<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, 1999
EMPLOYEES' THRIFT PLAN OF COLUMBIA ENERGY GROUP
Columbia Energy Group
13880 Dulles Corner Lane
Herndon, Virginia 20171-4600
<PAGE> 2
EMPLOYEES' THRIFT PLAN
OF COLUMBIA ENERGY GROUP
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C>
Report of Independent Public Accountants................................... 2
Statements of Net Assets Available for Benefits............................ 3
Statement of Changes in Net Assets Available for Benefits.................. 4
Notes to Financial Statements and Schedules................................ 5
Schedule A - Statements of Net Assets Available for Benefits............... 10
Schedule B - Statement of Changes in Net Assets Available for Benefits..... 12
Schedule of Assets Held for Investment Purposes (Schedule H, Part IV (I)).. 15
Schedule of Reportable Transactions (Schedule H, Part IV (j)............... 16
Consent of Independent Public Accountants.................................. 18
Federal Tax Consequences (Unaudited)....................................... 19
</TABLE>
All other schedules are omitted as they are not applicable or are not required
based on the disclosure requirements of the Employee Retirement Income Security
Act of 1974 ("ERISA") and applicable regulations issued by the Department of
Labor.
<PAGE> 3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Thrift Plan Committee of the
Employees' Thrift Plan of
Columbia Energy Group:
We have audited the accompanying statements of net assets available for benefits
of the Employees' Thrift Plan of Columbia Energy Group (the "Plan") as of
December 31, 1999 and 1998, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1999. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were 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. These supplemental schedules are the
responsibility of the Plan's Management. 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.
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 investments in the Columbia Energy Group
Stock Fund. 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.
ARTHUR ANDERSEN LLP
New York, New York,
June 14, 2000
2
<PAGE> 4
EMPLOYEES' THRIFT PLAN OF COLUMBIA ENERGY GROUP
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
Assets
<S> <C> <C>
Investments at fair value:
Columbia Energy Group
Common Stock $345,246,773 $346,169,555
Interest-bearing cash 8,860,867 2,930,746
------------ ------------
Total Columbia Stock Fund 354,107,640 349,100,301
Mutual Funds:
Retirement Money Market Portfolio 69,587,307 58,762,865
Magellan Fund 52,901,489 40,167,065
Contrafund 33,132,991 25,481,841
Equity Income 284,164 -
Growth Company Fund 31,398,501 13,560,277
Growth & Income Portfolio 62,350,522 63,071,162
Intermediate Bond Fund 33,464,339 35,429,049
Overseas Fund 11,517,661 8,791,851
Europe Fund 5,840,300 6,994,294
Pacific Basin Fund 4,883,920 1,436,029
Balanced Fund 19,895,539 19,724,355
Capital Appreciation Fund - 4,968,029
Short-Term Bond Fund - 3,666,107
Spartan U.S. Equity Index Fund 99,895,057 85,055,824
PIMCO Total Return Institutional 630,888 -
PIMCO Long-Term Government (Institutional) 210,167 -
PIMCO Low Duration Institutional 3,948,759 -
PIMCO StocksPlus Institutional 1,340,746 -
Vanguard US Growth 1,437,319 -
Loans to Participants 10,931,038 10,348,004
------------ ------------
797,758,347 726,557,053
Confederation Life Receivable 0 377,760
Employer Contributions Receivable 772,555 696,883
Participant Deposits Receivable 1,580,935 1,362,142
------------ ------------
Net Assets Available for Benefits $800,111,837 $728,993,838
============ ============
</TABLE>
The accompanying notes to financial statements and schedules are an integral
part of these statements.
3
<PAGE> 5
EMPLOYEES' THRIFT PLAN OF COLUMBIA ENERGY GROUP
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
Net Assets, Beginning of Year $ 728,993,838
Net Investment Income 32,760,502
Net Realized Gain on Securities Sold or
Distributed 60,262,429
Net Change in Unrealized Appreciation on
Investments 12,450,322
Participants' Deposits 28,392,526
Employer Contributions 12,285,996
Distributions to Participants (75,462,611)
Loan Activity 428,835
-------------
Net Assets, End of Year $ 800,111,837
=============
</TABLE>
The accompanying notes to financial statements and schedules are an
integral part of this statement.
4
<PAGE> 6
EMPLOYEES' THRIFT PLAN OF COLUMBIA ENERGY GROUP
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
December 31, 1999 and December 31, 1998
1. Description of the Plan
The Employees' Thrift Plan of Columbia Energy Group, formerly the
Employees' Thrift Plan of Columbia Gas System, (the "Plan") was adopted by the
Board of Directors of Columbia Energy Group, formerly 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
immediately eligible to join the plan. Participation is voluntary, and
participants are fully and immediately vested in the Plan.
