UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 30, 2000
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission file number 1-3559
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Atlantic Electric 401(K) Savings and Investment Plan-B
800 King Street
P.O. Box 231
Wilmington, DE 19899
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Custom Stable Value Fund Spectrum Growth Fund
T. Rowe Price Associates, Inc. T. Rowe Price Associates, Inc.
100 East Pratt Street 100 East Pratt Street
Baltimore, MD 21202 Baltimore, MD 21202
Equity Income Fund Conectiv Class A Common Stock Fund
T. Rowe Price Associates, Inc. Conectiv
100 East Pratt Street 800 King Street
Baltimore, MD 21202 Wilmington, DE 19899-0231
International Stock Fund Conectiv Common Stock Fund
T. Rowe Price Associates, Inc. Conectiv
100 East Pratt Street 800 King Street
Baltimore, MD 21202 Wilmington, DE 19899-0231
Equity Index Fund
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
Atlantic Electric
401(k) Savings and
Investment Plan - B
as of December 30, 2000 and 1999
and for the year ended
December 30, 2000 and
Supplemental Schedules at and for
the year ended December 30, 2000
i
Atlantic Electric 401(k) Savings and Investment Plan - B
Table of Contents
December 31, 2000 and 1999
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Page(s)
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Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-7
Supplemental Schedules:
Schedule of Assets (Held at End of Year) - Schedule H - Item 4(i) 8
Schedule of Reportable Transactions - Schedule H - Item 4(j) 9
Signature 10
* Refers to item numbers in Form 5500 (Annual Return Report of Employee
Benefit Plan) for the Plan year ended December 30, 2000, which schedules are
incorporated herein by reference.
ii
Report of Independent Accountants
To the Personnel and Compensation
Committee of Conectiv
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Atlantic Electric 401(k) Savings and Investment Plan - B at December 30,
2000 and 1999, and the changes in its net assets available for benefits for the
year ended December 30, 2000, in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States of America which require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental schedules of Assets (Held at End
of Year) and Reportable Transactions are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ PricewaterhouseCoopers
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PricewaterhouseCoopers
June 9, 2001
1
Atlantic Electric 401(k) Savings and Investment Plan - B
Statements of Net Assets Available for Benefits
December 30, 2000 and 1999
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2000 1999
Investments $ 43,282,975 $ 43,787,006
Receivables:
Employer contributions 13,929 13,516
Participant contributions 46,489 43,572
------------ ------------
Net assets available for benefits $ 43,343,393 $ 43,844,094
------------ ------------
The accompanying notes are an integral part of these financial statements.
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Atlantic Electric 401(k) Savings and Investment Plan - B
Statements of Changes in Net Assets Available for Benefits
December 30, 2000 and 1999
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Additions:
Employee contributions $ 2,678,059
Employer contributions 710,202
Interest income 785,513
Dividend income 1,919,059
Net depreciation in fair value of investments (2,675,233)
------------
Total additions 3,417,600
------------
Deductions:
Benefits paid to participants 3,915,301
Administrative fees 3,000
------------
Total deductions 3,918,301
------------
Net decrease in net assets available for benefits (500,701)
Net assets available for benefits, at beginning of year 43,844,094
------------
Net assets available for benefits, at end of year $ 43,343,393
------------
The accompanying notes are an integral part of these financial statements.
-3-
Atlantic Electric 401(k) Savings and Investment Plan - B
Notes to Financial Statements
December 30, 2000 and 1999
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1. Description of Plan
General
The following description of the Atlantic Electric 401(k) Savings and
Investment Plan - B (the "Plan"), a defined contribution plan, provides
only general information. Participants should refer to the Plan document
for a more comprehensive description of the Plan's provisions. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
Contributions
All full-time bargaining unit employees of the Atlantic City Electric
Company (the "Company"), are eligible to participate in the Plan.
Additionally, any employee who is not a regular full-time employee shall be
eligible to participate upon completion of 1,000 hours of service.
