-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N/QPZFIyDdiej0S36ARR9bkCL190awuT5bhBFvzhoTjw2ioQsWxSzOtNu39tOKSs JzScbab1OxzRREuqa1TLgw== /in/edgar/work/20000628/0000950159-00-000261/0000950159-00-000261.txt : 20000920 0000950159-00-000261.hdr.sgml : 20000920 ACCESSION NUMBER: 0000950159-00-000261 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PECO ENERGY CO CENTRAL INDEX KEY: 0000078100 STANDARD INDUSTRIAL CLASSIFICATION: [4931 ] IRS NUMBER: 230970240 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-01401 FILM NUMBER: 662643 BUSINESS ADDRESS: STREET 1: 2301 MARKET ST STREET 2: P O BOX 8699 CITY: PHILADELPHIA STATE: PA ZIP: 19101 BUSINESS PHONE: 2158414000 FORMER COMPANY: FORMER CONFORMED NAME: PHILADELPHIA ELECTRIC CO DATE OF NAME CHANGE: 19920703 11-K 1 0001.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 1-1401 PECO Energy Company Employee Savings Plan (Full title of the plan) PECO Energy Company P. O. Box 8699 2301 Market Street Philadelphia, PA 19101 (Name of the issuer of the securities held pursuant to the plan and the address of its principal executive offices) REQUIRED INFORMATION FINANCIAL STATEMENTS Statements of Net Assets Available for Benefits as of December 31, 1999 and 1998 Statement of Changes in Net Assets Available for Benefits for the Years Ended December 31, 1999 and 1998 EXHIBITS Consent of Independent Accountants CONTENTS Pages ----- Report of Independent Accountants 2 Financial Statements: Statements of Net Assets Available for Benefits, as of December 31, 1999 and 1998 3 Statements of Changes in Net Assets Available for Benefits for the years ended December 31, 1999 and 1998 4 Notes to Financial Statements 5-10 Supplemental Schedules: Schedule of Assets Held for Investment Purposes as of December 31, 1999, Schedule H, Part IV, Item 4i, Form 5500 11 List of Exhibits 12 Signature 13 Report of Independent Accountants To the Participants and Administrator of the PECO Energy Company Employee Savings Plan: In our opinion, the accompanying statements of net assets available for benefits, and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the PECO Energy Company Employee Savings Plan (the "Plan") at December 31, 1999 and 1998, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States. 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, which require that we plan and perform the audit 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 conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of Assets Held for Investment Purposes as of December 31, 1999, Schedule H, Part IV, Item 4i, Form 5500 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is 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. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/PricewaterhouseCoopers LLP Philadelphia, PA 19103 June 26, 2000 2 PECO ENERGY COMPANY EMPLOYEE SAVINGS PLAN Statement of Net Assets Available for Benefits as of December 31, 1999 and 1998 1999 1998 ------------ ------------ Investments $812,725,928 $687,323,082 ------------ ------------ Net assets available for benefits $812,725,928 $687,323,082 ============ ============ See notes to financial statements. 3 PECO ENERGY COMPANY EMPLOYEE SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits for the years ended December 31, 1999 and 1998 1999 1998 ------------- ------------- Additions: Employee contributions $ 32,677,666 $ 31,934,765 Employer contributions 7,112,506 6,655,284 ------------- ------------- Total contributions 39,790,172 38,590,049 Investment income: Interest 3,918,621 3,167,891 Dividends 54,898,793 27,654,438 Net appreciation in fair value of investments 70,936,190 125,540,832 Interest on loan repayments 1,183,195 1,106,290 ------------- ------------- 170,726,971 196,059,500 Deductions: Distributions (45,324,125) (29,135,458) ------------- ------------- Net additions 125,402,846 166,924,042 Net assets available for benefits: Beginning of year 687,323,082 520,399,040 ------------- ------------- End of year $ 812,725,928 $ 687,323,082 ============= ============= See notes to financial statements. 4 PECO ENERGY COMPANY EMPLOYEE SAVINGS PLAN Notes to Financial Statements 1. Description of the PECO Energy Company Employee Savings Plan: The following description of the PECO Energy Company Employee Savings Plan (Plan) provides only general information. Participants should refer to the Plan agreement for a complete description of the Plan's provisions. General - The Plan is a trusteed defined contribution plan. The Plan was formed on January 1, 1984 for the purpose of allowing eligible employees of PECO Energy Company and subsidiaries (the Company) to reduce their taxable income pursuant to Section 401(k) of the Internal Revenue Code. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). All employees classified as "regular," "part-time" or "probationary" become eligible to participate in the Plan immediately upon completion of six months of service. Contributions - Participants elect to have the Company make contributions to the Plan on their behalf. Such contributions are made by authorizing the Company to withhold from the participant's salary an amount equal to the contribution to be made. Participants may elect to authorize the Company to contribute from 1% to 17% of their base salary depending upon their salary level, up to certain IRS limits. Effective January 1, 1997, the Plan was amended to reflect the addition of employer matching contributions. The Company will make a matching contribution of 50 cents on each dollar of employee contributions up to 4% of an employee's base salary deposited into the Plan. Effective July 1, 1999, the Company's matching contribution was increased from 4% to 5%. Employees are always fully vested on employer contributions. Effective October 1, 1997, Fidelity Investments