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
(Mark One)
[ X ] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
[Fee Required]
For the fiscal year ended December 31, 1999.
[ ] 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 0-18595
A. Full title of the plan and the address of the plan, if different from
that of the issuer
named below:
ELIZABETHTOWN WATER COMPANY SAVINGS AND INVESTMENT PLAN - 401-K
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
E'TOWN CORPORATION
600 South Avenue
Westfield, New Jersey 07090
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ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN - 401(k)
financial statements for the years
ended December 31, 1999 and 1998 and
supplemental schedules for the
year ended December 31, 1999 and
independent auditors' report
prepared for filing as part of the annual
return/report of employee benefit plan (FORM 5500)
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ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN -
401(k)
TABLE OF CONTENTS
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DESCRIPTION PAGE
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits as of
December 31, 1999 and 1998 2
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 1999 and 1998 3
Notes to Financial Statements for the Years Ended
December 31, 1999 and 1998 4 - 7
Schedule of Assets Held for Investment Purposes
as of December 31, 1999 8
Schedule of Reportable Transactions for
the Year Ended December 31, 1999 9
Schedules not filed herewith are omitted
because of the absence of conditions under which
they are required.
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INDEPENDENT AUDITORS' REPORT
Elizabethtown Water Company
Savings and Investment Plan - 401(k)
We have audited the accompanying statements of net assets available for
benefits of Elizabethtown Water Company Savings and Investment Plan - 401(k)
(the "Plan") as of December 31, 1999 and 1998, and the related statements of
changes in net assets available for benefits for the years then ended. 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 in accordance with auditing standards generally
accepted in the United States of America. Those standards 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. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly in all material
respects, the net assets available for benefits of 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 of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in the table of
contents 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 schedules are the responsibility of the Plan's management. Such
schedules have been subjected to the auditing procedures applied in our audit
of the basic 1999 financial statements and, in our opinion, are fairly stated
in all material respects when considered in relation to the basic financial
statements taken as a whole.
/s/ Deloitte & Touche LLP
Parsippany, New Jersey
June 27, 2000
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ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN - 401(K)
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1999 and 1998
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December 31,
1999 1998
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ASSETS:
Investments (See Note 2) $27,552,465 $20,360,448
Contributions Receivable 23,548 63,302
Accounts Receivable 6,052 6,313
Accrued Repayment of Loans 347 4,502
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Total Assets 27,582,412 20,434,565
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NET ASSETS AVAILABLE FOR BENEFITS $27,582,412 $20,434,565
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See notes to financial statements.
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See notes to financial statements.
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ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN - 401(K)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1999 and 1998
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December 31,
1999 1998
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ADDITIONS:
Investment Income:
Net Appreciation in fair value of investments $5,099,691 $2,417,941
Interest Income 6,480 37,818
Dividend Income 1,166,366 750,850
Contributions:
Employer 562,912 455,526
Employees 1,427,308 1,199,525
Other:
Rollovers 0 27,287
Participant Loans 179,000 99,900
Repayment of Loans 123,892 107,937
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Total Additions 8,565,649 5,096,784
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DEDUCTIONS:
Distributions to Participants 1,140,718 1,294,594
Forfeitures 1,877 876
Employee Loans 179,000 99,900
Repayment of Loans 96,207 107,937
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Total Deductions 1,417,802 1,503,307
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NET INCREASE 7,147,847 3,593,477
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 20,434,565 16,841,088
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NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $27,582,412 $20,434,565
========== ==========
See notes to financial statements.
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ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN - 401(k)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND
1998
1. DESCRIPTION OF THE PLAN
General
The Savings and Investment Plan - 401(k) (Plan) was adopted by the
Elizabethtown Water Company (Company) as of January 1, 1988. The Plan is
administered by the Administrative Committee of the Company, appointed
from time to time by the Board of Directors. Expenses
incurred in the administration of the Plan are paid by the
Company.
Eligibility
Employees of Elizabethtown Water Company, The Mount Holly Water Company,
E'town Corporation and E'town Properties who were non-union employees as
of January 1, 1988 were eligible to join the Plan. As of January 1,
1995, employees who were union employees were eligible to join the Plan.
Employees may become members of the Plan after three months of service
and may enter the Plan at the next entry date. The entry dates are
January 1 and July 1. If an employee withdraws from the Plan, the
employee may not rejoin the Plan until the second entry date following
withdrawal.
Contributions
Non-union employees may reduce their salaries up to 10% or a dollar limit
of $10,000 and direct that the salary reductions be invested in the
Plan. This salary reduction, in accordance with the Internal Revenue
Code Section 401(k), shall not be subject to Federal or state income
taxes. As of April 1, 1996, the Company matches 60% of participating
non-union employees' salary reductions up to 6% with E'town Corporation
stock. E'town is the parent company of Elizabethtown Water Company.
Union employees may reduce their salaries up to 6% and, effective
February 1, 1998, the Company matched 25% of participating union
employees' salary reductions up to that 6%. Effective February 1, 1999,
with the signing of a new union contract, the participating union
employees' can reduce their salaries up to 10% with the Company matching
35% on the first 6% with E'town Corporation stock.
