin, Jr.
Matthew Holden. Jr.
frving K. Kessler R, chard M Wilson Finance Committee John M M ner Cha!rman Eleanor S Daniel Richard M. Dicke Mack C Jones Irvmg K Kessler Richard M. Wilson Pension and Insurance Committee Richard M. Dicke. Cha'rman Matthew Ho!aen, Jr John M. Miner Frank H Wheaton, Jr R'chara fl Vblson Officers John D Feehan. Presiaent and Ch:ef Execut:ve Officer Frank J F1cadenta, Sen:or V;ce President Ernest D Huggard Sen:or Vice President Jerrcld L Jacobs Senior V,ce Presrdent thchae\\ A Jarrett. Senior Vice Prescent Dawd V Banq V,ce Pres dent-Customer and Community Semces Jchn F Barn. V;ce Pres: dant-E!cctr:c Operat.ons T homas E. Vreeman. V.ce Pres. dent -Human Resources Snan A Parent, Vice Presiaent and Treasurer Josern G Sa:amore. V:ce Pros dent-Control Henry C Schaemm, Jr Vice Pros cent-Proauct on Mart;n R Werer Secretary and Ass:stant Treasurer Jasoph T. ke%. Jr, Assistant V:ce Pres cent -C.cevt:cos. and Ass:stant Secreta'y
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l Dividend Reinvestment and Stock Purchase Plan l
4 The Company continues to offer a Dividend Reinvestment and Stock Purchase Plan which f
i enables shareholders and employees to automatically invest their cash dividends in Company i
l stock, and also make optional cash payments without paying brokerage commissions or ser-l vice charges. Over 302,000 shares were purchased through the Plan in 1981 with proceeds j
to the Company in excess of SS million. There were 12,711 participants in the Plan at year-j end. To enroll, please contact our investor Records Department. See address on page 40.
l Share Listings Common Stock of the Company is listed on the New York Stock Exchange and the l
Philadelphia Stock Exchange. The 5 7/8% Cumulative Convertible Preferred Stock of the i
Company is listed on the New York Stock Exchange.
10-K Report Available The annual report to the Securities and Exchange Commission on Form 10-K is available to shareholders and may be obtained by writing to the Company, Attention: Mr. M. R. Meyer, Secretary. See address on page 1.
Transfer Agents
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For Common and Preferred Stock Morgan Guaranty Trust Company of New York 30 West Broadway, New York, New York 10015 For Common Stock First National State Bank of South Jersey Atlantic City, New Jersey 08404 e
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Commerc at S 33 Mater ai and Sscol,es 5 to Labor $ 07 Pre' erred and Co nmon j/.
Stock Deviaends 5 08 induste.al 5.18
.g, Interest 5 06 Taxes 5 15 fU e.)
Deprec:at>on 5 05
~ " Other Ae'nvested in Basmess 5 03 S 03 I
nes dent at 5 46 Fuel and Purchased Power $ 46 Where it Came From Where it Went l
Generation by Fuel Source
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R2 port of M:nig;m:nt The financial statements presented herein have been prepared by management in conformity with Generally Accepted Ac-counting Principles applicable to rate-regulated public utilities. Such Accounting Principles are consistent in all material respects with the accounting prescnbed by the Federal Energy Regulatory Commission and the New Jersey Department of Energy, Board of Public Utilities. In preparing the financial statements, management makes informed judgments and estimates relating to events and transactions that are currently being reported. The Company has established a system of internal accounting and financial controls and procedures designed to insure that the books and records reflect the transactions of the Company and that established Ex licies and procedures are followed. This system is examined by management on a continuing basis for effectiveress and efficiency and is reviewed on a regular basis by an internal audit staff that reports directly to the Audit Committee of the Board of Directors.
The Snancial statements have been examined by Deloitte Haskins & Sells, Certified Public Accountants, whose report thereon appears below. The auditors provide an ob,ective, independent review as to management's discharge of its responsibilities in-sofar as they reiate to the fairness of reported operating results and financial condition. Their examination includes procedures believed by them to previde reasonable assurance that the financial statements are not misleading and includes a review of the Company's system of internal 2 counting and financial controls and a test of transactions.
The Board of Directors has oversight responsibility for determining that management has fulfilled its obligation in the prepara-tion of financial statements and the ongoing examination of the Company's system of internal accounting control. The Audit Com-mittee, which is composed solely of outside directors and reports to the Board of Directors, meets regularly with management, Deloitte Haskins & Sells and the internal audit staff to discuss accounting, auditing and financial reporting matters. The Audit Committee reviews the program of audit work performed by the internal audit staff. To insure auditor independence, both Deloitte Haskins & Sells and the internal audit staff have complete and free access to the Audit Committee.
Auditors' Opinion Deloitte Haskins & Sells One World Trade Center Certified Public Accountants New York, New York 10048 To the Shareholders and the Board of Directors of Atlantic City Electric Company:
We have examined the balance sheets of Atlantic City Electric Company as of December 31,1981 and 1980 and the related statements of income and retained earnings and of changes in financial position for each of the three years in the period ended December 31,1981. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accouriting records and such other auditing procedures as we considered necessaryin the circumstances.
In our opinion, the accompanying financial statements present fairly the financial position of the Company at December 31, 1981 anc' 1980 and the results of its operations and the changes in its financial position for each of the three years in the period ended December 31,1981, in conformity with generally accepted accounting principles applied on a consistent basis.
January 29.1982 i
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< The C07aTs new customer SemCe aven. completed in 1981. e"ectxe4 hand!es about 10 000 mcwr es per week The new electrome Cal d shbut'on and wau areas base - npicked the Qu3hty Of SOT rCe 10 O# Cus!0'"er$
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St:t:m:nt of inc:ms cnd Rstrin d Eirnings For the Yccrs Ended Decimber 31 (Thrutends cf Dalitra Exc:pt P:r Shira Am:unts) 1981 1980 1979
- $469,683 5358,391 S283,106 OPERATING REVENUES-ELECTRIC (Notes 1 and 3).
OPEHATING EXPENSES:
Energy (Note 1):
154,652 131,894 100,472 Fuei 39,312 38,029 19,098 Interchange.
14,043 (20,281)
(20,340)
, Deferred Costs..
Net Energy.
208,007 149,642_
99,230 Purchased Power-Exclusive of Fue:
7,233 1,827 Power Production-Operason and Maintenance 36,206 28.819 24,717-Other Operation and Mamtenance 50,366 44,890 36,145-25,161 23,593 22,590 Depreciation (Note 1)
Taxes Other Than Federal income Taxes (Note 13).
44,200 35,546 35,860 24,994 17.841 17,886 Federal income Tax Expense (Notes 1 and 2)..
396,172 302,158 236,428
' Total Operating Expenses.
O P E R AT I N G I N C O M E...............................................
73,511 56,233 46,678 OTHER INCOME:
Allowance for Equity Funds Used During Construction (Note 1).
6,045 4,997 3,669 ~
Miscellaneous Non-Operating income Less income Deductions.
3,684 2,609 1,611 9,729 7,606 5,280 Total Other income INCOME BEFORE INTEREST CHARGES...............................
83,240 63,839 51,958 INTEREST CHARGES:
Interest on Long Term Debt.
30,621 26,705 18.094 Amortization of Debt Expense and Premium-Net.
210 57 41 8,150 1,573 1,632,
Interest on Short Term Debt 1,323 321 493-Other interest Expense.
Total Interest Charges.
40,304 28,656 20,260 Allowance for Debt Funds Used During Construction (Note 1).
(4,052)
(3,355)
(2,609)
Net interest Charges.
36,252
. 25,301 17,651 NET INCOME..........
46,988 38,538 34,307 RETAINED EARNINGS AT BEGINNING OF YEAR........................
8,977_
100,697 94,052 d5,965 139.235 1 8,359 i
DIVIDENDS DECLARED:
On Cumulative Preferred Stock.
7,508
. 6,340 6,039 Or: Common Stock.
27,379 23,918 21,623 Total Dividends Declared 34,887 30,258 27,662 RETAINED EARNINGS AT END OF YEAR.............
S121,078 S100,977
$100,697 EARNINGS FOR COMMON STOCK:
S 46,988 5 38,538
$ 34,307 Net income less Preferred D:v.dend Requements.
7,531 6,161 6,066 j
Balance Available for Common Stock S 39,457
$ 32,377 S 28.241 i
AVERAGE NUMBER OF SHARES OF COMMON l
STOCK OUTSTANDING (in thousands)..............................
13,034 12,372 11,980 PER COMMON SHARE:
Earnings S
3.03 S
2.62 S
2.36 Dividends Declared.
2.08 55 S
1.79 Dividends Paid S
2.04 S
1.90
$ 1.765 4
See Notes to Financial Statements k AtlanticElectric
St:t:m:nt cf Ch:ng:s in Fin:ncirl Pcsiticn Fcr the Yccr3 Ended Dec mber 31 (Thrusands cf D:llir:)
1981 1980 1979 SOURCE OF FUNDS:
Funds from Operations:
Net income.
