As Filed with the Securities and Exchange Commission on June 28, 2001 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, 2000 OR [ ] 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 1-6659 CONSUMERS WATER COMPANY EMPLOYEES' 401(k) SAVINGS PLAN AND TRUST PHILADELPHIA SUBURBAN CORPORATION 762 W. LANCASTER AVENUE BRYN MAWR, PA 19010
CONSUMERS WATER COMPANY EMPLOYEES' 401(k) SAVINGS PLAN AND TRUST The following audited financial statements are enclosed with this report: Financial Statements and Supplemental Schedules as of December 31, 2000 and 1999 Exhibit Page 23.1 Consent of PricewaterhouseCoopers LLP 4 23.2 Consent of KPMG LLP 5 99.1 Financial Statements and Supplemental Schedules as of December 31, 2000 and 1999 6
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, Consumers Water Company has duly caused this annual report to be signed by the undersigned thereunto duly authorized. Consumers Water Company Employees' 401(K) Savings Plan and Trust Plan Sponsor: Date /s/ Roy H. Stahl 06/27/01 -------------------------------- ----------- Roy H. Stahl Vice President Consumers Water Company
Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-81085) of Philadelphia Suburban Corporation of our report dated June 11, 2001, which appears on page 8 of this Form 11-K. /S/ PricewaterhouseCoopers LLP Philadelphia, Pennsylvania June 25, 2001
Exhibit 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS - ---------------------------------- The Board of Directors Philadelphia Suburban Corporation: We consent to incorporation by reference in the registration statement (No. 333-81085) on Form S-8 of Philadelphia Suburban Corporation of our report dated June 23, 2000, relating to the statement of net assets available for plan benefits of Consumers Water Company Employees' 401(k) Savings Plan and Trust as of December 31, 1999, and the related statement of changes in net assets available for plan benefits for the year then ended, which report appears in the December 31, 2000, annual report on Form 11-K of Philadelphia Suburban Corporation. /S/ KPMG LLP Philadelphia, Pennsylvania June 27, 2001
Exhibit 99.1 CONSUMERS WATER COMPANY EMPLOYEES' 401(k) SAVINGS PLAN AND TRUST Financial Statements and Supplemental Schedules December 31, 2000 and 1999 (With Independent Auditors' Reports Thereon)
CONSUMERS WATER COMPANY EMPLOYEES' 401 (k) SAVINGS PLAN AND TRUST Page Independent Auditors' Report of PricewaterhouseCoopers LLP 1 Independent Auditors' Report of KPMG LLP 2 Financial Statements: Statements of Net Assets Available for Plan Benefits 3 Statements of Changes in Net Assets Available for Plan Benefits 4 Notes to Financial Statements 6 Schedules 1 - Schedule of Assets Held for Investment Purposes at End of Year 9 2 - Schedule of Reportable Transactions 10
CONSUMERS WATER COMPANY EMPLOYEES' 401 (k) SAVINGS PLAN AND TRUST Report of Independent Accountants To the Participants and Administrator of Consumers Water Company Employees' 401(k) Savings Plan and Trust In our opinion, the accompanying statement of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of Consumers Water Company Employees' 401(k) Savings Plan and Trust (the "Plan") at December 31, 2000, and the changes in net assets available for benefits for the year then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, 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 our opinion. The financial statements of the Plan as of December 31, 1999 and for the year then ended were audited by other independent accountants whose report dated June 23, 2000 expressed an unqualified opinion thereon. 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 Schedule of 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 supplemental schedules 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. /S/ PricewaterhouseCoopers LLP Philadelphia, Pennsylvania June 11, 2001 1
CONSUMERS WATER COMPANY EMPLOYEES' 401 (k) SAVINGS PLAN AND TRUST Independent Auditors' Report The Pension Committee Consumers Water Company: We have audited the accompanying statement of net assets available for plan benefits of Consumers Water Company Employees' 401(k) Savings Plan and Trust (the Plan) as of December 31, 1999, and the related statement of changes in net assets available for plan benefits for the year 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 audit. We conducted our audit 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 audit provides 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 plan benefits of the Plan as of December 31, 1999, and the changes in net assets available for plan benefits for the year then ended, in conformity with generally accepted accounting principles. /S/ KPMG LLP Philadelphia, Pennsylvania June 23, 2000 2
