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<PAGE> 1
File No. 1-1098
FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
ANNUAL REPORT
PURSUANT TO SECTION 15(d)
of the
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM
The Columbia Gas System, Inc.
20 Montchanin Road
Wilmington, Delaware 19807
<PAGE> 2
EMPLOYEES' THRIFT PLAN
OF COLUMBIA GAS SYSTEM
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1993 AND 1992
<TABLE>
<S> <C>
Report of Independent Public Accountants ........................ 3
Statements of Net Assets ........................................ 5
Statement of Changes in Net Assets .............................. 6
Notes to Financial Statements ................................... 7
Schedule A - Statements of Net Assets ........................... 12
Schedule B - Statement of Changes in Net Assets ................. 14
Item 27(a) - Schedule of Assets Held for Investment Purposes ... 15
Item 27(d) - Schedule of Reportable Transactions ................ 16
Federal Tax Consequences ........................................ 18
</TABLE>
All other schedules are omitted as they are not applicable or are not required
based on the disclosure requirements of the Employee Retirment Income Security
Act of 1974 and applicable regulations issued by the Department of Labor.
-2-
<PAGE> 3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Thrift Plan Committee of the
Employees' Thrift Plan of Columbia Gas System:
We have audited the accompanying statements of net assets of the
Employees' Thrift Plan of Columbia Gas System (the "Plan") as of December 31,
1993 and 1992, and the related statement of changes in net assets for the year
ended December 31, 1993. These financial statements and schedules referred to
below are the responsibility of the Plan's management. Our responsibility is
to express an opinion on these financial statements and schedules 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, the financial statements referred to above present
fairly, in all material respects, the financial status of the Employees' Thrift
Plan of Columbia Gas System as of December 31, 1993 and 1992, and the changes
in its financial status for the year ended December 31, 1993, in conformity
with generally accepted accounting principles.
Our audits were made 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 reportable transactions are presented
for purposes 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. 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, except as discussed in the following paragraph.
As explained in the notes thereto, information certified by the
trustee and presented in the schedule of assets held for investment purposes
and the schedule of reportable transactions does not disclose the historical
cost of certain investments. Disclosure of this information is required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974.
As discussed in Note 2, on July 31, 1991, The Columbia Gas System,
Inc. ("Columbia") and its wholly owned subsidiary Columbia Gas Transmission
Corporation ("Transmission") filed separate voluntary petitions seeking
protection under Chapter 11 of the Federal Bankruptcy Code. Columbia and
Transmission are currently operating as debtors-in-possession subject to the
jurisdiction of the Bankruptcy Court. Transmission has filed a plan of
reorganization with the Court to emerge from Chapter 11 and Columbia intends to
file a plan of reorganization with the Court to emerge from
-3-
<PAGE> 4
Chapter 11. Although there can be no assurance Columbia and Transmission will
be able to complete a successful reorganization or what the impact of such
reorganization may be, the Plan is not included in the Chapter 11 filings and
management does not currently believe the pendency and resolution of such
filings will adversely affect the reported financial status of the Plan.
Although it is management's intention to continue to operate the Plan, it is
not possible to determine the ultimate effect, if any, of the bankruptcy
proceedings upon the future operations of the Plan.
ARTHUR ANDERSEN & CO.
New York, New York
June 14, 1994
-4-
<PAGE> 5
EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM
STATEMENTS OF NET ASSETS
<TABLE>
<CAPTION>
December 31, 1993 December 31, 1992
----------------- -----------------
<S> <C> <C>
Assets
- - ------
Investments:
Columbia Stock Fund $145,239,646 $127,020,744
Fidelity Mutual Funds:
Money Market/Investment Contract Fund 32,214,555 30,123,268
Ginnie Mae Portfolio 4,047,167 3,388,885
Magellan Fund 16,198,590 6,607,413
Growth & Income Portfolio 16,292,041 7,642,208
Intermediate Bond Fund 55,415,046 57,812,668
Overseas Fund 6,314,414 1,376,929
Balanced Fund 13,657,686 4,776,248
U.S. Equity Index Portfolio 41,091,202 40,203,642
ESOP (Note 5) 31,714,837 27,111,524
------------ ------------
362,185,184 306,063,529
Employer Contributions Receivable 934,189 877,228
Participant Deposits Receivable 1,648,240 1,546,020
------------ ------------
Total Assets $364,767,613 $308,486,777
Liabilities
- - -----------
ESOP Loan Payable (Note 5) $86,992,707 $86,992,707
Interest Payable on ESOP Loan 19,291,000 9,519,000
----------- -----------
Net Assets $258,483,906 $211,975,070
============ ============
</TABLE>
The accompanying notes to financial statements and schedules are an integral
part of these statements.
-5-
<PAGE> 6
EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Year Ended December 31, 1993
------------------------------------
<S> <C>
Net Assets, beginning of year $211,975,070
Net Investment Income 11,227,395
Net Realized Gain on Securities
Sold or Distributed 8,749,240
Net Unrealized Appreciation
on Investments 25,256,497
Participants' Deposits 19,473,212
Columbia's Contributions 11,064,010
Distributions to Participants (19,489,518)
Interest Expense on ESOP Loan (9,772,000)
------------
Net Assets, end of year $258,483,906
=============
</TABLE>
The accompanying notes to financial statements and schedules are an integral
part of this statement.
