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<PAGE> 1
Form U-13-60
Mutual and Subsidiary Service Companies
Revised February 7, 1980
ANNUAL REPORT
For the Period
Beginning January 1, 1998 and Ending December 31, 1998
--------------- -----------------
To The
U.S. SECURITIES AND EXCHANGE COMMISSION
OF
COLUMBIA ENERGY GROUP SERVICE CORPORATION
-----------------------------------------
(Exact Name of Report Company
A Subsidiary Service Company
("Mutual" or "Subsidiary")
Data of Incorporation December 31, 1932
-----------------
State or Sovereign Power Under which Incorporated or Organized - Delaware
--------
Location of Principal Executive Offices of Reporting Company:
12355 Sunrise Valley Drive, Reston, Virginia 20191-3420
DONATO FURLANO, ASSISTANT CONTROLLER
13880 Dulles Corner Lane
Herndon, VA 20171-4600
---------------------------------------------------------------------
(Name, title and address of officer to whom correspondence concerning
this report should be addressed)
COLUMBIA ENERGY GROUP
-------------------------------------------------------------------
(Name of Principal Holding Company whose Subsidiaries are served by
Reporting Company)
Page 1
<PAGE> 2
INSTRUCTIONS FOR USE OF FORM U-13-60
1. Time of Filing - Rule 94 provides that on or before the first day of May in
each calendar year, each mutual service company and each subsidiary service
company as to which the Commission shall have made a favorable finding
pursuant to Rule 88, and every service company whose application for
approval or declaration pursuant to Rule 88 is pending shall file with the
Commission an annual report on Form U-13-60 and in accordance with the
Instructions for that form.
2. Number of Copies - Each annual report shall be filed in duplicate. The
company should prepare and retain at least one extra copy for itself in
case correspondence with reference to the report become necessary.
3. Period Covered by Report - The first report filed by any company shall
cover the period from the date the Uniform System of Accounts was required
to be made effective as to that company under Rules 82 and 93 to the end of
that calendar year. Subsequent reports should cover a calendar year.
4. Report Format - Reports shall be submitted on the forms prepared by the
Commission. If the space provided on any sheet of such form is inadequate,
additional sheets may be inserted on the same size as a sheet of the form
or folded to such size.
5. Money Amounts Displayed - All money amounts required to be shown in
financial statements may be expressed in whole dollars, in thousands of
dollars or in hundred thousands of dollars, as appropriate and subject to
provisions of Regulation S-X (Section 210.3-01[b]).
6. Deficits Displayed - Deficits and other like entries shall be indicated by
the use of either brackets or a parenthesis with corresponding reference in
footnotes. (Regulation S-X, Section 210.3-01[C]).
7. Major Amendments or Corrections - Any company desiring to amend or correct
a major omission or error in a report after it has been filed with the
Commission shall submit an amended report including only those pages,
schedules, and entries that are to be amended or corrected. A cover letter
shall be submitted requesting the Commission to incorporate the amended
report changes and shall be signed by a duly authorized officer of the
company.
8. Definitions - Definitions contained in Instruction 01-8 to the Uniform
System of Accounts for Mutual Service Companies and Subsidiary Service
Companies, Public Utility Holding Company Act of 1935, as amended February
2, 1979, shall be applicable to words or terms used specifically within
this Form U-13-60.
9. Organization Chart - The service company shall submit with each annual
report a copy of its current organization chart.
10. Methods of Allocation - The service company shall submit with each annual
report a listing of the currently effective methods of allocation being
used by the service company and on file with the Securities and Exchange
Commission pursuant to the Public Utility Holding Company Act of 1935.
11. Annual Statement of Compensation for Use of Capital Billed - The service
company shall submit with each annual report a copy of the annual statement
supplied to each associate company in support of the amount of compensation
for use of capital billed during the calendar year.
Page 2
<PAGE> 3
- --------------------------------------------------------------------------------
LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Schedule or
Account Page
Description of Schedules and Accounts Number Number
- --------------------------------------------------------------------------------------- ----------------- ------------
<S> <C> <C>
COMPARATIVE BALANCE SHEET Schedule I 5-6
Service Company Property Schedule II 7-8
Accumulated Provision For Depreciation and Schedule III 9
Amortization of Service Company Property
Investments Schedule IV 10
Accounts Receivable From Associated Companies Schedule V 11-12
Fuel Stock Expenses Undistributed Schedule VI 13
Stores Expense Undistributed Schedule VII 14
Miscellaneous Current and Accrued Assets Schedule VIII 15
Miscellaneous Deferred Debits Schedule IX 16
Research, Development or Demonstration Expenditures Schedule X 17
Proprietary Capital Schedule XI 18
Long-Term Debt Schedule XII 19
Current and Accrued Liabilities Schedule XIII 20-21
Notes to Financial Statements Schedule XIV 22-23
COMPARATIVE INCOME STATEMENT Schedule XV 24
Analysis of Billing - Associate Companies Account 457 25
Analysis of Billing - Nonassociate Companies Account 458 26
Analysis of Charges for Service - Associate and Schedule XVI 27
Nonassociate Companies
Schedule of Expense by Department or Service Function Schedule XVII 28-30
Departmental Analysis of Salaries Account 920 31
Outside Services Employed Account 923 32-34
Employee Pensions and Benefits Account 926 35
General Advertising Expenses Account 930.1 36
Miscellaneous General Expenses Account 930.2 37
Rents Account 931 38
Taxes Other Than Income Taxes Account 408 39
Donations Account 426.1 40
Other Deductions Account 426.5 41
Notes to Statement of Income Schedule XVIII 42
</TABLE>
Page 3
<PAGE> 4
LISTING OF INSTRUCTIONAL FILING REQUIREMENTS
<TABLE>
<CAPTION>
Page
Description of Reports or Statements Number
- ----------------------------------------------------------------------------------------- --------
<S> <C>
Organization Chart 43
Methods of Allocation 44
Annual Statement of Compensation for Use of Capital Billed 45-46
</TABLE>
- --------------------------------------------------------------------------------
Page 4
<PAGE> 5
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
1998
- --------------------------------------------------------------------------------
SCHEDULE I - COMPARATIVE BALANCE SHEET
Give balance sheet of the Company as of December 31 of the
current and prior year
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
ACCOUNT ASSETS AND OTHER DEBITS AS OF DECEMBER 31
- ------------- ------------------------------------------------------------- ------------------------------
CURRENT PRIOR
------------- -------------
<S> <C> <C>
$000 $000
SERVICE COMPANY PROPERTY
101 Service company property (Schedule II) 53,762 47,737
107 Construction work in progress (Schedule II) -- --
------------- -------------
Total Property 53,762 47,737
------------- -------------
108 Less accumulated provision for depreciation and
amortization of service company property
(Schedule III) 25,582 25,176
------------- -------------
Net Service Company Property 28,180 22,561
------------- -------------
INVESTMENTS
123 Investments in associate companies (Schedule IV) -- --
124 Other investments (Schedule IV) -- --
------------- -------------
Total Investments -- --
------------- -------------
CURRENT AND ACCRUED ASSETS
131 Cash 420 15
134 Special deposits 171 171
135 Working funds 13 15
136 Temporary cash investments (Schedule IV) -- --
141 Notes receivable -- --
143 Accounts receivable 1,833 13
144 Accumulated provision for uncollectible accounts -- --
146 Accounts receivable from associate companies
(Schedule V) 44,336 44,278
152 Fuel stock expenses undistributed (Schedule VI) -- --
154 Materials and supplies -- --
163 Stores expense undistributed (Schedule VII) -- --
165 Prepayments 336 135
174 Miscellaneous current and accrued assets
(Schedule VIII) -- --
------------- -------------
Total Current and Accrued Assets 47,109 44,627
------------- -------------
DEFERRED DEBITS
181 Unamortized debt expense -- --
184 Clearing accounts 8,074 6,449
186 Miscellaneous deferred debits (Schedule IX) 11,852 14,838
188 Research, development, or demonstration
expenditures (Schedule X) -- --
190 Accumulated deferred income taxes 4,736 3,367
------------- -------------
Total Deferred Debits 24,662 24,654
------------- -------------
TOTAL ASSETS AND OTHER DEBITS 99,951 91,842
============= =============
</TABLE>
Page 5
<PAGE> 6
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
- --------------------------------------------------------------------------------
SCHEDULE I - COMPARATIVE BALANCE SHEET
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL AS OF DECEMBER 31
- ------------- ------------------------------------------------------------ ------------------------------
CURRENT PRIOR
------------- -------------
<S> <C> <C>
$000 $000
PROPRIETARY CAPITAL
201 Common stock issued (Schedule XI) 300 300
211 Miscellaneous paid-in-capital (Schedule XI) 12,700 12,700
215 Appropriated retained earnings (Schedule XI) -- --
216 Unappropriated retained earnings (Schedule XI) 186 187
------------- --------------
Total Proprietary Capital 13,186 13,187
------------- --------------
LONG-TERM DEBT
223 Advances from associate companies (Schedule XII) 16,043 16,043
