<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
COMMISSION FILE NUMBER 1-815
CONSOL INC. INVESTMENT PLAN FOR SALARIED EMPLOYEES
CONSOL PLAZA
1800 WASHINGTON ROAD
PITTSBURGH, PENNSYLVANIA 15241
(FULL TITLE OF THE PLAN)
CONSOL ENERGY INC.
300 DELAWARE AVENUE
SUITE 567
WILMINGTON, DELAWARE 19801
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<PAGE>
Audited Financial Statements
CONSOL Inc. Investment Plan for Salaried Employees
Years ended December 31, 1999 and 1998
with Report of Independent Auditors
<PAGE>
Audited Financial Statements
CONSOL Inc. Investment Plan for Salaried Employees
Years ended December 31, 1999 and 1998
with Report of Independent Auditors
<PAGE>
Supplemental Schedule
<PAGE>
CONSOL Inc. Investment Plan for Salaried Employees
Audited Financial Statements
Years ended December 31, 1999 and 1998
Contents
<TABLE>
<S> <C>
Report of Independent Auditors................................... 1
Audited Financial Statements
Statements of Net Assets Available for Benefits.................. 2
Statement of Changes in Net Assets Available for Benefits........ 3
Notes to Financial Statements.................................... 4
Supplemental Schedule
Schedule H, Line 4(i)--Schedule of Assets Held for
Investment Purposes at End of Year............................... 11
</TABLE>
<PAGE>
Report of Independent Auditors
To the Investment Plan Committee
CONSOL Inc.
We have audited the accompanying statements of net assets available for benefits
of the CONSOL Inc. Investment Plan for Salaried Employees as of December 31,
1999 and 1998, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1999. 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. 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 Plan at
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes as of December 31, 1999 is presented for purposes
of additional analysis and is not a required part of the financial statements
but is 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. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
June 9, 2000
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<PAGE>
CONSOL Inc. Investment Plan for Salaried Employees
Statements of Net Assets Available for Benefits
(Dollars in Thousands)
December 31
1999 1998
--------------------------
Investment at contract value:
Stable Value Fund $ 550,302 $ 547,742
Investments at fair value:
Noninterest-bearing cash and cash equivalents 323 -
Interests in registered investment companies 175,890 104,911
Barclays 3-Way Fund 24,443 24,244
Aggressive Asset Allocation Portfolio 1,204 1,222
Conservative Asset Allocation Portfolio 225 211
Moderate Asset Allocation Portfolio 939 744
Merrill Lynch Small Cap Index Trust 806 734
Merrill Lynch International Index Trust 768 695
Merrill Lynch Equity Index Trust 22,206 20,574
E.I. DuPont de Nemours & Company common stock,
5,963,098 shares 392,819 348,109
CONSOL Stock Fund 8,108 -
Daimler Chrysler common stock 332 517
--------------------------
Total investments 1,178,365 1,049,703
Participant loans receivable 20,689 21,111
Employer and employee contributions receivable 2,530 3,966
Pending Settlement Fund 61 -
--------------------------
Net assets available for benefits $1,201,645 $1,074,780
==========================
See accompanying notes.
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<PAGE>
CONSOL Inc. Investment Plan for Salaried Employees
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 1999
(Dollars in Thousands)
Contributions:
Employer contributions $ 11,445
Employee contributions 20,165
Rollover contributions 10,582
----------
Total contributions 42,192
Investment income (dividends and interest) 23,355
Net realized and unrealized appreciation
in fair value of investments 168,240
----------
Total additions 233,787
Benefits paid to participants 108,494
Other 276
----------
Total deductions 108,770
Net transfers to the Plan 1,848
----------
Net additions 126,865
Net assets available for benefits at beginning of year 1,074,780
----------
Net assets available for benefits at end of year $1,201,645
==========
See accompanying notes.
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<PAGE>
CONSOL Inc. Investment Plan for Salaried Employees
Notes to Financial Statements
December 31, 1999
(Dollars in Thousands)
1. Description of the Plan
The following description of the COSOL Inc. Investment Plan for Salaried
Employees (the Plan) provides only general information. Participants should
refer to the summary plan description for a more complete description of the
Plan's provisions.
General
The Plan is a defined contribution plan established in 1953. Salaried,
operations and maintenance and, in certain circumstances, production and
maintenance employees of CONSOL Inc. (CONSOL) and participating employers are
eligible to participate in the Plan on the first of the month following regular
full-time employment. In addition, temporary employees are eligible to
participate in the Plan upon completion of a period of 12 consecutive months,
commencing upon their employment date or anniversary date thereof, during which
the employee completes 1,000 or more hours of service. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
On April 29, 1999, CONSOL Energy, Inc. underwent an initial public offering. In
connection with the public offering, the Plan offers CONSOL Energy, Inc. common
stock (CONSOL Stock Fund) as an investment option. Participants of the Plan were
able to transfer funds into the CONSOL Stock Fund commencing in June 1999 and
elect to have contributions allocated to this fund in July 1999. In addition,
participants are no longer able to purchase E.I. DuPont de Nemours & Company
common stock under the Plan.
