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, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
For the transition period from to
Commission file number 1-4315
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
(Full title of the plan)
ORANGE AND ROCKLAND UTILITIES, INC.
(Name of issuer of the securities held pursuant to the plan)
ONE BLUE HILL PLAZA
PEARL RIVER, NEW YORK 10965
(Address of principal executive office)
TABLE OF CONTENTS
Page
Signature of Plan Administrator 3
Report of Independent Public Accountants 5
Financial Statements and Notes:
Statements of Net Assets Available for Benefits
as of December 31, 1996 and 1995 7
Statements of Changes in Net Assets Available for
Benefits for the years ended December 31, 1996 and 1995 10
Notes to Financial Statements 13
Supplementary Schedules:
I. Line 27a - Schedules of Assets Held for Investment
Purposes as of December 31, 1996 and 1995 24
II. Line 27d - Schedule of Reportable Transactions
for the year ended December 31, 1996 26
Exhibit
23 Consent of Independent Public Accountants
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.
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
By ROBERT J. MCBENNETT
Robert J. McBennett
Member, Retirement Committee
Date: MAY 14, 1997
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS
DECEMBER 31, 1996 AND 1995
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Orange and Rockland Utilities, Inc.
Retirement Committee
We have audited the accompanying statements of net assets
available for benefits of the Orange and Rockland Utilities, Inc.
Management Employees' Savings Plan (the "Plan") as of December
31, 1996 and 1995, and the related statements of changes in net
assets available for benefits for the years then ended. These
financial statements and the schedules referred to below are the
responsibility of the Plan's management. Our responsibility is
to express an opinion on these financial statements and schedules
based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. 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, the financial statements referred to above
present fairly, in all material respects, the net assets
available for benefits of the Orange and Rockland Utilities, Inc.
Management Employees' Savings Plan as of December 31, 1996 and
1995, and the changes in net assets available for benefits for
the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed 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. The Fund Information in the statement of net assets
available for benefits and the statement of changes in net assets
available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan 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.
ARTHUR ANDERSEN LLP
New York, New York
March 28, 1997
<TABLE>
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
<CAPTION>
Fidelity
Managed Growth &
Stock Income Loan Income
Fund Fund Account Portfolio
<S> <C> <C> <C> <C>
Assets:
Value of interest in
master trusts $3,889,659 $16,789,906 $ - $ -
Value of interest in registered
investment companies - - - 13,853,461
Loans to participants - - 1,364,152 -
Total assets 3,889,659 16,789,906 1,364,152 13,853,461
Net assets available
for benefits $3,889,659 $16,789,906 $1,364,152 $13,853,461
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
<CAPTION>
Fidelity
Fidelity Fidelity Asset Fidelity
Magellan OTC Manager Worldwide Combined
Fund Portfolio Fund Fund Funds
<S> <C> <C> <C> <C> <C>
Assets:
Value of interest in
master trusts $ - $ - $ - $ - $20,679,565
Value of interest in registered
investment companies 5,504,833 3,677,412 1,798,730 1,391,841 26,226,277
Loans to participants - - - - 1,364,152
Total assets 5,504,833 3,677,412 1,798,730 1,391,841 48,269,994
Net assets available
for benefits $5,504,833 $3,677,412 $1,798,730 $1,391,841 $48,269,994