224 Other long-term debt (Schedule XII) -- --
225 Unamortized premium on long-term debt -- --
226 Unamortized discount on long-term debt -- --
------------- --------------
Total Long-Term Debt 16,043 16,043
------------- --------------
CURRENT AND ACCRUED LIABILITIES
231 Notes payable -- --
232 Accounts payable 13,555 16,023
233 Notes payable to associate companies (Schedule XIII) -- --
234 Accounts payable to associate companies (Schedule XIII) 34,743 24,435
236 Taxes accrued 506 (1,857)
237 Interest accrued -- --
238 Dividends declared -- --
241 Tax collections payable 708 2
242 Miscellaneous current and accrued liabilities (Schedule XIII) 13,591 12,886
------------- --------------
Total Current and Accrued Liabilities 63,103 51,489
------------- --------------
DEFERRED CREDITS
253 Other deferred credits 5,698 8,901
255 Accumulated deferred investment tax credits -- --
------------- --------------
Total Deferred Credits 5,698 8,901
------------- --------------
282 ACCUMULATED DEFERRED INCOME TAXES 1,921 2,222
------------- --------------
TOTAL LIABILITIES AND PROPRIETARY CAPITAL 99,951 91,842
============= ==============
</TABLE>
Page 6
<PAGE> 7
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
SCHEDULE II - SERVICE COMPANY PROPERTY
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
BALANCE BALANCE
AT AT
BEGINNING RETIREMENTS OTHER CLOSE
DESCRIPTION OF YEAR ADDITIONS OR SALES CHANGES (1) OF YEAR
- -------------------------------------- -------------- ------------ ----------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
$000 $000 $000 $000 $000
SERVICE COMPANY PROPERTY
Account:
301 ORGANIZATION -- -- -- -- --
303 MISCELLANEOUS
INTANGIBLE PLANT -- -- -- -- --
304 LAND AND LAND RIGHTS 62 -- -- -- 62
305 STRUCTURES AND
IMPROVEMENTS 16,574 3,041 258 -- 19,357
306 LEASEHOLD IMPROVEMENTS -- -- -- -- --
307 EQUIPMENT (2) 24,924 3,245 2,506 -- 25,663
308 OFFICE FURNITURE AND
EQUIPMENT 5,786 4,073 1,865 -- 7,994
309 AUTOMOBILES, OTHER
VEHICLES AND RELATED
GARAGE EQUIPMENT -- -- -- -- --
310 AIRCRAFT AND AIRPORT
EQUIPMENT 248 543 248 -- 543
311 OTHER SERVICE COMPANY
PROPERTY (3) 143 -- -- -- 143
------------- ------------ ----------------- -------------- ----------
SUB-TOTAL 47,737 10,902 4,877 -- 53,762
------------- ------------ ----------------- -------------- ----------
107 CONSTRUCTION WORK IN
PROGRESS (4) -- -- -- -- --
------------- ------------ ----------------- -------------- ----------
TOTAL 47,737 10,902 4,877 -- 53,762
============= ============ ================= ============== ==========
</TABLE>
(1) PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
NOT APPLICABLE
- --------------------------------------------------------------------------------
Page 7
<PAGE> 8
SCHEDULE II - CONTINUED
- --------------------------------------------------------------------------------
(2) SUBACCOUNTS ARE REQUIRED FOR EACH CLASS OF EQUIPMENT OWNED. THE
SERVICE COMPANY SHALL PROVIDE A LISTING BY SUBACCOUNT OF EQUIPMENT
ADDITIONS DURING THE YEAR AND THE BALANCE AT THE CLOSE OF THE YEAR:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
BALANCE AT
CLOSE OF
SUBACCOUNT DESCRIPTION ADDITIONS YEAR
- ----------------------------------------------------------- --------------- ---------------
<S> <C> <C>
$000 $000
307-1 Telecommunications Equipment -- 115
307-2 Communications Management Center -- 1,246
307-3 Data Processing Equipment -- 25
307-4 Print Services Equipment -- 13
307-5 Research & Laboratory Equipment -- 72
307-6 Telecommunications Equipment 2,848 6,386
307-7 EDP Equipment - 4 years 345 14,061
307-8 EDP Equipment - 10 years -- 4
307-9 Personal Computer and Peripheral Equipment 52 1,807
307-10 Distribution Research Equipment -- 148
307-11 Electrical Supply Generators -- 1,786
------------- --------------
TOTAL 3,245 25,663
- ----------------------------------------------------------------------------------------- --------------
</TABLE>
(3) DESCRIBE OTHER SERVICE COMPANY PROPERTY:
Costs incurred in the internal development of the Employee
Accounting System Interface, Labor Distribution System, and
Intercompany Billing software.
- --------------------------------------------------------------------------------
(4) DESCRIBE CONSTRUCTION WORK IN PROGRESS:
Not Applicable
- --------------------------------------------------------------------------------
Page 8
<PAGE> 9
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
ADDITIONS
BALANCE CHARGED OTHER BALANCE
AT TO CHANGES AT
BEGINNING ACCOUNT ADD CLOSE
DESCRIPTION OF YEAR 403 RETIREMENTS (DEDUCT)(1) OF YEAR
- -------------------------------------------- ------------ ----------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
$000 $000 $000 $000 $000
ACCOUNT
301 ORGANIZATION -- -- -- -- --
303 MISCELLANEOUS INTANGIBLE
PLANT -- -- -- -- --
304 LAND AND LAND RIGHTS -- -- -- -- --
305 STRUCTURES AND
IMPROVEMENTS 5,002 372 258 -- 5,116
306 LEASEHOLD IMPROVEMENTS -- -- -- --
307 EQUIPMENT 17,476 4,159 2,506 -- 19,129
308 OFFICE FURNITURE AND
FIXTURES 2,313 743 1,865 -- 1,191
309 AUTOMOBILES, OTHER
VEHICLES AND RELATED
GARAGE EQUIPMENT -- -- -- -- --
310 AIRCRAFT AND AIRPORT
EQUIPMENT 248 4 248 -- 4
311 OTHER SERVICE COMPANY
PROPERTY 137 5 -- -- 142
-------------- ------------ ---------------- ------------- -----------
TOTAL 25,176 5,283 4,877 -- 25,582
============== ============ ================ ============= ===========
</TABLE>
(1) PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
NOT APPLICABLE
Page 9
<PAGE> 10
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
SCHEDULE IV - INVESTMENTS
- --------------------------------------------------------------------------------
INSTRUCTIONS: Complete the following schedule concerning investments.
Under Account 124, "Other Investments," state each investment
separately, with description, including, the name of issuing
company, number of shares or principal amount, etc.
Under Account 136, "Temporary Cash Investments," list each
investment separately.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- --------------------------------------------------------------------------------- ---------------- ----------------
<S> <C> <C>
Account 123 - Investment in Associate Companies None None
Account 124 - Other Investments None None
Account 136 - Temporary Cash Investments
System Money Pool - Unaffiliated None None
---------------- ----------------
TOTAL None None
================ ================
</TABLE>
- --------------------------------------------------------------------------------
Page 10
<PAGE> 11
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
SCHEDULE V - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
- --------------------------------------------------------------------------------
INSTRUCTIONS: Complete the following schedule listing accounts receivable from
each associate company. Where the service company has provided
accommodation or convenience payments for associate companies, a
separate listing of total payments for each associate company
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- -------------------------------------------------------------------------------- --------------- ----------------
<S> <C> <C>
$000 $000
ACCOUNT 146 - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
Columbia Energy Group 73 100
Columbia Gulf Transmission Company 2,199 2,598
Columbia Energy Services Corporation 1,663 3,830
Columbia Propane Corporation 1,516 1,840
Columbia Electric Corporation 206 944
Columbia LNG Corporation 186 221
Columbia Network Services Corporation 14 (6)
Columbia Insurance Corporation, Ltd. 41 1
Columbia Gas of Kentucky, Inc. 1,949 1,264
Columbia Gas of Ohio, Inc. 11,678 12,715
Columbia Gas of Maryland, Inc. 372 315
Columbia Gas of Pennsylvania, Inc. 5,503 4,267
Columbia Gas of Virginia, Inc. 1,773 2,149
Columbia Energy Group Capital Corporation 2 92
Columbia Gas Transmission Corporation 14,913 11,738
Columbia Atlantic Trading Corporation 12 --
Columbia Energy Resources, Inc. 2,178 2,268
--------------- ----------------
TOTAL 44,278 44,336
=============== ================
</TABLE>
- --------------------------------------------------------------------------------
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS:
<TABLE>
<CAPTION>
TOTAL
PAYMENTS
--------
<S> <C>
$000
See Schedule V-A, page 12
TOTAL PAYMENT 947,936
================
</TABLE>
- --------------------------------------------------------------------------------
Page 11
<PAGE> 12
SCHEDULE V-A
COLUMBIA ENERGY GROUP SERVICE CORPORATION
Convenience & Accommodation Payments
For the Year Ended December 31, 1998
<TABLE>
<CAPTION>
Employee Employee Corporate PH&H
Associate Company Benefits Payroll Insurance Leases
----------------- -------- --------- ---------- ---------
<S> <C> <C> <C> <C>
$000 $000 $000 $000
Columbia Energy Group 3,613 207 95 --
Columbia Gulf Transmission Company 6,523 29,250 197 406
Columbia Energy Services Corporation 3,802 26,261 1,300 721
Columbia Propane Corporation 5,837 15,286 360 1,718
Columbia Electric Corporation 531 3,264 7 --
Columbia LNG Corporation 879 2,342 13 53
Columbia Network Services Corporation 40 175 -- --
Columbia Insurance Corporation -- -- -- --
Columbia Gas of Kentucky, Inc. 4,527 13,473 163 919
Columbia Gas of Ohio, Inc. 28,002 135,446 1,827 4,785
Columbia Gas of Maryland, Inc. 1,027 3,467 61 175
Columbia Gas of Pennsylvania, Inc. 13,199 45,550 601 1,913
Columbia Gas of Virginia, Inc. 4,294 21,870 534 1,111
Commonwealth Propane -- -- -- --
Columbia Energy Group Capital Corporation 6 130 -- --
Columbia Gas Transmission Corporation 35,803 146,602 1,503 8,844
Columbia Atlantic Trading, Inc. -- -- -- --
Columbia Energy Resources, Inc. 6,365 22,100 108 2,880
-------- --------- ---------- ---------
Total 114,448 465,423 6,769 23,525
======== ========= ========== =========
</TABLE>
<TABLE>
<CAPTION>
Telecom.