Contributions
Each year participants may, with certain restrictions, contribute up to 19% of
monthly base pay to the Plan exclusive of supplemental make-up deposits. CONSOL
and participating employers match these contributions, dollar for dollar, up to
6% of base pay (as defined by the Plan). Contributions may be made with before-
tax or after-tax dollars. In addition, subject to certain limitations, a
participant is allowed to make lump-sum savings deposits in cash to the Plan.
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CONSOL Inc. Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Participant Accounts
Each participant's account is credited with the participant's contributions and
allocations of the Company's contributions and plan earnings and is charged with
an allocation of administrative expenses. Allocations are based on participant
earnings or account balances, as defined. Forfeited balances of terminated
participants' nonvested accounts are used to reduce future company
contributions. The benefit to which a participant is entitled is the benefit
that can be provided from the participant's account.
Vesting
Plan participants generally become vested upon completion of five years of
participation in the Plan or five cumulative years of service. Participants are
always 100% vested in their deposits and in the earnings on both their deposits
and the Company's contributions.
Participant Loans
Participants may borrow up to one-half of their nonforfeitable account balances
subject to certain minimum and maximum loan limitations. Such loans are
repayable over periods of 12 to 60 months (120 months maximum if for the
purchase of a principal residence) and bear an interest rate equal to the
average rate charged by selected major banks for secured personal loans.
Principal and interest are paid ratably through payroll deductions.
Payment of Benefits
Participants who retire from active service may elect to withdraw their entire
account in a lump-sum, to defer withdrawal until April 1 of the calendar year
following the year in which the participant attains age 70 1/2, or to elect an
option to have their account distributed over a period of not less than two
years or more than a period which would pay the account balance during the
employee's actuarial life in either a fixed or variable amount. Before-tax
deposits may be withdrawn only in the event of an employee's retirement, death,
termination, attainment of age 59 1/2 or defined hardship.
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<PAGE>
CONSOL Inc. Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Plan Termination
Although it has not expressed any intent to do so, CONSOL has the right under
the Plan to discontinue its contributions at any time and to terminate the Plan
subject to the provisions of ERISA. In the event of plan termination,
participants will become 100% vested in their accounts.
2. Summary of Significant Accounting Policies
Investment Valuation and Income Recognition
For financial reporting purposes, the assets of the Plan are reflected on the
accrual basis of accounting. The underlying assets of the Stable Value Fund
consist primarily of guaranteed investment contracts (GIC), separate account
portfolios (SAP), and synthetic guaranteed investment contracts (SYN) and are
fully benefit responsive. The Stable Value Fund is stated at cost plus accrued
interest, using the contracted interest rates applied to the daily account
balances, and is provided by the Plan's trustee. The contract value of the
investment contracts approximates market value. Investments in common stock
funds and interests in registered investment companies are stated at fair value
based on publicly quoted market prices. Investments in the Merrill Lynch Small
Cap Index Trust, Merrill Lynch International Index Trust, Merrill Lynch Equity
Index Trust, Barclays 3-Way Fund, and Aggressive Asset Allocation, Conservative
Asset Allocation and Moderate Asset Allocation Portfolios are stated at the fair
value of all underlying assets as reported by the applicable custodian.
The unit value or price of all investments reflects the dollar amount at which
participants' accounts are valued at the end of the period reported.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. Gains and losses on the sale of the E.I. DuPont
de Nemours & Company and CONSOL Energy, Inc. common stock are based on average
cost of the securities sold and are recognized on the trade date. Brokerage
commissions and Securities and Exchange Commission fees in connection with the
sale of E.I. DuPont de Nemours & Company common stock, CONSOL Energy, Inc.
common stock and Daimler Chrysler common stock are added to the cost thereof or
deducted from the sales proceeds derived therefrom.
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<PAGE>
CONSOL Inc. Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Use of Estimates
The preparation of financial statements, in conformity with generally accepted
accounting principles, requires management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
3. Investments
The following presents investments that represent 5% or more of the Plan's net
assets.