CONSUMERS WATER COMPANY EMPLOYEES' 401 (k) SAVINGS PLAN AND TRUST Statements of Net Assets Available for Plan Benefits December 31, 2000 and 1999 2000 1999 ---- ---- Investments at fair value- Participant directed investments $17,800,017 $18,108,937 Employer common stock 11,836,127 7,224,170 ----------- ----------- Total Investments $29,636,144 $25,333,107 Cash and cash equivalents 3,994 1,871 Receivables- Employer contributions 4,416 319,908 Participants' contributions 65,100 26,924 ----------- ----------- Net assets available for plan benefits $29,709,654 $25,681,810 =========== =========== See accompanying notes to financial statements. 3
CONSUMERS WATER COMPANY EMPLOYEES' 401 (k) SAVINGS PLAN AND TRUST Statement of Changes in Net Assets Available for Plan Benefits Year Ended December 31, 2000 Participant Directed Employer Investments Common Stock Total ----------- ------------ ----- Additions: Investment income $ 1,273,026 $ 281,276 $ 1,554,302 Realized/unrealized gain (loss) on investments (2,093,680) 3,916,465 1,822,785 ----------------------------------------------- Total investment income (820,654) 4,197,741 3,377,087 Contributions: Employer - 308,311 308,311 Participants 1,226,151 107,747 1,333,898 ----------------------------------------------- Total contributions 1,226,151 416,058 1,642,209 Net additions 405,497 4,613,799 5,019,296 Deductions: Benefits paid to participants 762,974 225,598 988,572 Management fee 2,813 67 2,880 ----------------------------------------------- Net increase (decrease) prior to interfund transfers (360,290) 4,388,134 4,027,844 Interfund transfers 81,785 (81,785) - ----------------------------------------------- Net change in plan assets (278,505) 4,306,349 4,027,844 Net assets available for plan benefits: Balance at beginning of year 18,137,732 7,544,078 25,681,810 ----------------------------------------------- Balance at end of year $ 17,859,227 $ 11,850,427 $ 29,709,654 =============================================== See accompanying notes to financial statements. 4
CONSUMERS WATER COMPANY EMPLOYEES' 401 (k) SAVINGS PLAN AND TRUST Statement of Changes in Net Assets Available for Plan Benefits Year Ended December 31, 1999 Participant Directed Employer Investments Common Stock Total ----------- ------------ ----- Additions: Investment income $ 1,539,718 $ 186,850 $ 1,726,568 Realized/unrealized gain (loss) on investments 1,353,580 (417,290) 936,290 ----------------------------------------------- Total investment income 2,893,298 (230,440) 2,662,858 Contributions: Employer - 319,908 319,908 Participants 1,271,405 97,088 1,368,493 ----------------------------------------------- Total contributions 1,271,405 416,996 1,688,401 Net additions 4,164,703 186,556 4,351,259 Deductions: Benefits paid to participants 2,825,923 844,113 3,670,036 Management fee 3,464 250 3,714 ----------------------------------------------- Net increase (decrease) prior to interfund transfers 1,335,316 (657,807) 677,509 Interfund transfers (117,142) 117,142 - ----------------------------------------------- Net change in plan assets 1,218,174 (540,665) 677,509 Net assets available for plan benefits: Balance at beginning of year 16,919,558 8,084,743 25,004,301 ----------------------------------------------- Balance at end of year $ 18,137,732 $ 7,544,078 $ 25,681,810 =============================================== See accompanying notes to financial statements. 5