Associate Company Systems Legal Other Total
----------------- --------- -------- ----------- ---------
<S> <C> <C> <C> <C>
$000 $000 $000 $000
Columbia Energy Group 8 347 53,103 1) 57,373
Columbia Gulf Transmission Company 11 28 1,351 37,766
Columbia Energy Services Corporation 905 361 240,370 2) 273,720
Columbia Propane Corporation 96 103 10,188 2) 33,588
Columbia Electric Corporation 42 22 3,212 7,078
Columbia LNG Corporation 13 6 253 3,559
Columbia Network Services Corporation 17 4 2,850 3,086
Columbia Insurance Corporation -- -- 8 8
Columbia Gas of Kentucky, Inc. 3 -- 203 19,288
Columbia Gas of Ohio, Inc. (36) 11 11,786 2) 181,821
Columbia Gas of Maryland, Inc. -- -- 47 4,777
Columbia Gas of Pennsylvania, Inc. 86 2 866 62,217
Columbia Gas of Virginia, Inc. -- 4 101 27,914
Commonwealth Propane 1 -- -- 1
Columbia Energy Group Capital Corporation -- 8 535 679
Columbia Gas Transmission Corporation 14 50 5,284 2) 198,100
Columbia Atlantic Trading, Inc. -- -- 54 54
Columbia Energy Resources, Inc. 55 30 5,369 2) 36,907
--------- -------- ----------- ---------
Total 1,215 976 335,580 947,936
========= ======== =========== =========
</TABLE>
Note 1: Primarily reflects electronic funds transfer for System Federal
tax payments.
Note 2: Primarily reflects a service offered by the Corporate Treasury
Department to provide a non-repetitive electronic funds transfer
to third parties.
Page 12
<PAGE> 13
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
SCHEDULE VI - FUEL STOCK EXPENSES UNDISTRIBUTED
- --------------------------------------------------------------------------------
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to
fuel stock expenses during the year and indicate amount
attributable to each associate company. Under the section headed
"Summary" listed below give an overall report of the fuel
functions performed by the service company.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
DESCRIPTION LABOR EXPENSES TOTAL
- --------------------------------------------------------------------------- ----- -------- -----
<S> <C> <C> <C>
$000 $000 $000
Account 152 - Fuel Stock Expenses Undistributed None None None
------------ --------------- ------------
TOTAL None None None
</TABLE>
SUMMARY:
Not Applicable
- --------------------------------------------------------------------------------
Page 13
<PAGE> 14
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
SCHEDULE VII - STORES EXPENSE UNDISTRIBUTED
- --------------------------------------------------------------------------------
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to
stores expense during the year and indicate amount attributable
to each associate company.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
DESCRIPTION LABOR EXPENSES TOTAL
- --------------------------------------------------------------------------- ----- -------- -----
<S> <C> <C> <C>
$000 $000 $000
Account 163 - Stores Expenses Undistributed None None None
------------ -------------- ------------
TOTAL None None None
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 14
<PAGE> 15
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
SCHEDULE VIII
MISCELLANEOUS CURRENT AND ACCRUED ASSETS
- --------------------------------------------------------------------------------
INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000
may be grouped, showing the number of items in each group.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- ------------------------------------------------------------------------------- ---------------- ----------------
<S> <C> <C>
$000 $000
Account 174 - Miscellaneous Current and Accrued Assets None None
---------------- ----------------
TOTAL None None
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 15
<PAGE> 16
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
SCHEDULE IX - MISCELLANEOUS DEFERRED DEBITS
- --------------------------------------------------------------------------------
INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000
may be grouped by class showing the number of items in each
class.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- ------------------------------------------------------------------------- ------------------ -----------------
<S> <C> <C>
$000 $000
ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS
Other Post Retirement Employee Benefits 10,213 8,596
Workers Compensation Claims 907 1,207
Intangible Asset - Pension Restoration Plan 1,127 1,127
Restricted Stock Awards 1,168 876
STEP Program 8 51
Labor Distribution Adjustment -- 38
Returned Payroll Checks (14) (10)
New Corporate Center 22 (33)
Benefits Outsourcing Project 942 --
Deferred Convenience Claims 410 --
Deferred Insurance Receivables 50 --
Branding Project 5 --
---------------- -----------------
TOTAL 14,838 11,852
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 16
<PAGE> 17
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
SCHEDULE X
RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES
- --------------------------------------------------------------------------------
INSTRUCTIONS: Provide description of each material research, development, or
demonstration project which incurred costs by the service
corporation during the year.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
DESCRIPTION AMOUNT
- ------------------------------------------------------------------------------------- ------------------
<S> <C>
$000
None
------------------
TOTAL None
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Page 17
<PAGE> 18
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
SCHEDULE XI - PROPRIETARY CAPITAL
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OUTSTANDING CLOSE OF PERIOD
NUMBER OF SHARES PAR OR STATED VALUE -----------------------------
ACCOUNT NUMBER CLASS OF STOCK AUTHORIZED PER SHARE NO. OF SHARES TOTAL AMOUNT
--------------- --------------- ---------------- ------------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
201 COMMON STOCK 3,000 $100 3,000 $300,000
</TABLE>
- --------------------------------------------------------------------------------
INSTRUCTIONS: Classify amounts in each account with brief explanation,
disclosing the general nature of transactions which give
rise to the reported amount.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION AMOUNT
------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ACCOUNT 211 - MISCELLANEOUS PAID-IN CAPITAL $12,700,000
ACCOUNT 215 - APPROPRIATED RETAINED EARNINGS --
-----------
TOTAL $12,700,000
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
INSTRUCTIONS: Give particulars concerning net income or (loss) during the
year, distinguishing between compensation for the use of
capital owed or net loss remaining from servicing
nonassociates per the General Instructions of the Uniform
System of Accounts. For dividends paid during the year in
cash or otherwise, provide rate percentage, amount of
dividend, date declared and date paid.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING NET INCOME DIVIDENDS CLOSE
DESCRIPTION OF YEAR OR (LOSS) PAID OF YEAR
--------------------------------------------------- ------------- -------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
$000 $000 $000 $000
ACCOUNT 216 - UNAPPROPRIATED RETAINED EARNINGS 186 2,237 2,237 186
Rate/Share Amount of Dividend Date Declared Date Paid
---------- ------------------ ------------- ---------
$ $000
186.40 559 02/11/98 02/27/98
186.45 559 05/13/98 05/31/98
186.45 559 08/12/98 08/31/98
186.45 559 11/11/98 11/30/98
--------------------------------------------------- ------------- -------------- ------------- ---------------
TOTAL 186 2,237 2,237 186
</TABLE>
- --------------------------------------------------------------------------------
Page 18
<PAGE> 19
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
Schedule XII - Long-Term Debt
- --------------------------------------------------------------------------------
INSTRUCTIONS: Advances From Associate Companies should be reported separately
for advances on notes, and advances on open account. Names of
associate companies from which advances were received shall be
shown under the class and series of obligation column. For
Account 224 - Other Long-Term Debt provide the name of creditor
company or organization, terms of the obligation, date of
maturity, interest rate, and the amount authorized and
outstanding.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TERMS OF OBLIG DATE
CLASS & SERIES OF INTEREST AMOUNT
NAME OF CREDITOR OF OBLIGATION MATURITY RATE AUTHORIZED
- ----------------------------- ---------------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
% $000
ACCOUNT 223 - ADVANCES FROM ASSOCIATE COMPANIES:
Columbia Energy Group Promissory Note 11/28/00 6.89 2,567
Columbia Energy Group Promissory Note 11/28/02 7.11 2,246
Columbia Energy Group Promissory Note 11/28/05 7.30 2,246
Columbia Energy Group Promissory Note 11/28/07 7.55 2,246
Columbia Energy Group Promissory Note 11/28/10 7.82 2,246
Columbia Energy Group Promissory Note 11/28/15 7.92 2,246
Columbia Energy Group Promissory Note 11/28/25 8.12 2,246
ACCOUNT 224 - OTHER LONG-TERM DEBT: --
TOTAL 16,043
------------
</TABLE>
<TABLE>
<CAPTION>
BALANCE AT DEDUC- BALANCE AT
BEGINNING ADDI- TIONS CLOSE
NAME OF CREDITOR OF YEAR TIONS (1) OF YEAR
- ----------------------------- ------------- ---------- --------- -------------
<S> <C> <C> <C> <C>
$000 $000 $000 $000
ACCOUNT 223 - ADVANCES FROM ASSOCIATE COMPANIES:
Columbia Energy Group 2,567 -- -- 2,567
Columbia Energy Group 2,246 -- -- 2,246
Columbia Energy Group 2,246 -- -- 2,246
Columbia Energy Group 2,246 -- -- 2,246
Columbia Energy Group 2,246 -- -- 2,246
Columbia Energy Group 2,246 -- -- 2,246
Columbia Energy Group 2,246 -- -- 2,246
ACCOUNT 224 - OTHER LONG-TERM DEBT: -- -- -- --
TOTAL 16,043 -- -- 16,043
------------ --------- --------- ------------
</TABLE>
- --------------------------------------------------------------------------------
(1) GIVE AN EXPLANATION OF DEDUCTIONS: The deductions represent the
portion of the Installment Promissory Notes which mature within one
year. Currently there is no long term debt due within the next year.