December 31
1999 1998
---------------------
E.I. DuPont de Nemours & Company common stock,
5,963,098 and 6,541,774 shares, respectively $392,819 $348,109
Prudential Insurance Company of America--8.38%,
7/01/2001 59,179 83,448
Fidelity Investments Magellan Fund 449,480 and
442,684 shares, respectively 61,413 53,485
During 1999, the Plan's investments (including investments bought, sold, as well
as held during the year) appreciated in fair value by $168,240, as follows:
<TABLE>
<CAPTION>
Net Appreciation
(Depreciation) in
Fair Value During Fair Value at
Year End of Year
--------------------------------------
<S> <C> <C>
Year ended December 31, 1999:
Fair value as determined by quoted market price:
Interests in registered investment companies $ 29,005 $ 175,890
Common stock:
CONSOL Stock Fund (1,477) 8,108
Other 96,275 393,151
Stable Value Fund 37,327 550,302
Fair value reported by applicable custodian 7,110 50,591
----------------------------------------
$168,240 $1,178,042
========================================
</TABLE>
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<PAGE>
CONSOL Inc. Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
3. Investments (continued)
As of March 31, 1999, the Stable Value Fund is considered to be a nonpooled
separate account held by the Plan. Prior to this date, the Stable Value Fund was
jointly owned by the Plan and the Thrift Plan for Employees of Conoco Inc., a
wholly owned subsidiary of DuPont. As of December 31, 1998, the balance of all
investment contracts was allocated to the two plans by Merrill Lynch based on
the relationship of the Plan's Stable Value Fund participant balances to total
Stable Value Fund participant balances. The investment contracts are entered
into based on an evaluation of the credit risk of the contract issuers and/or
third party guarantors. Collateral is generally not provided. The nature of the
Stable Value Fund is consistent as of December 31, 1999 and 1998.
The composition of assets of the Stable Value Fund as of December 31, 1999 and
1998 are as follows:
1999 1998
------------------------
Investment contracts $548,692 $537,917
Short-term investments 1,610 9,825
------------------------
$550,302 $547,742
========================
The composition of changes in net assets of the Stable Value Fund as of December
31, 1999 is as follows:
Employer contributions $ 9,643
Employee contributions 5,803
Rollover contributions 9,184
--------
Total contributions 24,630
Investment income 38,216
Benefits paid to participants (73,521)
Net loan activity (133)
Interfund transfers 13,368
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Net additions 2,560
Net assets as of the beginning of the year 547,742
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Net assets as of the end of the year $550,302
========
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<PAGE>
CONSOL Inc. Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
3. Investments (continued)
The aggregate crediting rates for all contracts as of December 31, 1999 was 7%.
The crediting rates for SAP and SYN contracts are reset annually and are based
on the market value of the underlying portfolio of assets backing these
contracts. Inputs used to determine the crediting rate include each contract's
portfolio market value, current yield-to-maturity, duration (i.e., weighted
average life), and market value relative to contract value. The average yield of
the Stable Value Fund was approximately 7% in 1999.
Certain financial information as of December 31, 1998 has been reclassified to
conform with the financial statement presentation as of and for the year ended
December 31, 1999. These reclassifications did not have an impact on the net
assets available for benefits.
Participants investing in the Stable Value Fund, Barclays 3-Way Fund, Merrill
Lynch Equity Index Trust, Merrill Lynch Small Cap Index Trust, Merrill Lynch
International Index Trust, and Aggressive Asset Allocation, Conservative Asset
Allocation and Moderate Asset Allocation Portfolios are assigned units at the
time of investment based on the net asset value per unit.
4. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
(IRS) dated November 18, 1994, stating that the Plan is qualified under Section
401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust
is exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan was amended
subsequent to the IRS determination letter. Therefore, the amendments are not
covered by the determination letter. The Plan Administrator believes the Plan is
being operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan is qualified and the related trust is tax-
exempt.
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<PAGE>
CONSOL Inc. Investment Plan for Salaried Employees
Notes to Financial Statements (continued)
5. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31
1999 1998
------------------------------
<S> <C> <C>
Net assets available for benefits per the financial
Statements $1,201,645 $1,074,780
Includes amounts allocated to withdrawing participants
reported as asset reductions per the financial statements 318 76
------------------------------
Total assets per the Form 5500 $1,201,963 $1,074,856
==============================
</TABLE>
Amounts payable to withdrawing participants are recorded on the Form 5500 as a
liability for benefit claims that have been processed and approved for payment
prior to December 31 but not yet paid as of that date. For financial statement
purposes, the amounts were deducted from the respective assets.
6. Transactions with Parties-in-Interest
Plan investments in the Merrill Lynch Small Cap Index Trust, the Merrill Lynch
International Index Trust and the Merrill Lynch Equity Index Trust are managed
by Merrill Lynch. Merrill Lynch is the trustee as defined by the Plan and,
therefore, these transactions qualify as party-in-interest. Trustee and
investment fees paid during 1999 were based upon customary and reasonable rates
for such services.
One of the investment vehicles available to employees, the CONSOL Stock Fund,
contains stock of CONSOL.