$ 46,988
$ 38,538
$ 34,307 Principal Non-Cash Charges (Credits) to income:
25,161 23,593 22,590 Depreciation.
Amortization of Nuclear Fuel 2,951 1,595 732 Allowance for Funds Used During Construction.
(10,097)
. (8,539)
(6,363)
Federal income Taxes-Deferred-Net 14,648 6,158 6,281 investment Tax Credit Adjustments-Net 7,141 5,045 4,354 458
~422 308 Other-Net...
87,250 66,812 62,209 Total Funds from Operations Funds from Outside Sources:
Long Term Debt 60,000 75,000 Less Pollution Control Funds Held by Trustees.
27,874 32,126 75,000 Subtotal,
Sale of Common Stock.
32,441 6,514 24,934 Sale of Preferred Stock 20,000 increase (Decrease) in Short Term Debt.
10,525 (24,175)'
39,475 Total Funds from Outside Sources.
75,092 77,339 64,409 (3,451)
(717) 633 Other-Net
$158,891
$143,434
$127,251 Total Source of Funds.
APPLICATION OF FUNDS:
Gross Additions to Utility Plant
$123,318
$ 97,330
$ 72,773 Property Abandonment Costs (15,95G)
(10,097)
(8,539)
(6,363)
Allowance for Funds Used During Construction.
97,265 88,791 66,410 Net.
Dividends on Preferred Stock 7,508 6,340 6,039 Dividends on Common Stock 27,379 23,918 21,623 5,682 23,847 3,222 Retirement and Maturity of Long Term Debt 15,956 Property Abandonment Costs Conversion of Preferred Stock 1,993 877 1,331 Redemption of Preferred Stock.
800 1,600 1,600 (96) 320 391 investments in Subsidiary Companies Increase (Decrease) in Working Capital
2,404 (2.259) 26,635
. $158,891
$143,434
$127,251 Total Application of Funds INCREASE (DECREASE) IN WORKING CAPITAL
Cash and Cash items.
S 3,845 (889)
$ 1,064 Accounts Receivable 11.,740 6,7'27 2,392 5,890 1,422 3,240 Fuel.
2,365 1,500 3.030 Materials and Supplies.
Deferred Energy Costs.
(14,104) 18,741 23,o29 Accounts Payable.
2,959 (11,202)
(5,366)
Taxes Accrued (5,285)
(4,587) 7,509 l
Accumulated Deferred Taxes.
3,894 (6,500)
(8,102) -
l Other (7,900)
(7,471)
(661) increase (Decrease) in Wosmg Capital.
$ 2,404
$ (2,259)
$ 26,635
Excludes Short Term Debt, Notes and Current Maturities of Long Term Debt and Cumulative preferred Stock Subject to Mandatory Redemption.
See Notes to Financial Statements 92 51
Bal nca Sheet Decemt,tr 31,1981 and 1980 (Thousands of Dollars)
Assets 1981 1980 ELECTRIC UTILITY PLANT (Notes 1 and 5):
In Service:
Production.
S 422,162
$339,722 154,418 137.076 Transmission.
230,842 262,074 Distribution..
'20,274
'17,682 General..
877,696 756,554 Total.
Less Accumulated Depreciation..
225,372 205,588 652,324
'550.966 Net 158,995 183,215 Construction Work in Progress 28,237 22.283 Nuclear Fuel.
Less Accumulated smortization 7,692 4,741 Net 20,545 17,542 831,864 751,723 Electric Utility Plant-Net
' INVESTMENTS (Note 6) 5,537 5,352 POLLUTION CONTROL CONSTRUCTION FUNDS UNEXPENDED-HEL'D BY TRUSTEES....
27,874 CURRENT ASSETS:
Cash (Note 10) 1,034 3,157 5,800 300 Temporary Cash investments Special Deposits and Working Funds.
1,881 1.413 Accounts Receivable:
35,410 26,761
- Utility Service Miscellaneous 5,669 3,078 Allowance for Doubtful Accounts..
(1,000)
(500) ~
29,576 23,686 Fuel (at average cost).
Materials and Supplies (at average cost).
16,641 14,276 3,771
.3,924 Prepayments.
Deferred Energy Costs (Notes 1 and 3) 23,177 37,281 121,959 113,376 Total Current Assets CEFERRED DEBITS:
Property Abandonment Costs (Notes 1 and 11)..
19,934-4,236 Unamortized Debt Expense (Note 1)..
3,598 2,074 3,023 3,034.
Other 26,555
~ 9.344 Total Deferred Debits..
T O T A L A S S ET S.............................................
$1,013 7_89
$ 879,795 '
t See Notes to Financial Statements A
I L
i 1981 1980 LI:bilities and Capitalization CAPITAllZATION:
Common Shareholders' Equity:
Common Stock (Note 7).
43,284 S 37,617 160,499 133,714 Premium on Capital Stock ~
Capital Stock Purchase Plan 78 39 Capital Stock Expense (1,730)
(1,744)
Retained Earnings.
121,078 108,977 323,209 278,603 Total Common Shareholders' Fquity.
Cumulative Preferred Stock Not Subject to Mandatory Redemption (Note 8) 43,531 45,524 55,200 56,000 Cumulative Preferred Stock Subject to Mandatory Redemption (Note 8).
371,769 337,488 Long Term Debt (Note 9).
Total Capitalization (less long term debt due and cumulative preferred stock subject to mandatory redemption within one year).
793,709 717,615 CURRENT LIABILITIES:
Current Portion:
800 800
(
Cumulative Preferred Stock Subject to Mandatory Redemption (Note 8).
19,620 Long Term Debt (Note 9)
Notes Payable to Banks (Note 10) 7,500 3,500 18,325 11,800 Commercial Paper (Note 10)
Accounts Payable.
25,869 28,828 2,810 3,613 Customer Deposits.
Taxes Accrued 12,980 7,695 Interest Accrued.
5,757 3,720 Dividends Declared.
9,509 8,090 Accumulated Deferred Taxes (Notes 1 and 2) 16,245 20,139 7,505 2,409 Other Total Current Liabilities.
126,920 90,594 DEFERRED CREDITS:
36,725
'29,584 Accumulat9d Deferred Investment Tax Credits (Notes 1 and 2)..
Accumulated Deferred income Taxes (Notes 1 and 2) 53,509 38,861 Other 2,926 3,141 Total Deferred Credits.
93,160 71,586 COMMITMENTS AND CONTINGENT LIABILITIES (Note 11)
TOTAL LI ABILITIES AND C APITALIZATION................................. $1,013,789
$879,795 g
N;tra to Fin:ncirl St;t: ment 3 FEDERAL INCOME TAXES-Deferr:d Federal Income Taxes NOTE 1. SIGNIFICANT ACCOUNTING POLICIES:
are provided on depreciable propsrty addco after 1973, but before REGULATION-The accounting and rates of the Company are January 1,1981, for the difference between tax accelerated and subject to the regulations of the State of New Jersey, Depart, tax straight-line depreciation under the ADR system. Tax reduc-mont of Energy, Board of Public Utilities (BPU) and in certain tions relating to the difference between tax straight-line and book respects to the Federal Energy Regulatory Commission (FERC).
depreciation are reflected currently (flowed-through)in Federal Income Tax Expense as allowed by the BPU.
ELECTRIC UTILITY PLANT-?roperty is stated at original cost.
For all property placed in service after December 31,1980, Generally the plant is subject to a first mortgage lien. The cost the Company provides deferred Federal Income Taxes for the dif-of property additions, including replacement of units of property ference between tax depreciation computed using the Accelerated and bettermonts, is capitalized. Included in certain additions is Cost Recovery System (ACRS) under the Economic Recovery Tax an Allowance for Funds Used During Construction (AFDC) which Act of 1981, and tax depreciation computed using book lines.
is defined in the applicable regulatory systems of accounts as in addition, the Company provides deferred Federal Income the net cost during the penod of construction of borrowed funds Taxes relating to the deferral of energy costs and, up to December used for construction purposes and a reasonable rate on other 31,1980, the use of the repair allowance provisions of ADR. In-funds when so used. AFDC has been calculated using a rate or vestment Tax Credits are deferred on the ba:anco sheet and are 8% for all years reported. Such rate is less than the maximum restored to income over the life of the related property.
allowed under a FERC order.
Gains on reacquired debt are recognized currently for book DEFERRED ENERGY COSTS-The Company has a Levelized purposes and as a reduction of property accounts for tax pur-Energy Clause (LEC) which utilizes projected energy costs and poses. Tax gains, therefore, are being returned to income by includes a provision for prior period under or over recoveries.
reduced tax depreciation expense over the lives of tne property.
i The recovery of energy costs is made through levelized mon-Accordingly, the Company provides deferred Federal Income thly charges over the period of projection. Any under or over laxes on its books.
recoveries are deferred in balance sheet accounts as a current RETIREMENT PLAN-The Company has in effect a non-asset or current liability as appropriate. Such deferrals are contributory defined benefit retirement plan covering all regular recognized in the Statement of income in the period in which employees. Concurrent with a 1979 amendment, the Board of they are subsequently recovered through the clause.