- --------------------------------------------------------------------------------
Page 19
<PAGE> 20
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
SCHEDULE XIII - CURRENT AND ACCRUED LIABILITIES
- --------------------------------------------------------------------------------
INSTRUCTIONS: Provide balance of notes and accounts payable to each associate
company. Give description and amount of miscellaneous current and
accrued liabilities. Items less than $10,000 may be grouped,
showing the number of items in each group.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
BALANCE AT BALANCE AT
BEGINNING CLOSE
DESCRIPTION OF YEAR OF YEAR
- -------------------------------------------------------------------- --------------- --------------
<S> <C> <C>
$000 $000
ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE COMPANIES
See Schedule XIII-A -- --
---------------- ---------------
TOTAL -- --
- -------------------------------------------------------------------------------------------------------------
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE COMPANIES
System Money Pool Payable 20,030 30,788
Columbia Energy Group 4,325 3,819
System Money Pool Interest Payable 78 136
Columbia Gulf Transmission Corporation 2 --
---------------- ---------------
TOTAL 24,435 34,743
- -------------------------------------------------------------------------------------------------------------
ACCOUNT 242 - MISCELLANEOUS CURRENT AND ACCRUED
LIABILITIES
Deferred Compensation 727 2,522
Retirement Income Plan 3,558 2,491
Accrued Vacation 2,043 2,198
Pension Retirement Benefits 2,540 2,050
Thrift Restoration Plan 960 1,327
LTIP Dividend Credit 397 1,090
Pension Restoration Plan 386 812
Comprehensive Medical Expense Plan Accrual 258 258
Deferred Compensation - Interest 45 216
Release & Retention Program 970 172
Employee Thrift Plan 130 146
Employee Agreements 216 104
Thrift Plan - Company 60 60
Post Retirement Benefit Obligation 59 59
Contract Retainage 431 27
Aircraft Engine Overhaul Accrual 42 20
Dental Assistance Plan Accrual 20 20
Flexible Spending 35 15
Unclaimed Accounts 15 13
Miscellaneous (6) (9)
---------------- ---------------
TOTAL 12,886 13,591
</TABLE>
- --------------------------------------------------------------------------------
Page 20
<PAGE> 21
SCHEDULE XIII-A
COLUMBIA ENERGY GROUP SERVICE CORPORATION
Notes Payable to Associate Companies
Account 233
<TABLE>
<CAPTION>
Balance at Balance at
Beginning Close
of Year of Year
--------------- --------------
<S> <C> <C>
$000 $000
Columbia Energy Group
6.89% Installment Promissory Note None None
7.11% Installment Promissory Note None None
7.30% Installment Promissory Note None None
7.55% Installment Promissory Note None None
7.82% Installment Promissory Note None None
7.92% Installment Promissory Note None None
8.12% Installment Promissory Note None None
--------------- ---------------
Total None None
=============== ===============
</TABLE>
Note: As of December 31, 1998 there are no current maturities.
Page 21
<PAGE> 22
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
SCHEDULE XIV
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish particulars
as to any significant contingent assets or liabilities existing
at the end of the year. Notes relating to financial statements
shown elsewhere in this report may be indicated here by
reference.
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Property, Plant and Equipment and Related Depreciation
Property, Plant and Equipment is stated at historical cost.
Depreciation is provided on a composite straight-line basis using the
average of depreciable property at the beginning and end of each
year.
b. Income Taxes
The Corporation provides deferred taxes with respect to timing
differences in the recognition of revenues and expenses for tax and
accounting purposes. The major difference results from using
accelerated depreciation for tax purposes. The Corporation is
included in the Consolidated Federal Income Tax Return filed for the
Columbia Energy Group and Subsidiaries.
c. Pension Costs
The Corporation participates in the Retirement Income Plan of the
Columbia Energy Group. This is a trusteed noncontributory Retirement
Income Plan which, with certain minor exceptions, covers all regular
employees. The Service Corporation's portion amounted to ($1,066,272)
in 1998 and $79,000 in 1997, including the amortization of unfunded
prior service costs.
d. Leases
Payments made by the Corporation in connection with operating leases
are charged to expense as incurred. No capitalized leases existed in
1998.
e. Account Numbers
The Corporation uses certain FERC accounts which do not match
existing SEC accounts; therefore, the year-end balances of the
following FERC accounts were reclassified to a corresponding SEC
account.
<TABLE>
<CAPTION>
Account Number
--------------- Year-End
Account Description FERC SEC Balance
----------------------- ---- ----- ----------
<S> <C> <C> <C>
$000
Interest Receivable 171 143 3
Deferred Income Taxes 283 282 1
</TABLE>
- --------------------------------------------------------------------------------
Page 22
<PAGE> 23
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
f. Post-Retirement Benefits Other Than Pensions
During 1991, the System adopted SFAS No. 106, Employer's Accounting
for Post-Retirement Benefits Other Than Pensions, retroactive to
January 1, 1991. The Corporation has elected to record and defer the
full amount of its estimated accumulated post-retirement obligations
other than pensions. These obligations total $6,680,000 as of
December 31, 1998, and represent the actuarial present value of the
post-retirement benefits to be paid to current employees and retirees
based on services rendered.
g. System Money Pool
The Parent Company and its subsidiaries participate in the System
Money Pool (Pool) which is administered by the Corporation on behalf
of the participants.
Participants invest their excess funds to the Pool. Short-term
financing requirements of participants, with the exception of the
Parent Company, are satisfied by advances from the Pool. Excess funds
in the Pool are invested by the Corporation on a short-term basis on
behalf of the depositors.
Participants depositing funds in the Pool share in the interest
earned on these investments plus interest paid to the Pool by
borrowers on a basis proportionate to their investment in the Pool.
Participants borrowing from the Pool pay interest at the rate
equivalent to the composite rate on short-term transactions of the
Pool. Participants may withdraw their investments in the Pool at any
time. Borrowings from the Pool are payable on demand, and may be
prepaid at any time without premium or penalty.
Page 23
<PAGE> 24
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year ended December 31, 1998
- --------------------------------------------------------------------------------
SCHEDULE XV
STATEMENT OF INCOME
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
1998 1997
----------------- ---------------
ACCOUNT DESCRIPTION CURRENT YEAR PRIOR YEAR
- ----------- ---------------------------------------------------------- ----------------- ---------------
<S> <C> <C> <C>
$000 $000
INCOME
457 Services rendered to associate companies 82,453 79,989
458 Services rendered to nonassociate companies -- 31
419 Interest Revenue - Other 10 --
---------------- ---------------
Total Income 82,463 80,020
EXPENSE
920 Salaries and wages 31,538 28,828
921 Office supplies and expenses 8,573 6,375
922 Administrative expense transferred-- credit (2,064) (2,058)
923 Outside services employed 13,318 11,764
924 Property insurance 90 178
925 Injuries and damages 280 192
926 Employee pensions and benefits 5,920 9,317
928 Regulatory commission expense 15 3
930.1 General advertising expenses 124 84
930.2 Miscellaneous general expenses 1,349 1,126
931 Rents 6,111 5,782
932 Maintenance of structures and equipment 3,302 3,352
403 Depreciation and amortization expense 4,958 5,476
408 Taxes other than income taxes 2,786 3,029
409 Income taxes 2,651 1,977
410 Provision for deferred income taxes 2,901 6,105
411 Provision for deferred income taxes - credit (4,571) (5,638)
426.1 Donations 122 119
426.3 Other deductions 3 --
430 Interest on debt to associate companies 2,387 1,925
431 Other interest expense 433 (152)
---------------- ---------------
Total Expense 80,226 77,784
---------------- ---------------
Net Income or (Loss) 2,237 2,236
================ ===============
</TABLE>
- --------------------------------------------------------------------------------
Page 24
<PAGE> 25