-6-
<PAGE> 7
EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
December 31, 1993 and December 31, 1992
1. Description of the Plan
The Employees' Thrift Plan of Columbia Gas System (Plan) was adopted by the
Board of Directors of The Columbia Gas System, Inc. (Columbia) on May 1, 1958.
Its purpose is to encourage employees to adopt a regular savings program and to
provide additional security for retirement. Each employee who works for a
Columbia company participating in the Plan is eligible to join the Plan on the
first day of any month after completing twelve months of service.
Participation is voluntary, and participants are fully and immediately vested
in the Plan.
Effective April 1, 1992, a wide range of mutual funds was made available to
Plan participants through Fidelity Investments' family of mutual funds. Such
funds replaced Funds A and C. Funds B (renamed the Columbia Gas Common Stock
Fund ("Columbia Stock Fund")), and D (renamed the Money Market/Investment
Contract Fund), remain essentially unchanged. The investment funds now offered
include:
Columbia Stock Fund: This Fund consists almost entirely of Columbia Common
Stock. A small portion is invested in money market instruments for
administrative purposes.
Money Market/Investment Contract Fund: Money Market/Investment Contract Fund
seeks to maximize current income consistent with the preservation of capital.
The Fund is invested primarily in the Fidelity Retirement Money Market
Portfolio. The Fidelity Retirement Money Market Portfolio invests in high
quality U.S. dollar denominated money market instruments of U.S. and foreign
issuers. The remaining investment contract, which matures on January 2,
1995, is presented in the financial statements and Item 27(a) at contract
value. The contract value reasonably approximates the fair market value of
the investment contract.
Ginnie Mae Portfolio: Fidelity Ginnie Mae Portfolio is an income-oriented
mutual fund that seeks a high level of current income, but may also consider
the potential for capital gain. The Portfolio invests primarily in
mortgage-backed securities issued by the Government National Mortgage
Association and other obligations guaranteed as to the timely payment of
principal and interest by the U.S. Government, although the Portfolio itself
is not guaranteed by the U.S. Government.
Magellan Fund: Fidelity Magellan Fund's goal is capital appreciation.
Magellan primarily invests in common stock and securities convertible into
common stock of U.S., multinational, and foreign companies of all sizes and
industries that offer potential for growth. Up to 20% of the Fund may be
invested in debt securities.
Growth & Income Portfolio: Fidelity Growth & Income Portfolio is a growth
and income mutual fund that seeks long-term capital growth, current income
and growth of income with reasonable investment risk. The Portfolio
primarily is invested in the securities of companies with the potential for
growth of earnings while paying current dividends, as well as securities
convertible into common stocks, preferred stocks and fixed income securities.
Intermediate Bond Fund: Fidelity Intermediate Bond Fund is an
income-oriented mutual fund that seeks a high level of current income. The
Fund invests primarily in investment grade (rated Baa or better by Moody's or
BBB or better by S&P) corporate debt obligations, as well as obligations
issued or guaranteed by the U.S. Government and its agencies or
instrumentalities, U.S. banks, prime commercial paper, as well as high
quality foreign debt instruments.
Overseas Fund: Fidelity Overseas Fund is a growth mutual fund that seeks
long-term capital growth through investments in foreign securities in both
developed and emerging markets. At least 65% of its total assets are
invested in securities of issuers from at least three countries outside the
United States. These securities include common stock, securities convertible
to common stock and debt instruments of foreign corporations and governments.
-7-
<PAGE> 8
Balanced Fund: Fidelity Balanced Fund is a growth and income mutual fund
that seeks the highest amount of income possible consistent with preservation
of capital by investing in a broadly diversified portfolio of high-yielding
securities, including common stocks, preferred stocks and bonds. At least
25% of Balanced Fund's assets are always invested in fixed-income securities.
The Fund maintains a diversified portfolio of stocks and bonds through all
market conditions.
U.S. Equity Index Portfolio: Fidelity U.S. Equity Index Portfolio is a
growth and income mutual fund that seeks to duplicate the composition and
total return of the Standard & Poor's 500 Composite Stock Price Index (S&P).
The Portfolio invests primarily in the common stock of the 500 companies that
make up the S&P.
Through March 31, 1992, the Plan offered employees of Columbia the
opportunity to invest a percentage of their monthly pay in one or more
investment funds as follows:
Fund A: Investments in Fund A consisted of a diversified fixed income
portfolio of United States Treasury and Agency securities, corporate bonds and
notes, preferred stocks and mortgage pass through securities. As circumstances
warranted, temporary investments of cash reserves in money market instruments
were also utilized.
Fund B: Investments in Fund B consisted of Columbia Common Stock. As
circumstances warranted, temporary investments of cash reserves in money market
instruments were also utilized.