Directors established a funding policy providing for direct pay-DEPRECIATION AND MAINTENANCE-The Company provides ment, from plan assets, of retirement benefits relating to services for straight-line depreciation based on the estimated remain-on or subsequent to January 1,1979. (Benefits were previously ing life of transmission and distribution property and, based on r uvided by the purchase of individual annuities upon the retire-th'e estimated service life, for all other depreciable property.
.aent of Plan participants.) Such funding arrangement was also Depreciation applicabic to nuclear plant includes certain amounts extended to service prior to January 1,1979 for those employees for dismantling or decommissioning. The overall composite rate consenting to the change. Costs of the plan are determined under of depreciation was approximately 3.3% for 1981,1980 and the aggregate cost method.
1979. Accumulated depreciation is charged with the cost of PROPERTY ABANDONMENT COSTS-These costs consist of depreciable property units retired together with removal costs less the Company's unamortized investment in Hope Creek Unit No.
salvage and other recoveries.
2, a nuclear generating unit which was cancelled in December 1981, and four off-shore nuclear units which were cancelled in NUCLEAR FUEL-The Company's amortization of Salem Units December 1978.
No.1 & 2 nuclear fuelis based on a rate using the number of units of thermal energy produced over the estimated total ther.
The off-shore nuclear units are be,ng amortized, with the i
mal units to be produced during the life of the fuel, plus a factor concurrence of the BPU, over a 20 year period. See Note 11 of Notes to Financial Statements fcr additional details on the 1981 representing the estimated future costs (storage and disposal for the disposition of spent nuclear fuel).
Hope Creek Unit No. 2 cancellation.
Nuclear fuel requirements for Peach Bottom Units No. 2 and OTHER-Capital Stock expense is being amortized on a ratable 3 are being provided by the operatmg company for Peach Bot-basis over 20 years.
tom through a fuel purchase contract. Presently, och costs Debt premium, d:scourt and expenses are amortized over are calculated using a zero net salvage value. The C )mpany is the life of the related debt. In conformity with allowed BPU rate-responsible for payment of its proportionate interest (7.51%) of making accounting, all gains or losses relating to reacquired debt the cost of the fuel consumed and of certain operating costs and are recognized currently.
interest expense during the term of the contract. The cost of nuclear fuel consumed is included in the Statement of income as a charge to fuel expense.
A.m
.m
- NOTE 2. FEDERAL INCOME TAXES:
FedIrci incoma tix expense opplicibis to current operttions is 1:ss than ths tmount computed by rpplying tha stitutory rit3 on book income subject to tax for the following reasons:
Years Ended December 31 1979 1981 1980 (In Thousands)
$46,988
$38,538
$34,307 N t income 27,332 19,700 18,868 Fed:ral income Tax Expensc (as below).
$74,320
$58,238
. $53,175 Book income Subject to Tax.....
income Tax at Statutory Rate (46%)...
534,187
$26,789
$24,461 -
Less:
Allowance for Funds Used During Construction 4,645 3,842 2,888 1,242 1,179 1,041 Crpitalized Overheads.
1,075 914 735 Inv:stment Tax Credits-Used....
(107) 1,154 929' Other
$27,332
$19,700'
$18,868 Total Federal Income Tax Expense Fed:ral Income Tax Expense is comprised of the following:
Fed:ral Income Tax Currently Payable..
. $13,124
$ (667)
$(1,550) 4,438 12,657 14,383 D:fstred Federal Income Taxes (as below) 8,507' 6,765 5,788 Investment Tax Credit-Earned.
4 (1,075)
(914)
~ (735) invsstment Tax Credit-Used 24,994 17,841 17,886 Federal Income Tax Expense Federal income Tax-Other income:
826 1,859 982 Currently Payable Deferred (as below)...
1,512 Total 2,338 1,859 982
$27,332
$19,700
$18,868 Total Federal Income Tax Expense.
Defstred Federal income Taxes result from the folowing timing differences:
S 6,195
$ 4,189
$ 3,830 Lib:ralized Depreciation.
2,551 2,967 Repair Allowance Amortization. Accelerated Depreciation, Repair Allowance and (708)
(625)
(516)
Property Abandonment Costs.
6,700 6
Prop:rty Abandonment Costs Gains on Reacquired Debt and Purchased Tax Benefits.
1,512 949 43 (6)
Othsr..
14,648 6,158 6,281 Total Current Liabilities:
Deferred Energy Costs (6,488) 8,620 8,528 Deferred Revenue.
(2,210).
(2,121)
(426)
Total Deferred Federal Taxes S 5,950-
$12,657
$14,383 -
Investment tax credit earned in 1981,1980 and 1979 includes $291,000, $806,000 and $699,000 respectively, representing the Company's use of the additional investment tax credit available under the Tax Reduction Act of 1975.
On December 30,1981, the Company entered into an agreement with a corporation to purchase the tax benefits on equipment having a tax basis of $2,636,371. Such tax benefits include 6% Investment Tax Credit and an ACRS life of 3 years.
P-
n NOTE 3. RATE MCREASES:
During the three y:ar period ended December 31,1981 rate increas:s have be:n approved by the BPU as follows, based in cach case on the applicable test year indicated:
Dt Amount Date Amount increase Test P:tition Re_ quested Effective Approved in Revenue Year (millions)
(millions)
March 1978
$35.7 (1)
July 1,1979 S10.0 4.0 %
1978 November 1979 85.7 September 26,1980 50.6 16.0 %
June 30,1980 August 1981 (2) 14.4 January 29,1982 11.3 June 30,1981 (1) 514,800.000 of the requested amount had previously been granted on a preliminary basis in July 1970.
(2) The Company's request was to recognize the cost of owning and operating its 7.41% share of the Salem Unit No. 2 Nuclear Generating Station (not considered in the $50,600,000 increase approved effective September 26,1980). The unit went into full commercial operation in October 1981. The $11,300,000 increase granted was based on the Company's investment in the unit as of June 30,1980.
On September 9,1981, the BPU issued a decision with respect to the design of the Company's residential, commercial and industrial rates. In this decision, the BPU recognized a separate customer class consisting of casino hotels in Atlantic City, and ordered the Company to provide a separate base rate and a separate energy adjustment clause for such customers. The effect of this change is to increase the rates of such customers with a corresponding reduction in the revenues received from all other customers. The revised rates became effective on October 1,1981. The casino hotels are seeking further proceedings before the BPU and in the courts on this issue. The Company cannot presently predict the final outcome of these proceedings or the effect, if any, on the Company.
Effective January 1,1981, the BPU authorized an annualincrease of approximately S41,600,000 in the Company's LEC from 1.1019 cents per kwh to 1.7914 cents per kwh and at the same time transl erred 1.0 cent per kwh from the LEC to base rates.
In March 1981, as a result of a significant projected under-recovery of energy costs, the Company filed a petition with the Board requesting an emergency increase in the LEC. Effective August 21,1981, the BPU granted an emergency LEC of 2.4582 cents per kwh to be effective through the remainder of 1981 and ordered an additional 1.0 cent per kwh transferred from the LEC to base rates, effective October 1,1981, resulting in an LEC of 1.4582 cents per kwh. The BPU set the LEC at this level to allow the Company to collect $25,600,000 by December 31,1981. In December 1981, the Company proposed a reduction in the LEC based on projected unrecovered energy costs of $33,100,000, and a slight decrease in the projected 1982 total cost of energy.
On January 6,1982, the BPU ordered an interim reduction in the Company's LEC to 0.7602 cent per kwh. This represents an approximate $39,300,000 reduction in the Company's LEC revenues on an annual basis. Concurrently, the BPU reduced, on an intenm basis, the energy adjustment clause rate applied to casino hotels (marginal energy adjustment clause-MEAC) from 2.4596 cents per kwh to 1.7616 cents per kwh. This represents an approximate $1,900,000 reduction in MEAC revenues on an annual basis. The BPU order that the LEC and MEAC reductions, which are effective January 1,1982, would go into effect simultaneous-ly with the Company's $11,300,000 base rate increase for Salem Unit No. 2 on January 29,1982. The net effect of these rate changes is a decrease of approximately S30,000,000 on an annual basis. In addition, the BPU has referred the Company's LEC and MEAC filings to tN Office of Administrative Law for evidentiary heanngs. The Company cannot presently predict the timing or the final decision of the BPU on the ultimate level of the LEC and MEAC.