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year ended December 31, 1998
- --------------------------------------------------------------------------------
ANALYSIS OF BILLING
ASSOCIATE COMPANIES
ACCOUNT 457
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DIRECT INDIRECT COMPENSAT'N TOTAL
COSTS COSTS FOR USE AMOUNT
NAME OF ASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL BILLED
- ----------------------------------------------- -------------- --------------- ---------------- ------------
<S> <C> <C> <C> <C>
457-1 457-2 457-3
-------------- --------------- ---------------- ------------
$000 $000 $000 $000
Columbia Energy Group 3,162 2,247 192 5,601
Columbia Gulf Transmission Company 4,141 1,774 336 6,251
Columbia Energy Services Corporation 3,285 1,840 116 5,241
Columbia Propane Corporation 940 558 74 1,572
Columbia Electric Corporation 403 337 37 777
Columbia LNG Corporation 164 134 17 315
Columbia Network Services Corporation 154 185 14 353
Columbia Insurance Corporation, Ltd 116 89 9 214
Columbia Gas of Kentucky, Inc. 1,814 681 105 2,600
Columbia Gas of Ohio, Inc. 15,465 5,748 859 22,072
Columbia Gas of Maryland, Inc. 559 209 34 802
Columbia Gas of Pennsylvania, Inc. 5,414 2,021 323 7,758
Columbia Gas of Virginia, Inc. 2,811 1,089 158 4,058
Columbia Energy Group Capital Corporation 11 20 1 32
Columbia Gas Transmission Corporation 14,243 5,814 1,099 21,156
Columbia Atlantic Trading, Inc. 7 9 1 17
Columbia Natural Resources, Inc. 2,010 1,048 148 3,206
-------------- --------------- ---------------- ------------
Total Amount Billed in 1998 54,699 23,803 3,523 82,025
Reconciliations to Total Revenues:
Difference between Amount of
Unbilled Revenue December 1997 and
December 1998 (2,528) 1,855 1,101 428
-------------- --------------- ---------------- ------------
52,171 25,658 4,624 82,453
============== =============== ================ ============
</TABLE>
- --------------------------------------------------------------------------------
Page 25
<PAGE> 26
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
ANALYSIS OF BILLING
NONASSOCIATE COMPANIES
ACCOUNT 458
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DIRECT INDIRECT COMPENSATION
COST COST FOR USE TOTAL EXCESS OR AMOUNT
NAME OF NONASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL COST DEFICIENCY BILLED
- ---------------------------- ------- ------- ---------- ---- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
458-1 458-2 458-3 458-4
------- ------- ---------- ----------
N/A $000 $000 $000 $000 $000
</TABLE>
- --------------------------------------------------------------------------------
INSTRUCTION: Provide a brief description of the services rendered to each
nonassociate company:
- --------------------------------------------------------------------------------
Page 26
<PAGE> 27
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
Schedule XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSOCIATE COMPANY NONASSOCIATE COMPANY
CHARGES CHARGES
----------------------------- ----------------------------
DESCRIPTION OF ITEMS DIRECT INDIRECT DIRECT INDIRECT
COST COST TOTAL COST COST TOTAL
- ---------------------------------------------- ------ -------- ------ ------ -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
$000 $000 $000 $000 $000 $000
920 Salaries and Wages 22,675 8,863 31,538 -- -- --
921 Office Supplies and Expenses 5,800 2,773 8,573 -- -- --
922 Administrative Expenses Transferred -
Credit 608 (2,672) (2,064) -- -- --
923 Outside Services Employed 9,839 3,479 13,318 -- -- --
924 Property Insurance -- 90 90 -- -- --
925 Injuries and Damages 185 95 280 -- -- --
926 Employee Pensions and Benefits 528 5,392 5,920 -- -- --
928 Regulatory Commission Expense 15 -- 15 -- -- --
930.1 General Advertising Expenses 69 55 124 -- -- --
930.2 Miscellaneous General Expense 478 871 1,349 -- -- --
931 Rents 5,508 602 6,110 -- -- --
932 Maintenance of Structure and Equipment 2,405 898 3,303 -- -- --
403 Depreciation and Amortization Expense 4,061 897 4,958 -- -- --
408 Taxes Other Than Income Taxes 50 2,736 2,786 -- -- --
409 Income Taxes -- 2,651 2,651 -- -- --
410 Provision for Deferred Income Taxes -- 2,901 2,901 -- -- --
411 Provision for Deferred Income Taxes - -- -- --
Credit -- (4,571) (4,571) -- -- --
411.5 Investment for Credit -- -- -- -- -- --
419 Other Interest -- (10) (10) -- -- --
421 Miscellaneous Income or Loss -- -- -- -- -- --
426.1 Donations 1 121 122 -- -- --
426.5 Other Deductions -- 3 3 -- -- --
427 Interest on Long-Term Debt -- -- -- -- -- --
431 Other Interest Expense -- 433 433 -- -- --
- ---------------------------------------------- ------ -------- ------ ------ -------- -----
Instructions: Total cost of service will
equal for associate and nonassociate
companies the total amount billed
under their separate analysis of
billing schedules.
- ---------------------------------------------- ------ -------- ------ ------ -------- -----
Total Expenses 52,222 25,607 77,829 -- -- --
------ -------- ------ ------ -------- -----
Compensation for Use of Equity Capital 2,237
------
430 Interest on Debt to Associate Companies 2,387
------
Total Cost of Service 82,453
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOTAL CHARGES FOR
SERVICE
------------------------------
DESCRIPTION OF ITEMS DIRECT INDIRECT
COST COST TOTAL
- ---------------------------------------------- ------ -------- ------
<S> <C> <C> <C> <C>
$000 $000 $000
920 Salaries and Wages 22,675 8,863 31,538
921 Office Supplies and Expenses 5,800 2,773 8,573
922 Administrative Expenses Transferred -
Credit 608 (2,672) (2,064)
923 Outside Services Employed 9,839 3,479 13,318
924 Property Insurance -- 90 90
925 Injuries and Damages 185 95 280
926 Employee Pensions and Benefits 528 5,392 5,920
928 Regulatory Commission Expense 15 -- 15
930.1 General Advertising Expenses 69 55 124
930.2 Miscellaneous General Expense 478 871 1,349
931 Rents 5,508 602 6,110
932 Maintenance of Structure and Equipment 2,405 898 3,303
403 Depreciation and Amortization Expense 4,061 897 4,958
408 Taxes Other Than Income Taxes 50 2,736 2,786
409 Income Taxes -- 2,651 2,651
410 Provision for Deferred Income Taxes -- 2,901 2,901
411 Provision for Deferred Income Taxes -
Credit -- (4,571) (4,571)
411.5 Investment for Credit -- -- --
419 Other Interest -- (10) (10)
421 Miscellaneous Income or Loss -- -- --
426.1 Donations 1 121 122
426.5 Other Deductions -- 3 3
427 Interest on Long-Term Debt -- -- --
431 Other Interest Expense -- 433 433
- ---------------------------------------------- ------ -------- ------
Instructions: Total cost of service will
equal for associate and nonassociate
companies the total amount billed
under their separate analysis of
billing schedules.
- ---------------------------------------------- ------ -------- ------
Total Expenses 52,222 25,607 77,829
------ -------- ------
Compensation for Use of Equity Capital 2,237
------
430 Interest on Debt to Associate Companies 2,387
------
Total Cost of Service 82,453
- -------------------------------------------------------------------------------------
</TABLE>
Page 27
<PAGE> 28
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
Schedule XVII
SCHEDULE OF EXPENSE DISTRIBUTION BY DEPARTMENT OR SERVICE FUNCTION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEPARTMENT OR SERVICE FUNCTION
------------------------------------
AIR
TOTAL ACCOUNTING TRANS- CLIENT
DESCRIPTION OF ITEMS AMOUNT OVERHEAD SERVICES PORTATION SUPPORT
-------------------------------------------- ------ -------- ---------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
920 Salaries and Wages 31,538 8,863 91 314 469
921 Office Supplies and Expenses 8,573 2,773 45 307 81
922 Administrative Expenses Transferred -
Credit (2,064) (2,672) -- -- 3
923 Outside Services Employed 13,318 3,479 50 62 17
924 Property Insurance 90 90 -- -- --
925 Injuries and Damages 280 95 -- 52 --
926 Employee Pensions and Benefits 5,920 5,392 -- 1 1
928 Regulatory Commission Expense 15 -- 4 -- --
930.1 General Advertising Expense 124 55 -- -- --
930.2 Miscellaneous General Expense 1,349 871 7 (193) --
931 Rents 6,110 602 -- 683 3
932 Maintenance of Structures and Equipment 3,303 898 -- 74 217
403 Depreciation and Amortization Expense 4,958 897 -- 4 --
408 Taxes Other Than Income Taxes 2,786 2,736 -- (27) --
409 Income Taxes 2,651 2,651 -- -- --
410 Provision for Deferred Income Taxes 2,901 2,901 -- -- --
411 Provision for Deferred Income Taxes -
Credit (4,571) (4,571) -- -- --
411.5 Investment Tax Credit -- -- -- -- --
421 Miscellaneous Income or Loss -- -- -- -- --
426 Donations 122 121 -- -- --