Fund C: Investments in Fund C consisted primarily of a diversified group of
high quality common stocks. The portfolio was designed to provide capital
appreciation and reasonable current dividend income within prudent and
acceptable parameters of risk. The portfolio also contained a varying position
of cash reserves invested in money market instruments.
Fund D: Fund D was invested in investment contracts with various insurance
companies and in a short-term money market fund. The rate of return on Fund D
was a weighted average of the returns from the investment contracts and the
short-term money market fund.
Effective April 1, 1992, the Thrift Plan Committee appointed Fidelity
Management Trust Company (Fidelity-Boston) Trustee for the Fidelity family of
mutual funds. First Fidelity Bank, N.A. (Fidelity-Philadelphia) continues to
be Trustee for the Columbia Stock Fund and the Employee Stock Ownership Plan
(ESOP).
Employees may deposit up to 6% of their monthly base pay in the various
investment funds, and Columbia will match such deposits at various levels based
on the period of an employee's participation in the Plan. Columbia's
contributions are invested in the Columbia Stock Fund except for employees age
55 or older who may direct monthly Columbia contributions among any of those
funds available for Plan participants' deposits. Employees may also invest up
to an additional 10% of their monthly base pay, but no additional contributions
will be made by Columbia. Employee deposits may be made on an after-tax and/or
before-tax basis. Before-tax deposits are not subject currently to federal
income tax but are taxable to the employee when they are withdrawn from the
Plan. Prior to age 59-1/2, an active employee may withdraw before-tax deposits
only under certain hardship conditions. If an employee makes a withdrawal from
his account, his future deposits are subject to various suspension periods
depending on the type of withdrawal. After-tax deposits are taxed before they
go into the applicable Funds of the Plan; therefore, they will not be taxed
when withdrawn.
Administrative expenses of the Plan are paid by the participating
subsidiaries of Columbia.
The value of participants' deposits in the Plan is reflected in Shares/Units
in each applicable Fund. Each Share/Unit has a value equal to every other
Share/Unit in that
-8-
<PAGE> 9
Fund. The value of a Share/Unit is determined daily by dividing the value of
each Fund by its total number of outstanding Shares/Units.
The following is a summary of the Share/Unit Values and Shares/Units
outstanding as of:
<TABLE>
<CAPTION>
December 31, December 31,
1993 1992
----------------------------- -------------------------
Share/Unit Shares/ Unit
Value Units Value Units
----------- ---------- -------- --------
($) ($)
<S> <C> <C> <C> <C>
Columbia Stock Fund 8.29 17,524,511 7.09 17,891,002
Money Market/Investment
Contract Fund 1.00 32,214,555 1.00 30,123,268
Ginnie Mae Portfolio 10.86 372,667 11.07 306,132
Magellan Fund 70.85 228,632 63.01 104,863
Growth & Income Portfolio 22.22 733,215 19.71 387,733
Intermediate Bond Fund 10.78 5,140,542 10.41 5,553,570
Overseas Fund 27.43 230,201 19.90 69,192
Balanced Fund 13.39 1,019,991 12.29 388,629
U.S. Equity Index
Portfolio 17.27 2,379,340 16.38 2,454,435
</TABLE>
As of December 31, 1993 and 1992, the only individual security held by
the Plan in excess of 5% of net assets was Columbia common stock, valued at
$145,239,646 and $127,020,744, respectively.
The above is a brief description of the Plan and is provided for general
information purposes only. Participants should refer to the Plan documents for
more complete information.
2. Chapter 11 Bankruptcy filings
On July 31, 1991, Columbia and its wholly-owned subsidiary, Columbia Gas
Transmission Corporation (Transmission), filed separate voluntary petitions
seeking protection under Chapter 11 of the Federal Bankruptcy Code. Columbia
and Transmission are currently operating as debtors-in-possession subject to
the jurisdiction of the Bankruptcy Court. Transmission has filed a plan of
reorganization with the Court to emerge from Chapter 11 and Columbia intends to
file a plan of reorganization with the Court to emerge from Chapter 11.
Although there can be no assurance Columbia and Transmission will be able to
complete a successful reorganization or what the impact of such reorganization
may be, the Plan is not included in the Chapter 11 filings and management does
not currently believe the pendency and resolution of such filings will
adversely affect the reported financial status of the Plan. Although it is
management's intention to continue to operate the Plan indefinitely, it is not
possible to determine the ultimate effect, if any, of the bankruptcy
proceedings upon the future operations of the Plan.
3. Summary of significant accounting policies
(A) Valuation of Investments
The assets of the Plan are reflected in the accompanying Statements of
Net Assets based on quoted market prices and per share net asset value. The
investment contract is based on contract value, which reasonably approximates
the fair market value of the asset.
(B) Basis of accounting.
The accounts of the Plan have been maintained on a modified cash basis
of accounting by Fidelity-Boston for the family of mutual funds, and by
Fidelity-
-9-
<PAGE> 10
Philadelphia for Columbia Stock Fund and the ESOP Suspense Account, which holds
the unallocated shares under the ESOP; however, the accompanying financial
statements have been prepared on an accrual basis, as of December 31, 1993 and
December 31, 1992, by application of memorandum entries to reflect:
(1) participants' deposits and Columbia's contributions
receivable;
(2) ESOP loan payable; and
(3) interest payable on ESOP loan.