Salary reductions are deducted each payroll period and deposited along
with the Company's matching contributions with the Trustee at the end of
the month.
The Plan provides that the salary reductions and matching contributions
are recorded in the accounts of the eligible participants.
Vesting and Distribution
All salary reductions are 100% vested and non-forfeitable. Employees are
vested in Company matching contributions based upon years of service.
Employees vest 25% each year after two years of service and are 100%
vested after five years of service. Distributions may be made from the
plan upon retirement, disability, death or separation from service.
Distributions may also be made for special financial hardship situations
in accordance with the Internal Revenue Code guidelines.
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Loans
Participants who are non-union may be granted a loan for Plan designated
purposes for up to 50% of their vested plan balance. Loans are repaid
over a period of up to 5 years, or longer for a loan for the purchase of
a principal residence. The interest rate is 2 points above prime or the
prevailing mortgage rate for a residential loan. At December 31, 1999,
interest rates on these loans range from 6.61% to 11% and maturity dates
range from February, 1999 to April, 2009. The loan and the interest
payments are credited to the participants' investment funds in relation
to the participants' investment decision. Effective February 1, 1999,
with the signing of a new union contract, union employees' are eligible
to apply for loans.
2. INVESTMENTS
Effective April 1, 1997 PNC Bank was appointed record keeper and
Trustee. Participants may elect to have their
contributions and their investments balance invested in any of the
following nine investments:
PNC Investment Contract Fund - The PNC Investment Contract Fund is invested
in guaranteed investment contracts (GIC's) issued by insurance companies and
cash equivalents. This fund is managed by PNC Asset Management. The average
maturity of the fund is less than three years. The PNC Investment Contract Fund
was replaced by the BlackRock Money Market Fund in June, 1999.
BlackRock Money Market Fund - The BlackRock Money Market Fund is a money
market fund that invests in a broad range of short term, high quality, U.S.
dollar-denominated instruments, including government, bank, commercial and other
obligations. This fund is managed by Compass Distributors, Inc. This is a new
fund which replaces the PNC Investment Contract Fund effective July, 1999.
Fidelity Advisor High Yield Fund - The Fidelity Advisor High Yield Fund is
invested in bonds of mature and "turnaround" companies seeking higher yields and
appreciation through lower-rated bonds. This fund is managed by Fidelity
Investments.
PNC Balanced Profile Fund - The PNC Balanced Profile Fund is a balanced
fund invested in the following Compass Capital Funds: Select Equity Portfolio,
Growth Equity Portfolio, Value Equity Portfolio and Mid-Cap Growth Equity
Portfolio. These funds are managed by PNC Asset Management.
BlackRock Large Cap Value Equity Fund - The BlackRock Large Cap Value
Equity Fund invests in stock with prices relative to earnings and book values
that are below average and have a market capitalization in excess of $5 billion.
This fund is managed by Compass Distributors, Inc.
Fidelity Advisor Growth Opportunities Fund - The Fidelity Advisor Growth
Opportunities Fund is invested in growth stocks of companies with above average
growth in sales and earnings. This fund is managed by Fidelity Investments.
Janus Worldwide Fund - The Janus Worldwide Fund invests in common stock of
foreign and domestic companies seeking long term growth of capital. This fund is
managed by Janus.
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Janus Growth and Income Fund - The Janus Growth and Income Fund invests
primarily in common stocks. It seeks long-term capital growth and current
income. This fund is managed by Janus.
BlackRock Small Cap Growth Equity Fund - The BlackRock Small Cap Growth
Equity Fund invests in small cap stocks that exhibit earnings growth rate
prospects and have a market value capitalization below $1 billion. This fund is
managed by Compass Distributors, Inc..
E'town Corporation Common Stock Fund - The E'town Corporation Stock Fund is
invested in E'town Corporation common stock which is traded on the New York
Stock Exchange. The shares are held in trust for the Plan by PNC Bank. The Plan
had 250,725 and 239,774 shares, respectively, of E'town Corporation common stock
at December 31, 1999 and 1998.
Effective, January 31, 1998 the Compass Capital Funds changed their name to
the BlackRock Funds. The Plan's investments are reported at fair market value
based on closing market quotations at December 31, 1999 and 1998. Purchases and
sales of securities are recorded on a trade date basis.