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995
<CAPTION>
Vanguard/ Vanguard/
Stock Guaranteed Loan Windsor Morgan Ariel Combined
Fund Fund Account Fund Growth Fund Growth Fund Funds
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash equivalents $ 77,401 $ - $ - $ 82,838 $ 37,225 $ 13,014$ 210,478
Common Stock - Orange and
Rockland Utilities, Inc. 4,361,536 - - - - - 4,361,536
Loans to participants - - 1,156,509 - - - 1,156,509
Value of interest
in master trust - 20,652,927 - - - - 20,652,927
Sales pending settlement - - - 11,317,012 2,858,123 1,248,640 15,423,775
Other assets 7 - - 16 4 1 28
Total assets 4,438,944 20,652,927 1,156,509 11,399,866 2,895,352 1,261,655 41,805,253
Liabilities:
Other liabilities (59,664) - - - - - (59,664)
Total liabilities (59,664) - - - - - (59,664)
Net assets available
for benefits $4,379,280 $20,652,927 $1,156,509 $11,399,866 $2,895,352 $1,261,655$41,745,589
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
<CAPTION>
Cumulative Fidelity
1995 Managed Growth &
Mellon Stock Income Loan Income
Funds Fund Fund Account Portfolio
<S> <C> <C> <C> <C> <C>
Additions:
Contributions:
Employee before-tax $ - $ 128,169 $ 587,334 $ - $ 911,758
Employee after-tax - 1,087 5,026 - 22,426
Rollovers - 25,029 12,888 - 71,120
Employer match - 66,116 13,405 - 139,581
Total contributions - 220,401 618,653 - 1,144,885
Earnings on investments:
Interest on loans to participants - - - 93,934 -
Gain from registered investment
companies - - - - 2,230,995
Gain on master trusts - 315,794 1,046,538 - -
Total earnings on investments - 315,794 1,046,538 93,934 2,230,995
- 536,195 1,665,191 93,934 3,375,880
Deductions:
Benefit payments to participants - (124,787) (1,886,568) (42,080) (509,960)
- (124,787) (1,886,568) (42,080) (509,960)
Increase (decrease) in net assets - 411,408 (221,377) 51,854 2,865,920
Net transfers from other
Company plan - 22,249 105,520 10,000 38,095
Fund transfers (41,745,589) 3,456,002 16,905,763 1,302,298 10,949,446
Changes in net assets (41,745,589) 3,889,659 16,789,906 1,364,152 13,853,461
Net assets available for benefits
at beginning of year 41,745,589 - - - -
Net assets available for benefits
at end of year $ - $3,889,659 $16,789,906 $1,364,152 $13,853,461
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
<CAPTION>
Fidelity
Fidelity Fidelity Asset Fidelity
Magellan OTC Manager Worldwide Combined
Fund Portfolio Fund Fund Funds
<S> <C> <C> <C> <C> <C>
Additions:
Contributions:
Employee before-tax $ 720,775 $ 331,997 $ 165,279 $ 116,312 $ 2,961,624
Employee after-tax 13,518 9,364 1,496 8,563 61,480
Rollovers 50,391 3,827 273,115 4,745 441,115
Employer match 136,260 56,764 27,832 18,772 458,730
Total contributions 920,944 401,952 467,722 148,392 3,922,949
Earnings on investments:
Interest on loans to participants - - - - 93,934
Gain from registered investment
companies 534,247 527,267 155,460 112,572 3,560,541
Gain on master trusts - - - - 1,362,332
Total earnings on investments 534,247 527,267 155,460 112,572 5,016,807
1,455,191 929,219 623,182 260,964 8,939,756
Deductions:
Benefit payments to participants (32,962) (26,918) (1,400) - (2,624,675)
(32,962) (26,918) (1,400) - (2,624,675)
Increase (decrease) in net
assets 1,422,229 902,301 621,782 260,964 6,315,081
Net transfers from other
Company plan 15,347 2,157 - 15,956 209,324
Fund transfers 4,067,257 2,772,954 1,176,948 1,114,921 -
Changes in net assets 5,504,833 3,677,412 1,798,730 1,391,841 6,524,405
Net assets available for benefits
at beginning of year - - - - 41,745,589
Net assets available for benefits
at end of year $5,504,833 $3,677,412 $1,798,730 $1,391,841 $48,269,994
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
Vanguard/ Vanguard/
Stock Guaranteed Loan Windsor Morgan Ariel Combined
Fund Fund Account Fund Growth Fund Growth Fund Funds
