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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 2-50853
THE COASTAL CORPORATION
THRIFT 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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<PAGE>
INDEPENDENT AUDITORS' REPORT
Administrator
The Coastal Corporation Thrift Plan
Houston, Texas
We have audited the accompanying statements of net assets available for
plan benefits of The Coastal Corporation Thrift Plan (the "Plan") as of December
31, 1999 and 1998, and the related statements of changes in net assets available
for plan benefits for the years 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 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 the Plan as of December 31,
1999 and 1998, and the changes in net assets available for plan benefits for the
years then ended 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 1 through 10,
Schedule of Assets Held for Investment Purposes at End of Year, 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, as amended. These schedules are the responsibility of the Plan's
management. Such schedules have been subjected to the auditing procedures
applied in our audit of the basic 1999 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.
DELOITTE & TOUCHE LLP
Houston, Texas
June 19, 2000
<PAGE>
THE COASTAL CORPORATION THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
December 31,
---------------------------------
1999 1998
--------------- --------------
<S> <C> <C>
ASSETS
Investments, at market:
Securities of The Coastal Corporation:
Common Stock........................................................ $ 472,527,707 $ 490,707,350
Class A Common Stock................................................ 331,447 378,261
$1.83 Cumulative Convertible Preferred Stock, Series B.............. 80,655 99,682
Valero Energy Corporation Common Stock................................. 351,947 416,925
Pacific Gas & Electric Corporation Common Stock........................ 192,926 342,405
Intelect Communications, Inc. Common Stock............................. 4,525 5,684
Diversified Fund....................................................... 22,722,005 27,376,139
Index Fund............................................................. 1,124,440 -
Short Term Investments................................................. 42,816,787 47,176,213
--------------- --------------
Total Investments......................................................... 540,152,439 566,502,659
--------------- --------------
Receivables:
Contributions.......................................................... 909,997 20,231
Dividends.............................................................. 876,087 917,602
Interest............................................................... 222,641 218,216
--------------- --------------
Total Receivables......................................................... 2,008,725 1,156,049
--------------- --------------
Cash .................................................................... 4 2
--------------- --------------
TOTAL ASSETS........................................................ 542,161,168 567,658,710
--------------- --------------
LIABILITIES
Payable to participants................................................... 2,955,839 3,904,325
--------------- --------------
TOTAL LIABILITIES................................................... 2,955,839 3,904,325
--------------- --------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS.................................... $ 539,205,329 $ 563,754,385
=============== ==============
</TABLE>
See Notes and Schedules to Financial Statements.
-2-
<PAGE>
THE COASTAL CORPORATION THRIFT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
For the Year Ended
December 31,
---------------------------------
1999 1998
--------------- --------------
<S> <C> <C>
ADDITIONS:
Investment income:
Dividends.............................................................. $ 4,076,854 $ 4,041,081
Interest............................................................... 2,437,572 2,737,022
--------------- --------------
Total investment income................................................ 6,514,426 6,778,103
--------------- --------------
Realized gains on investments (Note 7).................................... 2,902,685 2,755,691
--------------- --------------
Net change in unrealized appreciation
of investments (Note 8)................................................ 1,034,794 59,072,855
--------------- --------------
Contributions:
Employer............................................................... 21,160,891 20,008,426
Forfeitures............................................................ (373,870) (432,085)
--------------- --------------
Net employer contributions.......................................... 20,787,021 19,576,341
Rollover from other plans.............................................. 65,877 133,480
Participants........................................................... 23,591,213 22,132,071
--------------- --------------
Total contributions.................................................... 44,444,111 41,841,892
--------------- --------------
DEDUCTIONS:
Withdrawals............................................................... (79,445,072) (70,482,083)
--------------- --------------
Net (decrease) increase ............................................... (24,549,056) 39,966,458
--------------- --------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of Year...................................................... 563,754,385 523,787,927
--------------- --------------
End of Year............................................................ $ 539,205,329 $ 563,754,385
=============== ==============
</TABLE>
See Notes and Schedules to Financial Statements.
-3-
<PAGE>
THE COASTAL CORPORATION THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of the Plan
General
The Coastal Corporation Thrift Plan (the "Plan") is primarily an employee
stock purchase plan which is registered under the Securities Act of 1933, as
amended, and designed to provide a systematic means whereby the contributions of
eligible employees of The Coastal Corporation and participating subsidiaries
("Coastal" or "Company") and matching contributions of the Company may be
invested for the benefit of the participating employees. The Plan is
administered by Coastal, and pursuant to the provisions of the Plan, an
Administrative Committee comprised of employees of Coastal has been appointed to
carry out certain duties under the Plan. Chase Bank of Texas, National
Association (the "Trustee") is the Trustee of the Plan Trust (the "Trust"). All
employees eligible for participation in the Plan receive a prospectus and an
employee handbook, which may be updated by supplements from time to time,
containing a general description of the Plan. The Trustee holds the investment
assets of the Plan and executes transactions relating thereto.
