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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 21, 1998
CONSOLIDATED NATURAL GAS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-3196 13-0596475
(State of incorporation) (Commission (IRS Employer
File Number) Identification No.)
CNG Tower, 625 Liberty Avenue, Pittsburgh, PA 15222-3199
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (412) 690-1000
Not Applicable
(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
On April 21, 1998, Consolidated Natural Gas Company issued a press release
concerning its discontinuance of wholesale marketing and trading of natural
gas and electricity, including integrated energy management. A copy of the
press release is hereby incorporated by reference and made a part of this
filing as Exhibit 1 hereto.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONSOLIDATED NATURAL GAS COMPANY
________________________________
(Registrant)
By D. M. WESTFALL
______________________________
(D. M. Westfall)
Senior Vice President
April 21, 1998 and Chief Financial Officer
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Exhibit 1
for further information: Cynthia Navadeh
412-690-1442
Consolidated Natural Gas Will Focus on Retail Energy Marketing
and Exit Wholesale Business
- - Company will cease wholesale energy marketing and trading
- - Discontinued operation to result in first-quarter charge
estimated at $55 million to $75 million pretax
- - Existing commitments to customers and suppliers will be honored
PITTSBURGH, April 21, 1998 - Consolidated Natural Gas Company said today
it will concentrate its unregulated energy marketing activities on retail
customers and will discontinue wholesale marketing and trading of natural gas
and electricity, including integrated energy management.
The cost of exiting the unregulated wholesale energy marketing
operations will result in a pretax charge against first-quarter earnings that
is estimated to range from $55 million to $75 million. The company will
publicly report first-quarter earnings on April 30. It will no longer report
financial results for energy marketing services as a separate segment.
All existing customer and supplier commitments will be honored as the
company conducts an orderly transition from the wholesale business. The
company will close offices in suburban Pittsburgh and in Norwalk, Conn.
Layoffs are expected to total about 125. Employees who work for the company's
retail energy marketing business will not be affected.
CNG will continue to compete in the unregulated retail marketplace.
Doing business as Peoples Plus and East Ohio Energy, the company sells
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competitively priced natural gas and electricity and other products and
services to homeowners and small businesses in Pennsylvania and Ohio.
"Within the growing competitive marketplace for energy, we believe the
best prospects for profitable growth are occurring on the retail side, and we
intend to continue to build on our very strong position in this part of the
business," said George A. Davidson, Jr., chairman and chief executive officer.
"CNG already is the largest non-utility retail energy marketer in the U.S.
"We do not see the same opportunities to build shareholder value in
wholesale marketing and trading, despite our determined efforts over the last
five years. Wholesale margins across the industry have been driven to
virtually zero," Mr. Davidson said. "We believe that the time, cost and risk
involved in further scaling up a wholesale marketing and trading company at
this stage of market maturity are too great to justify, given the potential
rewards.
"We therefore have decided to devote our attention and resources to
other opportunities that will better enable us to meet our five-year goals of
increasing income by an average of 10 percent a year and obtaining half our
income from exploration and production, international and retail energy
marketing operations."
Consolidated Natural Gas Company is one of the nation's largest
producers, transporters, distributors and retail marketers of natural gas. The
company's natural gas transmission and distribution operations serve customers
in Ohio, Pennsylvania, Virginia, West Virginia, New York and other states in
the Northeast and Mid-Atlantic regions. CNG explores for and produces natural
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gas and oil in the United States and Canada. The company also selectively
participates in energy businesses abroad.
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This press release contains forward-looking statements. The company wishes to
caution readers that the assumptions which form the basis for forward-looking
statements with respect to or that may impact earnings for fiscal 1998, and
thereafter, include many factors that are beyond the company's ability to
control or estimate precisely, such as estimates of future market conditions
and the behavior of other market participants. Other factors include, but are
not limited to, weather conditions, economic conditions in the company's
service territory, fluctuations in energy-related commodity prices, conversion
activity, other marketing efforts and other uncertainties.
CNG's recent news releases are available 24 hours a day on the Internet, by
fax machine, or by voice recording. On the Internet, use CNG's web site:
www.cng.com For faxing, call 1-800-758-5804 on a touch-tone phone and enter
CNG's company extension, which is 203456. From a menu, you will then be able
to select releases that will be faxed to you immediately without charge. For
voice recordings, call 1-888-CNG-NEWS. This line is toll-free.