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Contributions:
Before-tax $ 164,730 $ 1,306,344 $ - $ 935,576 $ 148,274 $ 120,052$ 2,674,976
After-tax 3,930 34,159 - 32,900 5,262 1,334 77,585
Rollovers - 67,769 - - - - 67,769
Total contributions 168,660 1,408,272 - 968,476 153,536 121,386 2,820,330
Earnings on investments:
Interest on cash
equivalents 2,575 - - 5,646 731 686 9,638
Dividend income 343,774 - - - - - 343,774
Gain on sale of assets 35,980 - - - - - 35,980
Unrealized appreciation
of assets 382,498 - - - - - 382,498
Interest on loans to
participants - - 83,505 - - - 83,505
Gain from registered
investment companies - - - 2,180,854 390,348 170,046 2,741,248
Gain on master trust - 1,830,726 - - - - 1,830,726
Total earnings on
investments 764,827 1,830,726 83,505 2,186,500 391,079 170,732 5,427,369
933,487 3,238,998 83,505 3,154,976 544,615 292,118 8,247,699
Deductions:
Benefit payments to
participants (836,794) (2,712,306) - (854,565) (30,151) (64,964)(4,498,780)
(836,794) (2,712,306) - (854,565) (30,151) (64,964)(4,498,780)
Increase in net assets 96,693 526,692 83,505 2,300,411 514,464 227,154 3,748,919
Net transfers from other
Company plan 3,240 9,510 5,604 2,606 - - 20,960
Fund transfers (171,014) (2,676,240) (137,141) 1,551,325 1,369,786 63,284 -
Changes in net assets (71,081) (2,140,038) (48,032) 3,854,342 1,884,250 290,438 3,769,879
Net assets available for
benefits at beginning
of year 4,450,361 22,792,965 1,204,541 7,545,524 1,011,102 971,217 37,975,710
Net assets available
for benefits at end
of year $4,379,280 $20,652,927 $1,156,509 $11,399,866 $2,895,352 $1,261,655$41,745,589
The accompanying notes are an integral part of these statements.
</TABLE>
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Orange and Rockland Utilities,
Inc. Management Employees' Savings Plan (the "Plan") have been
prepared on the accrual basis of accounting in accordance with
generally accepted accounting principles as applied to employee
benefit plans and in accordance with the requirements of the
Employee Retirement Income Security Act of 1974 ("ERISA").
The investments in the Stock Fund Master Trust investment account
("Stock Fund Master Trust"), including cash equivalents and
Orange and Rockland Utilities, Inc. (the "Company") common stock,
and the registered investment companies are stated at fair market
value. The investments in the Managed Income Fund Master Trust
investment account (The "MIF Master Trust"), other than cash
equivalents, are valued at contract value. Contract value is
determined by the contributions made plus interest at the rate
specified on the various investment contracts.
NOTE B - DESCRIPTION OF PLAN
The following is a brief description of the Plan and is provided
for general information purposes only.
PARTICIPANTS SHOULD REFER TO THE PLAN AND THE PLAN PROSPECTUS FOR
MORE
COMPLETE INFORMATION.
General
The Plan is a qualified defined contribution employee profit-
sharing plan, effective January 1, 1985, for eligible management
employees of the Company (the "Participants").
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE B (Continued)
Participating Employees
At December 31, 1996 and 1995, there were approximately 676 and
687 Participants in the Plan, respectively. The number of
Participants in each of the Plan's funds were as follows:
December 31, 1996December 31, 1995
Stock Fund 262 321
Equity Funds:
Vanguard/Windsor Fund - 493
Vanguard/Morgan Growth Fund - 292
Ariel Growth Fund - 183
Managed Income Fund/Guaranteed Fund 396 509
Fidelity Asset Manager Fund 131 -
Fidelity Growth & Income Portfolio 521 -
Fidelity Magellan Fund 412 -
Fidelity OTC Portfolio 321 -
Fidelity Worldwide Fund 150 -
The total number of Participants in the Plan is less than the sum
of the number of Participants shown above because Participants
may participate in more than one fund.