Termination of the Plan
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 and to
terminate the Plan subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). In the event of termination,
participants will become 100 percent vested in their accounts.
Amendment
On December 19, 1998, the Plan was amended and restated as of January 1,
1999, to conform to statutory changes; to add an additional investment fund; to
provide participants in the Company's coal operations with (i) a Company-
matching contribution of 2% of a participant's basic compensation and (ii) the
option to contribute to the Plan on an after-tax basis; to provide credit for
determining eligibility to join the Plan for employees of certain facilities for
such employees' employment at the facilities prior to the Company's acquisition
of the facilities in 1998; to permit a participant's benefit to be
reduced to satisfy liabilities of the participant to the Plan due to conviction
of a crime involving the Plan or certain settlements involving violations of
fiduciary provisions of law with respect to the Plan; and to convert certain of
the Section 401(k) provisions of the Plan to employee stock ownership plan
("ESOP") provisions.
The plan was amended by amendment dated June 26, 1999, to conform to
statutory changes and to provide credit for determining eligibility to join the
Plan for employees of certain facilities for such employees' employment at the
facilities prior to the Company's acquisition of the facilities in 1999.
The Plan was amended effective March 17, 2000, to revise the voting
procedures to allow the Trustee to vote shares which have not been allocated to
participant accounts.
2. Summary of Significant Accounting Policies
Accounting Basis
The financial statements of the Plan are prepared on the accrual basis of
accounting.
Marketable Securities
Securities valuations are based on the last recorded sales price at
December 31, 1999 and 1998, as reported by the principal securities exchange on
which the security is traded, or the average of the bid and the asked price if
sold
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<PAGE>
over the counter. Realized gains and losses reported on the sale or withdrawal
of securities by participants are based on the difference between market values
of the securities sold and/or transferred to participants at the effective dates
and the market value at the beginning of the year and cost of securities
purchased during the year.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses. Actual results could differ from the estimates and assumptions
used.
Federal Income Taxes
The Company received its most recent determination letter dated June 26,
1996 from the Internal Revenue Service which states the Plan meets the exemption
requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"); and therefore, the Trust is exempt from taxation under Section
501(a) of the Code. Since that determination, certain amendments have been made.
It is the opinion of management that, on the basis of the Internal Revenue
Service's prior determination, and existing federal income tax laws, the Plan,
as amended, continues to be exempt from taxation. Accordingly, no provision has
been made for federal income taxes.
3. Contributions to the Plan
Employee Contributions
Upon enrollment, a participant may elect to contribute to the Plan on a
before- or after-tax basis (except that participants in Canada may contribute to
the Plan only on an after-tax basis), by means of regular payroll deductions,
from two percent (2%) to eight percent (8%), in increments of one percent (1%),
of the participant's basic compensation up to a maximum amount of $160,000 for
1999 and 1998, or such greater amount as may be allowed by Section 401(a) of the
Code. Generally, "basic compensation" means fixed salaries or wages per hour,
sales commissions, and truck mileage and loading which are paid by the Company
to the participant, excluding compensation for bonuses, overtime and other
incentive compensation.
Before-tax contributions are made pursuant to salary reduction agreements.
Salary reduction contributions for ESOP participants constitute and are treated
as an ESOP.
Employee contributions to the Plan, except those contributed as elective
deferrals (including salary reduction contributions) pursuant to Section 401(k)
(as limited by Section 402(g)) of the Code, are taxed at ordinary income tax
rates as a part of their salary. The Company matching contributions, investment
income, employee contributions under provisions of Section 401(k) of the Code,
and unrealized appreciation are not taxable to the employee until withdrawal.
Employer Contributions
The Company will make Company matching contributions for the account of the
participant at an amount equal to the employee's contributions subject to a
maximum rate of two percent (2%) of the employee's basic compensation (as
defined above) during the first and second year of active participation in the
Plan; thereafter, the Company matching contributions are increased to not more
than four percent (4%) during the third and fourth years of active
participation, six percent (6%) during the fifth and sixth years of active
participation and eight percent (8%) after six years of active participation in
the Plan. However, participants in the Company's coal operations are eligible
for Company matching contributions to a maximum of two percent (2%) of an
employee's basic compensation.
Vesting
A participant's balance in the Trust attributable to the employee's
contributions is vested in such participant at all times. The Company's
contributions and appreciation and earnings thereon in the participant's balance
vest at the rate of 20% upon completion of each twelve months of Active
Participation (as defined in the Plan); such vesting continues,
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<PAGE>
on a cumulative basis, until a participant becomes fully vested in all
contributions and appreciation and earnings thereon (usually 6 years, comprised
of the initial year of employment plus five years of Active Participation). Any
period of time during which a participant has declined to contribute to the Plan
is not included in the determination of vesting of Company contributions.