The Plan offers a wide range of funds to Plan participants. The
investment options 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.
Fidelity Retirement Money Market Portfolio: The Retirement Money Market
Portfolio seeks to maximize current income consistent with the
preservation of capital. The Portfolio invests in high quality U.S.
dollar denominated money market instruments of U.S. and foreign
issuers.
PIMCO Low Duration Fund: The Low Duration Fund is an income mutual fund
that seeks to provide current income while preserving capital. The Fund
invests in all types of bonds, including U.S. government, corporate,
mortgages and foreign. Most investments are in short- and
intermediate-maturity bonds. The fund maintains an average portfolio
duration of 1 to 3 years (approximately equal to an average maturity of
2 to 5 years). The Fund is managed by Pacific Investment Management
Company.
PIMCO Total Return Fund: The Total Return Fund is an income mutual fund
that seeks to provide high total return that exceeds general bond
market indices. The Fund invests in all types of bonds, including U.S.
government, corporate, mortgages and foreign. While the Fund maintains
an average portfolio duration of 3 to 6 years (approximately equal to
an average maturity of 5 to 12 years), investments may also include
short- and long-maturity bonds. The Fund is managed by Pacific
Investment Management Company.
Fidelity Intermediate Bond Fund: The Intermediate Bond Fund is an
income mutual fund that seeks a high level of current income. The Fund
invests primarily in investment grade 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 a limited amount of high quality foreign debt instruments,
while maintaining an average maturity of 3 to 10 years.
PIMCO Long-Term U.S. Government Fund: The Long-Term U.S. Government
Fund is an income mutual fund that seeks to provide high current income
by investing in high quality longer-maturity bonds. The Fund invests
primarily in high-quality, long-term U.S. government securities, while
maintaining an average portfolio duration of about 10 years and a
minimum average duration of 8 years (approximately equal to an average
maturity of 20 years. The total rate of return is expected to be more
volatile than that of short- and intermediate-term bond funds, due to
the risk involved with longer duration investments. The Fund is managed
by Pacific Investment Management Company.
Fidelity Balanced Fund: The Balanced Fund is a growth and income mutual
fund that seeks the highest amount of income possible while still
preserving its capital investment. The Fund invests in a broadly
diversified (domestic and foreign) portfolio of high-yielding
securities, including common stocks, preferred stocks and bonds. At
least 25% of the Balanced Fund's assets are always invested in
fixed-income securities.
Fidelity Equity Income Fund: The Equity Income Fund is a growth and
income mutual fund, that seeks to provide income while considering the
potential for capital appreciation while providing a yield that exceeds
5
<PAGE> 7
the yield of the S&P 500 Index. The Fund invests at least 65% of total
assets in income producing equity securities (large cap stocks). In
addition the Fund may invest in other types of equity and debt
securities, including lower quality debt securities.
Fidelity Growth & Income Portfolio: The 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 is primarily 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.
Fidelity Spartan U.S. Equity Index Fund: The Spartan U.S. Equity Index
Fund 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 Fund invests primarily in the common stock
of the 500 companies that make up the S&P.
PIMCO StocksPlus Fund: The Stocks Plus Fund is a growth and income fund
that seeks a total return which exceeds that of the S&P 500. The Fund
invests in S&P 500 Index securities (primarily futures contracts)
backed by a portfolio of fixed income instruments. The fund also can
invest in the common stocks that comprise the S&P 500. The Fund is
managed by Pacific Investment Management Company.
Fidelity Magellan Fund: The 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.
Fidelity Contrafund: The Contrafund seeks capital appreciation by
investing primarily in undervalued domestic and foreign stocks. These
companies may have favorable long-term outlooks due to termination of
unprofitable operations, changes in management, industry or products,
or possible mergers and acquisitions. A substantial portion of the
portfolio is invested in medium- to small-capitalization stocks.
Fidelity Growth Company Fund: The Growth Company Fund focuses on
capital appreciation by investing primarily in common stocks with
above-average growth characteristics. Investments include both foreign
and domestic securities. Growth can be measured by earnings or gross
sales.
Vanguard U.S. Growth Fund: The U.S. Growth Fund is a growth stock
mutual fund, that invests in stocks of high quality, seasoned primarily
U.S. companies with records of exceptional growth and above-average
growth. The companies usually have market values well above $1 billion
each and typically have strong positions in their markets, reasonable
financial strength and low sensitivity to changing economic conditions.
The Fund is managed by Lincoln Capital Management.
Fidelity Overseas Fund: The 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 of North America. Currency hedging is permitted.
Effective June 1, 2000, a 1% redemption fee will be charged on shares
held less than 30 days.