In February 1982, the Company will file a petition with the BPU requesting a base rate increase of $172,400,000, based on a projected September 30,1982 test year. The requested amount represents an increase of approximately 33.7% of total estimated 1982 revenues. The Company cannot presently predict either the amount, if any, of the increase which might be granted or the timing of the decision by the BPU.
l l
NOTE 4. RETIREMENT PLAN:
The cost to the Company in providing a retirement plan for its employees was $5,476,000,54,652.000 and $4,238,000 in 1981, 1980 and 1979, respectively. Approximately 80% of these costs were charged to operating expense and the remaining 20% which was associated with construction labor, was charged to the cost of new utility plant.
A comparison of accumulated plan benefits and plan net asse's (including purchased annuity contract amounts) for the Com-l pany's Plan is as follows:
January 1 1981 1980 1979 (in Thousands)
Actuarial present value of accumulated plan benefits:
Vested.
S67,810
$66.091 563,497 Nonvested 1,370 1,528 1,497 Total S69,180 567,619 564,994 S70,303 561,316 Net assets available for benefits S83,9_89 The weighted average assumed rate of return used in determining the actuarial present value of accumulated plan benefits was 7% for 1981 and 6% for 1980 and 1979. The Company's Plan is in compliance with the Employee Retirement income Secunty Act of 1974.
h%
l NOTE 5. JOINTLY-OWNED GENERATING STATIONS:
Tha Company participatss with oth:r utilitics in th3 construction and operation of seysral jointly-own:d electric production facilitics.
The amounts shown represent the Company's share of each jointly-owned plant at December 31, and includes an allowance for funds used during construction.
i-Electric Plant Construction Generation Energy Company's.
in Service Work in Progress (KWHs)
Station Source Share 1981-1980 1981 1980 1981 1980 (Dollars in Thousands)
Keystone Coal 2.47 %
$ 5,752
$ 5,607-173 139 213,104 262,768 Conemaugh Coal 3.83 11,189 10,786 165 433 290,209 403,660 Peach Bottom Nuclear 7.51 63,778 61,485 7,438 6,142 730,034 865,946 Salem (1)
Nuclear 7.41 140,849
.77,485 3,647 57,458 577,113 420,148 Hope Creek (2)
Nuclear 5.00 72,207 64,743 (1) Salem Unit No. 2 was placed in commercial operation on October 13,1981.
(2) As of December 23,1981, Hope Creek Unit No. 2 has been cancelled. See Note 11 of Notes to Financial Statements.
The Company provides its own financing during the construction period for its share of the jointly-owned plants and includes its share of direct operations and maintenance expenses in its Statement of income.
NOTE 6. INVESTMENT IN SUBSIDIARY COMPANIES:
The Company's investment in Deepwater Operating Company (Deepwater), a wholly-owned subsidiary which operates generating and process steam units owned by the Company, was $2,841,000 at December 31,1981 and 1980. The assets of Deepwater principally consist of working capital in which the equity of the Company is fairly represented by its investment in Deepwater.
The not production costs of Deepwater (after deducting contract charges) are charged to the Company. These costs are included in the Company's accounts classified as to operation, maintenance and taxes.
The Company also has an investment in Atlantic Housing, Inc. (Housing), a wholly-owned subsidiary, which amounted to
$820,538 and $916,455 at December 31,1981 and 1980, respectively. Housing's principalinvestment is a 20% undivided interest as tenant in common in a future generating station and industrial site.
NOTE 7. COMMON STOCK:
As of December 31,1981 and 1980, the Company's Common Stock included 18,000,000 authorized shares of Common Stock
($3 par value), respectively.
Shares issued and outstanding:
1981 1980 1979 Beginning of Year.
12,538,880 -
12,196,486
-10,916,308 Sale of Common Stock 1,500,000 1,000,000 Dividend Reinvestment and Stock Purchase 302,726 257,095 184,889 Employee Stock Ownership Plan 16,641 54,616 48,710 Conversion of Preferred Stock 69,743 30,683 46,579 Shares at end of year 14;427,990 12,538,880 12,196,486 At $3 Par Value
$43,283,970
$37,616,640
$36,589,458 Premium on Capital Stock was credited in 1981,1980 and 1979 with $26,785,552, $5,428,822 and $21.114,141, respectively, _
representing the excess of proceeds over the par value of shares of Common Stock issued, sold and converted. At December 31,1981 there were 340,769 shares of Common Stock authorized for issuance pursuant to its Dividend Reinvestment and Stock Purchase Plan which became effective in 1976 and 77,638 shares of Common Stock authorized for issuance pursuant to its Employee Stock Ownership Plan. At December 31,1981,123,603 shares of Common Stock were reserved for the conversion of 5-7/8%
Convertible Series of Preferred Stock.
NOTE 8. CUMULATIVE PREFERRED STOCK:
The Company has authorized 799,979 shares of Cumulative Preferred Stock, $100 Par Value,2,000,000 shares of cumulative -
preferred stock, No Par Value, and 3,000,000 shares of Preference Stock, No Par Value. Unissued shares may, or may not, possess mandatory redemption characteristics upon issuance. In certain circumstances, it dividends on issued Cumulative Preferred Stock are in arrears voting rights for the election of a majority of the Board of Directors becomes operative.
i e
r
NOTE 8(A). Cumut:tiv3 Pr;ferre 1 Stock Not Subject To M:nditory Redemption:
Curr:nt December 31 Premium on Redemption 1981 1980 Capital Stock Price Per Share (in Thousands)
$100 Par Value-Cumulative and Non-participating sh;res issued and outstanding:
Series:
4%
77,000 Shares
$ 7,700
$ 7,700
$93
$105.50 4.10 %
72,000 Shares 7,200 7,200 101.00 4.35 %
15,000 Shares 1,500 1,500 101.00 4.35 %
36,000 Shares 3,600 3,600 101.00 4.75 %
50,000 Shares 5,000 5,000 101.00 5.0%
50,000 Shares 5,000 5,000 100.00 5-7/8% Convertible Series:
35,310 Shares (1981).
3,531 103.00 55,240 Shares (1980).
5,524 7.52 % 100.000 Shares 10,000 10,000 106.77 Total.
$43,531
$45,524 Cumulative Preferred Stock Not Subject to Mandatory Redemption is redeemabe solely at the option of the Company upon pay-ment of the redemption price plus accumulated and unpaid dividends to the date fixed for redemption.
1 The 5-7/8% Convertible Series, of which 19,927,8,767 and 13,309 shares were converted in 1981,1980 and 1979 respectively, is convertible (subject to adjustment in certain events)into Common Stock at the rate of 3.5 shares of Common Stock for each share of Preferred.
NOTE 8(B). Cumulative Preferred Stock Subject To Mandatory Redemption:
Current Refunding Par December 31 Redemption Restricted Value 1981 198C Price Per Share Prior to (in Thousands)
Shares !ssued and Outstanding:
Series:
8.40 % 100,000 Shares
.$100 $10,000
$10,000
$115.00 9.96 % 160,000 Shares (1981).
.100 16,000 107.50 August 1,1984 168,000 Shares (1980).
.100 16,800
$8,25 100,000 Shares
.None 10,000 10,000 107.41 November 1,1987
$9.45 200,000 Shares
.None 20,000 20,000 November 1,1989 56,000 56,800 Less Portion due within one year.
800 800 Total.
$55,200
$56,000 On October 24,1980, the Company sold 200,000 shares of $9.45 No Par Preferred Stock ($100 stated value)in a private placement.
On August 1, annually 8,000 shares of the 9.96% Series must be redeemed through the operation of a sinking fund at a redemption price of $100 per share. At the option of the Company, an additional 8,000 shares may be redeemed on any sinking l
fund date, without premium, up to 40,000 shares in the aggregate. The Company redeemed 8,000 and 16,000 shares at par in l
1981 and 1980, respectively.
On November 1,1983, and annually thereafter,2,500 shares of the $8.25 No Par Preferred Stock Series must be redeemed through the opere. tion of a sinking fund at a redemption price of $100 per share. At the option of the Company, an additionci number of shares not to exceed 2.500 may be redeemed on any sinking fund date without premium.
On February 1,1985, and annually thereafter,4,000 shares of the 8.40% Series must be redeemed through the operatic,n of a sinking fund at a redemption prico of $100 per share. At the option of the Company, an additional 4,00G shares may be redeemed on any sinking fund date without premium, up to 32,000 shares in the aggregate.
On November 1,1986. and annually thereafter,40,000 shares of the 59.45 No Par Preferred Stock Series must be redeemed through the operation of a sinking fund at a redemption price of $100 per share. At the option of the Company, an additional 40,000 shares may be redeemed on any sinking fund date, without premium, up to 50,000 shares in the aggregate.
l The minimum sinking fund provisions of the above series aggregate $800,000 in 1982, $1,050.006 in 1983 and 1984, $1,450.000 in 1985, and $5,450.000 in 1986.
l l
l h1 a..... n._, _
(
NOTE 9. LONG TERM DEBT:
Dec;mber 31' 1981 1980 (In Thousands)
First Mortgage Bonds:
$ 4,620 $ - 4,620 3-1/4% Serics due (March 1) 1982.
4,050
-4,050 3-1/4% Series due (January 1) 1983.