4. Investment Programs(*)
Funds in Which Current Employee Contributions Are Invested:
The Coastal Common Stock Fund is a fund invested in the common stock of
Coastal. Cash dividends thereon are reinvested in such Common Stock Fund. All
Company matching contributions are invested in the Coastal Common Stock Fund
only.
The Diversified Fund is an unsegregated fund invested in capital stocks of
issuers (other than Coastal or any related employer or subsidiary thereof),
notes, bonds, debentures, and other similar types of investments. A portion of
the Diversified Fund may be retained in cash or invested temporarily in
obligations of the United States of America or in commercial paper.
The Index Fund is an unsegregated fund invested in capital stocks or
similar securities of issuers (other than Coastal or any subsidiary of Coastal).
The Index Fund seeks investment results which parallel the performance of an
unmanaged stock index fund such as the Standard & Poor's 500 Composite Stock
Price Index. A portion of the fund may be retained in cash or invested on a
short-term basis in commercial paper or obligations of the United States of
America.
The Interest Income Fund is an unsegregated fund invested in interest
bearing investments such as bonds, notes, debentures, savings accounts, savings
certificates, commercial paper, obligations of the United States of America,
deposit accounts maintained by one or more legal reserve life insurance
companies which provide for the payment of fixed or variable rates of interest
for specified periods of time, and other similar types of investments. A portion
of the Interest Income Fund may be retained in cash.
Funds in Which Current Employee Contributions Are Not Invested:
The Coastal Class A Common Stock Fund is a fund invested in Class A Common
Stock of Coastal which was received as a stock dividend in 1984. Dividends
declared on Coastal Class A Common Stock are invested in the Coastal Common
Stock Fund. A participant may have the Class A Common Stock in his account
converted to Coastal Common Stock. Class A Common Stock attributable to a
participant's own contributions and earnings may be converted into Coastal
Common Stock, the Common Stock sold and the proceeds invested in the Diversified
Fund, the Index Fund or the Interest Income Fund.
The Coastal Preferred Stock Fund is a fund established to hold $1.83
Cumulative Convertible Preferred Stock, Series B of Coastal. Dividends declared
on such Preferred Stock are invested in the Coastal Common Stock Fund. Each
participant may elect to convert his interest in this fund into Coastal Common
Stock.
The Valero Stock Fund is a fund established to hold the common stock of
Valero Energy Corporation ("Valero") received as a result of the spin-off of
Valero by Coastal. A participant may direct the sale of Valero common stock in
his account and have the proceeds invested in the Diversified Fund or the
Coastal Common Stock Fund, or to have Valero common stock attributable to the
participant's contributions and earnings sold, and the proceeds invested in the
Interest Income Fund. Dividends or other cash realized from the Valero common
stock are invested in the Coastal Common Stock Fund unless the participant
elects to have such cash invested in the Diversified Fund.
-----------------------
(*) For the Statement of Changes in Net Assets Available for Plan Benefits by
Fund, refer to Schedule 10.
-6-
<PAGE>
The PG&E Stock Fund is a fund established to hold common stock of Pacific
Gas & Electric Corporation ("PG&E") which was received as a dividend to holders
of Valero common stock in 1997. A participant may direct the sale of PG&E common
stock in his account and have the proceeds invested in the Diversified Fund or
the Coastal Common Stock Fund, or to have PG&E common stock attributable to the
participant's contributions and earnings sold, and the proceeds invested in the
Interest Income Fund. Dividends or other cash realized from the PG&E common
stock are invested in the Coastal Common Stock Fund unless the participant
elects to have such cash invested in the Diversified Fund.
The Intelect Stock Fund is a fund established to hold the common stock of
Intelect Communications, Inc. ("Intelect"), issued as a result of a spin-off by
Coastal. A participant may direct the sale of Intelect common stock in his
account and have the proceeds invested in the Coastal Common Stock Fund or the
Diversified Fund or to have Intelect common stock attributable to the
participant's contributions and earnings sold, and the proceeds invested in the
Interest Income Fund. Dividends or other cash realized from Intelect common
stock are invested in the Coastal Common Stock Fund.
A Diversified Fund was established in the Derby Refining Company Thrift
Plan prior to its merger into the Plan, and only the account balances
transferred from the Derby Refining Company Thrift Plan may be invested in this
fund. This fund has investments in Chase Bank of Texas, National Association
Fixed Income and Equity Funds.
The Government Bond Fund is an unsegregated fund which is invested in
obligations issued or guaranteed by the United States of America or by any
agency or instrumentality thereof and in savings deposits in any bank (including
the Trustee) to the extent they are fully guaranteed by the Federal Deposit
Insurance Corporation. This fund was established in the Derby Refining Company
Thrift Plan prior to its merger into the Plan, and only the account balances
transferred from the Derby Refining Company Thrift Plan may be invested in this
fund.
