<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[x] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission file number 333-37959
A. Full title of the plan:
RCN SAVINGS & STOCK OWNERSHIP PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
RCN CORPORATION
105 Carnegie Center
Princeton, New Jersey 08540
<PAGE>
RCN CORPORATION
RCN SAVINGS & STOCK OWNERSHIP PLAN
Index to the Financial Statements
and Supplemental Schedules
Pages
Report of Independent Accountants 1
Financial Statements:
Statement of Net Assets Available for Benefits, with
Fund Information at December 31, 1998 2
Statement of Net Assets Available for Benefits, with
Fund Information at December 31, 1997 3
Statement of Changes in Net Assets Available for Benefits,
with Fund Information for the year ended December 31,
1998 4
Statement of Changes in Net Assets Available for Benefits,
with Fund Information for the period ended December 31,
1997 5
Notes to Financial Statements 6-11
Supplemental Schedules:
Item 27(a)* - Schedule of Assets Held for Investment Purposes
at December 31, 1998 12
Item 27(d)* - Schedule of Reportable Transactions for the year
ended December 31, 1998 13
Item 27(a)* - Schedule of Assets Held for Investment Purposes
at December 31, 1997 14
Item 27(d)* - Schedule of Reportable Transactions for the period
ended December 31, 1997 15
* Refer to item numbers in Form 5500 (Annual Return/Report of
Employee Benefit Plan) for the plan periods ended December
31, 1998, which items are incorporated herein by reference
Signatures
Exhibits:
23 Consent of Independandent Accountants
<PAGE>
Report of Independent Accountants
To the Participants and Plan Administrator of
the RCN Savings & Stock Ownership 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 RCN Savings & Stock Ownership Plan (the "Plan") at December 31, 1998 and
1997 and the changes in net assets available for benefits for the periods then
ended in conformity with generally accepted accounting principles. 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
generally accepted auditing standards 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 schedules of Assets
Held for Investment Purposes 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 Fund Information
in the statements of net assets available for benefits and the statements of
changes in net assets available for benefits is presented for additional
analysis rather than to present the net assets available for benefits and
changes in net assets available for benefits of each fund.
The supplemental schedules and Fund Information 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.
PricewaterhouseCoopers LLP
June 28, 1999
<PAGE>
<TABLE>
RCN CORPORATION
RCN SAVINGS & STOCK OWNERSHIP PLAN
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1998
(Thousands of Dollars)
<CAPTION>
Non-Par
Participant Directed Directed
---------------------------------------------------------------------------- --------
Basic Retire Inter- Alliance RCN RCN
Value Capital Bond Growth Preser national Quasar Common Loan Common Clearing
Fund Fund Fund Fund Fund Fund Fund Stock Fund Stock Fund Total
------ ------- ---- ------ ------ -------- -------- ------ ---- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair
value:
Shares of registered
investment companies:
Merrill Lynch Basic
Value Fund Class A $2,813 $2,813
Merrill Lynch Capital
Fund Class A $1,975 1,975
Merrill Lynch Bond
Intermediate Term A $371 371
Merrill Lynch Growth
Fund for Investment
and Retirement Class A $2,040 2,040
Merrill Lynch Retirement
Preservation Trust $1,641 1,641
Ivy International Fund $485 485
Alliance Quasar Fund
Class A $284 284
RCN common stock -
422,017 shares $4,177 $3,288 7,465
Participants notes
receivable $633 633
Clearing Fund $33 33
------ ------- ----- ------ ------ -------- -------- ------ ---- -------- --------- ------
Total investments 2,813 1,975 371 2,040 1,641 485 284 4,177 633 3,288 33 17,740
------ ------ ----- ------ ------ -------- -------- ------ ---- -------- --------- -------
Contributions receivable 47 32 6 34 27 8 5 69 - 104 - 332