35,000 35,000 9-1/4% Series due (May 1) 1983.
5,000 5,000 3%
Series due (March 1) 1984 21,000 9%
Pollution Control Series due (May 1) 1984 10,000 10,000 3-1/4% Series duo (March 1) 1985..
10,000 10,000 4-1/2% Series due (January 1) 1987..
10,000 10,000 3-7/8% Series due (April 1) 1988 41/2% Series due (April 1) 1989 5,000 5,000 4-1/2% Series due (March 1) 1991 10,000 10,000 4-1/2% Series due (July 1) 1992.
12,350 15,000 4-3/8% Series due (March 1) 1993 13,500 15,000 5-1/8% Series due (February 1) 1996.
9,980 10,000 8-7/8% Series due (September 1) 2000 20,000 20,000 27,000 27,000 8%
Series due (May 1) 2001.
20,000 20,000 71/2% Series due (April 1) 2002 30,000 30,000 7-3/4% Series due (June 1) 2003
(
7 5/8% Pollution Control Seriet due (January 1) 2005 6,500-6,500 6-3/8% Pollution Control Serie, due (December 1) 2006 2,500
~ 2,500 12-5/8% Series due (January 1) 2010.
75,000 75,000 39,000 115/8% Pollution Control Series due (May 1) 2011 370,500 314,670 D:bentures:
5-1/4% Sinking Fund Debentures due (February 1) 1996.
2,267 2,840 7-1/4% Sinking Fund Debentures due (May 1) 1998.
2,786 3,725 5,053 6,565 Notes-7.90% Notes due (December 15) 1982 15,000 15,000 836 1,253 Unamortized Premium and Discount-Net 391,389 337,488 D: duct First Mortgage Bonds and Notes due within one year (19,620)
$371,769 $337,488 Deposits in sinking funds for retirement of debentures are required on February 1 of each year through 1995 for the 5-1/4% deben-tures, and on May 1 of each year tnrough 1997 for the 7-1/4% debentures in amounts in each case sufficient to redeem $100,000 principal amount plus, at the election of the Company, up to an additional $100,000 principal amount in each year. At December 31,1981 the Company had reacquired and cancelled $1,533,000 principal amount of the 5-1/4% debentures and $1,314,000 prin-cipal amount of the 7-1/4% debentures toward its requirements for 1982 and subsequent periods.
Current sinking fund requirements of $986,700 in connection with certain first mortgage bonds outstanding, are being satisfied by certification of property additions as provided for in the related mortgage indentures.
Annual sinking fund c'eposits are also required each year from 1986 through 2010 sufficient to redeem $3,000,000 pnncipal amount of the 12-5/0% first mortgage bonds plus, at the election of the Company, an additional $3,000,000 in each year.
In addition, annual sinking fund deposits of $3,500,000 in 2007 and 2008 and $10,000,000 in 2009 and 2010 are required in order to redeem orincipal amounts of the 11-5/8% Pollution Control Series.
NOTE 10. SHORT TERM DEBT AND COMPENSATING BALANCES:
1981 1980 1979 The Company had arrangements for short term debt as follows:
(Dollars in Thousands)
As of end of year-Weighted average interest rate for short term debt outstanding:
Commercial Paper.
12.2 %
18.3 %
13.2 %
Notes Payable to Banks.
12.8 %
19.3 %
14.7 %
For the year ended-Monthly amount of short term debt at any month-end:
Commercial Paper.
$62,475
$16,725
$31,975 Notes Payable to Banks.
S 7,500
$ 3,500
$ 7,500 Average amount of short term debt (based on daily outstanding balances):
Commercial Paper.
$43,284
$ 8,879
,5 9,352 Notes Payable to Banks.
S 3,661
$ 1,810
$ 2,260 Weighted daily average interest rates on short term debt:
Commercial Paper.
16.4 %
11.4 %
12.4 %
Notes Payable to Banks.
16.7 %
13.1 %
13.0 %
NOTE 10. Continued; in Apr!! of 1981, the Company negotiated new agreements providing for $115.000,000 of bank lines of credit, $108,000,000 of which were unused at December 31,1981 The Company is required, with respect to S17,000,000 of these credit lines, to maintain average compensating balances of S1,070,000 plus an equivalent additional amount if these lines are fully utilized. These com-pensating balances are maintained in demand deposits which are not legally restricted. The Company is in compliance with such compensating balance arrangements. With respect to the remaining available credit knes of $98,000,000 the Company pays com-mitment fees ranging from 3/8% to 1/2%. In 1981 commitment fees aggregated S400.897.
NOTE 11. COMMITMENTS AND CONTINGENCIES:
from the output of DPL's coal-fired Indian River Station. Indian River Construction expenditures includ:ng nuclear fue! but exclud:ng pro-Station commenced commercial operation on October 1,1980. Also, duction plant are estimated at approximately S60,000,000 for 1982.
CPL is planning to construct a 500 MW coal-fired generating sta-Commitment 1 for the construction of major production and transmis-tion (Vienna No. 9) which has been sized to accommodate a 25%
sion facihties amount to approximately $274,000,000 of which it is ownership (125 MW) by Atlantic Electric. Such unit is scheduled estimated that approximately S24,000,000 will be expended in 1982.
to be placed in commercial operatiori in 1990. The Company and These amounts excluda allowance for funds used dunng construction.
Pennsylvania Power & LigSt Company (PPL), have entered into an The Pnce-Anderson Act places a !iabihty !.mit of agreement whcreby the Company will purchase 5.94% of the net
$560,000,000 on each nuclear generating unit for public fiabWty capacity and energy output of each of two PPL 1050 MW nuclear claims that could arise from a nuclear incident. In the event of generating units scheduled to be placed in service in the second any such incident, all owners of nuclear generating units licens-quarter of 1983 and the founh quarter of 1984, respectively. The ed to operate would be required to contribute toward satisfac-purchase of power from PPL will commence with commercial opera-tion of such claims. The Company, as a co-own" of the Pea.h fien of the stations and continue through September 30,1991.
Bottom and Salem Stations has part ally insured for this exposure In 1981, the Company entered into a new agreement with by purchasing, through the principal owners, private insurance Allegheny Power Systems (APS) which will entitle the Company in the maximum available amount of $160,000,000. The re-to 59 MW of coal-fired capacity from the APS Pleasants Station mainder (5400,000,000)is provided by a combination of a man-in St. Mary's, West Virginia for the years 1982 through 1985. In datory program of retrospective premiums to be assessed againsi addition, the Company has a commitment with Public Service owners of nuclear reactors after a nucluar incident (up to Electric and Gas Company (PSE&G) where they will provide up S5,000,000 per incident but not more than $10,000,000 in any to 125 MW of power for the years 1988 through 1995.
calendar year for each hcensed nuclear reactor in the United As a result of these changes, the p'anned $550 million,290 States) and by indemnity agreements with the Nuclear MW coal-fired Cumberland Unit No.1, which was to go in ser-Regulatcry Commission. Accordingly, in the event of a r" ; lear vice in the spring of 1988 has been rescheduled for completion incident involving any hcensed nuclear reactor in Die United in the fa!I cf 1991.
States which was not covered by the $160,000,000 private in-The Company had planned to participate as a 5% owner in surance, the Company could be assessed, based on the four the construction of twn 1.067 MW nuclear units, known as Hope nuclear reactors now in service, a maximum amount in relation Creek Unit No.1 and 2 to be located in Salem County, New Jersey.
to its ownership participation (approximately $1,492.000 for any On December 23,1981, PSE&G who owns 95% of the oroject, an-such incident but not more than $2,984,000 in any year).
nounced the cancellation of Hope Creek Unit Nc. 2. Hope Creek The Company is a member of Nuclear Mutual Ltd. which Unit No.1 is currently phnned for comp;etion in 1986. According-provides insurance coverage up to 5450,000,000 fer property ly, on December 23,1981 the Company cancelled its 5.0% share damages to nuc! ear generating facilities of the memner com-of Hope Creek Unit No. 2. The Company's investment in Hope pantes. In the event of major loss at any plant covered by the Creek Unit No. 2 has been written off for federal income tax pur-grcup, the Company could be assessed up to $4,007,644, four-poses. For book purposes, as of December 23,1981, the Com-teen times its annual premium.
pany's inves' ment of $15,956,4T6, inciuding $2,390,676 of AFDC The Company is also a member of Nuclear Electnc Insurance has been transferred from Construction Work in Progress to Pro-Ltd which provides insurance coverage for the extra expense of perty Abandonment Costs and an appropriate amount of deferred replacement power dunng prolonged accidental outages of nuclear federal income taxes have been provided.
plants. After a deduct.ble penod of 26 weeks, weekly payments of On December 15,1981, the CU held public hearings on up to $2,300,000 are provided for one year and up to $1,150.000 the Hope Creek UV No. 2 abE
. nent issue. Dunng those for an add!!ional year, for each insured unit. If losses exceed ac-hearings, PSE&G and the No Jersey Puohc Advocate cumulated funds available to the group, the Company could be presented the BPU a joint position paper which supports the assessed up to $2.421,252, five times its current annual premium.
abandonment of Hope Creek Unit No. 2 and recommends the in add: tion, Nuclear Electnc insurance Ltd. also provides insurance recovery of the abandonment costs over either a 12 or 15 year for property damages to nuclear generat ng facilities in the amount penod Such joint position paper also recommends a similar of $247,000,000 for any damages in excess of $500,000.000. In the recovery for the Company. The Company, in its next rate request, event of a major loss, the Company could be assessed $1.230,648, plans to ask for a shorter amortization period and for carrying seven and one-half times its annual premium.
costs associated with the unamortized balance. The Company The Company has an agreement expinng May 31,1985. with annot presently predict the outcome or the timing of the deci-Delmarva Power & Light (DPL) for the purchase of 50 MW o' power sion which will be rendered by the BPU NOTE 12. LEASES:
The Company has certa 4n leases for property and equtpment which meet the cntena for capitahzation, but in accordance with rate making treatment are accounted for as operating leases. The capitahzat!on of such leases would not have a significant ef*ect on assets, liabihtes or operating expenses a1.