5. Administrative Costs
All administrative Plan expenses, including fees and Trustee expenses, are
paid by Coastal or its participating subsidiaries. Brokerage fees, taxes and
other transaction fees are paid from Plan assets.
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 a subsidiary of El Paso Energy. On May 5, 2000, the merger was
approved by the shareholders 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. The outstanding convertible preferred stock of Coastal
will be exchanged tax free (except for cash paid in lieu of fractional shares)
for El Paso Energy common stock on the same basis as if the preferred stock had
been converted into Coastal common stock immediately prior to the merger. 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.
-7-
<PAGE>
7. Realized Gains on Investments
The following is a summary of realized gains (losses) on investments for
the years ended December 31, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
------------------------------------------ -----------------------
Sales Proceeds Aggregate Realized Sales Proceeds Aggregate Realized
or Market Value Carrying Gain or Market Value Carrying Gain
Securities of Withdrawals Amount (Loss) of Withdrawals Amount (Loss)
--------------------------- --------------- ----------- ----------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Coastal Common Stock Fund:
The Coastal Corporation
Common Stock $40,124,171 $36,581,524 $3,542,647 $30,829,001 $28,957,888 $1,871,113
Coastal Class A Common Stock
Fund:
The Coastal Corporation
Class A Common Stock 13,433 12,617 816 1,829 1,735 94
Coastal Preferred Stock Fund:
The Coastal Corporation
$1.83 Cumulative Convertible
Preferred Stock, Series B 26,160 27,577 (1,417) 7,641 6,467 1,174
Valero Stock Fund:
Valero Energy Corporation
Common Stock 38,220 40,630 (2,410) 122,640 125,591 (2,951)
PG&E Stock Fund:
Pacific Gas & Electric
Corporation
Common Stock 38,424 45,958 (7,534) 69,471 67,051 2,420
Intelect Stock Fund:
Intelect Communications, Inc.
Common Stock 628 428 200 4,884 4,425 459
Diversified Fund:
Unaffiliated marketable
securities 29,255,684 29,906,991 (651,307) 28,424,826 27,541,444 883,382
Index Fund:
CBT Equity Group Fund 212,251 190,561 21,690 - - -
----------- ----------- ---------- ----------- ----------- ----------
$69,708,971 $66,806,286 $2,902,685 $59,460,292 $56,704,601 $2,755,691
=========== =========== ========== =========== =========== ==========
</TABLE>
8. Net Change in Unrealized Appreciation of Investments
During 1999 and 1998 the fair value of investments (including investments
bought and sold, as well as held during the year) appreciated (depreciated) as
follows:
<TABLE>
<CAPTION>
1999 1998
------------- --------------
<S> <C> <C>
Coastal Common Stock $ 1,879,478 $ 57,486,806
Coastal Class A Common Stock 2,923 3,537
Coastal Preferred Stock 9,056 11,820
Valero Common Stock (24,349) (189,269)
PG&E Common Stock (103,521) 14,588
Intelect Common Stock (731) (15,545)
Diversified Fund (872,099) 1,760,918
Index Fund 144,037 -
------------- --------------
$ 1,034,794 $ 59,072,855
============= ==============
</TABLE>
-8-
<PAGE>
9. Unit Values
For the funds which assign units to participants, the following table sets
forth the number of units and unit values:
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
------------------------------------ ------------------------------------
Employee Net Asset Employee Net Asset
Units Value Units Value
Outstanding Per Unit Outstanding Per Unit
-------------- ------------ --------------- --------------
<S> <C> <C> <C> <C>
Diversified Fund - Coastal 1,597,817 $ 14.2006 1,870,865 $ 14.6065
Diversified Fund - Derby 10,722 2.9914 19,441 2.5384
Index Fund 912,020 1.2329 - -
Interest Income Fund 42,566,974 1.0000 45,729,359 1.0000
Government Bond Fund 3,004 1.5701 3,004 1.4900
</TABLE>
The Plan's Diversified Fund - Coastal unit values are based on the value of
the underlying common and preferred stocks reported in Schedule 8. The unit
values are computed monthly and are adjusted for realized gains or losses from
sales of stocks, unrealized gains or losses based on changes in value of
securities held, and interest and dividends credited to the funds. The unit
value is calculated by dividing the value of these securities, as adjusted, by
the total number of units credited to participants in the fund.
The unit values for the Diversified Fund - Derby transferred into the Plan
from the Derby Refining Company Thrift Plan are based on the values established
by the fund managers for the Chase Bank of Texas, National Association Funds
reported in Schedule 8, under Fixed Income Funds and Equity Funds.
Index Fund unit values are based on the value of the underlying assets of
the CBT Equity Group Fund. The unit values are computed monthly and are adjusted
for realized gains or losses from sales of stocks, unrealized gains or losses
based on changes in value of securities held, and interest and dividends
credited to the funds. The unit value is calculated by dividing the value of
these securities, as adjusted, by the total number of units credited to
participants in the fund.