CONSUMERS WATER COMPANY EMPLOYEES' 401(k) SAVINGS PLAN AND TRUST Notes to Financial Statements December 31, 2000 and 1999 (1) DESCRIPTION OF PLAN The following description of the Consumers Water Company Employee's 401 (k) Savings Plan and Trust ("the Plan") is provided for general information purposes only. Participants should refer to the Plan document for more complete information. General The Plan is a defined contribution plan covering substantially all employees of the Consumers Water Company, a wholly owned subsidiary of Philadelphia Suburban Corporation ("the Company"). An employee becomes eligible to participate on January 1 of the year following the date on which his or her employment commenced. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). An employee may not participate in the Plan if the employee is a participant of a union with which the Company has a collective bargaining agreement directly or through an employee association, unless the collective bargaining agreement between the Company and the union involved specifically makes the Plan applicable to employees covered under such collective bargaining agreements, provided that benefits have been a subject of good faith bargaining between the Company and its employees. Contributions Participants may elect to contribute from 1% to 15% of their pretax compensation pursuant to a salary deferral election, up to a maximum of $10,500 in 2000 and $10,000 in 1999 as determined by Internal Revenue Code ss.402(g)(1). Participants may change the rate of their contribution or their investment elections. They may also make transfers or suspend their contributions at any time. Under the Plan, participants may contribute 1% to 9% of their compensation on an after-tax basis to their voluntary accounts. In any Plan year, a participant's aggregate contributions to the Plan (salary deferral amounts plus after-tax voluntary contributions) may not exceed 15% of such participant's compensation for the applicable Plan year. The Plan provides for the Company to contribute an amount equal to 40% of the pretax employee contribution up to $1,040 for each participant. The Company's contributions consisted of common stock in the Company. Participant Accounts Each participant's account is credited with the participant's contribution and allocations of (a) the Company's contribution and (b) Plan earnings. Allocations are based on participant contributions or account balances, as defined by the Plan document. Vesting Each participant will always be 100% vested in all employee and Company contributions. Payment of Benefits In the event a participant's employment is terminated by reason of death, disability or termination of service, a participant's interest will be distributed in a lump-sum payment. Withdrawals will be made in cash or shares of Company stock, to the extent permitted by law. Under certain circumstances, a participant may withdraw all or a portion of the employee contributions while employed. 6
CONSUMERS WATER COMPANY EMPLOYEES' 401(k) SAVINGS PLAN AND TRUST Notes to Financial Statements December 31, 2000 and 1999 (Continued) Loans Due from Participants Participants may borrow funds from their account balance equal to the lesser of $50,000 or half of their vested account balance for a period not to exceed five years. Repayment is made by payroll deduction. During the period covered by the report, all new loans issued after January 1, 2000 were issued at the prime rate of interest and prior to this loans were issued at 5.5%. The prime rate of interest changed during the year. The interest rate on loans outstanding as of December 31, 2000 ranged from 5.5% to 9.5%. Investment Options Participants can direct, at the time they enroll in the Plan, that their salary deferral and voluntary contributions be invested entirely in one of the funds offered by the Plan or divided among the funds. Subject to compliance with applicable state and federal securities laws, the Plan also permits participants to acquire an interest in Company common stock. Participants may change their investment instructions and reinvest their contributions in a different fund or funds. Termination of the Plan Although the Company does not intend to terminate the Plan, it may do so at its discretion, subject to the provisions of ERISA. All interests of the participants would be distributed to them as determined by the Committee (as hereinafter defined) and in accordance with applicable provisions of the Internal Revenue Code. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The accompanying financial statements have been prepared using the accrual basis. Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan's management to use estimates and assumptions that affect the accompanying financial statements and disclosures. Actual results could differ from these estimates. Administration The Plan is administered by a committee ("the Committee") consisting of three or more individuals selected by, and who may be removed at any time by, the Board of Directors of PSC. The Committee members may be employees of PSC and may be participants in the Plan. The Committee members receive no compensation from the Plan for their services in such capacity. The Committee has extensive administrative powers in connection with the Plan, including authority to interpret the provisions of the Plan, to adopt rules for its administration and to make other decisions with respect to the Plan. The custodian for the Plan's funds invests the funds as directed by the participants. The principal duties of the trustees are to receive all contributions paid to the Plan and to make investments and pay benefits as directed by the Committee. The assets of the Plan are held in the name of the Trustees. Substantially all of the administrative expenses of the Plan are paid by the Company. 7
CONSUMERS WATER COMPANY EMPLOYEES' 401(k) SAVINGS PLAN AND TRUST Notes to Financial Statements December 31, 2000 and 1999 (Continued) Reclassification Certain prior year amounts have been reclassified to conform to the current year's presentation. Investment Valuation The Plan's investments are stated at fair value. Mutual funds are valued at quoted market prices which represents the net asset value of shares held by the Plan at year-end. Common/collective trust funds are valued at unit value, which represents the fair value of the underlying assets as reported by the applicable custodian. Company stock is valued at its quoted market price at year-end. Loans to participants, short-term investments and cash are valued at cost, which approximates fair value. Dividend income is recorded on the ex-dividend date and interest income is recorded when earned. Realized gains and losses on the sale of the Company stock are based on average cost of the securities sold. Purchases and sales are recorded on a trade date basis. (3) INVESTMENTS The fair market values of individual assets that represent 5% or more of the Plan's net assets as of December 31, 2000 and 1999 are as follows: 2000 ---- Select Fund $ 8,881,205 Balanced Fund $ 2,479,656 Stable Assets $ 2,075,430 Employer Common Stock $ 11,836,127 1999 ---- Select Fund $ 9,997,086 Balanced Fund $ 2,665,259 Stable Assets $ 1,911,761 Employer Common Stock $ 7,224,170 Stock Split In August 2000, the Company's Board of Director's declared a 5-for-4 common stock split effected in the form of a stock distribution for all common shares outstanding, to shareholders of record on November 15, 2000. The new shares were distributed on December 1, 2000. (4) FEDERAL INCOME TAX CONSEQUENCES The Internal Revenue Service issued its latest determination letter dated May 3, 1995, which stated that the Plan and related trust, as amended, qualified under applicable provisions of the Internal Revenue Code (IRC) and, therefore are exempt from federal income taxes. The Plan administrator and the Plan's counsel believe that the Plan is designed and is currently being operated in compliance with applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plan's financial statements. 8
SCHEDULE 1 CONSUMERS WATER COMPANY EMPLOYEES' 401(k) SAVINGS PLAN AND TRUST Schedule of Assets Held for Investment Purposes at End of Year December 31, 2000 Description Issuer of Investment Cost Current Value - ------- --------------- ---- ------------- American Century Select Fund $ 8,881,205 American Century Balanced Fund $ 2,479,656 American Century Vista Fund $ 1,391,889 American Century Value Fund $ 731,481 American Century Equity Index $ 1,094,276 SEI Trust Stable Assets $ 2,075,430 Philadelphia Suburban Corporation Common Stock* $ 5,705,549 $11,836,127 Loans due from participants (interest rate 5.5% to 9.5%)* $ 1,146,080 $ 1,146,080 ----------- Total assets held for investment purposes $29,636,144 =========== * Represents a party-in-interest to the Plan. 9
SCHEDULE 2 CONSUMERS WATER COMPANY EMPLOYEES' 401(k) SAVINGS PLAN AND TRUST Schedule of Reportable Transactions Year Ended December 31, 2000 Description of Purchase Selling Issuer Investment Price Price Cost Net Gain - ------- ----------- ----- ------- ---- -------- Philadelphia Suburban Corporation Common Stock* Purchases $1,298,875 $ - $1,298,875 $ - Sales $ - $603,387 $ 426,118 $177,269 *Represents a party-in-interest to the Plan 10