L NOTE 13. SUPPLEMENTARY INCOME STATEMENT INFORMATION:
Operating expenses include taxes and other items not s parately idsntified in the Statement of income as follows:
Year Ended Dscemb:r 31 1981 1980 1979 (In Thousands)
Ta;es Other Than Federal income Taxes:
S 918
$ 944
$ 1,266 Real and Personal Property Taxes.
State Gross Receipts, Sales, Excise and Franchise Taxes and 45,204 32,924 33,149 Miscellaneous State and Local Taxes..
a 78 1,678 1,445 Payroll Taxes-Federal and State.
... $44,200
$35,546
$35,860 Total.
$28,087
$24,251
$20,565 Maintenance Expense.
i i
i Charges to income for royalties and advertising are less than 1% of gross revenue.
4 NOTE 14. QUARTERLY FINANCIAL RESULTS (UNADUlTEDj:
j Quarterly financial data which reflect all adjustments (which consist of only normal recurring accruals) necessary in the opinion of the Company for a fair presentation of such amounts are as icUows:
4 Oporating Operating Net Earnings for Earnings Quarter Revenues income income Common Stock Per Share (In Thousands)
(
1981 1st.
$112,762
$18,969
$13,760
$11,856
$.94 2nd 101,908 15,194 8,739 6,845
.54 3rd 133,552 24,963 17,499 15,627 1.22 4th.
121,461 14,385
_.6,990 5,129
.36
$469,683
$73,511_
$46,988
$39,457
$3.03(1) 1980 1 st.
$ 86,521
$12,611
$ 8,043
$ 6,560
$.54 2nd 77,378 9,572 5,995 4,514
.37 3rd 103,651 19,201 14,471 13,023 1.05 4th 90,841 14,849' 10,029 8,280
.66
$358,391
$56,233
$38,538_
$32,377_
$2.62 (1) The individual quarters do not add to the total due to the increasing average number of Common shares outstanding at the a
end of each quarter.
The revenues of the Company are subject to seasonal fluctuations due to increased sales and higher residential rates during the summer months.
4 Supplementary Information Concerning Th2 Effects Of Changing Prices (Unaudited)
The following supplementary information about the effects of changing prices is calcula*ed under two different methods.
The first method, which uses the Consumer Price Index for All Urban Customers (CPI U), adjusts data for generalinflation,.
providing financial information in dollars of equivalent value or purchasing power (constant dollars). The purpose of this metho is to make financial data more comparable by reporting the financial statement effects of the Company's investment in Utility Piart over a period of time in terms of a common unit of purchasing power.
The second method adjusts the fmancial data for changes in specific prices of the components of the Company's utility pf ant by applying the Handy-Whitman Index of Public Utility Construction Costs to historical cost by vintage years, reflecting the cu cost of replacing resources actually used in the Company's operations (current costs).
Constant dollar amounts differ from current cost amounts because, over the period utility plant is held, specific prices increase more or less rapidly than general inflation. Both of these methods involve the use of assumptions, approximations and estimates and therefore, the resulting measurements should be viewed in that context and not as precise indicators of the effects of inflation.
e
Supplementary Information Concerning The Effect] Of Changing Pri:es (Unaudited)-Continued Statement Of income From Continuing Operations %usted For Changing Prices Year Ended December 31,1981 (In Average 1981 Dollars)
Rnuits of Operations:
In Constant At Current Historical Dollars Cost (In Thousands)
Operating Revenues.
$469,683
$469,683
$469,683 Operation and Maintenance Expenses.
346,017 346,017 346,017 D:preciation and Amortization Expense.
25,161 64,352 64,500 Fcderal Income Tax Expenso 24,994 24,994 24,994 Oth:r.
26,523 26,523 26,523
$422,695
$4o,,886
$462,034 income from Continuing Operations.
$ 46,988
$ 7,797
$ 7,649 Depreciation and amortization expense egressed in constant dollar and current cost amounts were determined using the rates and methods used for computing book depreciation and amortization applied to utility plant balances reexpressed in terms of constant 4
dollars and current costs.
Only depreciaticn and amortization of nuclear fuel have been spec?fically adjusted for inflation in the above schedule. Operating revenues and other operating expenses were generally incurred rateably over the year, accordingly, the stated amounts already reflect, in effect, average 1981 dollars.
Significant to this data is the impact of a fixed income tax rate. Income taxes were not adjusted because the present tax laws do not allow a deduction for depreciation and amortization adjusted for the impact of inflation. Therefore, the Company's effective tax rate nses from 36 8% under the historical cost basis to 77.8% and 78.1 % under the respective constant dollar and current cost basis.
This supplementary information should not be used to assess the probabihty of future cash flows when existing utikty plant is replaced. The estimates do not reflect the effects of the regulatory process nor the specific plans of the Company for the replacement or modernization of utshty plant. A meaningful estimate of the estimated level of future capital spenditures is set torth on page 17 of the annual report.
Curr:nt Year Effect of increased Price Levels:
(In Thousands)
Increases in Specific Pnces on blikty Plant Held.
$153,000 increases in General Price Levels on Utikty Plant Held.
127,796 Excess of increase in Specific Prices Over increases in General Price Levels.
$ 25,204 At December 31,1981 the cost of utility plant, net of accumulated depreciation was $1,537,305,000 on a constant dollar basis and $1.600,527,000 on a current cost basis, while historical cost was $831,864,000. The accumulated provisions for depreci3 tion and amortization under both constant do'lar and current cost methods were estimated for each major class of utility plant (produc-tion; transmission; distnbution and general plant) by multiplying the respective cost data by a percentage representing the expired hfe of existing facihties of each class at December 31,1981.
Fuel inventones, the cost of fossil fuels used in generation, have not been restated from their historical cost. New Jersey regulation controls fuel costs, through the operation of a levelized energy clause, such that recovery is ultimately limited to actual cost. For this reason fuel inventories are effectively monetary assets.
Net Utihty Plan' Costs Recoverable:
Under rate making prescribed by the regulatory commissions to which the Company is subject, only the historical cost of uhhty plant is recoverable in revenues as depreciation. Therefore, the excess of the cost of utihty plant stated in terms of constant dollars or current ccst over the historical cost of plant is not presently recoverable. Due to this feature, the value of utshty plant and its effect on income from continuing operation adjusted for changing prices must be considered in terms of its net recoverable cost which is historical cost. While the rate making process gives no recognition to the current cost of replacing utility plant, based on past practices the Company believes it will be allowed to earn on the increased cost of its net investment when replacement of facilities actually occurs.
Current Year Dechne in Purchasing Power of Net Amounts Owed:
The current year dechne in purchasing power of net amounts owed was $39,573,000. Dunng a period of inflation, holders of monetary assets such as cash and receivables suffer a loss of general purchasing power while holders of monetary liabihties, generally long term debt, experience a gain because debt will be repaid in dollars having less purchasing power. The Company's gain from the dechne in purchasing power of its net amounts owed is primanly attributable to the substantial amount of debt and cumulative preferred stock subject to mandatory redemption which has been used to finance utikty plant. This gain, however, should not be considered as provid:ng funds to the Company, since the Company is limited under rate making procedure to the recovery only of its embedded cost of debt.