The Plan's Interest Income Fund unit values are based on $1.00 per unit.
The Government Bond Fund is currently invested in the Chase Bank of Texas
Short Term Money Market Group Fund which establishes the unit values.
-9-
<PAGE>
Schedule 1 - Investments *
------------------------
Coastal Common Stock Fund
-------------------------
<TABLE>
<CAPTION>
Security Shares Cost Market Value
-------- ---------- --------------- ---------------
<S> <C> <C> <C>
The Coastal Corporation
Common Stock:
December 31, 1999(1) 13,333,562 $ 151,213,154 $ 472,527,707
=============== ===============
December 31, 1998(1) 13,970,316 $ 147,958,849 $ 490,707,350
=============== ===============
</TABLE>
Schedule 2 - Investments
------------------------
Coastal Class A Common
Stock Fund
-----------------------
<TABLE>
<CAPTION>
Shares Cost Market Value
---------- --------------- ---------------
<S> <C> <C> <C>
The Coastal Corporation
Class A Common Stock:
December 31, 1999 9,353 $ 52,381 $ 331,447
=============== ===============
December 31, 1998 10,769 $ 60,311 $ 378,261
=============== ===============
</TABLE>
Schedule 3 - Investments *
------------------------
Coastal Preferred Stock Fund
----------------------------
<TABLE>
<CAPTION>
Shares Cost Market Value
---------- --------------- ---------------
<S> <C> <C> <C>
The Coastal Corporation
$1.83 Cumulative Convertible
Preferred Stock, Series B:
December 31, 1999 283 $ 7,957 $ 80,655
=============== ===============
December 31, 1998 394 $ 11,079 $ 99,682
=============== ===============
</TABLE>
Schedule 4 - Investments *
------------------------
Valero Stock Fund
------------------------
<TABLE>
<CAPTION>
Shares Cost Market Value
---------- --------------- ---------------
<S> <C> <C> <C>
Valero Energy Corporation
Common Stock:
December 31, 1999 17,708 $ 61,125 $ 351,947
=============== ===============
December 31, 1998 19,620 $ 67,725 $ 416,925
=============== ===============
<FN>
------------------------------------
* See also Schedule 9.
(1) Exceeds 5% of net assets.
</FN>
</TABLE>
-10-
<PAGE>
Schedule 5 - Investments *
------------------------
PG&E Stock Fund
------------------------
<TABLE>
<CAPTION>
Shares Cost Market Value
---------- --------------- ---------------
<S> <C> <C> <C>
Pacific Gas & Electric Corporation
Common Stock:
December 31, 1999 9,411 $ 27,434 $ 192,926
=============== ===============
December 31, 1998 10,870 $ 31,687 $ 342,405
=============== ===============
</TABLE>
Schedule 6 - Investments *
------------------------
Intelect Stock Fund
------------------------
<TABLE>
<CAPTION>
Shares Cost Market Value
---------- --------------- ---------------
<S> <C> <C> <C>
Intelect Communications, Inc.
Common Stock:
December 31, 1999 3,291 $ 1,698 $ 4,525
=============== ===============
December 31, 1998 3,789 $ 1,954 $ 5,684
=============== ===============
</TABLE>
Schedule 7 - Investments *
------------------------
Index Fund
------------------------
<TABLE>
<CAPTION>
Shares Cost Market Value
---------- --------------- ---------------
<S> <C> <C> <C>
Index Fund
(CBT Equity Group Fund):
December 31, 1999 19,779 $ 980,404 $ 1,124,440
=============== ===============
December 31, 1998 - $ - $ -
=============== ===============
<FN>
------------------------------------
* See also Schedule 9.