Fidelity Europe Fund: The Europe Fund seeks long-term capital growth by
investing primarily in companies that have their principal activities
in Europe. Normally, the Fund intends to maintain investments in at
least three different countries, though it may at times invest all of
its assets in a single country. A 1% redemption fee will be charged for
shares held less than 30 days.
Fidelity Pacific Basin Fund: The Pacific Basin Fund seeks long-term
growth of capital by investing in companies in the Pacific Basin. The
Fund will generally be invested in at least three different countries,
although it may at times invest all of its assets in one country. (It
normally invests a significant percentage of its assets in Japan.) A
1.5% redemption fee will be charged for shares held less than 90 days.
Unless otherwise indicated, the mutual funds are managed by Fidelity Management
and Research Company. Fidelity is the Trustee of the Plan assets.
6
<PAGE> 8
Employees may deposit up to 6% of their monthly base pay, subject to
IRS limitations, in the various investment funds, and Columbia will match such
deposits at various levels. Columbia's contributions are invested in the
Columbia Stock Fund except for employees age 50 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 13% of their monthly
base pay, subject to IRS limitations, 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. Such withdrawals are subject to a 10%
excise tax. 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 again.
The administrative expenses of the Plan are paid by the participating
subsidiaries of Columbia. Administrative fees relating to participant loans are
borne by the participants.
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 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, 1999 December 31, 1998
Share/Unit Shares/ Share/Unit Shares/
Value Units Value Units
----- ----- ----- -----
($) ($)
<S> <C> <C> <C> <C>
Columbia Stock Fund 36.37 9,733,767 32.77 10,652,948
Retirement Money Market Portfolio 1.00 69,587,307 1.00 58,762,865
Magellan Fund 136.63 387,188 120.82 332,454
Contrafund 60.02 552,033 56.79 448,703
Equity Income Fund 53.48 5,313 n/a n/a
Growth Company Fund 84.30 372,461 51.02 265,784
Growth & Income Portfolio 47.16 1,322,106 45.84 1,375,898
Intermediate Bond Fund 9.76 3,428,723 10.27 3,449,761
Overseas Fund 48.01 239,901 35.98 244,353
Europe Fund 37.47 155,866 33.48 208,910
Pacific Basin Fund 28.74 169,935 13.22 108,625
Balanced Fund 15.36 1,295,282 16.36 1,205,645
Capital Appreciation Fund n/a n/a 22.07 225,103
Short-Term Bond Fund n/a n/a 8.71 420,908
Spartan U.S. Equity Index Fund 52.09 1,917,740 43.96 1,934,846
PIMCO Total Return Institutional 9.90 63,726 n/a n/a
PIMCO Long-Term Government 9.36 22,454 n/a n/a
PIMCO Low Duration Institutional 9.84 401,297 n/a n/a
PIMCO StocksPlus Institutional 13.95 96,111 n/a n/a
Vanguard US Growth Fund 43.53 33,019 n/a n/a
</TABLE>
N/a - Not Applicable
As of December 31, 1999 and 1998, the only individual security held by
the Plan in excess of 5% of net assets was Columbia Common Stock, 5,458,447
shares valued at $345,246,773 and 5,994,278 shares valued at $346,169,555,
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.
7
<PAGE> 9
2. Summary of Significant Accounting Policies
(A) Valuation of investments.
The assets of the Plan are reflected in the accompanying Statements of
Net Assets Available for Benefits based on quoted market prices and per share
net asset value.
(B) Basis of accounting.
The accompanying financial statements have been prepared on an accrual
basis as of December 31, 1999 and December 31, 1998.
(C) Net realized gain (loss) on securities sold or distributed.
The cost of securities sold or distributed is determined on
the revalued cost of assets basis, whereby the cost of assets is adjusted to
reflect the market value of assets as of the prior year-end. The Plan recognized
gains and losses on the sale of securities and the distribution of Columbia
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, 1999.
(D) Unrealized appreciation (depreciation) of investments.
Fidelity 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 and market value of assets at
December 31, 1999.
(E) Financial derivatives
Plan assets are invested through seventeen mutual funds, any
of which could, from time-to-time, utilize financial derivatives. Generally
Accepted Accounting Principles require the investment managers of such funds to
list in their financial statements the amount and purpose of any such
derivatives. Participants are provided with copies of the mutual funds'
financial statements directly from Fidelity on a regular basis and should refer
to these for information on this issue. Generally speaking, the investment
managers use derivatives to hedge against certain unwanted actions, e.g.,
changes in interest rates and in foreign currency.
