SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996 Commission File Number
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Atlantic Electric 401(K) Savings and Investment Plan - A
6801 Black Horse Pike
Egg Harbor Twp., N.J. 08234-4130
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Custom Stable Value Fund Equity Index Fund
T. Rowe Price, Inc. T. Rowe Price, Inc.
100 East Pratt Street 100 East Pratt Street
Baltimore, Maryland 21202 Baltimore, Maryland 21202
Equity Income Fund Spectrum Growth Fund
T. Rowe Price, Inc. T. Rowe Price, Inc.
100 East Pratt Street 100 East Pratt Street
Baltimore, Maryland 21202 Baltimore, Maryland 21202
International Stock Fund Atlantic Energy, Inc. Common Stock
T. Rowe Price, Inc. Atlantic Energy, Inc.
100 East Pratt Street 6801 Black Horse Pike
Baltimore, Maryland 21202 Egg Harbor Twp., NJ 08234-4130
TABLE OF CONTENTS
Page
Independent Auditors' Report 2
Atlantic Electric
401(K) Savings and Investment Plan - A
Financial Statements as of December 31, 1996 and 1995
and For The Year Ended December 31, 1996:
Statements of Net Assets Available for Benefits 3
Statement of Changes in Net Assets Available for Benefits 4
Notes to Financial Statements 5
Supplemental Schedules:
I: Schedule of Reportable Transactions-Form 5500, Item 27d 15
II: Schedule of Assets Held for Investment
Purposes, December 31, 1996 - Form 5500, Item 27a 16
*****
INDEPENDENT AUDITORS' REPORT
Atlantic Electric
401(K) Savings and Investment Plan - A
We have audited the accompanying statements of net assets
available for benefits of Atlantic Electric 401(K) Savings and
Investment Plan-A as of December 31, 1996 and 1995 and the
related statement of changes in net assets available for benefits
for the year ended December 31, 1996. 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 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, such financial statements, present fairly, in all
material respects, the net assets available for benefits of
Atlantic Electric 401(k) Savings and Investment Plan-A as of
December 31, 1996 and 1995, and the changes in net assets
available for benefits for the year ended December 31, 1996 in
conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental 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 the
audit of the basic 1996 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
Deloitte & Touche LLP
Parsippany, New Jersey
June 26, 1997
ATLANTIC ELECTRIC
401(K) SAVINGS AND INVESTMENT PLAN - A
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996 AND 1995
ASSETS 1996 1995
Investments at fair value:
Common Collective Trust $31,416,584 $34,054,336
Mutual fund accounts 33,689,981 23,293,265
Participant Loans 1,516,415 1,297,588
Atlantic Energy, Inc. Common Stock 203,165 -
Contributions receivable:
Atlantic City Electric Company 23,756 23,226
Participants 66,779 65,868
NET ASSETS AVAILABLE FOR BENEFITS $66,916,680 $58,734,283
See notes to financial statements.
ATLANTIC ELECTRIC
401(K) SAVINGS AND INVESTMENT PLAN - A
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1996
1996
Additions to assets:
Investment income:
Interest - GIC $1,973,147
Interest - Participant Loans 109,824
Dividends 1,754,527
Net appreciation
of investments 3,761,156
7,598,654
Contributions:
Participants' 3,383,252
Employers' 1,155,709
4,538,961
Total additions 12,137,615
Deductions from Assets:
Benefits paid to participants 3,950,568
Administrative Fees 4,650
Total deductions 3,955,218
Increase in net assets
available for benefits 8,182,397
Net assets available for benefits,
at beginning of year 58,734,283
Net assets available for benefits,
at end of year $66,916,680
See notes to financial statements.
ATLANTIC ELECTRIC
401(K) SAVINGS AND INVESTMENT PLAN - A
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
1. SIGNIFICANT ACCOUNTING POLICIES
Plan Description
The Atlantic Electric 401(K) Savings and Investment Plan - A
(the "Plan") is a defined contribution savings plan designed
to comply with the requirements of the Employee Retirement
Income Security Act of 1974 and with the requirements for
qualifications under Section 401(k) of the Internal Revenue
Code. The Plan is administered by the Benefits/Trusts
Investment Committee appointed by the Board of Directors of
Atlantic Energy, Inc., parent holding Company of Atlantic
City Electric Company. Employee contributions to the Plan
are remitted to T. Rowe Price Trust Company and invested as
directed by Plan participants.