</FN>
</TABLE>
-11-
<PAGE>
Schedule 8 - Investments *
------------------------
Diversified Fund
------------------------
<TABLE>
<CAPTION>
Security - December 31, 1999 Shares Cost Market Value
-------- --------- --------------- ---------------
<S> <C> <C> <C>
Common Stocks
-------------
AT&T 7,500 $ 380,304 $ 358,232
Albertsons Inc. 8,500 383,694 274,125
Alcoa Inc. 6,300 280,777 522,900
Alltel Corp. 5,400 383,870 446,515
American General Corp. 7,300 356,821 553,888
American Home Products Corp. 7,200 357,766 282,600
Aon Corp. 9,760 233,261 390,400
Avon Products Inc. 7,000 265,208 231,000
Baker Hughes Inc. 11,500 361,608 242,225
Bank of America Corp. (New) 7,831 542,695 393,022
Bank of New York Inc. 9,500 349,109 380,000
Bank One Corp. (New) 7,678 361,213 245,696
Baxter International Inc. 6,400 303,706 402,003
Bestfoods 4,900 233,945 257,559
Block H R Inc. 6,400 314,075 280,000
Caterpillar Inc. 3,300 183,486 155,308
Chase Manhattan Corp. (New) 4,100 317,809 318,521
Chevron Corp. 6,400 540,770 554,400
Clorox Co. 6,500 282,238 327,438
Conoco Inc. CL B WI 14,179 319,416 352,703
Dana Corp. 6,200 300,981 185,616
Deere & Co. 10,600 412,230 459,775
Dow Chemical Co. 3,800 474,802 507,775
Du Pont E I De Nemours & Company 4,389 254,151 289,125
Duke Energy Corporation 4,700 280,164 235,587
Eaton Corp. 2,800 201,620 203,350
El Paso Energy Corporation 10,700 358,342 415,299
Emerson Electric Co. 4,100 235,172 235,237
Exxon Mobil Corporation 6,900 423,157 555,885
Fed Natl Mtg Assoc. 4,400 305,762 274,727
First Union Corp. 6,500 274,256 214,097
Fleet Boston Financial Corp. 10,100 404,440 351,611
GTE Corporation 5,400 292,597 381,040
General Dynamics Corp. 5,100 333,894 269,025
General Motors Corp 5,200 301,139 377,978
H J Heinz Co. 6,600 317,260 262,766
International Paper Co. 11,240 471,435 634,419
Kimberly Clark Corp. 7,500 356,485 490,785
Knight Ridder Inc. 4,100 222,501 244,208
Marsh & McLennan Companies Inc. 4,100 294,444 392,321
May Department Stores Co. 9,600 322,489 309,600
McGraw Hill Companies Inc. 9,840 203,304 606,389
Mellon Financial Corp. 12,300 288,265 418,975
Merrill Lynch & Co Inc. 2,400 187,673 199,951
Minnesota Mining & Mfg Co. 3,300 306,176 322,987
Morgan J P & Co. Inc. 1,500 197,175 189,937
<FN>
------------------------------------
* See also Schedule 9.
</FN>
</TABLE>
-12-
<PAGE>
<TABLE>
<CAPTION>
Security - con't Shares Cost Market Value
-------- ---------- --------------- ---------------
<S> <C> <C> <C>
Norfolk Southern Corp. 7,400 261,889 151,700
P G & E Corp. 4,800 158,924 98,400
Pepsico Inc. 11,100 419,079 391,275
Pharmacia Upjohn 4,400 232,558 198,000
Philip Morris Cos. Inc. 6,600 256,319 151,800
Pitney Bowes Inc. 7,200 270,289 347,854
Ratheon Co Cl B 6,100 190,660 162,034
Rockwell International Corp. (New) 5,500 339,732 263,312
SBC Communications Inc. 6,664 277,469 324,870
Summit Bancorp 5,450 148,186 166,906
Sunoco Inc. 3,600 120,533 84,600
TRW Inc. 3,700 193,380 192,171
Thomas & Betts Corporation 5,370 219,129 171,169
U S Bancorp 9,500 331,374 226,223
Unocal Corp. 11,900 513,264 399,400
Weyerhaeuser Co. 7,600 452,182 545,779
Williams Companies Inc. 4,500 185,978 137,533
Xerox Corp. 6,700 360,753 152,010
--------------- ---------------
Total common stock $ 19,703,383 $ 20,162,036
--------------- ---------------
Foreign stock
-------------
Alcan Aluminum Ltd. 12,500 $ 392,246 $ 517,188
Astrazeneca PLC 6,600 278,797 275,550
BP Amoco PLC 28 1,043 1,661
British Airways PLC 3,100 202,912 199,563
Cable & Wireless PLC Co. 8,400 237,018 444,679
Glaxo Welcome PLC 3,200 164,886 178,800
Imperial Chemical Industries PLC 8,300 422,420 353,273
Royal Dutch Petroleum 9,200 476,103 557,180
--------------- ---------------
Total foreign stocks $ 2,175,425 $ 2,527,894
--------------- ---------------
Fixed Income Funds
------------------
CBT Intermediate Term Bond Group Fund 63 $ 11,349 $ 11,447
--------------- ---------------
Total Fixed Income Funds $ 11,349 $ 11,447
--------------- ---------------
Equity Funds
------------
CBT Special Equity Group Fund 30 $ 1,983 $ 3,937
CBT Equity Income Group Fund 10 578 1,771
CBT American Core Equity Group Fund 67 1,201 3,820
CBT International Equity Group Fund 105 1,318 3,634
CBT Equity Growth Group Fund 197 1,903 7,466