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<PAGE>
CONSOL Inc. Investment Plan for Salaried Employees
EIN 25-1671742 Plan No. 002
Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes
at End of Year
December 31, 1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
Identity of Issue, Borrower, Number of
Lessor or Similar Party Description of Investment Shares/Units Current Value
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONSOL Stock Fund Common Stock 810,760 $ 8,108
======================
E.I. DuPont de Nemours &
Company Common Stock 5,963,098 $392,819
======================
Daimler Chrysler Common Stock 4,252 $ 332
======================
Merrill Lynch* Global Holdings Fund
CL A 196,467 $ 2,872
Capital Fund CL A 155,492 4,987
Basic Value Fund CL A 277,765 10,597
Growth Fund CL A 61,089 1,675
-----------------------
20,131
Janus Investments Enterprise Fund 250,826 19,231
Mercury Fund 889,579 38,972
----------------------
58,203
Fidelity Investments Fidelity Fund PV1 121,417 5,173
Equity Income Fund 20,422 1,092
Magellan Fund 449,480 61,413
Low Priced Stock Fund 95,714 2,167
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Growth & Income Fund 171,487 8,087
----------------------
77,932
</TABLE>
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<PAGE>
Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes
at End of Year (continued)
<TABLE>
<CAPTION>
Identity of Issue, Borrower, Number of
Lessor or Similar Party Description of Investment Shares/Units Current Value
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Franklin Value Investors Trust Small Cap Growth Fund
CL 1 135,709 5,989
Balance Sheet 17,097 521
Custodian Fund Inc. 8,437 291
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6,801
AIM Value Fund 89,607 4,376
Equity Constellation Fund
CL A 47,955 1,943
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6,319
Franklin Templeton Growth Fund 53,814 1,074
Foreign Fund 198,841 2,231
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3,305
MFS Investment Management Total Return Fund 31,337 435
Research Fund 49,949 1,441
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1,876
Hotchkis and Wiley International Fund 50,109 1,323
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Interests in registered investment
companies $175,890
=================
Monumental Life Ins. Co. SYNGIC, 6.87%, 1/01/2004 31,726,352 $ 31,726
</TABLE>
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<PAGE>
Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes
at End of Year (continued)
<TABLE>
<CAPTION>
Identity of Issue, Borrower, Number of
Lessor or Similar Party Description of Investment Shares/Units Current Value
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Life Insurance Co. GIC, 9.89%, 6/01/2000 4,182,753 4,183
GIC, 6.45%, 04/01/2025 46,976,338 46,976
Bankers' Trust SYNGIC, 7.11%, 12/31/2025
28,030,714 28,031
SYNGIC, 5.93%, 12/01/2002
34,831,312 34,831
CDC Investment Mgmt. Corp. SYNGIC, 6.95%, 10/01/2002
29,733,884 29,734
Deutsche Bank SYNGIC, 6.93%, 12/31/2025
37,400,236 37,400
SYNGIC, 5.73%, 12/31/2025
39,638,537 39,639
Metropolitan Life Ins. Co. SAGIC, 7.30%, 12/31/2025 33,798,930 33,799
Monumental Life Ins. Co. GIC, 6.35%, 12/31/2025 47,365,614 47,366
Prudential Insurance Company
of America GIC, 8.38%, 7/01/2001 59,179,594 59,179
The Travelers Ins. Co. GIC, 9.66%, 6/01/2000 3,930,130 3,930
Transamerica Life Ins. GIC, 7.10%, 9/01/2006 36,830,780 36,831
Citibank SYNGIC, 7.42%, 8/31/2001 9,092,633 9,093
John Hancock Mutual Life GIC, 6.01%, 7/01/2003 17,081,519 17,082
Union Bank of Switzerland SYNGIC, 6.73%, 1/01/2025 42,529,445 42,529
J.P. Morgan SYNGIC, 5.76%, 12/31/2002
39,231,984 39,232
Short-term investments (including
Merrill Lynch Government Fund) 6.01%, 12/31/2025 8,740,757 8,741
------------------
Total Stable Value Fund $550,302
==================
</TABLE>
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<PAGE>
Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes
at End of Year (continued)
<TABLE>
<CAPTION>
Identity of Issue, Borrower, Number of
Lessor or Similar Party Description of Investment Shares/Units Current Value
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aggressive Asset Allocation Portfolio 80,991 $ 1,204
===============
Conservative Asset Allocation Portfolio 17,273 $ 225
===============
Moderate Asset Allocation Portfolio 69,380 $ 939
===============
Merrill Lynch* Small Cap Index Trust 61,724 $ 806
===============
International Index Trust 49,224 $ 768
===============
Equity Index Trust 218,306 $22,206
===============
BZW Global Investors Barclays 3-Way Fund 870,350 $24,443
===============
Participant loans* 7.75% to 9% $20,689
===============
*Indicates parties-in-interest.
</TABLE>
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