3. Participating Companies
The names of the participating companies as of December 31,
1999 with contributions for the year then ended are shown below:
<TABLE>
<CAPTION>
Employer
Contributions
-------------
<S> <C>
Columbia Gas Transmission Corp..................... $ 3,596,690
Columbia Gas of Kentucky, Inc. .................... 370,545
Columbia Gas of Maryland, Inc. .................... 118,699
Columbia Gas of Ohio, Inc. ........................ 3,310,767
Columbia Gas of Pennsylvania, Inc. ................ 1,109,131
Columbia Energy Group Service Corp. ............... 818,905
Columbia Gulf Transmission Company................. 850,867
Columbia Propane Corp. ............................ 391,987
Columbia LNG Corp. ................................ 60,569
Columbia Natural Resources, Inc. .................. 567,830
Columbia Gas of Virginia, Inc. .................... 487,904
Columbia Electric Corp. ........................... 55,332
Columbia Energy Services........................... 532,958
Columbia Network Services.......................... 13,812
-----------
Total.......................................... $12,285,996
===========
</TABLE>
8
<PAGE> 10
4. Confederation Life Guaranteed Investment Contract
On August 12, 1994, Canadian and Michigan regulators froze the
Confederation Life Insurance Company Guaranteed Investment Contract (GIC). In
order to provide liquidity to Plan participants who had invested in the
Retirement Money Market/GIC Fund, on September 20, 1995 Columbia Energy Group
and Columbia Gas Transmission (TCO) lent monies to the Plan. On July 29, 1998,
these loans were satisfied. Under the terms of the loans, once the principal was
paid in full to Columbia and TCO, the excess monies received on account of the
Confederation Life GIC is to be paid to Plan participants who had investments in
the Money Market/GIC Fund on August 12, 1994. An initial payment of $273,485 was
received on July 29, 1998. A final payment totaling $377,760 was received by
Fidelity on December 21, 1998. These monies were allocated to participants'
accounts on January 5, 1999.
5. Tax Status
See "Federal Tax Consequences" located elsewhere in this document for a
general discussion of the impact of taxes on the participant.
The Plan received a favorable determination letter, dated November 28,
1990, from the Internal Revenue Service in which it ruled that the Plan is in
compliance with Sections 401(a) and 401(k) and the related Trust is exempt from
taxation under Section 501(a) of the Internal Revenue Code (IRC). The Company is
of the opinion that the Plan, as amended, meets the IRC requirements and,
therefore, continues to be tax-qualified and tax-exempt.
6. Other
The accompanying Schedules A and B reflect additional detail by Fund of
the Statements of Net Assets Available for Benefits for the years ended December
31, 1999 and December 31, 1998 and Statement of Changes in Net Assets Available
for Benefits for the year ended December 31, 1999.
9
<PAGE> 11
Schedule A (Page 1 of 2)
EMPLOYEES' THRIFT PLAN OF COLUMBIA ENERGY GROUP
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Assets
-------------------------------------------------------------
Employer Participant
12/31/99 Contributions Deposits Total
Investments Market Value Receivable Receivable Net Assets
----------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C>
Columbia Stock Fund $354,107,640 $726,500 $274,911 $355,109,051
Mutual Funds:
Retirement Money Market Portfolio 69,587,307 8,002 161,088 69,756,397
Magellan Fund 52,901,489 6,482 203,147 53,111,118
Contrafund 33,132,991 2,956 127,053 33,263,000
Equity Income Fund 284,164 112 2,735 287,011
Growth Company Fund 31,398,501 4,327 99,616 31,502,444
Growth & Income Portfolio 62,350,522 6,375 210,542 62,567,439
Intermediate Bond Fund 33,464,339 1,717 82,979 33,549,035
Overseas Fund 11,517,661 681 37,332 11,555,674
Europe Fund 5,840,300 906 21,279 5,862,485
Pacific Basin Fund 4,883,920 909 17,297 4,902,126