Employees may contribute up to 10% of base pay. Upon enrollment in the
Plan, a participant may direct employee contributions in any of seven
investment options. The tax savings portion of participant contributions
(up to 6% of an employee's base pay) is matched by the Company at a rate of
50% not to exceed 3% of the employee's compensation. The Company's matching
contribution is invested in the Stable Value Fund. Federal income taxes on
these contributions and the related income are deferred until withdrawn.
Benefits from the tax savings portion of the Plan can be withdrawn upon the
attainment of age 59-1/2, retirement, separation from service, death or in
special financial hardship situations. In addition, employees may
contribute up to an additional 10% of base pay on an after-tax basis to the
supplemental savings portion of the Plan, which also earns income that is
not subject to Federal income tax until withdrawn. These contributions may
be withdrawn once a quarter subject to the provisions of the Internal
Revenue Code.
Participant Accounts
Participants' contributions are recorded in the period of the related
payroll deductions. The Company's matching contributions are recorded in
the period of the related participants' contributions. Participants are
fully vested in employee and employer contributions in their respective
accounts at all times.
Termination of Plan
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time subject
to the provisions of ERISA.
Administration Costs
Certain professional fees and administrative expenses incurred in
connection with the Plan are paid by the Company. The facilities of the
Company are used by the Plan at no charge. Loan processing fees are paid by
the participants and deducted from Plan assets.
Participant Loans Receivable
Participants may borrow from their fund accounts a minimum of $1,000 up to
a maximum equal to the lesser of $50,000 or 50 percent of their account
balance. Loan terms range from one to five years and up to fifteen years
for the purchase of a primary residence. The loans are secured by the
balance in the participant's account and bear interest at a rate
commensurate with local prevailing rates as determined quarterly by the
Plan Administrator. The interest rate for 2000 and 1999 was 9%. Principal
and interest is paid ratably through weekly payroll deductions.
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Atlantic Electric 401(k) Savings and Investment Plan - B
Notes to Financial Statements
December 30, 2000 and 1999
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2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared under the accrual basis
of accounting.
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices which represent the
net asset value of shares held by the Plan at year-end. Participant loans
are valued at cost which approximates fair value.
Purchases and sales of investments are recorded on the trade-date. Interest
income is accrued when earned. Dividend income is recorded on the ex-
dividend date. Common stock is valued at closing price on its principal
exchange, shares of common collective trusts are valued at net asset value.
Investment in Common/Collective Trust
The Custom Stable Value Common Trust Fund invests in various term
guaranteed insurance contracts and maintains a cash reserve balance with
all excess funds. The average yield and the weighted average crediting
interest rate are based on the underlying contracts.
Payment of Benefits
Benefits are recorded when paid.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that affect the reported amounts of net
assets available for benefits at the date of financial statements and the
changes in net assets available for benefits during the reporting period
and, where applicable, disclosures of contingent assets and liabilities at
the date of the financial statements. Actual results could differ from
those estimates.
Risks and Uncertainties
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds, and other investment
securities. Investment securities are exposed to various risks, such as
interest rate, market and credit risks. Due to the level of risk associated
with certain investment securities and the level of uncertainty related to
changes in the value of investment securities, it is at least reasonably
possible that changes in risks in the near term could materially affect
participants' account balances and the amounts reported in the Statements
of Net Assets Available for Benefits and the Statements of Changes in Net
Assets Available for Benefits.
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Atlantic Electric 401(k) Savings and Investment Plan - B
Notes to Financial Statements
December 30, 2000 and 1999
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3. Investment Options
The investment options available to plan participants have the following
objectives:
(i) T. Rowe Price Custom Stable Value Fund - to provide principal
stability and a high level of monthly income;
(ii) T. Rowe Price Equity Income Fund - to provide substantial dividend
income and secondarily, long-term capital appreciations;
(iii) T. Rowe Price Equity Index Fund - to match the performance of the
Standard & Poor's Stock Index;
(iv) T. Rowe Price International Stock Fund - to provide the
diversifications of an international fund as well as the opportunity
for long-term capital growth;
(v) T. Rowe Price Spectrum Growth Fund - to provide long-term growth of
capital;
(vi) Conectiv Common Stock - to provide maximum capital appreciation and
dividend income from Conectiv Common Shares.