--------------- ---------------
Total Equity Funds $ 6,983 $ 20,628
--------------- ---------------
GRAND TOTAL $ 21,897,140 $ 22,722,005
=============== ===============
</TABLE>
-13-
<PAGE>
Schedule 8A - Investments *
-------------------------
Diversified Fund
-------------------------
<TABLE>
<CAPTION>
Security - December 31, 1998 Shares Cost Market Value
-------- --------- --------------- ---------------
<S> <C> <C> <C>
Common Stocks
-------------
AT&T 3,700 $ 280,552 $ 280,552
Aluminum Co. America 6,500 445,527 484,653
American General Corp. 9,000 409,223 702,026
American Home Products Corp. 10,400 328,832 586,300
Ameritech Corp. 9,900 486,239 627,412
Aon Corp. 6,307 194,276 349,250
Bank One Corp. 10,378 514,656 529,921
Bankamerica Corp. 9,531 654,092 573,051
Bankboston Corp. 8,200 246,696 319,283
Baxter International Inc. 9,100 431,832 585,239
Bell Atlantic Corp. 8,000 377,152 432,000
Bestfoods 13,700 654,092 729,525
Browning Ferris Industries Inc. 12,400 441,204 352,619
Chevron Corp. 6,900 556,687 572,265
Chubb Corp. 7,200 504,695 466,200
Cooper Industries Inc. 7,000 364,223 333,809
Deere & Co. 11,300 431,291 371,487
Dominion Resources Inc. 11,600 544,506 542,300
Du Pont E I De Nemours & Company 8,050 445,986 427,149
Emerson Electric Co. 9,600 545,597 580,800
First Union Corp. 9,620 423,627 585,011
Ford Motor Company 9,200 243,719 539,920
Fortune Brands Inc. 14,500 487,447 458,563
Frontier Corp 17,500 434,296 595,000
GTE Corporation 9,900 511,681 643,500
General Motors Corp 5,600 327,087 400,747
H J Heinz Co. 9,900 459,334 560,588
Kimberly Clark Corp. 14,400 684,451 784,800
Lockheed Martin Corp. 4,700 497,917 398,325
May Department Stores Company 8,500 428,305 513,188
McGraw Hill Companies Inc. 8,520 352,062 867,975
Mellon Bank Corporation 7,300 304,123 501,875
Mobil Corp 4,100 286,146 357,213
PPG Industries Inc. 5,300 365,089 308,391
Pacificorp 15,900 315,953 334,886
Penney J C Inc. 9,400 618,653 440,625
Pharmacia Upjohn Inc 13,100 498,720 741,788
Pitney Bowes Incorporated 13,100 359,012 865,412
St. Paul Companies Inc. 11,700 457,739 407,300
Southern Co. 14,200 384,422 412,680
Summit Bancorp 8,550 211,811 373,524
Tenneco Inc. 18,200 720,183 619,928
Texas Utilities Company 12,000 509,388 560,244
Thomas &Betts Corporation 7,470 304,821 323,541
USX Marathon Group 10,200 305,413 307,275
<FN>
------------------------------------
* See also Schedule 9.
</FN>
</TABLE>
-14-
<PAGE>
<TABLE>
<CAPTION>
Security - con't. Shares Cost Market Value
-------- ---------- --------------- ----------------
<S> <C> <C> <C>
Union Camp Corp. 9,100 457,531 610,838
Wells Fargo Company 12,600 440,280 503,206
Williams Companies Inc. 14,500 340,594 452,212
Xerox Corp. 3,100 296,009 365,800
--------------- ---------------
Total Common Stocks $ 20,883,171 $ 24,680,196
--------------- ---------------
Foreign Stocks
--------------
British Airways PLC 5,800 $ 378,050 $ 393,310
British Petroleum PLC 4,414 313,326 400,571
Cable & Wireless PLC Co. ADR 9,100 256,770 334,425
Glaxo Welcome PLC Sponsored 6,100 295,603 423,950
Imperial Chemical Industries PLC ADR 17,500 895,008 611,398
Royal Dutch Petroleum 9,900 473,142 473,963
Zeneca Group PLC Sponsored ADR 200 8,026 8,975
--------------- ---------------
Total Foreign Stocks $ 2,619,925 $ 2,646,592
--------------- ---------------
Fixed Income Funds
------------------
CBT Managed Bond Group Fund 447 $ 4,831 $ 6,241
CBT Limited Term Bond Group Fund 1,226 12,797 15,677
--------------- ---------------
Total Fixed Income Funds $ 17,628 $ 21,918
--------------- ---------------
Equity Funds
------------
CBT Special Equity Group Fund 21 $ 888 $ 2,360
CBT Equity Income Group Fund 38 2,279 6,099
CBT American Core Equity Group Fund 213 3,798 9,601
CBT International Equity Group Fund 96 1,099 2,291
CBT Equity Growth Group Fund 252 2,429 7,082
--------------- ---------------
Total Equity Funds $ 10,493 $ 27,433
--------------- ---------------
GRAND TOTAL $ 23,531,217 $ 27,376,139
=============== ===============
</TABLE>
-15-
<PAGE>
Schedule 9 - Investments
------------------------
Short Term Investments
----------------------
<TABLE>
<CAPTION>
December 31,
-------------------------------------------
1999 1998
------------------- -------------------
Chase Bank of Chase Bank of