Balanced Fund 19,895,539 5,403 82,659 19,983,601
Spartan U.S. Equity Index Fund 99,895,057 6,506 226,710 100,128,273
Pimco Tot Return 630,888 282 2,128 633,298
Pimco Long Term Government 210,167 22 482 210,671
Pimco Low Duration 3,948,759 454 14,031 3,963,244
Pimco StkPlus Inst 1,340,746 556 6,187 1,347,489
Vanguard US Growth 1,437,319 365 10,759 1,448,443
Loans to Participants 10,931,038 10,931,038
TOTAL $797,758,347 $772,555 $1,580,935 $800,111,837
</TABLE>
10
<PAGE> 12
Schedule A (Page 2 of 2)
EMPLOYEES' THRIFT PLAN OF COLUMBIA ENERGY GROUP
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
ASSETS
--------------------------------------------------------------
EMPLOYER PARTICIPANT
12/31/98 CONTRIBUTIONS DEPOSITS TOTAL
INVESTMENTS MARKET VALUE RECEIVABLE RECEIVABLE NET ASSETS
----------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C>
COLUMBIA STOCK FUND 349,100,301 662,050 273,641 350,035,992
FIDELITY MUTUAL FUNDS:
RETIREMENT MONEY MARKET PORTFOLIO 58,762,865 11,054 146,940 58,920,859
MAGELLAN FUND 40,167,065 3,112 160,007 40,330,184
CONTRAFUND 25,481,841 2,278 100,988 25,585,107
GROWTH COMPANY FUND 13,560,277 2,554 57,236 13,620,067
GROWTH & INCOME PORTFOLIO 63,071,162 5,014 199,721 63,275,897
INTERMEDIATE BOND FUND 35,429,049 887 86,845 35,516,781
OVERSEAS FUND 8,791,851 821 37,784 8,830,456
EUROPE FUND 6,994,294 764 23,328 7,018,386
PACIFIC BASIN FUND 1,436,029 232 9,225 1,445,486
BALANCED FUND 19,724,355 2,917 59,757 19,787,029
CAPITAL APPRECIATION FUND 4,968,029 1,217 23,073 4,992,319
SHORT-TERM BOND FUND 3,666,107 382 13,669 3,680,158
SPARTAN U.S. EQUITY INDEX FUND 85,055,824 3,601 169,928 85,229,353
CONFEDERATION LIFE 377,760 377,760
LOANS TO PARTICIPANTS 10,348,004 10,348,004
TOTAL 726,934,813 696,883 1,362,142 728,993,838
</TABLE>
11
<PAGE> 13
Schedule B
(Page 1 of 3)
EMPLOYEES' THRIFT PLAN OF COLUMBIA ENERGY GROUP
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
COLUMBIA STOCK RETIREMENT
TOTAL FUND MONEY MARKET MAGELLAN CONTRAFUND
<S> <C> <C> <C> <C> <C>
Net Assets Beginning of Year 728,993,838 350,035,992 58,920,859 40,330,184 25,585,107
Net Investment Income 32,760,502 5,314,476 3,477,254 4,267,126 4,934,547
Net Realized Gain/(Loss) on 60,262,429 40,783,231 -- 2,428,891 1,346,187
Securities Sold or
Distributed
Net Change Unrealized 12,450,322 (6,897,563) -- 3,525,424 280,235
Appreciation/(Depreciation)
of Investments
Participants' Deposits 28,392,526 5,367,874 3,177,651 3,580,382 2,279,564
Columbia Contributions 12,285,996 11,735,970 91,180 71,681 40,187
Distributions to Participants (75,462,611) (24,149,293) (21,057,924) (3,319,133) (2,549,974)
Interfund Exchanges -- (27,817,075) 25,477,272 2,258,219 1,317,278
Loan Activity 428,835 735,439 (329,895) (31,656) 29,869
Net Assets, End of Year 800,111,837 355,109,051 69,756,397 53,111,118 33,263,000
</TABLE>
<TABLE>
<CAPTION>
GROWTH GROWTH &
EQUITY COMPANY INCOME
<S> <C> <C> <C>
Net Assets Beginning of Year -- 13,620,067 63,275,897
Net Investment Income 17,715 2,143,193 4,406,409
Net Realized Gain/(Loss) on 7,484 1,068,573 4,491,304
Securities Sold or
Distributed
Net Change Unrealized (13,240) 9,548,886 (2,790,753)
Appreciation/(Depreciation)
of Investments
Participants' Deposits 7,080 1,633,821 3,794,096
Columbia Contributions 553 42,854 85,932
Distributions to Participants -- (1,393,172) (6,016,805)
Interfund Exchanges 267,235 4,847,384 (4,306,444)
Loan Activity 184 (9,162) (372,197)
Net Assets, End of Year 287,011 31,502,444 62,567,439
</TABLE>
12
<PAGE> 14
Schedule B
(Page 2 of 3)
EMPLOYEES' THRIFT PLAN OF COLUMBIA ENERGY GROUP
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
INTERMEDIATE PACIFIC
BOND OVERSEAS EUROPE BASIN BALANCED
<S> <C> <C> <C> <C> <C>
Net Assets, Beginning of 35,516,781 8,830,456 7,018,386 1,445,486 19,787,029
Year
Net Investment Income 2,073,818 700,893 313,017 43,918 2,915,495
Net Realized Gain/(Loss) (211,666) 491,132 205,225 274,937 572,186
on Securities Sold or
Distributed