------ ------ ----- ------ ------ -------- -------- ------ ---- -------- --------- -------
Total assets 2,860 2,007 377 2,074 1,668 493 289 4,246 633 3,392 33 18,072
------ ------ ----- ------ ------ -------- -------- ------ ---- -------- --------- -------
Net assets available
for benefits $2,860 $2,007 $377 $2,074 $1,668 $493 $289 $4,246 $633 $3,392 $33 $18,072
====== ====== ==== ====== ====== ======== ======== ====== ==== ======== ========= =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
RCN CORPORATION
RCN SAVINGS & STOCK OWNERSHIP PLAN
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1997
(Thousands of Dollars)
<CAPTION>
Non-Par
Participant Directed Directed
-------------------------------------------------------------------------- --------
Basic Retirement Inter- RCN RCN
Value Capital Bond Growth Preservation national Common Loan Common Clearing
Fund Fund Fund Fund Fund Fund Stock Fund Stock Fund Total
------ ------- ---- ------ ------------ -------- -------- ----- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair
value:
Shares of registered
investment companies:
Merrill Lynch Basic
Value Fund Class A $2,123 $2,123
Merrill Lynch Capital
Fund Class A $1,592 1,592
Merrill Lynch Bond
Intermediate Term A $269 269
Merrill Lynch Growth
Fund for Investment
and Retirement Class A $1,986 1,986
Merrill Lynch Retirement
Preservation Trust $1,547 1,547
Ivy International Fund $222 222
RCN common stock -
121,808 shares $2,810 $1,362 4,172
Participants notes
receivable $512 512
Cash and cash
equivalents $195 195
------ ------- ----- ------ ------ ----- --------- ---- -------- -------- ------
Total investments 2,123 1,592 269 1,986 1,547 222 2,810 512 1,362 195 12,618
------ ------- ----- ------ ------ ----- --------- ---- -------- -------- -------
Interfund rec/(pay) 21 20 5 38 13 9 22 - 67 (195) -
------ ------- ----- ------ ------ ----- --------- ---- -------- -------- -------
Total assets 2,144 1,612 274 2,024 1,560 231 2,832 512 1,429 - 12,618
------ ------- ----- ------ ------ ----- --------- ---- -------- -------- -------
Net assets available
for benefits $2,144 $1,612 $274 $2,024 $1,560 $231 $2,832 $512 $1,429 $ - $12,618
====== ======= ==== ====== ====== ===== ========= ==== ======== ======== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
RCN SAVINGS & STOCK OWNERSHIP PLAN
Statement of Changes in Net Assets Available for Benefits, with Fund Information
for the year ended December 31, 1998
(Thousands of Dollars)
<CAPTION>
Non-Par-
ticipant
Participant Directed Directed
----------------------------------------------------------------------- --------
Basic Retir Inter- Alliance RCN RCN
Value Capital Bond Growth Preser National Quasar Common Loan Common Clearing
Fund Fund Fund Fund Fund Fund Fund Stock Fund Stock Fund Total
----- ------- ---- ------ ------- -------- -------- ------- ---- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income:
Net apprec (deprec)
in fair value of
investments $47 $(12) $3 $(561) $2 $10 $(33) $525 - $490 - $471
Interest/dividends 212 117 19 37 90 8 10 - $42 - $9 544
Contributions:
Participant's contrib-
tions 499 390 109 699 242 201 115 608 - - - 2,863
Employer's contribution - - - - - - - - - 1,292 - 1,292
Rollovers 49 44 7 98 16 38 7 74 - - - 333
----- ------- ---- ------ ------- -------- -------- ------- ---- -------- -------- ------
Total additions 807 539 138 273 350 257 99 1,207 42 1,782 9 5,503
----- ------- ---- ------ ------- -------- -------- ------- ---- -------- -------- ------
Deductions from net assets
attributed to:
Benefits paid to
participants (54) (126) (7) (65) (76) (21) (3) (52) (17) (49) - (470)
Administrative expenses (1) (1) - (1) - - - - - - - (3)
----- ------- ---- ------ ------- -------- -------- ------- ---- -------- -------- ------
Total deductions (55) (127) (7) (66) (76) (21) (3) (52) (17) (49) - (473)
----- ------- ---- ------ ------- -------- -------- ------- ---- -------- -------- ------
Net increase (decrease)
prior to interfund
transfers 752 412 131 207 274 236 96 1,155 25 1,733 9 5,030
Interfund transfers (130) (33) (48) (279) (137) (23) 9 260 126 231 24 -