At December 31, 1999 and 1998, the following investments held were
greater than 5% of the fair value of the Plan's net assets at the end of the
Plan year:
December 31,
1999 1998
BlackRock Large Cap Value Equity Fund, 148,753
and 140,009 shares, respectively $2,234,265 $2,238,740
Fidelity Advisor Growth Opportunities Fund,
36,983 and 30,492 shares, respectively 1,725,629 1,530,996
Janus Worldwide Fund, 36,876 and 31,903 shares
respectively 2,818,434 1,510,911
BlackRock Small Cap Growth Equity Fund, 49,260
and 40,019 shares, respectively 1,048,014 -
E'town Corporation Common Stock Fund, 250,725
and 239,774 shares, respectively* 15,950,484 11,613,980
* Nonparticipant - directed
During 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated in
value by $5,099,691 as follows:
Common stock $3,652,375
Mutual funds 1,447,316
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$5,099,691
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Nonparticipant-Directed Investments
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments is as
follows:
December 31,
1999 1998
Net Assets:
Common Stock $15,959,182 $11,637,782
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Year ended
December 31, 1999
Changes in Net Assets:
Contributions $748,026
Interest 6,480
Dividends 497,989
Net appreciation 3,652,375
Transfers between funds 144,068
Repayment of loans 23,229
Distribution to participants (725,920)
Forfeitures (1,872)
Employee Loans (22,975)
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Total Changes in Net Assets $4,321,400
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3. TERMINATION OF THE PLAN
Although it has not expressed any intent to do so, the Company may
terminate the Plan at any time. In the event of termination, the assets
of the Plan will be distributed to the participants by the Trustees,
according to the participants' account balances, less the administration
costs of the Trustee.
4. TAX STATUS
The Plan conforms with the requirements of Section 401(a) of the Internal
Revenue Code 1986 (the "Code") and is intended to be exempt from
taxation under Section 501(a) of the Code.
The Plan obtained its latest determination letter on July 24, 1995. The
Plan has been amended since receiving the determination letter. However,
the Plan administrator believes that the Plan is currently designed and
being operated in compliance with the applicable requirements of the Code
and the related trust was tax-exempt as of the financial statement date.
Therefore, there is no provision for income taxes in the Plan's financial
statements.
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5. OTHER
The Plan's accounts are maintained on an accrual basis.
The Plan considers all highly liquid investments with maturity dates of
90 days or less to be cash equivalents.
There are no material lease commitments or parties in interest
transactions.
As of December 31, 1999 and 1998, no benefits were due to participants
who have withdrawn from participation in the Plan.
6. OTHER EVENT
On November 21, 1999, E'town Corporation announced the sale of E'town
Corporation to Thames Water PLC for $68 cash per share. Upon closing of
this transaction which is currently expected to occur before the end of
2000, assuming all regulatory approvals are received, stock within each
participants account will be converted to cash at $68 per share. After the
cash has been received in the participants account, the participant may
direct the proceeds to any of the other investments in the Plan.
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ELIZABETHTOWN WATER COMPANY Form 5500
SAVINGS AND INVESTMENT PLAN - 401(k)
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1999
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Original Cost Market Value
BLACKROCK MONEY MARKET FUND
811,451.54 Shares @ $1.2093 per share $959,546 $981,288
FIDELITY ADVISOR HIGH YIELD FUND
51,812.09 Shares @ $11.37 per share 635,225 589,104
PNC BALANCED PROFILE FUND
51,583.76 Shares @ $21.6907 per share 856,474 1,118,888
BLACKROCK LARGE CAP VALUE EQUITY FUND
148,752.65 Shares @ $15.02 per share 2,249,187 2,234,265
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND
36,983.05 Shares @ $46.66 per share 1,623,799 1,725,629
JANUS WORLDWIDE FUND
36,876.02 Shares @ $76.43 per share 1,639,682 2,818,434
BLACKROCK SMALL CAP GROWTH EQUITY FUND
49,259.51 Shares @ $32.06 per share 1,048,014 1,579,260
JANUS GROWTH & INCOME FUND
4,164.46 Shares @ $41.94 per share 146,214 174,657
E'TOWN CORPORATION COMMON STOCK
250,725.17 Shares @ $62.25 per share 7,520,918 15,607,642
E'TOWN CORPORATION STOCK LIQUIDITY FUND*
342,842.13 Shares @ $1.00 per share 342,842 342,842
LOAN FUND
Market value at December 31, 1999 represents
the total unpaid principal balance at the
end of the year. Interest rates on these
loans range from 6.61% to 11%. Maturity
dates range from February, 1999 through
April, 2009. 380,456 380,456
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TOTAL $17,402,357 $27,552,465
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* This fund represents the cash for investment in E'town Corporation Stock
that is not immediately invested into E'town Corporation Stock.
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ELIZABETHTOWN WATER COMPANY Form 5500
SAVINGS AND INVESTMENT PLAN - 401(K)
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999 *
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Number Number Net
of Total of Total Gain /
Purchases Purchases Sales Sales (Loss)
E'Town Corporation Common Stock 28 1,444,972 - - 18,468
E'Town Corporation Stock
Liquidity Fund 50 1,536,883 61 1,448,720 -
PNC Investment Contract Fund - - 20 1,050,289 104,303
BlackRock Money Market Fund 16 1,066,584 - - 953
Reportable transactions consist of any single transaction or series of
transactions within the Plan year with the same person or entity or for the
same security which, when aggregated, involves an amount that is in excess of
5% of the fair value of Plan assets at the beginning of the Plan year.
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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 hereunto duly authorized.
Date: June 28, 2000 ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN - 401(K)
By: /s/ Gail P. Brady
Name: Gail P. Brady
Title: Trustee