Contributions
Prior to January 2, 1996, no contributions to the Plan were made
by the Company. Effective for payroll periods after December 31,
1995, the Company provides matching contributions of 50% of
Participants' before-tax contributions to the Plan up to 3% of
compensation. The maximum Company matching contribution per
Participant, therefore, is 1.5% of compensation.
Participants may elect to make before-tax or after-tax
contributions in accordance with the terms of the Plan. Company
matching contributions are invested in accordance with
Participants' before-tax investment elections.
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE B (Continued)
Transferred Hourly Plan Contributions
Any amounts held on behalf of Orange and Rockland Utilities,
Inc., Hourly Group Savings Plan (the "Hourly Plan") participants
who become management employees will be transferred to the Plan
in accordance with the terms of the Plan. The transferred Hourly
Plan contributions will be treated in the same manner as before-
tax contributions except where otherwise specifically provided in
the Plan.
Rollover Contributions
Employees may elect to roll over into the Plan any cash received
in any distribution from a pension, profit sharing or stock bonus
plan meeting the requirements of Section 401(a) of the Internal
Revenue Code of 1986, or from any qualifying individual
retirement account or annuity. Rollover contributions are
invested and otherwise treated in the same manner as other
contributions except where otherwise specifically provided in the
Plan.
Participant Accounts and Vesting
Separate accounts are maintained for each Participant's interest
in the Plan. Participant accounts, including Company match, are
at all times fully vested and nonforfeitable.
Withdrawals and Distributions Upon Termination of Employment
A Participant may elect to withdraw, according to the Plan's
rules governing withdrawals, all or a portion of the
Participant's after-tax contributions and earnings, in accordance
with the terms of the Plan. The earnings portion of the
withdrawal may be subject to an excise tax.
A Participant, in general, may withdraw before-tax contributions
and earnings only in the case of hardship and in accordance with
the terms of the Plan. The Participant may be subject to an
excise tax on the taxable portion of such withdrawal.
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE B (Continued)
Upon termination of employment for any reason, a Participant's
account balance, if less than or equal to $3,500, will be
distributed to the Participant or designated beneficiary as soon
as practicable, unless the Participant elects to defer such
distribution in accordance with the terms of the Plan. However,
if the value of a Participant's account is greater than $3,500,
the Participant's account will not be distributed until the
Participant elects in writing to receive such distribution,
subject to certain limitations, and in accordance with the terms
of the Plan.
In addition, the taxable portion of the distribution may be
subject to an excise tax.
Administration of Plan
The Plan is administered by the Company's Retirement Committee,
whose members are appointed by the Company's Board of Directors.
Prior to January 2, 1996, the Plan's investments were held by
Mellon Bank, N.A. (the "Previous Trustee") in accordance with the
terms of a master trust agreement (the "Previous Trust
Agreement") between the Previous Trustee and the Company.
Effective January 2, 1996, the Plan's investments were
transferred to Fidelity Management Trust Company ("Current
Trustee") in accordance with the terms of a new master trust
agreement between the Current Trustee and the Company.
Amendment or Discontinuance of Plan
While the Company expects to continue the Plan indefinitely, it
reserves the right to amend or terminate the Plan at any time, in
whole or in part, provided that no amendment may retroactively
reduce the rights of Participants.
NOTE C - INVESTMENT OF FUNDS
Participant contributions and Company matching contributions are
invested, at the election of the Participant, in one or a
combination of funds. The following is a brief description of
the funds available:
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE C (Continued)
Stock Fund
Prior to January 2, 1996, the assets of the Stock Fund were
invested exclusively in common stock of the Company purchased by
the Previous Trustee on the open market, through the method of
purchase and sales used by the Previous Trustee in the normal
course of its security transactions, or through enrollment in the
Company's Dividend Reinvestment and Stock Purchase Plan.