Net Change Unrealized (1,532,201) 2,357,651 365,518 1,861,668 (1,867,874)
Appreciation/(Depreciation)
of Investments
Participants' Deposits 1,450,421 597,077 382,269 191,811 1,458,968
Columbia Contributions 20,685 12,798 11,082 6,731 57,273
Distributions to Participants (2,828,819) (783,918) (701,306) (285,160) (3,014,524)
Interfund Exchanges (871,764) (705,277) (1,757,064) 1,358,872 146,961
Loan Activity (68,220) 54,862 25,358 3,863 (71,913)
Net Assets, End of Year 33,549,035 11,555,674 5,862,485 4,902,126 19,983,601
</TABLE>
<TABLE>
<CAPTION>
SPARTAN PIMCO PIMCO
CAPITAL SHORT-TERM U.S. EQUITY TOT L-T
APPRECIATION BOND INDEX RETURN GOVT
<S> <C> <C> <C> <C> <C>
Net Assets, Beginning of 4,992,319 3,680,158 85,229,353 -0- -0-
Year
Net Investment Income -- 170,868 1,663,195 6,801 2,136
Net Realized Gain/(Loss) 1,236,110 (83,932) 7,645,746 (32) (631)
on Securities Sold or
Distributed
Net Change Unrealized (598,533) 19,646 8,197,019 (6,448) (4,873)
Appreciation/(Depreciation)
of Investments
Participants' Deposits 508,939 229,393 3,580,517 10,264 1,456
Columbia Contributions 16,848 7,747 78,483 545 482
Distributions to Participants (361,295) (250,309) (8,666,394) -- --
Interfund Exchanges (5,799,113) (3,745,200) 2,495,293 622,161 211,691
Loan Activity 4,725 (28,371) (94,939) 7 410
Net Assets, End of Year 0 0 100,128,273 633,298 210,671
</TABLE>
13
<PAGE> 15
Schedule B
(Page 3 of 3)
EMPLOYEES' THRIFT PLAN OF COLUMBIA ENERGY GROUP
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
PIMCO PIMCO CONFEDERATION
LOW STKPLUS VANGUARD LOAN LIFE
DURATION I INST US GROWTH ACTIVITY RECEIVABLE
<S> <C> <C> <C> <C> <C>
Net Assets, Beginning of -- -- -- 10,348,004 377,760
Year
Net Investment Income 71,401 176,596 61,644 -- --
Net Realized Gain/(Loss) (7,266) 7,802 7,148 -- --
On Securities Sold or
Distributed
Net Change Unrealized (24,912) (51,206) 81,878 -- --
Appreciation/(Depreciation)
of Investments
Participants' Deposits 77,371 18,364 45,208 -- --
Columbia Contributions 2,781 1,364 820 -- --
Distributions to Participants (81,662) -- (2,923) -- --
Interfund Exchanges 3,924,476 1,199,273 1,253,582 -- (377,760)
Loan Activity 1,055 (4,704) 1,086 583,034 --
Net Assets, End of Year 3,963,244 1,347,489 1,448,443 10,931,038 0
</TABLE>
14
<PAGE> 16
Employer ID#: 13-1594808
Plan #: 002
EMPLOYEES' THRIFT PLAN OF COLUMBIA ENERGY GROUP
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (SCHEDULE H, PART IV (I))
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Identity of Issuer,
Borrower, Lessor,
or Similar Party* Description of Investment Value
----------------- ------------------------- -----
<S> <C> <C>
Columbia 9,733,767 units of Columbia Stock Fund(1) (2) $354,107,640
Fidelity 69,587,307 shares of Retirement Money Market Portfolio 69,587,307
Fidelity 387,188 shares of Magellan Fund 52,901,489
Fidelity 552,033 shares of Contrafund 33,132,991
Fidelity 5,313 shares of Equity Income Fund 284,164
Fidelity 372,461 shares of Growth Company Fund 31,398,501
Fidelity 1,322,106 shares of Growth & Income Portfolio 62,350,522
Fidelity 3,428,723 shares of Intermediate Bond Fund 33,464,339
Fidelity 239,901 shares of Overseas Fund 11,517,661
Fidelity 155,866 shares of Europe Fund 5,840,300
Fidelity 169,935 shares of Pacific Basin Fund 4,883,920
Fidelity 1,295,282 shares of Balanced Fund 19,895,539
Fidelity 1,917,740 shares of Spartan U.S. Equity Index Fund 99,895,057
Fidelity 63,726 shares of PIMCO Total Return Institutional 630,888
Fidelity 22,454 shares of PIMCO Long-Term Government 210,167
Fidelity 401,297 shares of PIMCO Low Duration Institutional 3,948,759
Fidelity 96,111 shares of PIMCO StocksPlus Institutional 1,340,746
Fidelity 33,019 shares of Vanguard US Growth Fund 1,437, 319
Participants Loans to Participants 10,931,038
------------
TOTAL THRIFT PLAN $797,758,347
============
</TABLE>
* All parties listed are considered parties-in-interest.
(1) Actual shares of Columbia Energy Group Common Stock held
equals 5,458,447, valued at $345,246,773.