All full-time non-bargaining unit employees of Atlantic City
Electric Company, its wholly-owned subsidiary, Deepwater
Operating Company and effective February 9, 1995, all full-
time employees of Atlantic Energy Inc., Atlantic Energy
Enterprises, Inc., Atlantic Generation, Inc., Atlantic
Thermal Systems, Inc., Atlantic Southern Properties, Inc.,
ATE Investments, Inc., and Atlantic Energy Technologies,
Inc., (together referred to as the "Company"), are eligible
to participate in the Plan. Additionally, any employee who
is not a regular full time employee shall be eligible to
participate in the Plan upon completion of 1000 hours of
service. Employees may contribute up to 10% of base pay to
the tax savings portion of the contributions in any of six
investment options. Options available to the employee are
the Custom Stable Value Fund, Atlantic Energy, Inc. Common
Stock (effective January 1, 1996), Equity Index Fund, Equity
Income Fund, International Stock Fund, and Spectrum Growth
Fund. The tax savings portion of participant contributions
(up to 6% of an employee's base pay) is matched by the
Company at a rate of 50% not to exceed 3% of the employee's
compensation. Federal Income taxes on these contributions
and the related income are deferred until withdrawn. The
benefits from the tax savings portion of the Plan can be
withdrawn upon the attainment of age 59 1/2, retirement,
separation from service, death or in special financial
hardship situations. In addition, employees may contribute
up to an additional 10% of base pay on an after-tax basis to
the supplemental savings portion of the Plan, which also
earns income that is not subject to Federal income tax until
withdrawn. These contributions may be withdrawn once a
quarter subject to the provisions of the Internal Revenue
Code.
Tax Status
The Plan obtained its latest determination letter on March
23, 1995, in which the Internal Revenue Service stated that
the Plan was in compliance with the applicable requirements
of the Internal Revenue Code. The Plan administrator and
the Plan's tax counsel believe that the Plan is currently
designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code.
Therefore, no provision for income taxes has been included
in the Plan's financial statements.
Participant Accounts
Participants' contributions are recorded in the period of
the related payroll deductions. The Company's matching
contributions are recorded in the period of the related
participants' contributions. Income is recorded as earned.
Distributions to participants are recorded in the period in
which distributions are made. Participants are fully vested
in employee and employer contributions in their respective
accounts at all times.
Plan Termination
Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its
contributions at any time subject to the provisions of
ERISA. In the event of Plan termination, participants
remain 100 percent vested in their accounts.
Administration Costs
Certain professional fees and administrative expenses
incurred in connection with the Plan are paid by the
Company. The facilities of the Company are used by the Plan
at no charge. Loan processing fees are paid by the
participants and deducted from Plan assets.
Participant Loans Receivable
The Plan began to make Participant loans effective April 1,
1995. Participants may borrow from their fund accounts a
minimum of $1,000 up to a maximum equal to the lesser of
$50,000 or 50 percent of their account balance. Loan
transactions are treated as a transfer from the investment
fund to the participant Loan fund. Loan terms range from 1-
5 years or up to 15 years for the purchase of a primary
residence. The loans are secured by the balance in
the participant's account and bear interest at a rate
commensurate with local prevailing rates as determined
quarterly by the plan administrator. The interest rate for
1996 and 1995 was 9%. Principal and interest is paid
ratably through weekly payroll deductions.
Investments
The investment options available to plan participants have
the following objectives:
(i) Custom Stable Value Fund - to provide principal
stability and a high level of monthly income;
(ii) Equity Income Fund - to provide substantial dividend
income and secondarily, long-term capital
appreciations;
(iii) Equity Index Fund - to match the performance of the
Standard & Poor's Stock Index;
(iv) International Stock Fund - to provide the diversifications
of an international fund as well as the opportunity
for long-term capital growth;
(v) Spectrum Growth Fund - to provide long-term growth of
capital;
(vi) Atlantic Energy Company Stock - to provide maximum
capital appreciation and dividend income form
Atlantic Energy Common Shares.
The investments in Mutual Funds are stated at fair value as
determined by quoted market prices. The investments in the
Common Collective Trust are stated at contract value (which
approximates fair value) which is the aggregate of
contributions and income earned on such contributions, less
participants' withdrawals.