(C) Net realized gain on securities sold or distributed.
The cost of securities sold or distributed is determined on the
revalued cost of assets basis (revalued cost), whereby the cost of assets is
adjusted to reflect the market value of assets as of the prior year end or
purchase price if bought in the current year. The Plan recognized a gain or
loss on the sale of securities and the distribution of Columbia Gas Common
Stock to withdrawn participants in settlement of their accounts equal to the
difference between the revalued cost and market value of the securities sold or
distributed through December 31, 1993. Sales of temporary investments, such as
demand notes, United States Treasury Bills, Certificates of Deposit and
commingled funds of money market instruments, have been excluded because no
gains or losses resulted.
(D) Unrealized appreciation (depreciation) on investments.
Fidelity Boston determines the market value of all assets and
share values on a daily basis. Unrealized appreciation (depreciation) is equal
to the difference between the revalued cost of assets or purchase price if
bought in the current year and market value of assets at December 31, 1993.
4. Participating Companies
The names of the participating companies, as of December 31,
1993, with contributions and deposits for the year ended December 31, 1993 are
shown below:
<TABLE>
<CAPTION>
Columbia Employee
Contributions Deposits
------------- ----------
<S> <C> <C>
Columbia Coal Gasification Corp. . . . . . . . . . . . $9,277 $13,873
Columbia Gas Development Corp. . . . . . . . . . . . . 267,002 631,326
Columbia Gas Transmission Corp. . . . . . . . . . . . . 3,503,308 6,200,681
Columbia Gas of Kentucky, Inc. . . . . . . . . . . . . 272,035 489,797
Columbia Gas of Maryland, Inc. . . . . . . . . . . . . 66,346 120,650
Columbia Gas of Ohio, Inc. . . . . . . . . . . . . . . 3,431,846 5,831,482
Columbia Gas of Pennsylvania, Inc. . . . . . . . . . . 917,168 1,521,517
Columbia Gas System Service Corp. . . . . . . . . . . . 856,662 1,472,704
Columbia Gulf Transmission Company . . . . . . . . . . 710,631 1,270,016
Columbia Propane Corp. . . . . . . . . . . . . . . . . 15,516 33,215
Columbia LNG Corp. . . . . . . . . . . . . . . . . . . 29,811 40,170
Columbia Natural Resources . . . . . . . . . . . . . . 419,243 737,807
Commonwealth Gas Services, Inc. . . . . . . . . . . . . 353,803 683,016
Commonwealth Propane, Inc. . . . . . . . . . . . . . . 167,388 335,150
TriStar Ventures Corp. . . . . . . . . . . . . . . . . 16,246 27,766
Columbia Energy Services. . . . . . . . . . . . . . . . 27,728 64,042
----------- -----------
Total . . . . . . . . . . . . . . . . . . . . . . . $11,064,010 $19,473,212
=========== ===========
</TABLE>
-10-
<PAGE> 11
5. Employee Stock Ownership Plan
In 1990, Columbia established a Leveraged Employee Stock Ownership Plan
(ESOP). The ESOP was designed to pre-fund a portion of the matching obligation
under the terms of the Thrift Plan and to utilize tax advantages afforded by
the Internal Revenue Code.
In October 1991, the Board of Directors of Columbia authorized the
termination of the ESOP subject to the approval of the Bankruptcy Court. It is
anticipated that the termination will be part of Columbia's plan of
reorganization. Upon termination, any shares of common stock of Columbia
remaining in the ESOP Trust account would be sold and the proceeds paid to the
holders of debentures issued under the ESOP. Any unpaid balance due would
become subject to the subordinate guarantee of Columbia and become a claim to
be resolved as part of the reorganization plan.
In March, 1993, First National Bank of Boston (FNBB), Trustee for the
Indenture under which the ESOP debt was issued, filed a complaint against
Columbia alleging tortious interference with contract for failure to pay debt
service and breach of fiduciary duty. On March 24, 1994, the Bankruptcy Court
issued an order denying Columbia's motion for summary judgment on the
pleadings. Columbia filed a Motion for Leave to Appeal. If that motion is
denied, the matter will proceed to trial. Columbia believes that it has
meritorious defenses to FNBB's claims and that the non-payment of ESOP debt
will not affect the participants' benefits under the Plan, as Columbia expects
to fully satisfy the outstanding ESOP debt balance upon its emergence from
bankruptcy.
6. Distributions
As of December 31, 1993 and 1992, amounts due to participants who had
requested a withdrawal were $1,972,785 and $2,248,672, respectively.
7. Tax Status
See "Federal Tax Consequences" located elsewhere in this document for
additional discussion of the tax status.
The Plan received a favorable determination letter from the Internal
Revenue Service in which it ruled that the Plan is in compliance with Section
401(a) and 401(k) and is exempt from taxation under Section 501(a) of the
Internal Revenue Code (IRC). The Company and legal counsel are of the opinion
that the Plan, as amended, meets the IRC requirements and, therefore, continues
to be tax-exempt.