(2) Records are maintained by Fidelity on a fair market value
basis; therefore, historical cost basis information is not
available
15
<PAGE> 17
Employer ID#: 13-1594808 Plan #: 002
EMPLOYEES' THRIFT PLAN OF COLUMBIA ENERGY GROUP
Schedule of Reportable Transactions (Schedule H, Part IV, (j))
Individual Transactions By Issue
For The Year Ended December 31, 1999
<TABLE>
<CAPTION>
Current Value of
Identity Description Purchase Selling Transaction Cost of Asset on Transaction Net Gain
of Party of Asset Price Price Expense Asset Date (Loss)
-------- --------- ------ ------ ------- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
No Reportable Transactions
NOTE: There were no lease rentals during the year.
16
<PAGE> 18
Employer ID#:13-1594808
Plan #: 002
EMPLOYEES' THRIFT PLAN OF COLUMBIA ENERGY GROUP
Schedule of Reportable Transactions (Schedule H, Part IV, (j))
Cumulative Transactions By Issue
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Identity Description Total Transaction
of Party* of Asset Purchases Total Sales Expenses Cost of Asset
--------- -------- --------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C>
Columbia Columbia Stock Fund $74,785,229 -- $74,785,229
Columbia Columbia Stock Fund -- 108,971,175 (1)
Fidelity Magellan 22,897,993 -- 22,897,993
Fidelity Magellan -- 16,117,885 (1)
Fidelity Growth & Income Fund 18,294,498 -- 18,294,498
Fidelity Growth & Income Fund -- 20,715,689 (1)
Fidelity Retirement Money Market
Fund 88,459,999 -- 88,459,999
Fidelity Retirement Money Market
Fund -- 77,635,557 (1)
Fidelity Spartan U. S. Equity Index
Fund 21,204,047 -- 21,204,047
Fidelity Spartan U.S. Equity Index
Fund 22,207,579 (1)
</TABLE>
<TABLE>
<CAPTION>
Identity Current Value of
of Party* Asset on Transaction Date Net Gain or Loss
--------- ------------------------- ----------------
<S> <C> <C>
Columbia $ 74,785,229 --
Columbia 108,971,175 40,256,646
Fidelity 22,897,993 --
Fidelity 16,117,885 2,428,891
Fidelity 18,294,498 --
Fidelity 20,715,689 4,491,304
Fidelity
88,459,999 --
Fidelity
77,635,557 --
Fidelity
21,204,047 --
Fidelity
22,207,579 7,645,746
</TABLE>
* All parties listed are considered parties-in-interest.
(1) Records are maintained by Fidelity; historical cost information
unavailable.
Note: There were no lease rentals during the year.
17
<PAGE> 19
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K, into the Company's previously filed Form S-8
Registration Statement File No. 33-42776.
ARTHUR ANDERSEN LLP
New York, New York,
June 29, 2000
18
<PAGE> 20
FEDERAL TAX CONSEQUENCES
(Unaudited)
NOTE: THE INFORMATION PROVIDED HEREIN IS INTENDED TO PROVIDE GENERAL INFORMATION
REGARDING THE FEDERAL TAX TREATMENT OF AN INDIVIDUAL'S WITHDRAWALS OF FUNDS FROM
THE PLAN. THE INFORMATION IS BASED ON CURRENT INTERNAL REVENUE CODE PROVISIONS
AND REGULATIONS IN EFFECT AS OF 1/1/99 AND DOES NOT ADDRESS ANY STATE AND LOCAL
TAX CONSEQUENCES OF PLAN WITHDRAWALS.
PARTICIPANTS ARE URGED TO CONSULT WITH THEIR PERSONAL TAX ADVISOR
BEFORE MAKING PLAN WITHDRAWALS.
Tax Treatment of Distributions and Withdrawals
If a participant withdraws money from the Plan, some or all of the participant's
withdrawal may be taxed. To the extent that any taxable money is sent directly
to the participant, the Trustee is required to withhold 20% of the taxable
amount to meet Federal tax requirements. A participant can avoid the 20% Federal
withholding requirement by requesting a direct rollover of all or part of the
taxable portion of the participant's withdrawal and distribution to an
Individual Retirement Account (IRA) or to another tax-qualified plan.
In addition to ordinary income taxes, a 10% additional income tax may be imposed
on the taxable portion of a participant's distribution unless:
- the participant is age 55 or older in the year he or she terminates
employment with Columbia,
- the participant is age 59 or over when he or she receives the
distribution,
- the withdrawal is due to disability or death,
- the withdrawal is used to pay unreimbursed medical expenses,
- payment is made to an alternate payee under a QDRO, or
- the withdrawal is rolled over directly to an Individual Retirement
Account (IRA) or another qualified plan.