The following table represents the fair value of investments
by issuer comprising 5 percent or more of the Plan's assets:
December 31,
Investments at Fair Value: 1996 1995
Custom Stable Value Fund $31,416,584 $34,054,336
Equity Index Fund 10,711,382 7,395,022
Equity Income Fund 18,645,089 14,156,541
$60,773,055 $55,605,899
The net appreciation in fair value of each significant type
of investment is as follows:
December 31,
1996 1995
Custom Stable Value Fund $ -0- $ -0-
Equity Index Fund 1,522,724 1,448,040
Equity Income Fund 1,913,605 2,550,472
$3,436,329 $3,998,512
The custom stable value fund invests funds in various term
guaranteed insurance contracts and maintains a cash reserve
balance with all excess funds. The average yield and the
weighted average crediting interest rate are based on the
underlying contracts.
For the years ended December 31, 1996 and 1995 the
guaranteed insurance contracts of the Custom Stable Value
Fund, in aggregate, had an average yield of 6.36% and 6.31%
respectively.
At December 31, 1996 and 1995, the fund had a weighted
average crediting interest rate of 6.93% and 6.77%,
respectively.
Distributions
At December 31, 1996 and 1995, there were no benefits
payable to plan participants.
2. PARTICIPANT-DIRECTED INVESTMENT FUNDS AS OF DECEMBER 31, 1996 AND 1995
Net assets available for plan benefits, and changes therein, are presented below for each
participant-directed investment fund for the year ended December 31, 1996:
(In Dollars)
Net Assets available for Plan Benefits December 31, 1996
Custom Stable Equity Equity Spectrum
Value Fund Index Fund Income Fund Growth Fund
Investments
Common Collective
Trust $31,416,584 $ $ $
Mutual Fund
Accounts 10,711,382 18,645,089 2,563,007
Atlantic Energy, Inc.,
Common Stock
Contributions Receivables
Employee 16,330 19,191 22,688 4,829
Employer 23,739 8 1 5
Participant Loans
Net Assets Available
for Plan Benefits $31,456,653 $10,730,581 $18,667,778 $2,567,841
Net Assets available for Plan Benefits as of December 31, 1996 (continued)
Int'l Loan Atlantic Energy
Stock Fund Fund Stock Total
Investments
Common Collective
Trust $ $ $ $31,416,584
Mutual Fund
Accounts 1,770,503 33,689,981
Atlantic Energy, Inc.
Common Stock 203,165 203,165
Contributions Receivables
Employee 3,698 43 66,779
Employer 3 23,756
Participant Loans 1,516,415 1,516,415
Net Assets Available _________
for Plan Benefits $1,774,204 $1,516,415 $203,208 $66,916,680
Changes in Net Assets available for Benefits for the year ended December 31, 1996
Custom Stable Equity Equity Spectrum
Value Fund Index Fund Income Fund Growth Fund
Additions:
Employer $ 1,080,810 $ 36,311 $ 34,969 $ 2,717
Employee 842,149 925,935 1,210,611 229,398
Investment Income
Interest - GIC 1,973,147
Interest-Loans 31,720 29,980 35,347 8,564
Dividends - 356,450 1,169,397 175,944
Net Appreciation
of Investment 1,522,724 1,913,605 195,863
Interfund
transfers (4,114,967) 853,573 1,068,645 877,984
TOTAL ADDITIONS (187,141) 3,724,973 5,432,574 1,490,470
Deductions
Distributions
to Participants (2,451,876) (407,068) (941,739) (79,951)
Administrative Fees (1,810) (1,008) (1,474) (203)
TOTAL DEDUCTIONS (2,453,686) (408,076) (943,213) (80,154)
Increase in
net assets (2,640,827) 3,316,897 4,489,361 1,410,316
Net assets available
for plan benefits,
1/1/96 34,097,480 7,413,684 14,178,417 1,157,525
Net assets available
for plan benefits,
12/31/96 $31,456,653 $10,730,581 $18,667,778 $2,567,841
/TABLE
Changes in Net Assets available for Benefits for the year ended December 31, 1996 (continued)
Int'l Loan Atlantic Energy
Stock Fund Fund Stock Total
Additions:
Employer $ 902 $ $ 1,155,709
Employee 166,426 $ 8,733 3,383,252
Investment Income
Interest - GIC 1,973,147