A Atlantir Ffnerne
Five-Year Comparison Of Selected Financial Data including Unaudited Supplementary Data Adjusted For Changing Prices (In Thousands of Dollars Except Per Share Amounts-Constant Dollar and Current Cost Amounts Expressed in 1977 Dollars)
Years Ended December 31 1981 1980 1979 1978 1977 Oper: ting Revenue
-historical
$ 469,683
$358,391
$283,106
$255,058
$234,995
-in constant dollars (a) 312,950 263,566 236,356 236,914 234,995 i
Income frorn Continuing Operations
-histcrical
$ 46,988
$ 38,538
$ 34,307
$ 30,064
$ 27,358
-in constant dollars (a) 5,195' 6,339 10,108'
-at current cost (a) 5,396 4,078 5,806 Income from Continuing Operations per Share of Common Stock
-historical 3 03 2.62 2.36 2.21 2.06
-in constant dollars
.01
.15
.43
-ht current cost
.01
(.03)
.06 4
Effective Income Tax Rate
-historical 36.8 %
33.8 %
35.5 %
38.8 %
34.1 %
-constant dollar basis 77.8 73.8 63.9
-current cost basis 78.1 81.4 75.5 Excen of Increases in General Price Levels Over increases in Specific Prices (a)
$ (16,793)
$ 32,032
$ 37,783 Decline in Purchasing Power of Not Amount Owed (a) $ 26,367
$ 33,106
$ 39,500 i
Not Assets at Year End
-historical
$ 338,846
$324,127
$310,231
$279,897
$271,135
-in constant dollars (average) 218,474 227,667 243,753 286,941 281,493 Not income as a Percent of Operating Hevenue i
-historical 10.00 %
10.75 %
12.12 %
11.79 %
11.64 %
-trended in 1977 dollars 6.66 7.91 10.12 10.95 11.64 Earned Rate of Return on Shareholders' Equity i
-historical 12.21 %
11.62 %
10.70 %
10.26 %
9.87 %
-trended in 1977 dollars 0.14 8.55 8.93 9.53 9.87 i
Total Assets at Year-End-historical
$1,013,789
$879,795
$779,026
$699,861
$662,614 Long Term Debt and Cumulative Preferred Stock i
Subject to Mandatory Redemption
-historical
$ 442,769
$394,288 3324,848
$329,781
$330,120 Dividends Declared per Share of Common Stock
-historical 5
2.08 1.93 1.79 1.70 1.62
-in constaat dollars 1.39 1.42 1.49 1.58 1.62 Market Piice per Common Share at Year End
-historical 17.25
$ 15.75
$ 17.125
$ 18.00
$ 23.00
-in constant dollars 11.49 11.58 14.30 16.72 23.00 Average Consumer Prico Index 272.4 246.8 217.4 195.4 181.5 Certain comparative per share data trended in average 1981 dollars (without adjustment of earnings for the pro forma effects of inflation on depreciation amounts) are as follows:
Earnings S
3.03 2.89 2.96 3.08 3.09 Dividends Declared 2.08 2.13 2.24 2.37 2.43 Market Price (Year End) 17.25 17.38 21.46 25.09 34.51 (a) These amounts will differ from those shown for constant dollar and current costs in Statement of locome From Continuing Operations Adjusted for Changing Prices because a different base year has been used (1977 in the data presented above and 1981 in the Changing Price information) in order to illustrate the impact of changing prices in alternative forms.
w
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Atlantic Electric is an investor-owned public utility which provides electric energy to our customers in the southern one-third of New Jersey. Out ates are subject to the approval of the New Jersey Board of Public Utilities (BPU). The Company's goals contmue to be the assurance of continued financial stabihty, providing for the necessary return on investment needed to attract capital at a reasonable co;; and offsetting the effects of inflation on our operating costs. A detailed analysis of our Results of Operat ons, Liquidity and Capital Resources follows RESULTS OF OPERATIONS:
REVEtJUES Operating revenues have increased during the three year period ending December 31,1981, primarily as a result of base rate increases, increases in the Levelized Energy Clause (LEC) and increased kilowatt hour sales. The relative impact of these increases are shown below (dollars in thousands):
Increase (Decrease) Over Previous Year 1981 1980 Base Rate increase S 37,977 10.6 %
S 4,160 6.0 %
LEC increase' 70,677 19.8 53,755 19.0 Kilowatt-hour Sales increase 2,638 0.7 17,370 1.6
$111,292 31,10'o 575,285 26.6 %
~
Includes transfers to General Rates. See Note 3 of Notes to FAaniiaIStatemeds-Future operating revenues will be effected by general economic conditions, timeliness and adequacy of rate relief and the effectiveness of our efforts to promote customer conservation and improve our load management techniques.
OPERATIOtJ AND MAltJTEtJAtJCE EXPENSES Net Energy Costs, includ:ng purchase 1 power, have inee3 sed approximately 110% over the three year period primanly as a result of the increased cost of imported oil and mcreased generation due to higher sales. We anticipate reducing the impact of increasing energy costs due to a number of factors: 1) Salem Unit #2 became commercially operable on October 13,1981, and provides us with 82 MW of low cost nuclear generation,2) on June 1,1981, we became a full member of tb1 Pennsylvania-New Jersey-Maryland Inter-connection, and we anticipate a reduction of apmoximately 154o in the cost of interchange power as a result of additional benefits provided to full members and 3) conversion of uc peaking power jet units at our Caril's Comer Station to natural gas.
Net Deferred Energy Costs of $14.043,000 in 1981 represents the recognition of $36,233,000 of prior period unrecovered energy costs coincident with recovery of such costs through increased revenue and the deferral of $22,190,000 of unrecovered 1981 costs. On January 6,1982, the BPU, in an interim order, reduced the Company's LEC (See Note 3). However, we project that the reduced LEC witi be sufficient to result in the recovery of all unrecovered energy costs in 1982.
The increased cost of purchased power is due to an agreement reached in April 1981 with Allegheny Power Systems, whereby we purchase capacity to the extent it is ava:labte on a week-by-week basis. The impact of these purchases in 1981 resulted in a savings to our customers over what it would have cost the Company to acquire this capacity from alternative sources.
Increases in other operation and maintenance expenses are primarily the result of increases in labor costs and the cost of materials and supphes.
O THER Interest expense has increased substantially in 1981 over the 1980 and 1979 levels, as a result of: 1) significant short-term borrowings necessary to finance unrecovered fuel costs and to continue our expanded construct:on program until more favorable long term financing could be arranged,2) the issuance of additional pollution control series first mortgage bonds and 3) interest related to Federal Income Tax settlements.
LIQUIDITY AND CAPITAL RESOURCES Of our gross capital requirements for the period 1979 to 1981, approximately 27%, after deducting dividends declared on common and preferred stock, was generated internally. The remainder was raised through the issuance of common and preferred stock, long-term debt, pollution control bonds and short term debt on an interim basis.
Although we are making a concerted effort to reduce our capital expenditures by encouraging conservation, use of alternate energy sources and by effective load management, the need to replace existing plant, upgrade our transmission and distribution system, and provide for growth, ind:cate the need to provide approximately $608 milhon over the next five years for cash construc-tion expenditures Due to inflation and changes in technology, depreciation accruals are not adequate to fund the replacement of existing utihty plant when necessary (see supplementary information concermng the effects of inflation, page 33),
hk,,
r,
=... _ _
i Projected Construction Expanditures I
i (Millions of Dollars) l l
5200 i
L 1
1
$160 l
$150 i
S136
$123 l
$ 98 591 i
5100 4
$ 50 S 0 i
1982 1983 1984 1985 1986 l
Assuming adequate rate relief, our estimates indicate that over the five year period from 1982 to 1986 an average of 45%
of our total cash construction requirements will be generated internally.
I The additional requirement will be raised through the capital markets with the objective of maintaining a capital structure of less than 48% long-term debt, approximately 41% common equity with the balance composed of preferred stock. Our current capitalization ratios are 48% long-term debt,40% common and 12% preferred stock. We use short-term financing on an interim basis and maintain total lines of credit of $115,000,000. Refer to Note 10 for additional details on short-term financing.
We are currently investigating alternative methods of financing our program for converting oil-fired units to coal and natural gas. Our proposal, included in our December 4,1981 LEC filing, would allow us to recoup our investment by retaining a portion j
(two-thirds) of the fuel cost savings generated by the conversions until the investment is recovered. One-third of the savings is passed on to the customer. immediately, if approved, this would enable us to reduce our financing requirements and would pro-vide substantial savings to our customers through reduced rates and financing costs.
1981 1980 1979 l
Sources-c/kwh c/kwh c/kwh i
Coal 45 2.177 37 1.504 34 1.334 Oil 20 5.771 24 4.783 32 3.161 Nuclear 22
.384 21
.379 21
.367 Natural Gas 4
5.249 8
4.191 5
3.399 interchange 9
7.529 10 5.987 8
4.115 Total 100 3.083 100 2.731 100 2.032 l
Our embedded cost of capital, as of December 31,1981, is 8.54% for long-term debt and 7.50% for preferred stock. With i
our sinking fund requirements, refinancing of maturing low cost debt and financing our operations, we anticipate our embedded i
I cost to rise.
l The tabulation on page 35 includes key indicators which we believe are helpfulin evaluating the performance of the Company l
over the past five years. The tabulation also includes certain unaudited supplementary information showing estimates of the ef-l fects of changing prices. This data, which should be viewed as estimates Of the approximate effects of inflation rather than as l
precise measures, is expressed in the dollars of the earliest comparative year (1977). The trends demonstrated reflect the need to control costs and point out the responsibility of regulatory agencies to provide timely and adequate rate relief. Additional sup-j plementary information concerning the effects of changing pnces is included on page 33 of the annual report.