8. Other
Schedules A and B below reflect additional detail by Fund of the
accompanying Statements of Net Assets, for the years ended December 31,
1993 and December 31, 1992 and Statement of Changes of Net Assets for
the year ended December 31, 1993.
-11-
<PAGE> 12
EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM
Schedule A
(p. 1 of 2)
STATEMENT OF NET ASSETS
For the Year Ended December 31, 1993
<TABLE>
<CAPTION>
Columbia Money Market/ Growth &
Total Stock Fund Contract Fund Ginnie Mae Magellan Income
------------ ------------ ------------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
- - ------
Investments:
Columbia Stock Fund $145,239,646 $145,239,646
Fidelity Mutual Funds:
Money Market/Investment
Contract Fund 32,214,555 $32,214,555
Ginnie Mae Portfolio 4,047,167 $4,047,167
Magellan Fund 16,198,590 $16,198,590
Growth & Income Portfolio 16,292,041 $16,292,041
Intermediate Bond Fund 55,415,046
Overseas Fund 6,314,414
Balanced Fund 13,657,686
U.S. Equity Index
Portfolio 41,091,202
ESOP 31,714,837
---------- ----------- ---------- --------- ---------- ----------
362,185,184 145,239,646 32,214,555 4,047,167 16,198,590 16,292,041
Employer Contributions
Receivable 934,189 864,456 14,600 2,057 7,377 10,210
Participant Deposits
Receivable 1,648,240 623,531 159,923 30,233 150,884 125,256
----------- ------------ ----------- ---------- ----------- ----------
Total Assets 364,767,613 146,727,633 32,389,078 4,079,457 16,356,851 16,427,507
LIABILITIES
- - -----------
ESOP Loan Payable 86,992,707 -- -- -- -- --
Interest Payable on
ESOP Loan 19,291,000 -- -- -- -- --
------------ ------------ ----------- ---------- ----------- -----------
Net Assets $258,483,906 $146,727,633 $32,389,078 $4,079,457 $16,356,851 $16,427,507
============ ============ =========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Intermediate Overseas Balanced U.S. Equity
Bond Fund Fund Fund Index ESOP
------------ ---------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
- - ------
Investments:
Columbia Stock Fund
Fidelity Mutual Funds:
Money Market/Investment
Contract Fund
Ginnie Mae Portfolio
Magellan Fund
Growth & Income Portfolio
Intermediate Bond Fund $55,415,046
Overseas Fund $6,314,414
Balanced Fund $13,657,686
U.S. Equity Index
Portfolio $41,091,202
ESOP $31,714,837
---------- ----------- ---------- ----------- -----------
55,415,046 6,314,414 13,657,686 41,091,202 31,714,837
Employer Contributions
Receivable 13,433 3,351 9,884 8,821 --
Participant Deposits
Receivable 221,731 43,156 83,237 210,289
------------ ----------- ---------- ------------- ----------
Total Assets 55,650,210 6,360,921 13,750,807 41,310,312 31,714,837
LIABILITIES
- - -----------
ESOP Loan Payable -- -- -- -- 86,992,707
Interest Payable on
ESOP Loan -- -- -- -- 19,291,000
----------- ---------- ----------- ----------- -------------
Net Assets $55,650,210 $6,360,921 $13,750,807 $41,310,312 ($74,568,870)
=========== ========== =========== =========== =============
</TABLE>
-12-
<PAGE> 13
EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM
Schedule A
(p. 2 of 2)
STATEMENT OF NET ASSETS
For the Year Ended December 31, 1992
<TABLE>
<CAPTION>
Columbia Money Market/ Growth &
Total Stock Fund Contract Fund Ginnie Mae Magellan Income
------------ ------------ ----------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
- - ------
Investments:
Columbia Stock Fund $127,020,744 $127,020,744
Fidelity Mutual Funds:
Money Market/Investment
Contract Fund 30,123,268 $30,123,268
Ginnie Mae Portfolio 3,388,885 $3,388,885
Magellan Fund 6,607,413 $6,607,413
Growth & Income
Portfolio 7,642,208 $7,642,208
Intermediate Bond Fund 57,812,668
Overseas Fund 1,376,929
Balanced Fund 4,776,248
U.S. Equity Index
Portfolio 40,203,642
ESOP 27,111,524
------------ ------------ ----------- ---------- ---------- ----------
306,063,529 127,020,744 30,123,268 3,388,885 6,607,413 7,642,208
Employer Contributions
Receivable 877,228 824,216 14,278 2,523 4,115 5,662
Participant Deposits
Receivable 1,546,020 706,385 149,056 24,196 66,719 62,915
------------ ------------ ----------- ---------- ---------- ----------
Total Assets 308,486,777 128,551,345 30,286,602 3,415,604 6,678,247 7,710,785
LIABILITIES
- - -----------
ESOP Loan Payable 86,992,707 -- -- -- -- --
Interest Payable on
ESOP Loan 9,519,000 -- -- -- -- --
------------ ------------ ----------- ---------- ---------- ----------
Net Assets $211,975,070 $128,551,345 $30,286,602 $3,415,604 $6,678,247 $7,710,785
============ ============ =========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Intermediate Overseas Balanced U. S. Equity
Bond Fund Fund Fund Index ESOP
----------- ---------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
- - ------
