For Immediate Release
For Immediate ReleaseJuly 8, 2002
Potomac Electric Power Company (Pepco)(NYSE:POM) today announced the declaration of a special dividend on its Common Stock in connection with its anticipated merger with Conectiv. The companies have received all of the regulatory approvals required to complete the merger, with the exception of the U. S. Securities and Exchange Commission. SEC approval is expected to occur in time to allow the merger to close in the third quarter.
The special dividend, which is payable only if the merger occurs during the third quarter, covers the portion of the third quarter preceding the merger. The dividend will ensure that Pepco shareholders continue to receive their Common Stock dividend at the current rate up until the time of the merger.
As declared by the Executive Committee of the Pepco Board of Directors under authority granted by the Board, each holder of record of Common Stock at the close of business on the day preceding the effective time of the merger will receive a dividend of $.00271739 per share per day for the period from July 1, 2002, through and including the day preceding the effective time of the merger. The $.00271739 per day rate applied to the entire quarter equals $.25 per share. The special dividend will be paid within 10 business days after the merger is consummated.
In the merger with Conectiv, Pepco and Conectiv each will become a subsidiary of Pepco Holdings, Inc., a newly formed public utility holding company (Pepco Holdings) and each outstanding share of Pepco common stock will be converted into one share of Pepco Holdings common stock. Following the merger, Pepco Holdings is expected to pay a dividend at the rate of $.00271739 per day per share for the remainder of the third quarter.
The merger of Pepco, based in Washington, D.C., and Conectiv, based in Wilmington, Del., will create one of the largest electricity delivery companies in the mid- Atlantic region with a transmission network serving 1.8 million customers in a 10,000-square-mile area. The two utilities will continue operations as separate companies under Pepco Holdings, Inc., which will be headquartered in Washington, D.C.
Pepco (www.pepco.com) is an investor-owned company that delivers electricity to more than 700,000 customers in Washington, D.C., and the Maryland suburbs. Conectiv (www.conectiv.com) is focused on two core energy businesses. Conectiv Power Delivery provides regulated energy delivery services to more than one million customers in New Jersey, Delaware, Maryland and Virginia. Conectiv Energy manages a growing portfolio of "mid-merit" power plants that can respond quickly to changes in the demand for power with the PJM power pool.
FORWARD-LOOKING STATEMENTS Except for historical statements and discussions, the statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws. These statements contain management`s beliefs based on information currently available to them and on various assumptions concerning future events. Forward-looking statements are not a guarantee of future performance or events. They are subject to a number of uncertainties and other factors, many of which are outside the company`s control. In connection with the transaction, additional important factors that could cause actual results to differ materially from those in the forward-looking statements herein include risks and uncertainties relating to delays in obtaining or adverse conditions contained in related regulatory approvals; changes in economic conditions; availability and cost of capital; changes in weather patterns; changes in laws, regulations or regulatory policies; developments in legal or public policy doctrines, and other presently unknown or unforeseen factors. These uncertainties and factors could cause actual results to differ materially from such statements. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This information is presented solely to provide additional information to further understand the results and prospects of the company.
Point of Contact:Charles Taylor