Affiliated plan transfers 94 16 20 122 (29) 49 184 (1) (30) (1) - 424
----- ------- ---- ------ ------- -------- -------- ------- ---- -------- -------- ------
Net increase (decrease) 716 395 103 50 108 262 289 1,414 121 1,963 33 5,454
Beginning of year 2,144 1,612 274 2,024 1,560 231 - 2,832 512 1,429 - 12,618
------ ------ ---- ------ ------ -------- -------- ------ ---- ------ -------- -------
End of year $2,860 $2,007 $377 $2,074 $1,668 $493 $289 $4,246 $633 $3,392 $33 $18,072
======= ====== ==== ====== ====== ======== ======== ====== ==== ======= ======== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
RCN CORPORATION
RCN SAVINGS & STOCK OWNERSHIP PLAN
Statement of Changes in Net Assets Available for Benefits, with Fund Information
for the period ended December 31, 1997
(Thousands of Dollars)
<CAPTION>
Non-Par-
ticipant
Participant Directed Directed
-------------------------------------------------------------------------- --------
Basic Capi- Retir Inter- CTE Cable RCN RCN
Value tal Bond Growth Preser Natl Common Common Common Loan Common Clear
Fund Fund Fund Fund Fund Fund Stock Stock Stock Fund Stock Fund Total
----- ----- ---- ------ ------- ------- ------ ------ ------ ---- -------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income:
Net apprec (deprec)
in fair value of
investments $202 $92 $3 $(29) - $(10) $165 $266 $374 - $1,048 - $2,111
Interest/dividends 77 67 4 138 $23 3 - - - $8 - - 320
Contributions:
Participant's contrib-
tions 107 96 26 186 62 48 - - 106 - - - 631
Employer's contribution - - - - - - - - - - 306 - 306
Rollovers 3 - - - - - - - 2 - - - 5
----- ----- ---- ------ ------- ------- ------ ------ ------ ---- -------- ----- -------
Total additions 389 255 33 295 85 41 165 $266 482 8 1,354 - 3,373
----- ----- ---- ------ ------- ------- ------ ------ ------ ---- -------- ----- -------
Deductions from net assets
attributed to:
Benefits paid to
participants (2) (6) (2) (7) (1) (1) - - (5) - (13) - (37)
Administrative expenses - - - - - - - - (1) - - - (1)
----- ----- ---- ------ ------- ------- ------ ------- ------ ---- -------- ----- ------
Total deductions (2) (6) (2) (7) (1) (1) - - (6) - (13) - (38)
----- ----- ---- ------ ------- ------- ------ ------- ------ ---- -------- ----- ------
Net increase (decrease)
prior to interfund
transfers 387 249 31 288 84 40 165 266 476 8 1,341 - 3,335
Interfund transfers (51) (19) (17) (149) (137) (27) (1,161) (349) 1,874 36 - - -
Affiliated plan transfers 1,808 1,382 260 1,885 1,613 218 996 83 482 468 88 - 9,283
----- ----- ---- ------ ------- ------- ------ ------- ------ ---- -------- ----- ------
Net increase (decrease) 2,144 1,612 274 2,024 1,560 231 - - 2,832 512 1,429 - 12,618
------ ------ ---- ------ ------ ------- ------ ------- ------ ---- -------- ----- -------
End of year $2,144 $1,612 $274 $2,024 $1,560 $231 $ - $ - $2,832 $512 $1,429 $ - $12,618
====== ====== ==== ====== ====== ======= ====== ======= ====== ==== ======== ===== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
RCN CORPORATION
RCN SAVINGS & STOCK OWNERSHIP PLAN
Notes to Financial Statements
(Thousands of Dollars)
1. Description of Plan:
The following brief description of RCN Savings and Stock Ownership Plan, formed
on October 1, 1997 (the "Plan") is provided for general information purposes
only. Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
(a) General:
The Plan is a defined contribution plan covering substantially all employees of
RCN Corporation and its subsidiaries (the "Company"), who have attained the age
of twenty-one and have three months of enlisted service. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974.
The Plan was formed for the benefit of employees of the Company as a consequence
of the distribution of common stock of RCN Corporation by C-TEC Corporation
("C-TEC"), the Company's former parent. As part of C-TEC's restructuring,
C-TEC changed its name to Commonwealth Telephone Enterprises, Inc. In
connection with the formation of the Plan and the restructuring, assets
amounting to $9,282 were transferred to the Plan.