Interest-Loans 3,634 457 122 109,824
Dividends 46,345 6,391 1,754,527
Net Appreciation
of Investments 131,529 (2,565) 3,761,156
Interfund
transfers 905,861 218,370 190,534 -0-
_________ _______ __________
TOTAL ADDITIONS 1,254,697 218,827 203,215 12,137,615
Deductions
Distributions
to Participants (69,934) (3,950,568)
Administrative Fees (148) _______ (7) (4,650)
TOTAL DEDUCTIONS (70,082) -0- (7) (3,955,218)
Increase in
net assets 1,184,615 218,827 203,208 8,182,397
Net assets available
for plan benefits,
1/1/96 589,589 1,297,588 -0- 58,734,283
Net assets available
for plan benefits,
12/31/96 $1,774,204 $1,516,415 $203,208 $66,916,680
Net assets available for plan benefits, and changes therein, are presented below for each
participant-directed investment fund for the year ended December 31, 1995:
(In Dollars)
Net Assets available for Plan Benefits as of December 31, 1995
Custom Stable Equity Equity Spectrum
Value Fund Index Fund Income Fund Growth Fund
Investments
Common Collective
Trust $34,054,336 $ $ $
Mutual Fund
Accounts 7,395,022 14,156,541 1,154,349
Contributions Receivable
Employee 19,918 18,662 21,876 3,176
Employer 23,226
Participant Loans
Net Assets Available
for Plan Benefits $34,097,480 $7,413,684 $14,178,417 $1,157,525
/TABLE
Net Assets available for Plan Benefits as of December 31, 1995 (continued)
Int'l Loan
Stock Fund Fund Total
Investments
Common Collective
Trust $ $ $34,054,336
Mutual Fund
Accounts 587,353 23,293,265
Contributions Receivables
Employee 2,236 65,868
Employer 23,226
Participant Loans 1,297,588 1,297,588
Net Assets Available
for Plan Benefits $ 589,589 $1,297,588 $58,734,283
/TABLE
SCHEDULE I
ATLANTIC ELECTRIC
401(K) SAVINGS AND INVESTMENT PLAN - A
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
Transactions or series of transactions in excess of 5% of the
market value of plan assets:
Description Net Gain
Units or of Market or
Shares Investment Cost Value (Loss)
Purchases:
T. Rowe Price
Custom Stable
Value Fund $3,672,817
T. Rowe Price
Equity Income
Fund 4,472,395
T. Rowe Price
Equity Index
Fund 2,810,448
Sales:
T. Rowe Price
Custom Stable
Value Fund 6,309,916 $6,309,916 $ -0-
T. Rowe Price
Equity Income
Fund 1,557,387 1,889,372 331,985
T. Rowe Price
Equity Index
Fund 863,345 1,011,212 147,867
Schedule II
ATLANTIC ELECTRIC
401(K) SAVINGS AND INVESTMENT PLAN - A
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
Description of Current
Investment Cost Value
Custom Stable Value Fund GIC $31,416,584 $31,416,584
Equity Index Fund Mutual Fund 8,081,137 10,711,382
Equity Income Fund Mutual Fund 15,037,066 18,645,089
Spectrum Growth Fund Mutual Fund 2,337,273 2,563,007
International Stock Fund Mutual Fund 1,639,911 1,770,503
Atlantic Energy, Inc. Common Stock 206,714 203,165
Stock*
Participant Loans Various Loans
at 9%, maturing 1,516,415 1,516,415
January 1997
through January
2002.
TOTAL ASSETS HELD FOR INVESTMENT $60,235,100 $66,826,145
*Represents a qualified investment in an Employer related
security.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee
benefit plan) have duly caused this annual report to be signed on
its behalf by the undersigned thereunto duly authorized.
Date: June 26, 1997 /s/ L. M. Walters
L. M. Walters
Treasurer
Exhibit Index
Exhibit No.
23 Independent Auditors' Consent
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration
Statement No. 333-11683 on Form S-8 of Atlantic Energy, Inc. of
our report dated June 17, 1997, appearing in this Annual Report
on Form 11-K of Atlantic City Electric Company 401K Savings and
Investment Plan - A for the fiscal year ended December 31, 1996.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Parsippany, New Jersey
June 26, 1997