426 Other Deductions 3 3 -- -- --
427 Interest on Long-Term Debt -- -- -- -- --
430 Interest on Debt to Associate Companies 2,387 2,387 -- -- --
431 Other Interest Expense 433 433 -- -- --
--------------------------------------------
Instruction: Indicate each department or
service function. (See
Instruction 01-3 General
Structure of Accounting System:
Uniform System Account)
-------------------------------------------- ------ -------- ---------- --------- -------
Total Expenses 80,226 28,004 197 1,277 791
-------------------------------------------- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------
COMMON/ CORPORATE
CORPORATE COMMUNI- CORPORATE
DESCRIPTION OF ITEMS SYSTEMS CONSOLIDATION CATIONS FINANCE
-------------------------------------------- --------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C>
920 Salaries and Wages 1,112 798 460 229
921 Office Supplies and Expenses 53 88 214 20
922 Administrative Expenses Transferred -
Credit -- -- -- --
923 Outside Services Employed 208 59 2,014 89
924 Property Insurance -- -- -- --
925 Injuries and Damages -- -- -- --
926 Employee Pensions and Benefits -- -- -- --
928 Regulatory Commission Expense -- -- -- --
930.1 General Advertising Expense -- -- -- --
930.2 Miscellaneous General Expense 234 99 71 24
931 Rents -- 1 2 --
932 Maintenance of Structures and Equipment 64 -- -- --
403 Depreciation and Amortization Expense -- -- -- --
408 Taxes Other Than Income Taxes -- -- -- --
409 Income Taxes -- -- -- --
410 Provision for Deferred Income Taxes -- -- -- --
411 Provision for Deferred Income Taxes -
Credit -- -- -- --
411.5 Investment Tax Credit -- -- -- --
421 Miscellaneous Income or Loss -- -- -- --
426 Donations -- -- 1 --
426 Other Deductions -- -- -- --
427 Interest on Long-Term Debt -- -- -- --
430 Interest on Debt to Associate Companies -- -- -- --
431 Other Interest Expense -- -- -- --
--------------------------------------------
Instruction: Indicate each department or
service function. (See
Instruction 01-3 General
Structure of Accounting System:
Uniform System Account)
-------------------------------------------- --------- ------------- --------- ---------
Total Expenses 1,671 1,045 2,762 362
-------------------------------------------- ----------------------------------------------------
</TABLE>
Page 28
<PAGE> 29
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
Schedule XVII
SCHEDULE OF EXPENSE DISTRIBUTION BY DEPARTMENT OR SERVICE FUNCTION
- --------------------------------------------------------------------------------
DEPARTMENT OR SERVICE FUNCTION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ENTERPRISE ENVIRON- HUMAN
Account CORPORATE MULTIMEDIA MENTAL GOVERNMENT RESOURCES/
Number TREASURY COMMUNICATIONS AFFAIRS EXECUTIVE AFFAIRS BENEFITS
-------------- ------------- ---------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$000 $000 $000 $000 $000 $000
920 282 2,049 303 2,265 254 1,295
921 31 711 65 424 87 174
922 - - 44 - - -
923 60 728 238 1,030 53 664
924 - - - - - -
925 - - - - - -
926 - - - 2 - 19
928 - - - - - -
930.1 - - - - - 69
930.2 248 304 17 528 89 933
931 - 131 1 118 253 115
932 - 1 - - - 2
403 - 1,155 - - - -
408 - - - - - -
409 - - - - - -
410 - - - - - -
411 - - - - - -
411.5 - - - - - -
419 - - - - - -
421 - - - - - -
426.1 - - - - - -
426.5 - - - - - -
427 - - - - - -
430 - - - - - -
431 - - - - - -
-------------- ------------- ---------------- -------------- -------------- -------------- -------------
Total Expenses 621 5,079 668 4,367 736 3,271
------------- ---------------- -------------- -------------- -------------- -------------
</TABLE>
<TABLE>
<CAPTION>
MC
Account INTERNAL INVESTOR BUILDING
Number AUDIT RELATIONS LEGAL SERVICES
-------------- ------------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
$000 $000 $000 $000
920 1,017 401 1,050 1
921 213 72 181 -
922 57 - - -
923 114 416 2,270 -
924 - - - -
925 - - - -
926 - - - -
928 - 8 - -
930.1 - - - -
930.2 108 135 133 -
931 8 18 1 1
932 - - - -
403 - - - -
408 - - - -
409 - - - -
410 - - - -
411 - - - -
411.5 - - - -
419 - - - -
421 - - - -
426.1 - - - -
426.5 - - - -
427 - - - -
430 - - - -
431 - - - -
-------------- ------------- ------------- ---------- -------------
Total Expenses 1,517 1,050 3,635 2
------------- ------------- ---------- -------------
</TABLE>
Page 29
<PAGE> 30
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
Schedule XVII
SCHEDULE OF EXPENSE DISTRIBUTION BY DEPARTMENT OR SERVICE FUNCTION
- --------------------------------------------------------------------------------
DEPARTMENT OR SERVICE FUNCTION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NETWORK RESTON
Account COMPUTER OTHER RISK BUILDING STEP STRATEGIC
Number SERVICES GENERAL PAYROLL MANAGEMENT SERVICES PROGRAM PLANNING
- -------------- -------------- ---------- ----------- -------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
$000 $000 $000 $000 $000 $000 $000
920 2,993 3,726 424 452 25 414 486
921 2,507 5 3 124 2 25 51
922 445 - - - - - -
923 878 10 41 312 13 25 184
924 - - - - - - -
925 - - - 133 - - -
926 - 504 - - - 1 -
928 - - - - - - -
930.1 - - - - - - -
930.2 (2,897) 15 219 63 3 116 34
931 4,157 - - 1 - - 1
932 2,046 - - - 1 - -
403 2,902 - - - - - -
408 77 - - - - - -
409 - - - - - - -
410 - - - - - - -
411 - - - - - - -
411.5 - - - - - - -
419 - - - - - - -
421 - - - - - - -
426.1 - - - - - - -
426.5 - - - - - - -
427 - - - - - - -
430 - - - - - - -
431 - - - - - - -
- -------------- -------------- ---------- ----------- -------------- ------------ ------------ -----------
Total Expenses 13,108 4,260 687 1,085 44 581 756
-------------- ---------- ----------- -------------- ------------ ------------ -----------
</TABLE>
<TABLE>
<CAPTION>
Account FINANCIAL ENERGY
Number REPORTING TAX VENTURES
- -------------- ----------- ---------- -----------
<S> <C> <C> <C>
$000 $000 $000
920 685 558 522
921 28 116 173
922 - - 59
923 47 322 (65)
924 - - -
925 - - -
926 - - -
928 - 3 -
930.1 - - -
930.2 142 14 32
931 1 13 -
932 - - -
403 - - -
408 - - -
409 - - -
410 - - -
411 - - -
411.5 - - -
419 - - -
421 - - -
426.1 - - -
426.5 - - -
427 - - -
430 - - -
431 - - -
- -------------- ----------- ---------- -----------
Total Expenses 903 1,026 721
----------- ---------- -----------
</TABLE>
Page 30
<PAGE> 31
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
DEPARTMENTAL ANALYSIS OF SALARIES
ACCOUNT 920
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
DEPARTMENTAL SALARY EXPENSE
----------------------------------------------------- NUMBER
INCLUDED IN AMOUNTS BILLED TO PERSONNEL
NAME OF DEPARTMENT --------------------------------------- ------------
Indicate each department or TOTAL PARENT OTHER NON END OF
service function AMOUNT COMPANY ASSOCIATES ASSOCIATES YEAR
------------------------------- ----------- ---------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C>
$000 $000 $000 $000
Accounting Services 91 29 62 -- 11
Air Transportation 314 255 59 -- 7
Client Support 469 -- 469 -- 11
Common/Corporate Systems 1,112 8 1,104 -- 46
Consolidation Accounting 798 72 726 -- 13
Corporate Communications 460 -- 460 -- 6
Corporate Finance 229 3 226 -- 6
Corporate Treasury 282 6 276 -- 5
Dulles Building Services 25 -- 25 -- 6
Energy Ventures 522 444 78 -- 6
Enterprise Multimedia Communication 2,049 3 2,046 -- 50
Environmental Affairs 303 14 289 -- 5
Executive 2,265 172 2,093 -- 13
Finance & Investor Relations 254 -- 254 -- 6
Financial Planning & Reporting 685 4 681 -- 11
Government Affairs 1,295 -- 1,295 -- 3
Human Resources/Benefits 1,017 5 1,012 -- 18
Internal Audit 401 10 391 -- 17
Legal 1,050 161 889 -- 13
Marble Cliff Building Services 1 1 -- -- 16
Network Computer Services 2,993 -- 2,993 -- 71
Other General 3,726 -- 3,726 -- --
Payroll 424 -- 424 -- 17
Risk Management 452 8 444 -- 6
Step Program 414 103 311 -- 12
Strategic Planning 486 -- 486 -- 5
Tax 558 22 536 -- 9
----------- ----------- ------------- ------------ -------------
Total 22,675 1,320 21,355 -- 389
=========== =========== ============= ============ =============
</TABLE>
- --------------------------------------------------------------------------------
Page 31
<PAGE> 32
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
- --------------------------------------------------------------------------------
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed.
If the aggregate amounts paid to any one payee and included
within one subaccount is less than $100,000, only the aggregate
number and the amount of all such payments included within the
subaccount need be shown. Provide a subtotal for each type of
service.