(b) Contributions:
Each year, participants may contribute between 1% and 15% of their annual
compensation. For the Plan years ended December 31, 1998 and 1997, the
statutory maximum reduction which participants may elect could not exceed
$10 and $9.5, respectively.
Contributions are subject to certain limitations. Participants may also
contribute amounts representing distributions from other qualified employee
retirement plans. The Company contributes on behalf of each participant an
amount not to exceed 100% of the first 3.5% of the participant's compensation.
All Company contributions are used to purchase common stock of RCN.
Participants may change salary deferral elections as of each of the following
entry dates (January 1, April 1, July 1 or October 1). Participants may change
investment elections on a daily basis, subject to limitations on RCN stock.
(c) Participant's Account:
Each participant's account is credited with the participant's contribution and
allocations of the Company's contribution and Plan earnings, and charged with
an allocation of administrative expenses. Allocations are based upon
participant's account balances, as defined. The benefit to which a participant
is entitled is the benefit that can be provided from the participant's account
balance.
<PAGE>
(Thousands of Dollars)
1. Description of Plan, continued:
(d) Vesting:
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company's matching contributions portion of their
accounts plus earnings thereon is based on years of continuous service according
to the following schedule:
Years of Service Vested Percent
1 0%
2 25%
3 50%
4 75%
5 100%
(e) Investment Options:
The investment programs of the Plan are as follows:
Basic Value Fund:
This Merrill Lynch Fund invests primarily in stocks that appear undervalued,
especially those selling at a discount from book value or at low price/earnings
ratios. The investment goal is capital appreciation.
Capital Fund:
This Merrill Lynch Fund provides for a return on investment based on the
performance of a balanced investment in equity, debt, convertible, and money
market securities.
Bond Fund:
This Merrill Lynch Fund provides for a return on investment based on the
performance of investment grade fixed income securities comprising the fund.
Growth Fund:
This Merrill Lynch Fund provides for a return on investment based on the
performance of equity securities comprising the fund.
<PAGE>
(Thousands of Dollars)
1. Description of Plan, continued:
Retirement Preservation Trust Fund:
Invested in Merrill Lynch Trust account which is made up primarily of guaranteed
investment contracts generally issued by an insurance company or a bank
returning guaranteed principal and interest to the fund. A lesser portion of
the fund is composed of high-quality money market investments.
International Fund:
This Ivy Mackenzie Fund invests primarily in stocks of European, Pacific Basin
and South American Markets. The investment goal is long-term capital
appreciation.
Alliance Quasar Fund:
This Alliance Fund invests in widely diversified portfolios of equity securities
spread among many industries that offer the possibility of above-average
earnings growth.
RCN Common Stock:
Monies invested in this fund are used to purchase common stock of RCN
Corporation.
Loan Fund:
The Fund represents the outstanding principal balance for all participant loans.
Clearing Fund:
This Merrill Lynch Fund serves as a clearing fund representing unallocated
funds.
(f) Plan Benefits:
On termination of service due to death, disability or retirement a participant
may elect to receive a lump sum distribution if the value of the participant's
account is less than or equal to $5. If the value of the participant's
account is greater than $5 and the participant rolled over money from a
qualified plan, the participant may elect to have their benefit paid out in
an annuity.
<PAGE>
(Thousands of Dollars)
1. Description of the Plan, continued:
(f) Plan Benefits, continued:
A participant may elect to have the lump-sum distribution be paid in cash or
RCN Corporation common stock (from the Common Stock Fund). If a member elects
to receive stock, only whole shares are distributed with cash being distributed
in lieu of fractional shares.
Additionally, the Plan permits participants to withdraw a portion or all of
their vested account balance. These special distributions include in service
distributions and hardship withdrawals. An active participant may request an
in service distribution upon attaining age 59 1/2. A hardship withdrawal may
be granted to a participant for emergency circumstances as defined by the Plan.
