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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1999
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 33-21095
THE COASTAL CORPORATION
DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
(Full title of the plan)
THE COASTAL CORPORATION
Coastal Tower
Nine Greenway Plaza
Houston, Texas 77046-0995
(Name of issuer of the securities held pursuant to
the plan and address of its principal executive office)
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INDEPENDENT AUDITORS' REPORT
Administrator
The Coastal Corporation Dividend Reinvestment
and Stock Purchase Plan
Houston, Texas
We have audited the accompanying statements of net assets available for Plan
benefits of The Coastal Corporation Dividend Reinvestment and Stock Purchase
Plan (the "Plan") as of December 31, 1999 and 1998, and the related statements
of changes in net assets available for Plan benefits for each of the three years
in the period ended December 31, 1999. Our audits also included the financial
statement schedule on page 6. These financial statements and financial statement
schedule are the responsibility of the Plan's management. Our responsibility is
to express an opinion on these financial statements and financial statement
schedule 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, net assets available for Plan benefits as of December 31, 1999 and
1998, and the changes in net assets available for Plan benefits for each of the
three years in the period ended December 31, 1999, in conformity with generally
accepted accounting principles. Also, in our opinion, such financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.
Houston, Texas
March 13, 2000
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THE COASTAL CORPORATION DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
December 31,
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1999 1998
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<S> <C> <C>
ASSETS:
Investments, at market:
Securities of The Coastal Corporation:
Common stock (cost: 1999--$13,722,054; 1998--$11,722,686)............... $ 22,338,099 $ 21,426,355
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Receivables:
Dividends.................................................................. 38,900 37,550
Contributions.............................................................. 104,367 120,928
Receivable from Salomon Smith Barney....................................... 359 321
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Total Receivables............................................................. 143,626 158,799
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Cash.......................................................................... 13,528 10,715
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TOTAL ASSETS.......................................................... 22,495,253 21,595,869
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LIABILITIES................................................................... - -
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NET ASSETS AVAILABLE FOR PLAN BENEFITS........................................ $ 22,495,253 $ 21,595,869
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</TABLE>
See Notes and Schedule to Financial Statements.
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THE COASTAL CORPORATION DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
For The Years Ended
December 31,
-----------------------------------------------
1999 1998 1997
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<S> <C> <C> <C>
ADDITIONS:
Investment income:
Interest and dividend income................................. $ 150,719 $ 128,063 $ 109,876
Net appreciation in fair value of investments................ 152,445 2,375,083 3,616,177
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303,164 2,503,146 3,726,053
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Contributions:
Participant cash contributions............................... 2,430,539 2,883,520 2,579,874
Participant non-cash contributions........................... 1,999,033 1,248,871 983,265
Employer contributions....................................... 738,424 471,490 487,120
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5,167,996 4,603,881 4,050,259
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TOTAL ADDITIONS........................................... 5,471,160 7,107,027 7,776,312
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DEDUCTIONS:
Withdrawal payments............................................. 4,571,776 3,167,351 3,663,611
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Increase in net assets available for plan benefits.............. 899,384 3,939,676 4,112,701
NET ASSETS, JANUARY 1........................................... 21,595,869 17,656,193 13,543,492
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NET ASSETS, DECEMBER 31......................................... $ 22,495,253 $ 21,595,869 $ 17,656,193
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</TABLE>
See Notes and Schedule to Financial Statements.
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THE COASTAL CORPORATION DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of the Dividend Reinvestment and Stock Purchase Plan
On July 15, 1996, The Coastal Corporation (the "Company" or "Coastal")
filed a prospectus covering its Dividend Reinvestment and Stock Purchase Plan
(the "Plan") with the Securities and Exchange Commission. The Plan provides for
eligibility to any person or entity, including employees of the Company and its
subsidiaries and members of the Board of Directors of the Company upon
compliance with the Plan enrollment requirements. The Plan provides a convenient
and economical way to purchase shares of Coastal Common Stock, par value
$0.331/3 per share ("Common Stock"), through employee payroll deductions and/or
optional cash payments. Under the Plan, participants may deposit certificates
for other shares of Common Stock with the Plan Administrator for safekeeping.
These deposits are accounted for as participant non-cash contributions to the
Plan. In addition, the Company may make optional payments on behalf of any
employee. All participants are furnished a Plan prospectus.
2. Summary of Significant Accounting Policies
Accounting Basis
The financial statements are prepared on the accrual basis of accounting
and participants' account allocations are determined on the cash basis.
Investment Valuation
Common Stock investments are stated at quoted market prices at year end.
Taxes
The Plan is not a deferred compensation arrangement and, therefore, does
not have to meet the requirements for qualifications as specified in Section
401(a) of the Internal Revenue Code of 1986, as amended, nor is it subject to
any of the provisions of the Employee Retirement Income Security Act of 1974, as
amended.
Under current United States tax laws, the purchase and sale of Common Stock
pursuant to the Plan is not subject to income or withholding tax. Dividends paid
on Common Stock held in the Plan are considered taxable income, even though
reinvested under the Plan. Dividends paid on Common Stock held in the Plan by
nonresident alien employees are subject to withholding tax at a rate of 30%, or
at a lower rate if based on a tax treaty between the United States and their
country of residence.
3. Investments
The majority of the Plan's assets are held by the brokerage firm of Salomon
Smith Barney.
4. Plan Termination
Although it has not expressed any intent to do so, the Company reserves the
right to suspend, modify or terminate the Plan at any time. All participants
shall at all times be fully vested in their account balances.
5. Administration Costs
All costs of administering the Plan are paid by the Company. Participants
of the Plan are required to pay broker commissions at a reduced rate from
typical commission rates.
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6. Merger
Coastal and El Paso Energy Corporation ("El Paso Energy") announced on
January 18, 2000 the execution of definitive agreements for the merger of
Coastal and El Paso Energy. Each share of Coastal common stock and Class A
common stock will be converted on a tax-free basis (except for cash paid in lieu
of fractional shares) into 1.23 shares of El Paso Energy common stock. It is
expected that the merger will be completed during the fourth quarter of 2000 and
be accounted for as a pooling of interests. The merger is subject to various
conditions, particularly federal regulatory approval.
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THE COASTAL CORPORATION DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
SCHEDULE I - INVESTMENTS
COASTAL COMMON STOCK
<TABLE>
<CAPTION>
Security Shares Cost Market Value
-------- ---------- --------------- ------------------
<S> <C> <C> <C>
The Coastal Corporation Common Stock
December 31, 1999.................................... 630,352 $ 13,722,054 $ 22,338,099
December 31, 1998.................................... 610,003 $ 11,722,686 $ 21,426,355
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, The
Coastal Corporation, as Administrator, has duly caused this Annual Report to be
signed on its behalf by the undersigned hereunto duly authorized.
THE COASTAL CORPORATION, AS
ADMINISTRATOR OF
THE COASTAL CORPORATION
DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
Date: March 28, 2000 By: AUSTIN M. O'TOOLE
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Austin M. O'Toole
Senior Vice President and Secretary
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