Participant interests were stated in shares.
Effective January 2, 1996, the assets of the Stock Fund are
commingled for investment purposes in the Stock Fund Master Trust
with the assets of the Hourly Plan's Stock Fund and are invested
by the Current Trustee primarily in common stock of the Company
along with a small portion of money market instruments for
liquidity. Participant interests are stated in units to allow
for daily valuation. During the year, month end Net Asset Values
ranged between $9.44 per unit and $10.79 per unit. For the year
ended December 31, 1996, there are 616,508 units in the Stock
Fund with a Net Asset Value of $10.79 per unit.
The purchase price of such stock includes brokerage commissions
and any transfer taxes, if applicable. The Stock Fund is stated
at fair market value.
The percentage interest in the Stock Fund Master Trust for the
Plan's Stock Fund at December 31, 1996 was 58.47%.
The Stock Fund Master Trust's assets at December 31, 1996 are
presented in the following table:
Investments:
At Fair Market Value-
Cash Equivalents $ 23,865
Common Stock - Orange and
Rockland Utilities, Inc. 6,579,152
6,603,017
Receivables 49,114
Net Assets $6,652,131
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE C (Continued)
The earnings on investments of the Stock Fund Master Trust for
the year ended December 31, 1996 are presented in the following
table:
Interest on cash equivalents $ 6,553
Dividend income 497,612
Gain on sale of assets 268,951
Unrealized depreciation of assets (243,792)
Earnings on investments $529,324
Managed Income Fund/Guaranteed Fund
The assets of the Managed Income Fund are commingled for
investment purposes in the MIF Master Trust with the assets of
the Hourly Plan's Managed Income Fund. Prior to January 2, 1996,
the Managed Income Fund was known as the Guaranteed Fund and the
Master Trust was administered by the Previous Trustee. The
assets are invested primarily in fixed-income investments issued
by high-quality insurance companies and banks in accordance with
the Guaranteed Fund's investment guidelines. Effective January
2, 1996, the fund was renamed the Managed Income Fund. The MIF
Master Trust is being administered by the Current Trustee and new
contributions are invested in the Current Trustee's Managed
Income Portfolio ("MIP") in addition to the fixed-income
investments previously purchased for the fund. As the previous
fixed-income investments mature, all proceeds will be invested in
the MIP. All of the investments of the Master Trust are stated
at contract value except for the cash equivalents, which are
stated at fair market value.
The investment experience of the Master Trust is allocated
monthly based on the Master Trust's assets as calculated by the
Current Trustee. The amount is derived from the prior month-end
contract value of each Plan's Managed Income Fund, plus
contributions and transfers in and less benefit payments and
transfers out for the current month.
The percentage interest in the Master Trust for the Plan's
Managed Income Fund at December 31, 1996 and the Plan's
Guaranteed Fund at December 31, 1995 was 53.36% and 53.53%,
respectively.
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE C (Continued)
The Master Trust's assets, at December 31, 1996 and 1995, are
presented in the following table:
1996 1995
Investments:
At Fair Market Value -
Cash Equivalents $ 2,010,376 $ 3,216,594
At Contract Value -
Fixed-Rate Insurance
Company Contracts 13,630,661 16,871,629
Pooled Fund Investment 15,824,772 18,494,278
29,455,433 35,365,907
Net Assets $31,465,809 $38,582,501
The earnings on the Master Trust's investments consist of
interest income on the various fixed-income securities. For the
years ended December 31, 1996 and 1995 such earnings were
$1,883,328 and $3,208,934, respectively.
Equity Funds
Contributions may be invested in one or more registered
investment company mutual funds ("Equity Funds") selected by the
Company's Retirement Committee.