(g) Participant Loans:
Participants may borrow from their account the lesser of 50% of their vested
account balance or $50. Loan transactions are treated as a transfer to
(from) the investment fund from (to) the Loan Fund. Loan terms range from
1-5 years unless the loan is for the purchase of a primary residence, for which
the term is 30 years. The loans are collateralized by the balance in the
participants account and bear interest at a rate commensurate with local
prevailing rates as determined by the Plan administrator. Principal and
interest is paid through payroll deductions.
(h) Forfeitured Accounts:
At December 31, 1998 forfeited nonvested accounts totaled $40. These accounts
will be used to reduce future employer contributions. Also, in 1998, employer
contributions were reduced by $0 from forfeited non-vested accounts.
2. Summary of Significant Accounting Policies:
Basis of Accounting:
The accompanying financial statements are prepared on the accrual basis of
accounting and incorporate the following significant accounting policies:
(a) 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. The guaranteed investment
contracts held in the Merrill Lynch Retirement Preservation Trust Fund are
valued at fair value. The Company stock is valued at its quoted market price.
Participant loans are valued at cost which approximates fair value.
<PAGE>
(Thousands of Dollars)
2. Summary of Significant Accounting Policies, Continued:
(a) Investment Valuation and Income Recognition, continued:
Purchases and sales of securities are recorded on the trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
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.
(b) Expenses of the Plan:
Fees and other costs incurred are paid by the Plan, then allocated to each
investment fund.
(c) Benefit Payments:
Benefit payments to participants are recorded when paid.
(d) Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make significant estimates and
assumptions that affect the reported amounts of net assets and changes therein,
and disclosure of contingent assets and liabilities. Actual results could
differ from those estimates.
(e) 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. 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.
<PAGE>
(Thousands of Dollars)
3. Plan Termination:
Although it has not expressed any intention to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
4. Related Party Transactions:
Certain Plan investments are shares of mutual funds managed by Merrill Lynch.
Merrill Lynch is the trustee as defined by the Plan and, therefore, these
transactions qualify as party-in-interest.
As described in Note 1, participants may choose to purchase common stock of RCN
Corporation, the Plan Sponsor. During 1998, purchases of $2,862 were made,
and proceeds of $440 were received from sales of RCN Corporation's common
stock.
5. Tax Status:
The Internal Revenue Service has determined and informed the Company by a
letter dated March 11, 1999 that the Plan and related Trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC). The
Plan Administrator and Plan's tax counsel believe that the Plan was operated
in compliance with the applicable requirements of the IRC.
6. Plan Mergers:
During 1998, defined contribution plans of two acquired companies, Erol's
Internet, Inc. and Ultranet Communications, Inc., were merged with and into
the Plan. In connection with the merger, assets amounting to $424 were
transferred to the Plan.
<PAGE>
<TABLE>
RCN CORPORATION
RCN SAVINGS & STOCK OWNERSHIP PLAN
(Thousands of Dollars)
Item 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1998
<CAPTION>
(a) (b) (c) (d) (e)
Current
Identity of Issue Description of Asset Cost Value
- --- ----------------------- ---------------------------------- ----------- ----------
<S> <S> <S> <C> <C>
* Merrill Lynch Basic Value Fund $2,604 $2,813
Capital Fund 1,911 1,975
Bond Fund 366 371
Growth Fund 2,585 2,040
Retirement Preservation Fund 1,641 1,641
International Fund 483 485
Alliance Quasar Fund 313 284
Clearing Fund 33 33
* RCN Common Stock Shares of RCN Common Stock 5,288 7,465
* Participants' Notes Participants' loans with interest