(vii) Conectiv Class A Common Stock - to provide maximum capital
appreciation and dividend income from Conectiv Class A Common Shares.
4. Investments
The following presents investments that represent 5 percent or more of the
Plan's net assets:
December 30,
----------------------------
2000 1999
Custom Stable Value Fund $ 11,294,587 $ 12,119,187
Equity Index Fund 14,889,604 15,686,163
Equity Income Fund 10,824,727 11,309,115
Spectrum Growth Fund 2,921,336 2,214,291
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$ 39,930,254 $ 41,328,756
------------ ------------
During 2000, the Plan's investments (including investments bought, sold and
held during the year) depreciated in value by $2,675,233 as follows:
Registered investment companies $ 2,534,518
Common stock 140,715
------------
$ 2,675,233
------------
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Atlantic Electric 401(k) Savings and Investment Plan - B
Notes to Financial Statements
December 30, 2000 and 1999
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5. Non-participant-Directed Investments
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investment is
as follows:
December 30,
----------------------------
2000 1999
Net assets:
Custom stable value fund $ 11,318,415 $ 12,141,663
------------ ------------
Year ended
December 30,
2000
Changes in net assets:
Contributions $ 1,330,514
Interest income 715,665
Benefits paid to participants (1,700,091)
Administrative fees (726)
Transfers to participant-directed investments (1,168,610)
------------
$ (823,248)
------------
6. Tax Status
The Plan obtained its latest determination letter on March 23, 1995, in
which the Internal Revenue Service stated that the Plan was in compliance
with the applicable requirements of the Internal Revenue Code. The Plan has
been amended since receiving the determination letter. However, the Plan
Administrator and the Plan's tax counsel believe that the Plan is currently
designed and being operated in compliance with the applicable requirements
of the Internal Revenue Code.
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Atlantic Electric 401(k) Savings and Investment Plan - B
EIN#: 51-0377417, PLAN#: 003
Schedule H - Item 4(i)
Schedule of Assets (held at End of Year)
December 30, 2000
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Supplemental Schedules
Current
Identity of Issue Investment Type Cost Value
T. Rowe Price:
Custom Stable Value Fund Common/Collective Trust $ 11,294,587 $ 11,294,587
Equity Index Fund Mutual Fund 11,313,046 14,889,604
Equity Income Fund Mutual Fund 10,212,494 10,824,727
Spectrum Growth Fund Mutual Fund 3,034,925 2,921,336
International Stock Fund Mutual Fund 1,788,676 1,575,841
*Conectiv Common Stock 99,256 111,576
*Conectiv Class A Common Stock Common Stock 233,134 148,940
Participant Loans Various loans at 9.00% maturing
March 2000 through October 2015 - 1,516,364
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Total $ 37,976,118 $ 43,282,975
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* Parties-in-interest
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Atlantic Electric 401(k) Savings and Investment Plan - B
EIN#: 51-0377417, PLAN#: 003
Schedule H - Item 4(j)
Schedule of Reportable Transactions*
for the year ended December 30, 2000
Current
Value of
Asset on Historical
Identity of Purchase Selling Historical Transaction Gain/
Party Involved Description of Assets Price Price Cost Date Loss
T. Rowe Price Custom Stable Value Fund:
Purchases $ 5,665,989 $ 5,665,989 $ 5,665,989
Sales $ 6,490,589 6,490,589 6,490,589
* Non-participant directed transactions or series of transactions in excess of
5% of the current value of the Plan's assets as of the beginning of the
Plan's assets as of the beginning of the Plan year as defined in Section
2520.103-6 of the Department of Labor Rules and Regulations for Reporting and
Disclosure under ERISA.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
Atlantic Electric 401(K) Savings and Investment Plan-B
Date: June 22, 2001 /s/ John C. van Roden
-----------------------------------------
John C. van Roden, Senior Vice President
and Chief Financial Officer
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