Tax Treatment of Withdrawals
The following withdrawals are 100% taxable, even for hardship:
- Company contributions and their earnings,
- a participant's savings in a before-tax account and their earnings,
- earnings on a participant's Rollover Contributions, lump sum and
after-tax deposits, and
- a participant's Rollover Contribution deposits.
All of a participant's after-tax deposits made to the Plan before January 1,
1987 can be withdrawn during active employment for any reason with no taxes
applied to the withdrawal.
19
<PAGE> 21
A participant's after-tax deposits made to the Plan after December 31, 1986 can
also be withdrawn for any reason, but such withdrawals are not tax free. Once a
participant has withdrawn all pre-1987 after-tax contributions, a portion of
each subsequent withdrawal from the participant's after-tax account will be
considered investment earnings, and will be taxable. The amount of your
withdrawal that is considered a return of the participant's after-tax savings,
and consequently non-taxable, will be determined as follows:
Total remaining savings before a participant's withdrawal in his or her
after-tax account contributed after December 31, 1986 divided by total remaining
savings in his or her after-tax account contributed after December 31, 1986,
plus his or her investment earnings multiplied by the total amount of the
withdrawal equals non-taxable portion of the participant's withdrawal.
<TABLE>
<S> <C>
For example:
- If savings in a participant's after-tax account
contributed after 12/31/86 equals $3,000
- And the investment earnings since 12/31/86 equals $1,000
- The total of the after-tax savings contributed after
12/31/86 plus investment earnings equals $4,000
- And the withdrawal equals $1,000
- 3/4 of the withdrawal will not be taxable ($3,000/$4,000);
1/4 of the withdrawal will be taxable
- Non-taxable amount equals $ 750
- Taxable amount equals $ 250
</TABLE>
In other words, in the above example, if a participant withdraws $1,000 from his
or her after-tax account that he or she contributed to the Plan after December
31, 1986, $750 would not be taxable; $250 would be considered by the IRS to be a
return of investment earnings and subject to regular income tax, the 20%
withholding requirement and possibly the 10% additional tax.
Tax Treatment of Withdrawals from a Participant's Before-Tax Account
A participant's before-tax contributions are not taxed when they go into his or
her account, rather they are fully taxed when withdrawn. If a participant
withdraws money from his or her account during active employment, the money will
be added to his or her other income for that year and taxed at the participant's
applicable income tax rate. Withdrawals during active employment may also be
subject to a 10% additional tax over and above any regular income taxes due,
unless a participant meets any of the conditions previously listed under Tax
Treatment of Distributions and Withdrawals. Loans from a participant's
before-tax account are not taxable.
If the withdrawal is payable to a participant, the withholding requirements
discussed previously apply. A participant can avoid the Federal withholding
requirement by requesting a direct transfer rollover to an IRA or another
tax-qualified plan.
Possible Tax Advantages When Receiving a Lump Sum Distribution
If a participant receives a lump sum distribution of his or her account, he or
she may be able to defer or reduce their tax liability.
20
<PAGE> 22
In general, a participant can use only one of the following tax advantages:
1. Deferral of tax liability
If a participant leaves the Company and receives a withdrawal from his or her
account, he or she may want to consider rolling all or part of the taxable
amount into an IRA or into another employer's tax qualified plan. By doing so,
the participant can continue to defer paying taxes on the money. If the
distribution of the account would otherwise be subject to the 10% additional
tax, this approach would also let the participant avoid paying this additional
tax if he or she leaves their money in the IRA or other plan until they are age
59.
2. Reduction of tax liability
If a participant takes a lump sum distribution of his or her account, he or she
may be entitled to special tax treatment such as five-year or ten-year averaging
or long-term capital gains treatment.
If the participant was younger than 50 years old on January 1, 1986, five-year
averaging tax treatment is currently available only once, and only if:
- the entire account balance is paid to the participant in one tax year
after age 59 and
- the individual was a Plan participant for five or more years.
Under five-year averaging, the lump sum distribution is taxed in one year as if
the participant had received it over five years and as if he or she had no other
income during that time. The tax rate used is the one effective during the year
the participant receives the distribution.
If a participant was age 50 or over as of January 1, 1986, he or she is
grandfathered under pre-1987 tax laws. This means that if the participant
receives the entire balance of his or her account in one tax year, he or she
will have a choice of:
- ten-year averaging under 1986 tax rates, or
- five-year averaging under the rates prevailing in the year he or she
receives the money.
If a participant is grandfathered, he or she can use five-year or ten-year
averaging at any time, but whichever method he or she chooses can only be used
once. The participant can choose whichever method is best for him or her.
However, to use either averaging method, he or she must have been a Plan
participant for five or more years.
21
<PAGE> 23
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 ENERGY GROUP
By /s/ M.W. O'Donnell
---------------------
M.W. O'Donnell
Member, Thrift Plan Committee
June 29, 2000
22