4 1
W
Stati tical Review 1981-1971 Facilities for Service 1981 1980 1979 Total Utility Plant (Thousands).
$1,064,928
$ 962,052
$ 870,075 Gross Additions to Utility Plant (Thousands).
$ 123,318 97,330 72,773 Pole Miles of Transmission and Distribution Lines.
6,910 6,879 6,831 Generating Capacity (Kilowatts) (a) (b).
1,524,600 1,434,700 1,384,700 Mrximum Utility System Demand-Kw 1,263,800 1,261,700 1,192,600 M rgin of Reserve at Times of Peak (% of Avail Gen.)
17.1 %
12.1 %
13.9 %
En:rgy Supply (Thousands of Kwh)
Net Generation 5,302,023 5,533,178 5,397,338 Purchased and Interchanged - Net 946,241 643,106 464,143 Total System Load.
6,248,264 6,176,284 5,861,481 Electric Sales (Thousands of Kwh)
Residential.
2,480,225 2,514,738 2,411,732 Commercial 1,849,863 1,769,208 1,580,384 Industrial 1,279,724 1,286,205 1,255,304 All Others.
65,555 63,753 60,799 Total 5,675,367 5,633,904 5,305,219 R:sidential Electric Service (Average per Customer)
Amount of Electricity used during the year (Kwh).
7,751 8,003 7,849 4
Amount paid for a year's service.
S 670.66 536.99
$ 439.92 Price paid por Kilowatt hour.
8.65c 6.71 C 5.61C Customer Data (Average)
Residential With Electric Heating.
56,100 52,225 48,339 Residential Without Electric Heating 263,904 261,988 258,941 Total residential 320,004 314,213 307,280 Ccmmercial 43,219 43,267 43,219 Industrial 1,032 1,041 1,048 Other 634 654 667 Total Customers.
364,889 359,175 352,214 Total Service Locations.
386,046 379,242 371,362 Population Served.
1,056,000 1,037,000 1,015,000 Financial Data (Thousands of Dollars)
Energy Sales Residential
$ 214,614
$ 168,733
$ 135,178 Commercial 156,624 115,973 88,819 Industrial.
82,908 60,512 47,590 All Others.
9,700 7,836 6,624 Total 463,846 353,054 278,211 Other Electric Revenue.
5,837 5,337 4,895 Total
$ 469,683
$ 358,391
$ 283,106 investor information Earnings per Average Common Share 3.03 2.62 2.36 Average Number of Shares Outstanding (In Thousands).
13,034 12,372 11,980 l
Dividends Paid on Common Stock (Cash).
2.04 1.90 1.765 Dividend Payout Ratio.
67 %
73 %
75 %
Book Value Per Share (Year End).
22.40 22.22 21.63 Price Eamings Ratio (Year End) 6 6
7 Times Fixed Charges Earned (before income taxes) 2.84 3.03 3.62 Shareholders and Employees (Year End)
Common shareholders 48,424 47,762 48,194 Employees -
2,035 1,968 1,903 (a) Excludes capacity allocated to a large industrial customer.
(b) Includes unit purchase of capacity 50,000 kilowatts under contract with Delmarva Power and Light Company.
1 xW
i 1978 1977 1976 1975 1974 1973 1972 1971
$ 802,473
$ 753,269
$ 710,343
$ 675,617
$ 637,250
$ 572,555
$ 511,274
$ 455,956 58,073 48,733 41,702
$ 46,745
$ 71,200
$ 67,864
$ 58,434
$ 54,151 6,786 6,735 6,696 6,645 6,580 6,506 6,408 6.333 1,414,700 1,414,700 1,334,700 1,334,700 1,278,700 1,013,500 965,900 897,600 1,177,400 1,176,000 1,030,300 1,069,400 1,004,400 1,051,400 920,400 829,300 16.7 %
16.9 %
22.8 %
19.9 %
21.5 %
4.7%
7.6%
5,625,988 5,293,019 4,918,906 4,715,357 4,651,334 4,236,083 4,071,225 4,262,062 130,037 224,169 324,196 190,852 229,197 665,558 458,050
- 74,395 5,756,025 5,517,188 5,243,102 4,906,209 4,880,531 4,901,641 4,529,275 4,187,667 2,377,202 2.221,250 2,070,766 1,938,724 1,882,560 1,899,122 1,741,895 1,624,793 1,586,097 1,478,559 1,392,029 1,346,216 1,298,858 1,351,974 1,183,668 1,059,498 1,250,636 1,220,260 1,143,170 1,036,755 1,136,935 1,119,478 1,061,932 990,363 60,705 58,866 57,667 56,465 57,477 58,129 64,531 88,963 5,274,640 4,978,935 4,663,632 4,378,160 4,375,830 4,428,703 4,052,026 3,763,617 7,951 7,653 7,320 7,018 6,982 7,303 7,008 6,793 s
406.18 378.36 349.64 329.25 291.21
$ 230.19
$ 207.37 178.19 5.11C 4.940 4.78C 4.690 4.17C 3.15c 2.96C 2.624 44,387 40,318 37,581 35,235 32,215 28,627 25,105 22,228 254,592 249,927 245,296 241,019 237,397 231,408 223,449 216,970 298,979 290,245 282,877 276,254 269,612 260,035 248,554 239,198 42,672 42,033 41,170 40,608 40,351 39,810 38,009 35,921 1,034 1,047 1,071 1,100 1,080 948 1,011 1,047 673 676 681 684 679 678 7E 997 343,358 334,001 325,799 318,646 311,722 301,471 288,331 277,163 362,131 352,205 343,147 336,105 330,758 320,834 309,393 297,437 990,000 961,000 937,000 915,000 894,000 865,000 828,000 796,000
$ 121,440
$ 109,818 98,904 90,956 78,512 59,856 51,544 42,623 80,539 73,354 66,354 63,544 55,713 42,804 35,868 28,648 42,185 40,885 36,438 34,974 33,565 22,008 19,350 16,529 5,973 5,630 5,406 4,881 4,207-3,861 3,763 3,919 250,137 229,687 207,102 194,355 171,997 128,529 110.525 91,719 4,921 5,308 4,925 4,724 4,614 4,365 4,128 3,687
$ 25h05J
$ 234,995
$ 212,027
$ 199,079
$ 176,611
$ 132,894
$ 114,653 95,406 2.21 2.06 2.60 2.41 2.54 2.40 2.26 1.89 10,791 10,630 9,747 9,490 8,973 8,453 7,810 7,437 1.67 1.62 1.56 1.51 1.50 1.4688 1.4144 1.36 76 %
79 %
60 %
63 %
59 %
61 %
63 %
72 %
21.27 20.71 20.25 19.34 18.45 17.85 16.77 15.59 8
11 9
7 5
7 10 12 3.62 3.17 3.14 2.88 2.33 -
2.62 2.70 2.34 44,490 43,826 42,516 39,232 39,054 36,835 35,549 33,839 1,797 1,739 1,714 1,741 1,811 1,810 1,743 1,747
. This Annual Report has been prepared for the purpose of providing general and statistical information concerning the Com-pany and not in connection with any sale, offer for sale or solicitation of an offer to buy any securities.
c
Crmm:n Strck, Prica.R2nga cnd Divid:nds Tha Common Stock of the Company is traded on the N3w York Stock Exchange (Principal Markst) and the Philad:Iphia Stock Exchange. The high and low sales prices of the Common Stock as reported in the Wall Street Journal as New York Stock Exchange-Composite Transactions for the periods indicated were as follows:
Dividends Paid -
1981 1980 Per Share High Low High Low 1981 1980 First Ouarter 17-1/4' 15-1/4 3/8 14-7/8
. $.49
$.46 -
Second Quarter 18-1/4 15-1/4 19-3/4 15-1/8
$.49
. $.46 Third Quarter 17-3/4 16-1/8
-19 5/8-17-1/8
$.53
- $.49
- Fourth Quarter 18-1/4 16 17 3/4-15-1/8
$.53
$.49
- For your convenience, listed below are the proposed 1982 record dates and payable dates, for dividends on Common Stock:
Record Dates Payable Dates March 18,1982 September 16,1982 April 15,1982 October 15,1982 June 17,1982 December 16,1982 July 15,1982 January 15,1983 Investor Records: Communications regarding stock transfer requirements or lost certificates should be directed to the appropriate
(
Transfer Agent. Changes of address, inquiries on dividends or matters concerning the Dividend Reinvestment and Stock Pur-chase Plan should be addressed to:
Atlantic City Electric Company investnr Records Department 1600 Pame Avenue Atlantic City, New Jersey 08404 or telephone Area Code 609/645-4506 or 4507.
n

ML20042C648

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