Prior to January 2, 1996, the following three Equity Funds were
available: Vanguard/Windsor Fund ("Windsor"), Vanguard/Morgan
Growth Fund ("Morgan") and Ariel Growth Fund ("Ariel"). Windsor
and Morgan are members of the Vanguard Group of Investment
Companies. Windsor is managed by Wellington Management Company
while Morgan is managed by Wellington Management Company,
Franklin Portfolio Associates, Inc., and Husic Capital
Management. Ariel is managed by Ariel Capital Management.
Effective January 2, 1996, the Retirement Committee replaced the
previous three Equity Funds with a new menu of five Equity Funds,
all of which are managed by Fidelity Management and Research
Company ("Fidelity Equity Funds"). The Fidelity Equity Funds are
as follows: Fidelity Asset Manager Fund, Fidelity Growth &
Income Portfolio, Fidelity Magellan Fund, Fidelity OTC Portfolio
and Fidelity Worldwide Fund.
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE C (Continued)
On December 29, 1995, the Prior Trustee sold the Plan's entire
holdings in Windsor, Morgan and Ariel in preparation for the
conversion to the Fidelity Equity Funds. On January 2, 1996, the
Prior Trustee received the proceeds of these sales and
transferred such proceeds to the Current Trustee. Accordingly,
these sales are classified on the Plan's December 31, 1995
statement of net assets available for benefits as sales pending
settlement.
The Equity Funds are stated at fair market value.
NOTE D - LOANS TO PARTICIPANTS
A Participant may obtain a loan under the Plan in a minimum
amount of $500 and subject to a maximum amount as provided in the
Plan. No more than one loan request may be made by a Participant
in any 12 month period and only one loan per Participant may be
outstanding at a time. The interest rate on loans is determined
by the Retirement Committee on a quarterly basis. The interest
rate established for a loan will not be changed during the term
of the loan. Each loan will be evidenced by a promissory note
payable to the Current Trustee for the loan amount, including
interest, and secured by a lien on the Participant's account.
The terms of the loan generally require repayment within five
years.
NOTE E - FEDERAL INCOME TAX STATUS
The Company has received a favorable determination letter from
the Internal Revenue Service ("IRS") dated July 11, 1995, that
the Plan meets the requirements of the Tax Reform Act of 1986.
The Company has previously received a favorable determination
letter from the IRS, dated March 19, 1986, that the Plan meets
the requirements of Section 401(a) and 401(k) of the Internal
Revenue Code of 1954, as amended (the "Code"), and that the Trust
is exempt from federal income tax under Code Section 501(a).
The Plan has been amended since receiving the latest
determination letter. However, the Retirement Committee and the
Plan's tax counsel believe that the Plan is designed and is
currently being operated in compliance with the applicable
provisions of the Code.
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE E (Continued)
The following is intended only as a brief, general description of
the federal income tax consequences to Participants participating
in the Plan. Participants should refer to the prospectus for the
Plan and consult a tax advisor to determine the specific federal,
state and local tax consequences of participation in the Plan.
1.A Participant's after-tax contributions are fully taxable to
the Participant in the year contributed to the Plan; and,
therefore, they are not taxed again when distributed or
withdrawn from the Plan.
2.A Participant's before-tax contributions are not taxable to
the Participant in the year contributed to the Plan; and,
therefore, they are taxable to the Participant when
distributed or withdrawn from the Plan.
3.Dividends, interest, profits from the sale of securities by
the Trustee, and other investment earnings on after-tax or
before-tax contributions are not taxable to the Participant
while held in the Plan's Trust; and, therefore, they are
taxable to the Participant when distributed or withdrawn
from the Plan.
4.Upon withdrawal from the Plan, a Participant will be subject
to income taxes on amounts deferred and may be subject to excise
taxes on the taxable portion of such withdrawals and
distributions. However, the Participant may be eligible for
certain favorable tax treatment on such amounts.