<TABLE>
<CAPTION>
RELATIONSHIP
"A" = ASSOCIATE
FOR WHOM PURCHASED ADDRESS "NA" = NON-ASSOCIATE AMOUNT
------------------ ------- -------------------- ------
<S> <C> <C> <C>
$000
See schedule 923-A 13,318
</TABLE>
- --------------------------------------------------------------------------------
Page 32
<PAGE> 33
SCHEDULE 923-A
COLUMBIA ENERGY GROUP SERVICE CORPORATION
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
<TABLE>
<CAPTION>
RELATIONSHIP
"A" = ASSOCIATE AMOUNT
"NA" = NON -------------------
FOR WHOM PURCHASED ADDRESS ASSOCIATE $000 $000
- ---------------------------- -------------------------------------- ----------- -------- --------
<S> <C> <C> <C> <C>
1-Special Services - Legal
Akin, Gump, Strauss, Hauer, & 1900 Pennzoil Place-South Tower, Houston, TX 77002 NA 161
LeBoeuf, Lamb, Greene & MacRae 125 W. 55th Street New York., N.Y. 100195389 NA 1,404
Shandwick Public Affairs P.O. Box 3075 Buffalo, NY 14240 NA 73
Shearman & Sterling 599 Lexington Ave. New York, NY 1002-24676 NA 68
Sullivan & Cromwell 125 Broad St. New York, NY 10004 NA 110
46 Organizations 541
Total Special Services - Legal 2,357
2-Special Services - Audit
Arthur Andersen LLP P.O. Box 13882, Newark, NJ 07188-0882 NA 28
--------
Total Special Services - Audit 28
3-Special Services - Other
Adams, William C. 5150 Southwest 21st St. Plantation, FL 33317 NA 52
Bowne of New York City, Inc. 345 Hudson St. New York, NY 10014-9884 NA 58
The Case Hoyt Corp. P.O. Box 522625, Miami, FL. 33152 NA 243
Columbia Gas of Ohio, Inc. A/R, P.O. Box 117, Columbus, OH 43216 A 173
Comdisco Continuity Service P.O. Box 91753, Chicago, IL. 60693 NA 201
Corna/ Kokosing Construction C 2500 Harrison Rd. Columbus, OH 43204 NA 102
Cyborg Systems P.O. Box 6197, Chicago, IL 60680-6197 NA 123
Dawson Personnel Services P.O. Box 710943 Columbus, OH 43271-0943 NA 204
DRPollard & Associates Inc. 2200 Wilson Blvd. Suite 409, Arlington, VA 22201 NA 74
Deloitte & Touche P.O. Box 1613, Stamford, CT 06920-1313 NA 253
EDI Business Group, Inc. 7224 Cadence Ct., Columbia, MD 21046 NA 58
Excel Temporary Services P.O. Box 277041, Atlanta, GA 30384-7041 NA 78
FlightSafety International P.O. Box 75691, Charlotte, NC 28275 NA 62
Gartner Group Inc. P.O. Box 911319, Dallas, TX 75391-1319 NA 274
Harris Trust & Savings Bank 33101 Treasury Center, Chicago, IL 60694-3100 NA 151
Harris Bank P.O. Box 755, Chicago, IL 60690-0755 NA 62
Iconix 4927 Auburn Ave. Bethesda, MD 20814 NA 61
IBM P.O. Box 98880, Chicago, IL 60693 NA 284
International Network Services P.O. Box 7049, San Francisco, CA 94120-7049 NA 144
The Invisions Group LTD. 4927 Auburn Ave. Bethesda, MD 20814 NA 153
Knowledge Link Dept. L-1715, Columbus, OH 43260-1715 NA 80
Lexis-Nexis P.O. Box 7247-7090, Philadelphia, PA 19170-7090 NA 54
Mcardle Printing Co. Inc. 800 Commerce Dr., Upper Marlboro MD 20772 NA 371
Marine Midland Bank P.O. Box 4203, Buffalo, NY 14240-4203 NA 64
PNC Bank, N.A. 620 Liberty Ave. Pittsburgh, PA 15265 NA 136
Pinkerton P.O. Box 2111 Carol Stream, IL 60132-2111 NA 82
Placers Temps & Search P.O. Box 15621, Wilmington, DE. 19850-5621 NA 85
Sarcom Dept. #0703, Columbus, OH 43271-0703 NA 442
Savoy Partners LTD. 1620 L Street, NW Suite 801, Washington, DC 20036 NA 65
Techforce Corp P.O. Box 861419, Orlando, FL 32886-1419 NA 109
Trustees, University of PA 3809 Walnut St. Philadelphia, PA 19104-3604 NA 109
Wayfarer Aviation, Inc. P.O. Box 29764, New York, NY 10087-9764 NA 76
Xerox Corp P.O. Box 827598, Philadelphia, PA 19182-7598 NA 548
523 Organizations 2,409
--------
Total Special Services - Other 7,440
</TABLE>
Page 33
<PAGE> 34
SCHEDULE 923-A
COLUMBIA ENERGY GROUP SERVICE CORPORATION
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
<TABLE>
<CAPTION>
RELATIONSHIP
"A" = ASSOCIATE AMOUNT
"NA" = NON ---------------------
FOR WHOM PURCHASED ADDRESS ASSOCIATE $000 $000
- ---------------------------- -------------------------------------- --------------- -------- --------
<S> <C> <C> <C> <C>
4-Special Services - Tax
Ambassador Research Inc. 6495 Refugee Rd. NW, Pinkerton, OH 43147 NA 80
Arthur Andersen LLP P.O. Box 13882, Newark, NJ 07188-0882 NA 55
Stroock & Stroock & Lavan LLP 180 Maiden Lane, New York, NY 10038 NA 107
9 Organizations 66
--------
Total Special Services - Tax 308
--------
5- Special Services - Consulting
A. T. Kearney, Inc. 225 Reinekers Ln., Alexandria, VA 22314 NA 187
Dames & Moore File No 54279, Los Angeles, CA 90074-4279 NA 223
Eastman Consultants, Inc. 19034 Penninsula Point Dr., Cornelius, NC 28031 NA 92
Gartner Group, Inc. P.O. Box 911319, Dallas TX 75391-1319 NA 95
Invisions Group LTD 4927 Auburn Ave., Bethesda, MD 20814 NA 112
Johnson, John Paul 7713 Lear Rd., Mclean, VA 22102 NA 66
Korn/ Ferry International Dept. Ch 10228, Palatine, IL 60055-0228 NA 51
LAI P.O. Box 30027, Tampa, FL 33630-3027 NA 66
OVCA Associates Inc. 7 Overlook Road, Louisville, KY 40207 NA 57
SSI Inc. P.O. Box 98991, Chicago, IL 60693 NA 80
Savoy Partners, LTD 1620 L St. NW, Suite 801, Washington, DC 20036 NA 51
Craig Eric Schneier Assoc. 175 Highland Terrace, Princeton, NJ 08540 NA 71
Shandwick Public Affairs P.O. Box 1213, Dept. 14984, Newark, NJ 07101 NA 728
Teleos Consulting 12 Chestnut Hill Terrace, Newton, Ma 02467 NA 91
Towers Perrin P.O. Box 8500, S-6110, Philadelphia, PA 19178 NA 280
Watson Wyatt & Co. P.O. Box 277665, Atlanta, GA 30384-7665 NA 85
78 Organizations 850
-------- --------
Total Special Services - Consulting 3,185
--------
Total All Special Services 13,318
========
</TABLE>
Page 34
<PAGE> 35
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
EMPLOYEE PENSIONS AND BENEFITS
ACCOUNT 926
- --------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of each pension plan and benefit program
provided by the service company. Such listing should be limited
to $25,000.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
DESCRIPTION AMOUNT
- --------------------- --------------
<S> <C>
$000
Hewett Admin Start-up costs 1,951
Medical Expense Plan 1,723
Employee Relocation Expense 1,382
Thrift Plan 863
Pension Restoration Plan 426
Dental Assistance Plan 215
Long-Term Disability Insurance 156
Miscellaneous 93
Other Post-Employment Benefits 82
Group Life Insurance 77
Employee Cafeteria Subsidy 64
Educational Assistance 62
Flexible Spending Health & Dental (31)
Employee Assistance Plan (79)
Employee Retirement Expense (1,064)
--------------
Total 5,920
- ---------------------------------------------------------------------------------------------
</TABLE>
Page 35
<PAGE> 36
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
GENERAL ADVERTISING EXPENSES
ACCOUNT 930.1
- --------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 930.1,
"General Advertising Expenses," classifying the items according
to the nature of the advertising and as defined in the account
definition. If a particular class includes an amount in excess of
$3,000 applicable to a single payee, show separately the name of
the payee and the aggregate amount applicable thereto.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
DESCRIPTION NAME OF PAYEE AMOUNT
- -------------------------------- ------------------------------------ -------------
<S> <C> <C>
$000
Employee Recruiting Stackig, Inc. 84
Employee Recruiting Gammill Group Inc. 20
Employee Recruiting The Columbus Dispatch 13
Employee Recruiting Nationwide Advertising Service 5
Employee Recruiting Alexus International 2
-------------
TOTAL 124
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Page 36
<PAGE> 37
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
MISCELLANEOUS GENERAL EXPENSES
ACCOUNT 930.2
- --------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 930.2,
"Miscellaneous General Expenses," classifying such expenses
according to their nature. Payments and expenses permitted by
Section 321 (b)(2) of the Federal Election Campaign Act, as
amended by Public Law 94-283 in 1976 (2 U.S.C. Section 441 (b)(2)
shall be separately classified.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
DESCRIPTION AMOUNT
- ----------------------------------------------------------------------------- ----------------
<S> <C>
$000
Dues and Memberships - Corporate 374
Employee Recruiting 239
Courier Services 217
Other 182
Industry Meetings 72
Employee Training 69
Bank Service Charges 66
Filing and License Fees 43
Aircraft Service 35
Political Activities 24
Newswire Services 14
Employment Agreement 8
SEC Filings 6
----------------
TOTAL 1,349
- --------------------------------------------------------------------------------------------------
</TABLE>
Page 37
<PAGE> 38
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
RENTS
ACCOUNT 931
- --------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 931, "Rents",
classifying such expenses by major grouping of property, as
defined in the account definition of the Uniform System of
Accounts.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMOUNT
- ------------------------------------------------------------------------------ -----------------
<S> <C>
$000
Data Processing 4,156
Office Space 934
Air Transportation 602
Auto and General Tools 177
Communications 59
Miscellaneous 182
-----------------
TOTAL 6,110
- ------------------------------------------------------------------------------------------------------
</TABLE>
Page 38
<PAGE> 39
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
TAXES OTHER THAN INCOME TAXES
ACCOUNT 408
- --------------------------------------------------------------------------------
INSTRUCTIONS: Provide an analysis of Account 408, "Taxes Other Than Income
Taxes." Separate the analysis into two groups: (1) other than
U.S. Government taxes, and (2) U.S. Government taxes. Specify
each of the various kinds of taxes and show the amounts thereof.