Texas Short Term Texas Short Term
Money Market Money Market
Group Fund (1) Group Fund (1)
---------------- -------------------
<S> <C> <C>
Coastal Common Stock Fund $ 44,439 $ 926,064
Coastal Preferred Stock Fund - 274
Valero Stock Fund 6,529 6,128
PG&E Stock Fund - -
Intelect Stock Fund 184 178
Diversified Fund 193,944 509,716
Interest Income Fund 42,566,974 45,729,359
Government Bond Fund 4,717 4,494
--------------- ---------------
Total $ 42,816,787 $ 47,176,213
=============== ===============
</TABLE>
Schedule 10 - Statement of Changes
in Net Assets Available For Plan
Benefits by Fund
----------------------------------
<TABLE>
<CAPTION>
Beginning of Year 1999 Change End of Year
----------------- ----------- -----------
<S> <C> <C> <C>
Coastal Common Stock Fund $ 489,430,052 $ (17,272,381) $ 472,157,671
Coastal Class A Common Stock Fund 378,831 (46,848) 331,983
Coastal Preferred Stock Fund 99,957 (19,302) 80,655
Valero Stock Fund 415,968 (88,916) 327,052
PG&E Stock Fund 339,852 (127,367) 212,485
Intelect Stock Fund 5,729 (1,030) 4,699
Diversified Fund 27,423,592 (4,736,023) 22,687,569
Index Fund - 1,060,262 1,060,262
Interest Income Fund 45,655,907 (3,317,695) 42,338,212
Government Bond Fund 4,497 244 4,741
--------------- --------------- ---------------
Total $ 563,754,385 $ (24,549,056) $ 539,205,329
=============== =============== ===============
<FN>
------------------------------------
(1) Exceeds 5% of net assets
</FN>
</TABLE>
-16-
<PAGE>
Schedule of Assets Held for Investment Purposes at End of Year
Employer Identification No.: 74-1734212; Plan No. 003
Form 5500: Year Ended December 31, 1999
<TABLE>
<CAPTION>
(c)
(b) Description of Investment
including Maturity Date, Rate (d) (e)
(a) Identity of Issue, Borrower, of Interest, Collateral, Par Cost of Market
Lessor or Similar Party or Maturity Value Acquisition Value
---- -------------------------------------------- ------------------------------------------- -------------- --------------
<S> <C> <C> <C> <C>
* The Coastal Corporation (1) 13,333,562 shares common stock $ 151,213,154 $ 472,527,707
9,353 shares Class A common stock (2) 52,381 331,447
283 shares $1.83 convertible preferred
stock, Series B 7,957 80,655
Valero Energy Corporation 17,708 shares common stock 61,125 351,947
Pacific Gas & Electric Corporation 9,411 shares common stock 27,434 192,926
Intelect Communications, Inc. 3,291 shares common stock 1,698 4,525
Diversified Fund - See Schedule 8 See Schedule 8 for list of
for list of investment entities. investments. 21,897,140 22,722,005
Index Fund (CBT Equity Group Fund) 19,779 units 980,404 1,124,440
Chase Bank of Texas Short Term Money
Market Group Fund (1) Money market 42,816,787 42,816,787
-------------- --------------
$ 217,058,080 $ 540,152,439
============== ==============
<FN>
------------------------------------
* Party-In-Interest.
(1) Exceeds 5% of net assets.
(2) Class A Common Stock may be distributed to employee participants, but
cannot be transferred to other individuals or organizations.
</FN>
</TABLE>
-17-
<PAGE>
Schedule of Reportable Transactions
Series Transactions, When Aggregated, Involving an Amount in Excess of
Five Percent of the Current Value of Plan Assets
Employer Identification No.: 74-1734212; Plan No. 003
Form 5500: Year Ended December 31, 1999
<TABLE>
<CAPTION>
(b) (f)
Description of Asset Expense
(a) (including interest (c) (d) (e) incurred (g) (h)
Identity of rate and maturity Purchase Selling Lease with Cost of Current (i)
Party Involved in case of loan) Price Price(1) Rental transaction Asset Value Net Gain
------------------------- ------------------------ -------- ------------ ------ ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
* The Coastal Corporation Common Stock:
Sales & distributions
(1,041,476 shares) $40,124,171 $36,581,524 $3,542,647
<FN>
------------------------------------
* Party-In-Interest
(1) Or distribution value.
</FN>
</TABLE>
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Administrative Committee has duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
THE COASTAL CORPORATION
THRIFT PLAN
Date: June 28, 2000 By: AUSTIN M. O'TOOLE
--------------------------------------
Austin M. O'Toole
Member of the Administrative Committee
-19-