assumed the role and responsibility of Record Keeper and Trustee for the Plan. Participants may elect that their contributions be invested in one or more of the following generic fund categories - Growth, Growth and Income, Balanced, Equity Income, Small Capitalization Growth, Foreign, Money Market, Fixed Income, or Company Stock. (See Note 3) By giving notice to the Plan Record Keeper and subject to rules established by the Plan Administrator, participants may suspend or change the amount of their contributions and exchange their investments among the investment funds. Distributions and exchanges can be made on a daily basis provided the market is open and the request is confirmed by the Record Keeper prior to 4:00 p.m. EST. 5 PECO ENERGY COMPANY EMPLOYEE SAVINGS PLAN Notes to Financial Statements 1. Description of the PECO Energy Company Employee Savings Plan, Continued: Participant Accounts - Each participant's account is credited with the participant's contribution, the Company's contribution and an allocation of Plan earnings. Payment of Benefits - Upon termination of service a participant receives a lump-sum amount equal to the value in his or her account. Participant Loans - The Plan allows participants to obtain loans. Participants may borrow up to 50% of their account balances subject to a minimum of $500 and a maximum of $50,000. Loans have terms of up to 30 years for the purchase of a primary residence or one to four years for other purposes and bear interest at rates determined by the Plan Administrator based on similar rates charged by regional commercial lenders. Loans are repayable in equal installments by means of payroll deductions. A participant may not have more than one loan outstanding at any time or take more than one loan in a plan year. 2. Summary of Significant Accounting Policies: Valuation of Investments and Income Recognition ----------------------------------------------- Investments in mutual funds are valued at the reported net asset value on the last day of the year. The Fidelity Money Market Fund is valued at the cost of contributions made plus earnings less withdrawals. The PECO Energy Common Stock Fund is valued primarily using the Company's closing stock price. The insurance contracts are benefit-responsive guaranteed investment contracts and are valued at contract value. Contract value represents the cost of contributions made under the contract plus earnings at the contract rate less withdrawals. Purchases and sales of investments are reflected on a trade-date basis. Dividend income is recorded when declared payable. Net Appreciation/(Depreciation) in Investments ---------------------------------------------- The Plan presents in the statement of changes in net assets available for benefits the net appreciation/(depreciation) in the fair value of its investments which consists of the realized gains or losses and the unrealized appreciation/(depreciation) on those investments. Distributions ------------- Distributions are recorded when paid. 6 PECO ENERGY COMPANY EMPLOYEE SAVINGS PLAN Notes to Financial Statements 2. Summary of Significant Accounting Policies, Continued: Concentration of Credit Risk ---------------------------- The Plan invests in benefit-responsive guaranteed investment contracts with two insurance companies and is subject to credit risk with respect to these insurance companies. This risk is mitigated by the fact that these companies are rated A and A+ by A.M. Best. Use of Estimates ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Risk 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. 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 would materially affect participants' account balances and the amounts reported in the statement of net assets available for benefits and the statement of changes in net assets available for benefits. 3. Investments: The Plan investments consist of the following funds: Growth - The growth mutual fund invests primarily in U.S. and foreign common stocks of companies that are considered undervalued or out of favor and whose products show potential for improvement. Investments can include any type of security that may produce capital growth. The goal of these funds is to provide capital growth over the long-term. Growth and Income - The growth and income mutual fund invests primarily in common stocks, focusing on larger, more established companies. Investments are spread out across many different kinds of companies and industries. The goal of these funds is to provide capital growth and income over the long-term. 7 PECO ENERGY COMPANY EMPLOYEE SAVINGS PLAN Notes to Financial Statements 3. Investments, Continued: Small Capitalization - The small capitalization growth fund invests primarily in stocks of companies which have market capitalization of less than $1 billion at the time of investment. The fund tries to keep at least one-third of its assets in stocks of companies with market capitalizations of $550 million or less and also invests up to 25% of its assets in foreign securities. This fund's goal is to provide capital growth over the long-term. Equity Income - The equity income mutual fund invests primarily in attractively priced, dividend paying, income-producing equity securities; including common and preferred stocks, convertible securities, and debt securities (bonds). The goal of this fund is to invest for capital growth and current income. Foreign - The foreign fund invests primarily in common stocks of companies in any foreign country, developed or developing. The goal of this fund is to provide capital growth over the long-term by investing internationally. Money Market Fund - The money market fund invests primarily in high quality, investment grade, short-term, U.S. dollar denominated money market