Provide a subtotal for each class tax.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMOUNT
- ------------------------------------------------------------------------------ -----------------
<S> <C>
$000
(1) Other than U.S. Government Taxes:
Property 672
Sales and Use 65
Unemployment 47
License or Franchise 14
-----------------
Total - other 798
(2) U.S. Government Taxes:
Federal Insurance Contribution 1,960
Unemployment 27
Miscellaneous 1
-----------------
Total - Federal 1,988
TOTAL 2,786
- ----------------------------------------------------------------------------------------------------
</TABLE>
Page 39
<PAGE> 40
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
DONATIONS
ACCOUNT 426.1
- --------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 426-1,
"Donations," classifying such expenses by its purpose. The
aggregate number and amount of all items of less than $3,000 may
be shown in lieu of details.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
- ------------------------------------------------- --------------------------------------- -------------
<S> <C> <C>
$000
Columbia Gas Foundation Community Welfare 110
Greater Loudon Babe Ruth World Series Inc. Community Welfare 10
Miscellaneous (8) Community Welfare 2
-------------
TOTAL 122
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Page 40
<PAGE> 41
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
OTHER DONATIONS
ACCOUNT 426.5
- --------------------------------------------------------------------------------
INSTRUCTIONS: Provide a listing of the amount included in Account 426.5, "Other
Deductions," classifying such expenses according to their nature.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
DESCRIPTION AMOUNT
- --------------------------------------------------------------------------- ---------------------
<S> <C>
$000
NONE
---------------------
TOTAL NONE
- -----------------------------------------------------------------------------------------------------
</TABLE>
Page 41
<PAGE> 42
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
SCHEDULE XVIII
NOTES TO STATEMENT OF INCOME
- --------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes regarding the
statement of income or any account thereof. Furnish particulars
as to any significant increase in services rendered or expenses
incurred during the year. Notes relating to financial statements
shown elsewhere in this report may be indicated here by
reference.
- --------------------------------------------------------------------------------
For additional notes, see Page 22, Notes to Financial Statements.
- --------------------------------------------------------------------------------
Page 42
<PAGE> 43
COLUMBIA ENERGY GROUP SERVICE CORPORATION
ORGANIZATIONAL CHART
<TABLE>
<S> <C> <C> <C> <C>
-------------------------
Chairman, President &
CEO
RICHARD, III
-------------------------
|
-------------------------------------------------|---------------------------------------------
| | | | |
------------------- --------------- ------------- ------------- ---------------------
SR VP Strategic SR VP Human Senior VP Senior VP Senior VP & Chief
Planning Resources Services & CFO Legal Officer
HAMMICK FONT MAGLEY O'DONNELL SCHWOLSKY
------------------- --------------- ------------- ------------- ---------------------
| | | | |
| | | | |
- ---------------------- ---------------------- ---------------------- ------------------ -------------------------
Strategic Planning Corporate Benefits Air Transportation Consolidation Environmental Affairs
- ---------------------- ---------------------- ---------------------- ------------------ -------------------------
| Human resources Client Support Corporate Treasury Legal
|
- ---------------------- ---------------------- ---------------------- ------------------ -------------------------
Governmental Affairs Training Common/Corporate Corporate Finance Risk Management
Systems
- ---------------------- ---------------------- ---------------------- ------------------ -------------------------
| Organizational Enterprise Multimedia Financial Planning
| Development Communications & Reporting
- ---------------------- ---------------------- ---------------------- ------------------
Corporate Executive Marble Cliff Internal Audit
Communications Compensation Building Services
- ---------------------- ---------------------- ---------------------- ------------------
| Network Computer Tax
| Services
- ---------------------- ---------------------- -----------------
Investor Relations Dulles Building Accounting
Services Services
- ---------------------- ---------------------- -----------------
Payroll Energy Ventures
---------------------- -----------------
</TABLE>
Page 43
<PAGE> 44
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
METHODS OF ALLOCATION
- --------------------------------------------------------------------------------
The following Basis of Allocation have been approved by the SEC as a
method of allocating Job Order charges and convenience payments directly to
Associate Companies.
- Total Gross Fixed Assets and Total Operating Expenses
- Total Gross Fixed Assets
- Total Distribution Property and Distribution Expenses
- Total Production Property and Expense
- Total Storage Property and Expense
- Transmission Property and Transmission Expenses
- Total Operating Expenses and Gross Depreciable Property
- Gross Depreciable Property
- Number of Automobile Units Owned and Leased
- Number of Retail Customers
- Number of Regular Employees
- Fixed Allocation
- Direct Costs
Page 44
<PAGE> 45
ANNUAL REPORT OF COLUMBIA ENERGY GROUP SERVICE CORPORATION
For the Year Ended December 31, 1998
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
- --------------------------------------------------------------------------------
COMPENSATION FOR USE OF CAPITAL
SUMMARY OF BILLING TO ASSOCIATE COMPANIES
<TABLE>
<CAPTION>
Direct &
Allocated Compensation
Company Labor Billed
- -------------------------------------------------------------------- ----------------- ------------------
<S> <C> <C>
$000 $000
Columbia Energy Group 1,519 192
Columbia Gulf Transmission Company 1,166 336
Columbia Energy Services Corporation 1,099 116
Columbia Propane Corporation 334 74
Columbia Electric Corporation 206 37
Columbia LNG Corporation 80 17
Columbia Network Services Corporation 105 14
Columbia Insurance Corporation, Ltd. 58 9
Columbia Gas of Kentucky, Inc. 419 105
Columbia Gas of Ohio, Inc. 3,487 859
Columbia Gas of Maryland, Inc. 127 34
Columbia Gas of Pennsylvania, Inc. 1,251 323
Columbia Gas of Virginia, Inc. 673 158
Columbia Energy Group Capital Corporation 10 1
Columbia Gas Transmission Corporation 3,758 1,099
Columbia Atlantic Trading Corporation 5 1
Columbia Energy Resources, Inc. 663 148
---------------- -----------------
Total 14,960 3,523
================ =================
</TABLE>
The above is a summary of the Compensation for Use of Capital billed to each
company. Attached is a sample of the annual statement sent to each associate
company. Since they are identical except for the amount billed, the summary is
included in lieu of seventeen individual statements (see page 46).
- --------------------------------------------------------------------------------
Page 45
<PAGE> 46
COLUMBIA ENERGY GROUP SERVICE CORPORATION
COMPENSATION FOR USE OF CAPITAL
- --------------------------------------------------------------------------------
BILLED TO
COLUMBIA PROPANE CORPORATION
DURING 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SYSTEM MONTHLY
INTEREST DIRECT & RATE
BILLING TO NET TOTAL ALLOCATED COL. 3/
MONTH PARENT INCOME COMPENSATION LABOR COL. 4
- ------------- ----------------- ----------------- ----------------- ------------------- --------------
(1) (2) (3) (4) (5)
<S> <C> <C> <C> <C> <C>
JANUARY 108,101.73 186,437.00 294,538.73 1,073,606.68 27.43451
FEBRUARY 102,868.12 186,437.00 289,305.12 1,259,264.74 22.97413
MARCH 181,386.57 186,437.00 367,823.57 1,299,428.73 28.30656
APRIL 106,593.43 186,437.00 293,030.43 1,310,622.31 22.35811
MAY 106,182.94 186,437.00 292,619.94 1,207,124.13 24.24108
JUNE 105,786.37 186,437.00 292,223.37 1,300,440.64 22.47110
JULY 105,755.70 186,437.00 292,192.70 1,274,576.87 22.92468
AUGUST 105,474.27 186,437.00 291,911.27 1,201,816.91 24.28916
SEPTEMBER 106,808.77 186,437.00 293,245.77 1,252,055.69 23.42114
OCTOBER 104,688.01 186,437.00 291,125.01 1,259,554.58 23.11333
NOVEMBER 104,478.68 186,437.00 290,915.68 1,340,347.90 21.70449
DECEMBER 104,680.45 186,437.00 291,117.45 1,181,123.99 24.65
----------------- ----------------- ----------------- ------------------- --------------
1,342,805.04 2,237,244.00 3,580,049.04 14,959,963.17 23.93087
================= ================= ================= =================== ==============
</TABLE>
<TABLE>
<CAPTION>
MANAGEMENT
D&A LABOR COMPENSATION
BILLING BILLED TO BILLED
MONTH CPC COL. 5 x COL. 6
- ------------- ---------------- -------------------
(6) (7)
<S> <C> <C>
JANUARY 27,851.70 7,640.98
FEBRUARY 32,709.19 7,514.65
MARCH 33,185.62 9,393.71
APRIL 30,477.80 6,814.26
MAY 23,698.58 5,744.79
JUNE 23,337.18 5,244.12
JULY 23,894.40 5,477.72
AUGUST 25,678.20 6,237.02
SEPTEMBER 23,979.64 5,616.31
OCTOBER 22,390.52 5,175.19
NOVEMBER 31,021.48 6,733.05
DECEMBER 35,307.54 8,702.42
---------------- ------------------
333,531.85 80,294.23
================ ==================
</TABLE>
- --------------------------------------------------------------------------------
Page 46
<PAGE> 47
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of 1935
and the rules and regulations of the Securities and Exchange Commission issued
thereunder, the undersigned company has duly caused this report to be signed on
its behalf by the undersigned officer thereunto duly authorized.
COLUMBIA ENERGY GROUP SERVICE CORPORATION
By:
---------------------------------------
D. Furlano
Assistant Controller
Date: April 28, 1999
- --------------------------------------------------------------------------------
Page 47
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