Investments:
Columbia Stock Fund
Fidelity Mutual Funds:
Money Market/Investment
Contract Fund
Ginnie Mae Portfolio
Magellan Fund
Growth & Income
Portfolio
Intermediate Bond Fund $57,812,668
Overseas Fund $1,376,929
Balanced Fund $4,776,248
U.S. Equity Index
Portfolio $40,203,642
ESOP $27,111,524
----------- ---------- ---------- ----------- -------------
57,812,668 1,376,929 4,776,248 40,203,642 27,111,524
Employer Contributions
Receivable 11,744 1,439 4,306 8,945 --
Participant Deposits
Receivable 244,434 14,807 40,872 236,636 --
----------- ---------- ---------- ----------- -------------
Total Assets 58,068,846 1,393,175 4,821,426 40,449,223 27,111,524
LIABILITIES
- - -----------
ESOP Loan Payable -- -- -- -- 86,992,707
Interest Payable on
ESOP Loan -- -- -- -- 9,519,000
----------- ---------- ---------- ----------- -------------
Net Assets $58,068,846 $1,393,175 $4,821,426 $40,449,223 ($69,400,183)
=========== ========== ========== =========== =============
</TABLE>
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<PAGE> 14
EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM
Schedule B
STATEMENT OF CHANGES IN NET ASSETS
For the Year Ended December 31, 1993
<TABLE>
<CAPTION>
Columbia Money Market/ Growth &
Total Stock Fund Contract Fund Ginnie Mae Magellan Income
------------ ---------------- ------------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Assets,
Beginning of Year $211,975,070 $128,551,345 $30,286,602 $3,415,604 $6,678,247 $7,710,785
Net Investment Income 11,227,395 1,627 1,469,801 324,594 1,292,930 815,287
Net Realized Gain on
Securities Sold or
Distributed 8,749,240 6,298,499 -- 11,412 548,062 463,144
Net Unrealized
Appreciation/
(Depreciation)
on Investments 25,256,497 15,676,801 -- (108,926) 316,026 774,869
Participants'
Deposits 19,473,212 7,968,416 1,895,093 352,487 1,368,202 1,229,283
Columbia's
Contributions 11,064,010 10,303,428 164,880 29,327 77,706 102,080
Distributions to
Participants (19,489,518) (6,758,042) (4,484,466) (371,224) (203,235) (545,903)
Interfund Exchanges -- (15,314,441) 3,057,168 426,183 6,278,913 5,877,962
Interest Expense
on ESOP Loan (9,772,000) -- -- -- -- --
------------ ------------ ----------- ---------- ----------- -----------
Net Assets, End
of Year $258,483,906 $146,727,633 $32,389,078 $4,079,457 $16,356,851 $16,427,507
============ ============ =========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Intermediate Overseas Balanced U. S. Equity
Bond Fund Fund Fund Index ESOP
------------ ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Net Assets,
Beginning of Year $58,068,846 $1,393,175 $4,821,426 $40,449,223 ($69,400,183)
Net Investment Income 4,498,134 94,854 1,052,919 1,676,440 809
Net Realized Gain on
Securities Sold or
Distributed 536,117 295,506 335,913 260,587 --
Net Unrealized
Appreciation/
(Depreciation)
on Investments 1,458,705 600,846 30,299 1,905,373 4,602,504
Participants'
Deposits 2,815,468 323,497 797,195 2,723,571 --
Columbia's
Contributions 163,219 29,375 89,004 104,991 --
Distributions to
Participants (4,118,442) (60,710) (534,990) (2,412,506) --
Interfund Exchanges (7,771,837) 3,684,378 7,159,041 (3,397,367) --
Interest Expense
on ESOP Loan -- -- -- -- (9,772,000)
------------ ---------- ------------ ----------- -------------
Net Assets, End
of Year $55,650,210 $6,360,921 $13,750,807 $41,310,312 ($74,568,870)
============ ========== ============ =========== =============
</TABLE>
-14-
<PAGE> 15
Employer ID#: 13-1594808
Plan #: 002
EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM
ITEM 27(a) SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1993
<TABLE>
<CAPTION>
Identity of Issue,
Borrower, Lessor,
or Similar Party Description of Investment Cost(3) Value
- - ------------------ ------------------------------------------- ---- -----
<S> <C> <C> <C>
Columbia 17,524,511 shares of -- $145,239,646
Columbia Stock Fund(1)
Fidelity-Boston 32,214,555 shares of -- 25,147,456
Money Market Portfolio
Confederation Life 8.8% Guaranteed Investment -- 7,067,099
Contract maturing 1/2/1995
Fidelity-Boston 372,667 shares of Ginnie Mae Portfolio -- 4,047,167
Fidelity-Boston 228,632 shares of Magellan Fund -- 16,198,590
Fidelity-Boston 733,215 shares of Growth & Income Portfolio -- 16,292,041
Fidelity-Boston 5,140,542 shares of Intermediate Bond Fund -- 55,415,046
Fidelity-Boston 230,201 shares of Overseas Fund -- 6,314,414
Fidelity-Boston 1,019,991 shares of Balanced Fund -- 13,657,686
Fidelity-Boston 2,379,340 shares of U.S. Equity Index
Portfolio -- 41,091,202
Columbia ESOP(2) -- 31,714,837
-- ------------
TOTAL THRIFT PLAN -- $362,185,184
== ============
</TABLE>
(1) Actual shares of The Columbia Gas System, Inc. Common Stock held
equals 6,339,607.