NOTE F - EXPENSES OF THE PLAN
The costs of general administration of the Plan and trustee fees
are paid by the Company. The expenses of the investment funds,
including management fees of the investment managers of the
Equity Funds and the Managed Income Fund, are deducted from the
earnings of those funds.
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE G - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets for benefits per
the financial statements at December 31, 1996 and 1995 to Form
5500:
1996 1995
Net assets available for benefits per
the financial statements $48,269,994 $41,745,589
Amounts allocated to withdrawing
Participants - (599,181)
Net assets available for benefits
per the Form 5500 $48,269,994 $41,146,408
The following is a reconciliation of benefits paid to
Participants per the financial statements for the year ended
December 31, 1996 and 1995 to form 5500:
1996 1995
Benefit payments to Participants per
the financial statements $2,624,675 $4,498,780
Add: Amounts allocated to withdrawing
Participants at December 31, 1996
and 1995 - 599,181
Less: Amounts allocated to withdrawing
Participants at December 31, 1995
and 1994 (599,181) (566,007)
Benefit payments to Participants per
Form 5500 $2,025,494 $4,531,954
Amounts allocated to withdrawing Participants are recorded on the
Form 5500 for benefit claims that have been processed and
approved for payment prior to December 31, 1996 and 1995 but not
yet paid as of those dates.
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE H - PLAN AMENDMENTS
The following is a summary of the major changes reflected in the
January 1, 1996 amendment and restatement of the Plan, as adopted
by the Retirement Committee on December 19, 1995.
1. Company matching contributions were added to the Plan, at a
rate of 50% for the first 3% of before-tax Contributions.
The Company will provide a true-up of matching contributions
at year end to enable Participants contributing at a per pay
period rate above 3% to receive the full benefit of the
Company match.
2. Effective as of December 1, 1995, the service requirement
for participation in the Plan was decreased from 1,000 hours
of service in a one-year period to 500 hours of service in a
six-month period.
3. The maximum percentage of compensation which can be
contributed under the Plan as a combination of before-tax
and after-tax contributions was decreased from 20% to 15%.
As a result, the maximum percentage of compensation which
can be contributed under the Plan as before-tax
contributions also decreased from 20% to 15%.
4. The investment elections pertaining to the investment of new
Participant contributions may be changed by notifying
Fidelity Institutional Retirement Services Company by 4:00
p.m. on a payroll processing date. Previously, 30 days'
advance written notice was required.
5. A withdrawal may be made once in any 12-month period, rather
than once per calendar year.
6. A number of changes were made to the Plan to reflect changes
made recently to the Code by the Small Business Job
Protection Act.
7. Model language drafted by the IRS was added to address the
rights of reemployed veterans.
<TABLE>
SCHEDULE I
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
<CAPTION>
Description Current
Identity of Issue of Investment Cost Value
<S> <C> <C> <C>
Participant Loans Lowest rate = 7.00% $1,364,152 $ 1,364,152
Highest rate = 8.19%
Value of Interest in
Registered Investment
Companies:
*Fidelity Growth
& Income Portfolio Equity Mutual Fund -
450,812 shares 12,496,379 13,853,461
*Fidelity Magellan
Fund Equity Mutual Fund -
68,256 shares 5,697,653 5,504,833
*Fidelity OTC
Portfolio Equity Mutual Fund -
112,425 shares 3,563,108 3,677,412
*Fidelity Asset
Manager Fund Equity Mutual Fund -
109,212 shares 1,770,269 1,798,730
*Fidelity
Worldwide Fund Equity Mutual Fund -
90,438 shares 1,329,811 1,391,841
24,857,220 26,226,277
Value of Interest
in Master Trusts:
*Stock Fund Master Orange and Rockland Utilities,
Trust Inc. Common Stock -
360,487 units 1,873,725 3,889,659
*Managed Income Fund Various Fixed-Income
Master Trust Investments
16,789,906 units 16,789,906 16,789,906
18,663,631 20,679,565
Total - Assets Held for Investment Purposes $44,885,003 $48,269,994
*Party in interest to the Plan.