rates from 8.25% to 8.5% with
maturity dates from 1999 to 2028 - 633
----------- -----------
Total $15,225 $17,740
=========== ===========
</TABLE>
* Party-in-interest
<PAGE>
<TABLE>
RCN CORPORATION
RCN SAVINGS & STOCK OWNERSHIP PLAN
(Thousands of Dollars, Except Transaction Data)
Item 27(d) - Schedule of Reportable Transactions
for the year ended December 31, 1998
<CAPTION>
(a) (b) (c) (d) (e) (f) (g)
Number of Purchase Selling Current Net Gain
Identity of Party Description of Asset Transactions Price Price Cost Value Loss
- -------------------- ----------------------- ------------ ---------- -------- ---------- ---------- --------
<S> <S> <C> <C> <C> <C> <C> <C>
Merrill Lynch* Basic Value Fund 149 $1,069 - $1,069 $1,069 -
Basic Value Fund 161 - $425 394 - $31
Capital Fund 150 670 - 670 670 -
Capital Fund 171 - 274 259 - 15
Growth Fund 158 1,104 - 1,104 1,104 -
Growth Fund 207 - 488 549 - (61)
Retirement Preservation Fund 264 521 - 521 521 -
Retirement Preservation Fund 112 - 360 360 - -
Clearing Fund 112 830 - 830 830 -
Clearing Fund 112 - 806 806 - -
RCN Corporation* Shares of RCN Common Stock 239 2,862 - 2,862 2,862 -
Shares of RCN Common Stock 169 - 440 335 - 105
</TABLE>
*Party-in-interest
<PAGE>
<TABLE>
RCN CORPORATION
RCN SAVINGS & STOCK OWNERSHIP PLAN
(Thousands of Dollars)
Item 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1997
<CAPTION>
(a) (b) (c) (d) (e)
Current
Identity of Issue Description of Asset Cost Value
- --- ----------------------------- ----------------------------- ----------- -----------
<S> <S> <S> <C> <C>
* Merrill Lynch Basic Value Fund $1,930 $ 2,123
Capital Fund 1,501 1,592
Bond Fund 266 269
Growth Fund 2,029 1,988
Retirement Preservation Fund 1,547 1,547
International Fund 231 222
Clearing Fund 195 195
* RCN Common Stock Shares of RCN Common Stock 2,766 4,172
* Participants' Notes Participants' loans with
interest rates from 8.25%
to 8.5% with maturity dates
from 1998 to 2027 - 512
------------ ------------
Total $10,465 $ 12,618
============ ============
</TABLE>
*Party-in-interest
<PAGE>
<TABLE>
RCN CORPORATION
RCN SAVINGS & STOCK OWNERSHIP PLAN
(Thousands of Dollars, Except Transaction Data)
Item 27(d) - Schedule of Reportable Transactions
for the year ended December 31, 1997
<CAPTION>
(a) (b) (c) (d) (e) (f) (g)
Number of Purchase Selling Current Net Gain
Identity of Party Description of Asset Transactions Price Price Cost Value Loss
- --------------------- ------------------------ ------------ ----------- -------- ---------- ---------- --------
<S> <S> <C> <C> <C> <C> <C> <C>
Merrill Lynch* Basic Value Fund 21 $ 176 - $ 176 $ 176 -
Basic Value Fund 31 - $ 61 54 - $ 7
Capital Fund 26 153 - 153 153 -
Capital Fund 34 - 36 35 - 1
Bond Fund 17 27 - 27 27 -
Bond Fund 19 - 20 20 - -
Growth Fund 30 337 - 337 337 -
Growth Fund 33 - 207 193 - 14
Retirement Preservation Fund 54 90 - 90 90 -
Retirement Preservation Fund 26 - 156 156 - -
Clearing Fund 17 1,790 - 1,790 1,790 -
Clearing Fund 18 - 1,790 1,790 - -
RCN Corporation* Shares of RCN Common Stock 44 2,228 - 2,228 2,228 -
Shares of RCN Common Stock 37 - 49 32 - 17
C-TEC Corporation* Shares of C-TEC Common Stock 2 - 1,161 996 - 165
Cable Michigan, Inc.* Cable Michigan Common Stock 1 - 349 83 - 266
</TABLE>
*Party-in-interest
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this annual report to be signed on its behalf by the
undersigned thereunto duly authorized.
RCN SAVINGS & STOCK
OWNERSHIP PLAN
DATE: June 29, 1999 By /s/ Michael J. Mahoney
-----------------------
Michael J. Mahoney
President & COO
<PAGE>
EXHIBIT 23
----------
Consent of Independent Accountants
We consent to the incorporation by reference in the registration statement of
RCN Corporation on Form S-8 (File Nos. 333-37959 and 333-38137) of our report
dated June 28, 1999, on our audits of the financial statements and financial
statement schedules of RCN Savings & Stock Ownership Plan as of December 31,
1998 and 1997 and for the periods ended December 31, 1998, which report is
included in this Annual Report on Form 11-K
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
June 29, 1999