(2) Actual shares of The Columbia Gas System, Inc. Common Stock held
equals 1,416,155.
(3) Records are maintained by Fidelity Boston on a fair market value
basis; therefore, cost basis information is unavailable.
-15-
<PAGE> 16
Employer ID#: 13-1594808
Plan #: 002
EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM
Item 27(d) Schedule of Reportable Transactions
Individual Transactions By Issue
For The Year Ended December 31, 1993
<TABLE>
<CAPTION>
Current Value
of Asset on
Identity Description Purchase Cost of Transaction Net Gain
of Party of Asset Price Selling Price Expenses Asset Date Or (Loss)
- - -------- ----------- ----------- ------------- -------- ---------- ----------- ----------
<S> <C>
No Reportable Transactions
</TABLE>
Note: There were no lease rentals during the year.
-16-
<PAGE> 17
Employer ID#: 13-1594808
Plan #: 002
EMPLOYEES' THRIFT PLAN OF COLUMBIA GAS SYSTEM
Item 27(d) Schedule of Reportable Transactions
Cumulative Transactions By Issue
For The Year Ended December 31, 1993
<TABLE>
Current Value
of Asset on
Identity Description Purchase Selling Cost of Transaction Net Gain
of Party of Asset Price Price Expense Asset(1) Date(1) Or (Loss)
- - --------------- ------------- --------- ---------- ------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Columbia Columbia Stock Fund $29,455,950 $33,212,349 -- -- -- ($2,400,275)
Fidelity-Boston Retirement Money 23,598,194 18,197,164 -- -- -- --
Market Portfolio
Fidelity-Boston Magellan Fund 14,458,262 5,731,172 -- -- -- 152,325
Fidelity-Boston Growth & Income 12,941,552 5,529,732 -- -- -- 163,937
Portfolio
Fidelity-Boston Intermediate Bond 12,501,503 16,893,947 -- -- -- 573,919
Fund
Fidelity-Boston Balanced Fund 12,286,740 3,771,513 -- -- -- 60,972
Fidelity-Boston U.S. Equity Index 7,858,482 9,136,882 -- -- -- 661,884
Portfolio
</TABLE>
(1) Records are maintained by Fidelity-Boston; cost and current value
information are unavailable.
Note: There were no lease rentals during the year.
-17-
<PAGE> 18
FEDERAL TAX CONSEQUENCES
Thrift Plan accounts can be paid in different ways and at different times -
depending on the needs and the various alternatives requested by the
participants. Accordingly, the federal, state and local tax laws may affect
each participant's individual situation.
It is not possible to explain here all of the tax implications of each
individual situation. Thus, each participant should seek competent advice from
a tax advisor prior to requesting a distribution from the Thrift Plan.
Generally:
o after-tax deposits are taxed before they go into the
Plan so they will not be taxed again.
o before-tax deposits are not subject to federal income
tax before they go into the Plan and as long as they
remain in the Plan, but are generally taxable when
received.
o before-tax deposits are subject to current Social
Security taxes, and may be subject to current state and
local taxes as well.
o withdrawals of investment earnings, Columbia
contributions, or before-tax deposits are subject to
federal income tax; an additional 10% tax is payable if
the withdrawal is made prior to age 59-1/2, with the
following exceptions:
- withdrawals made because of disability, or death;
- withdrawals made after the participant's
separation from service after attainment of
age 55;
- withdrawals after the participant's separation
from service payable at least annually in
substantially equal installments over the life
(or life expectancy) of the employee or the
joint lives (or life expectancies) of the
participant and a designated beneficiary;
- withdrawals made to cover a family member's
deductible medical expenses; and
- withdrawals made to comply with a qualified
domestic relations order (QDRO).
Note: A QDRO arises out of court proceedings in which a spouse, child or other
dependent is awarded a share of the participant's Thrift Plan account as a
marital asset.
The 1/1/87 Tax Rule
During employment, a participant may withdraw after-tax deposits placed into
the Plan before 1/1/87 without federal tax liability, since these monies were
taxed before being deposited.
The situation is different as to withdrawals of after-tax deposits placed into
the Plan on or after 1/1/87. Participants may not withdraw only their
deposits. To accelerate collection of tax the federal tax law requires that
each withdrawal be prorated among after-tax deposits, before-tax deposits and
investment earnings.
Subject to the exceptions noted above, when taxable amounts are withdrawn,
federal income tax plus an additional 10% tax is due if the withdrawal is made
prior to age 59-1/2.