</TABLE>
<TABLE>
SCHEDULE I
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
<CAPTION>
Description Current
Identity of Issue of Investment Cost Value
<S> <C> <C> <C>
Participant Loans Lowest Rate = 7.00%;
Highest Rate = 9.25% $1,156,509 $ 1,156,509
Cash Equivalents:
*Mellon Bank EB Temporary Investment
Fund 210,478 210,478
Common Stock:
*Orange and Rockland Orange and Rockland
Utilities, Inc. Utilities, Inc. Common Stock
- 122,001 shares 3,424,750 4,361,536
Sales Pending Settlement:
Ariel Growth Fund Equity Mutual Fund
- 45,704 shares 1,248,640 1,248,640
Vanguard/Morgan Equity Mutual Fund
Growth Fund - 202,848 shares 2,858,123 2,858,123
Vanguard/Windsor Equity Mutual Fund
Fund - 778,872 shares 11,317,012 11,317,012
15,423,775 15,423,775
Value of Interest in
Master Trust:
Guaranteed Fund Various Fixed-Income
Master Trust Investments
- 20,652,927 units 20,652,927 20,652,927
Total - Assets Held for Investment purposes $40,868,439 $41,805,225
*Party in interest to the Plan.
</TABLE>
<TABLE>
SCHEDULE II
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<CAPTION>
Current Value
Identity of Description Purchase Selling Expenses Cost of of Asset on Net Gain
Party Involved of Transactions Price Price Incurred Asset Transaction Date(Loss)
<S> <C> <C> <C> <C> <C> <C> <C>
Series of Transactions:
*Stock Fund Master Orange and Rockland$ 696,769 $ $ -$ 696,769$ 696,769 $ -
Trust Utilities, Inc. 1,560,573 - 734,852 1,560,573 825,721
Common Stock
*Managed Income Various Fixed- 5,049,175 - 5,049,175 5,049,175 -
Fund Master Trust Income Investments 8,419,255 - 8,419,255 8,419,255 -
*Fidelity Growth & Equity Mutual 17,110,980 - 17,110,980 17,110,980 -
Income Portfolio Fund 4,820,100 - 4,614,600 4,820,100 205,500
*Fidelity Magellan Equity Mutual 7,418,033 - 7,418,033 7,418,033 -
Fund Fund 1,588,190 - 1,720,381 1,588,190 (132,191)
*Fidelity OTC Equity Mutual 4,402,803 - 4,402,803 4,402,803 -
Portfolio Fund 850,155 - 839,695 850,155 10,460
*Fidelity Asset Equity Mutual 1,968,330 - 1,968,330 1,968,330 -
Manager Fund Fund 201,148 - 198,060 201,148 3,088
*Fidelity Worldwide Equity Mutual 1,867,337 - 1,867,337 1,867,337 -
Fund Fund 542,978 - 537,525 542,978 5,453
*Party in interest to the Plan
</TABLE>
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, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
For the transition period from to
Commission file number 1-4315
ORANGE AND ROCKLAND UTILITIES, INC.
MANAGEMENT EMPLOYEES' SAVINGS PLAN
(Full title of the plan)
ORANGE AND ROCKLAND UTILITIES, INC.
(Name of issuer of the securities held pursuant to the plan)
ONE BLUE HILL PLAZA
PEARL RIVER, NEW YORK 10965
(Address of principal executive office)
EXHIBITS
Volume 1 of 1
EXHIBIT INDEX
Exhibit
Number
23 Consent of Independent Public Accountants
EXHIBIT NO. 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 11-K, into the
Company's previously filed Registration Statement on Form S-8
(File No. 33-25359).
ARTHUR ANDERSEN LLP
New York, New York
May 12, 1997