securities of domestic and foreign issuers. Investments include short-term corporate obligations, U.S. government obligations, and certificates of deposit. The goal of this fund is to preserve participants' investments, maintain a stable price, and provide current income. Fixed Income Fund - This fund is comprised of both contracted rate investments through a managed income portfolio as well as insurance contracts. The contract rate is established at the commencement of the contract and remains fixed (except for certain conditions) at that rate until maturity. The contract rate reflects market and other conditions at the commencement of the contract. Balanced Fund - The balanced fund invests primarily in a diversified mix of common and preferred stocks, and investment grade bonds. The fund is diversified across many sectors and industries. The goal of this fund is to provide regular income, conservation of principal and an opportunity for long-term growth of principal and income. PECO Energy Common Stock Fund - The Company stock fund invests in primarily PECO Energy Company common stock and a small amount of short-term investments which enables participants to buy or sell without the usual trade settlement period of individual stock transactions. 8 PECO ENERGY COMPANY EMPLOYEE SAVINGS PLAN Notes to Financial Statements 3. Investments, Continued: As of December 31, 1999 and 1998, respectively, the Plan held the following investments, each of which accounted for more than 5% of the total net assets available for benefits: Investments 1999 1998 ----------- ------------- ------------- Legg Mason NAV Value Trust Fund $ 331,945,229 $ 249,649,394 Fidelity Contrafund 207,589,326 183,395,100 Putnam Growth & Income Fund A 69,122,232 78,782,668 During 1999 and 1998, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated by $70,936,190 and $125,540,832, respectively, as follows: 1999 1998 ------------- ------------- Mutual Funds $ 75,902,582 $ 112,782,821 Common Stock (4,966,392) 12,758,011 ------------- ------------- Total $ 70,936,190 $ 125,540,832 ============= ============= As of December 31, 1999 and 1998, respectively, the Plan held insurance contracts with interest rate ranges of 6.30% to 7.13% and 6.30% to 7.70%, respectively. 4. Plan Termination: While it is the Company's intention to continue the Plan in operation indefinitely, the Company may terminate the Plan in whole or in part at any time. Any such termination, partial termination or discontinuance of contributions shall be effected only upon condition that such action is taken as shall render it impossible for any part of the assets of the Plan to be used for, or diverted to, purposes other than the exclusive benefit of the Plan participants and their beneficiaries. 9 PECO ENERGY COMPANY EMPLOYEE SAVINGS PLAN Notes to Financial Statements 5. Tax Status: The Internal Revenue Service has determined and informed the Company that the Plan is qualified under Sections 401(a) and 401(k) of the Internal Revenue Code and that the Plan is exempt from federal income tax under Section 501(a) by letter dated April 15, 1995. The Plan has been amended since receiving the original determination letter, however, the Company believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Internal Revenue Code. 6. General and Administrative Expenses: All administrative fees are paid by the Company on behalf of the Plan. 10
PECO ENERGY COMPANY EMPLOYEE SAVINGS PLAN Schedule of Assets Held for Investment Purposes as of December 31, 1999 Schedule H, Part IV, Item 4i, Form 5500 e. Current a. b. Identity of Issuer, Lessor Similar Party c. Description of Investment d. Cost Value - --- ----------------------------------------------- ------------------------------------------ -------------- ---------------- Legg Mason NAV Value Trust Mutual Fund $ 219,939,040 $ 331,945,229 * Fidelity Contrafund Mutual Fund 184,210,351 207,589,326 Putnam Fund Mutual Fund 78,163,986 69,122,232 Spartan Mutual Fund 19,726,619 24,960,256 Franklin Small Capitalization Fund Mutual Fund 11,996,439 17,793,289 Putnam Equity Income Fund Mutual Fund 2,489,813 2,196,170 * Fidelity Retirement Money Market Mutual Fund 33,045,196 33,045,196 Dodge & Cox Balanced Fund Mutual Fund 21,262,495 20,305,136 * Managed Income Portfolio II Mutual Fund 35,349,000 35,349,000 Continental Assurance Company (1997) Insurance Contract maturing 12/29/01, 7.13% 9,206,963 9,206,963 Continental Assurance Company (1996) Insurance Contract maturing 12/29/00, 6.30% 13,849,729 13,849,729 Principal Mutual Life Insurance Company (1995) Insurance Contract maturing 12/30/99, 7.70% 295 295 Templeton Foreign Fund Mutual Fund 3,675,674 4,121,993 * PECO Energy Company Common stock 19,262,912 27,741,632 Participant Loans Rates ranged from 6.30% to 8.75% -- 15,499,482 ------------- ------------- $ 652,178,512 $ 812,725,928 ============= ============= * - Denotes parties in interest
11 EXHIBITS List of Exhibits: - ---------------- Exhibit 23.1 - Consent of Independent Accountants 12 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the plan) have duly caused this annual report to be signed by the undersigned hereunto duly authorized. By: /s/ J. Barry Mitchell -------------------------------------- J. Barry Mitchell Vice President - Finance and Treasurer Plan Administrator 13 EX-23.1 2 0002.txt Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Registration No. 333-36739) of PECO Energy Company of our report on our audits of the financial statements of the PECO Energy Employee Savings Plan as of December 31, 1999 and 1998 and for each of the two years in the period ended December 31, 1999, dated June 26, 2000, which appears on page 3 of this Form 11-K. /s/ PricewaterhouseCoopers LLP Philadelphia, PA 19103 June 26, 2000 -----END PRIVACY-ENHANCED MESSAGE-----