-18-
<PAGE> 19
Taxation of A Hardship Withdrawal
Hardship withdrawals are subject to the federal income tax plus the additional
10% tax unless they are made on or after the date on which the participant
attains age 59-1/2 or are made to cover a family member's deductible medical
expenses.
Lump Sum Distributions
A "lump sum distribution" qualifies for special treatment under the federal tax
laws. A lump sum distribution is the payment, within the same year, of the
participant's entire balance under the Plan that is payable (i) on account of
the participant's disability or death, (ii) after the participant has reached
age 59-1/2, or (iii) on account of the participant's separation from
employment. Except in the case of payments to a beneficiary on account of the
participant's death, the participant must also have been a participant in the
Thrift Plan for five years. The following rules apply to lump sum
distributions:
1. The portion of the distribution representing a return
of after-tax deposits is not subject to federal income
tax. If the participant was age 50 or older before
January 1, 1986 he may make a one-time election (before
or after reaching age 59 1/2) of a special "ten-year
averaging" available under pre-1987 tax law, or a
special "five-year averaging" available under the Tax
Reform Act of 1986. In general, ten-year averaging
allows the participant to calculate the tax on his
distribution separately from other income as if equal
portions of the distribution were received over a
ten-year period using 1986 tax rates. If elected,
pre-1987 capital gain rules (using a 20% tax rate) will
apply to the taxable portion allocated to years prior
to 1974. Five-year averaging is similar, but the
averaging period is shorter, as the name implies, and
uses the tax rates in effect in the year of the
distribution. Participants must have attained the age
of 59-1/2 in order to elect five-year averaging.
If the participant was younger than age 50 on January
1, 1986, he can only make a one-time election of
"five-year averaging" provided his account is paid in a
lump sum after reaching age 59 1/2.
2. Unless the participant otherwise elects, taxation of
net unrealized appreciation on Columbia stock
distributed in a lump sum is deferred until the shares
are sold. At that time, gains realized will be
considered as long-term capital gains to the extent of
the unrealized appreciation at the time of the
distribution. If the value of the stock has increased
between the time of the distribution and sale, the
additional gain is subject to the normal holding period
on capital gains. The five year participation
requirement for lump sum treatment does not apply.
If a participant's distribution of Columbia stock does
not qualify for lump sum treatment, then the deferral
of taxation for net unrealized appreciation applies
only to stock attributable to a participant's after-tax
participant contributions.
Annuity Distributions and Periodic Payments
If the participant elects to receive a distribution in the form of an annuity,
or in a series of equal periodic payments over more than one year, a portion of
each payment will be considered non-taxable to the extent it represents a
participants after tax deposits. In general, the portion that is not taxable
is determined by multiplying each payment by a fraction, the numerator of which
is the participant's total after- tax deposits (if any) and the denominator of
which is the total expected payments. If the participant's
-19-
<PAGE> 20
payments started after December 31, 1986, then the following rule applies:
once the total amount of payments treated as non-taxable equals the total
amount of the participant's after-tax deposits, all subsequent payments are
fully taxable. If a participant's payments started before January 1, 1987,
this rule does not apply. Furthermore, if the participant's payments started
on or before July 1, 1986 and all of his after- tax deposits were recoverable
within the first three years, after-tax deposits were treated as recovered
first (and therefore nontaxable), with all subsequent payment being fully
taxable.
Other Rules
Different rules may apply to payments made directly to beneficiaries and to
payments to persons who are "alternate payees" under a QDRO.
Under the Tax Reform Act of 1986, an additional excise tax of 15% may also
apply where an individual receives, within one calendar year, retirement
distributions from one or more qualified plans in excess of a specific
statutory amount.
Required Withholding
As of January 1, 1993, the Plan is required by federal law, to withhold 20%
from the taxable portion of any cash distribution of the participant's Thrift
Plan Account made directly to the participant. The participant may avoid the
20% withholding only by arranging for the Plan to make the distribution on the
participant's behalf directly to an Individual Retirement Account (IRA) or
other qualified benefit plan or annuity. Pursuant to this arrangement, a
participant may not personally receive any distribution of his Plan interest.
However, the required 20% withholding does not apply to the following
distributions:
- payments that will continue over the
participant's life or life expectancy or over
the joint lives or life expectancies of the
participant and a beneficiary;
- payments payable in installments over 10 years
or more;
- required distributions after age 70-1/2;
- corrective distributions; or
- payments expected to total less than $200
annually.
-20-
<PAGE> 21
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report dated June 14, 1994 included in this Form 11-K, into the Company's
previously filed Form S-8 Registration Statement File No. 33-42776.
ARTHUR ANDERSEN & CO.
New York, New York
June 27, 1994
-21-
<PAGE> 22
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Thrift Plan Committee has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
EMPLOYEES' THRIFT PLAN OF
COLUMBIA GAS SYSTEM
June 27, 1994 By /s/ M. W. O'Donnell
----------------------------
M. W. O'Donnell
Senior Vice President and
Chief Financial Officer
-22-
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