APPENDIX C (Continued)

ENGINEERS PUBLIC SERVICE COMPANY AND SUBSIDIARIES

Condensed actual consolidated balance sheets and pro forma giving estimated effect to merger and refinancing as at November 30, 1943

Parent company's reserve for depreciation in value of
investments in subsidiaries

Pro forma utility plant (including intangibles) is stated on the following basis:

(1) At original cost for companies whose reports and studies have been completed and finally or tentatively reviewed by Federal and State
regulatory bodies, plus plant acquisition adjustments of $13,509,580; reserves of $1,163,501 had been provided for at November 30, 1943 and pro-
vision for amortization of the balance is being made by charges to income over a 15-year period; plus plant adjustments of $10,410,571 of which
$2,463,495 was disposed of in December 1943 and $7,947,076 is fully reserved

(2) At cost of construction and/or acquisition based on cash paid and par or stated value of securities issued therefor, less write-down of
$1,677,707 for which original cost studies are required but not completed (including an unclassified property account, an undetermined portion
of which relates to utility plant for which original cost studies are not required). Extensions to June 30, 1944 and January 1, 1945 for the com-
pletion of such studies have been granted by State regulatory bodies

(3) At cost of construction and/or acquisition based on cash paid and par or stated value of securities issued therefor, less write-down of
$3,108,864 for which original cost studies are not required

Total

Includes $17,637,260 stated value of VEPCO common stock.

Includes $18,546,555 stated value of merged company's common stock.

APPENDIX D

ENGINEERS PUBLIC SERVICE COMPANY AND SUBSIDIARIES Actual and pro forma consolidated income statements for the 12 months ended November 30, 1943

• Federal taxes included in the column "As per company exhibit" have been computed on he basis of the rates current prior to the 1943 Revenue Act enacted February 25, 1944. The econd column gives effect to the adjustment only of the VEPCO taxes based on the 1943 levenue Act enacted February 25, 1944, and likewise, column three gives effect to the same djustment for both VEPCO and VPS only. The remaining subsidiaries included in the onsolidated statement have not been so adjusted, and to this extent the last two columns of he statement are not to be considered comparable with the first column.

VEPCO's balance for common dividends and surplus would be increased by $160,037 if EPCO's $6 preferred stock were refinanced by $5 preferred stock, which refinancing could e accomplished irrespective of the merger

ས

AND POWER COMPANY, ET AL. 939

VIRGINIA ELECTRIC AND POWER COMPANT, ET JUL.

APPENDIX D

od into one share of the new lectric and Power Comblic Service Comin cash and

PUBLIC SERVICE COMPANY AND SUBSIMLARIES ma consolidated income statements for tha ended November 30, 1945

As per mpany ibit

Actual

Adjusted to re-
flect (1) the
retirement of
$3,500,000 of
Engineers' pre-
ferred stock and
(2) the adjust
ments to VEPCO
as shown in
Appendix B-1

24

$59,037,424

ercent pre

of both series

k will also reapaid dividends le merger. It is pout May 26, 1944. ic Service Company who does not desire to erred stock of Virginia he will become entitled avail himself of an undereceive not less than $112.50 preferred stock less transfer this opportunity such a stockn favor of the merger and (2) I accompanying the enclosed dehave the same received by the deter than 5 p.m., E.W.T. on May 16, eferred stockholders of Virginia PubCentral Bank of Richmond, Richmond, d stockholders of Virginia Electric and state-Planters Bank and Trust Company,

འ ར་་

MĀ KAST

Pro format

373, 867, 932-1

21, 633, 370327, 900, ota

3, 164, 320" / MAJA, 623, 645 5,396, 767 £430 6, 515, 347

21, 673, 301 714, 12200 2 ́5, 878, OTD

older who does not vote in favor of the therefrom within 90 days after the special 7, 1944 is entitled to receive cash therefor to value thereof may be appraised under Virginia

on is advised that the common stock of Virginia Company and of Virginia Electric and Power Comy General Gas & Electric Corporation and by Enc Service Company, respectively, will be voted in merger and that such vote will be sufficient to put into effect. However, Engineers Public Service ComVirginia Electric and Power Company have the right the merger if less than 95 percent of the preferred stock of the two companies assent to the merger, although ers Public Service Company and Virginia Electric and Company may accept the merger if a lesser number of able votes is received.

ais Commission has heretofore granted applications and perted declarations to become effective respecting the various ansactions. A copy of the Commission's findings and opinion ill be sent to any stockholders requesting the Commission for the same, free of charge. The various transactions have been approved by the State Corporation Commission of Virginia, the North Carolina Utilities Commission, the West Virginia Public Service Commission and the Federal Power Commission to the extent of their respective jurisdictions.

REPORT OF THE COMMISSION

(To Security Holders Pursuant to Section 11 (g) of the Public Utility Holding Company Act of 1935)

TO THE STOCKHOLDERS OF VIRGINIA ELECTRIC AND POWER COMPANY AND VIRGINIA PUBLIC SERVICE COMPANY This report is addressed to you, as stockholders of Virginia Electric and Power Company and Virginia Public Service Com pany, by the Commission. This Commission is a Federal agency, created by Congress in 1934. The Public Utility Holding Company Act of 1935, which it administers, requires it to submit a report to security holders upon proposals such as those discussed herein.

Accompanying this report are communications relating to spe cial stockholders' meetings of your respective companies to be held on May 17, 1944 to vote upon the merger of Virginia Public Service Company into Virginia Electric and Power Company (by virtue of which Virginia Public Service Company will cease to exist as a separate corporation), the exchange of the preferred and common stock of Virginia Public Service Company for preferred stock plus cash, and for common stock, respectively, of Virginia Electric and Power Company, a reduction of the common stock of the latter company, and other related transactions, including the issuance of new securities by Virginia Electric and Power Company.

The documents sent you include, in addition to this report, a letter from your company, a notice of the special meeting, a proxy, a prospectus and a deposit and sale agreement together with a letter of transmittal. Your attention is directed to all of these papers, which describe the proposed transaction in detail. As all of the common stock of Virginia Public Service Company is owned by General Gas & Electric Corporation1 and is being acquired by Engineers Public Service Company,1 and substantially all of the common stock of Virginia Electric and Power Company is owned by Engineers Public Service Company, this report is concerned solely with the treatment to be accorded to the preferred stock of Virginia Electric and Power Company and Virginia Public Service Company.

Under the proposals, each share of the $6 dividend preferred stock of Virginia Electric and Power Company will be converted into one share of that company's $5 dividend preferred stock, and will receive cash for accrued and unpaid dividends to the date of the merger. Each share of Virginia Public Service Com

• Adjusted to give effect to the reduction of preferred dividend requirements in the amount of $188,913 based upon the application of the average dividend rate of 5.4 percent to the sumed reduction of $3,500,000 of preferred stock. No adjustment has been made to give effect to the reacquisition of $4,000,000 of Engineers' preferred stock permitted by order of the Commission dated April 14, 1944.

1 Both General Gas & Electric Corporation and Engineers Public Service Company Te public utility holding companies, registered with this Commission pursuant to the Public Utility Holding Company Act of 1935.