<PAGE> 1
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEARS ENDED JUNE 30, 1998 AND 1997
COMMISSION FILE NUMBER 1-3196
------------------------
THRIFT PLANS
OF
CONSOLIDATED NATURAL GAS COMPANY
AND
ITS PARTICIPATING SUBSIDIARIES
(FULL TITLE OF THE PLAN)
------------------------
CONSOLIDATED NATURAL GAS COMPANY
(NAME OF ISSUER OF THE SECURITIES)
CNG TOWER, 625 LIBERTY AVENUE
PITTSBURGH, PENNSYLVANIA 15222-3199
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
===============================================================================
<PAGE> 2
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY
AND ITS PARTICIPATING SUBSIDIARIES
FORM 11-K ANNUAL REPORT
FOR THE FISCAL YEARS ENDED JUNE 30, 1998 AND 1997
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants.........................................................................1
Financial Statements
Consolidated Statement of Net Assets Available for Benefits with
Fund Information - June 30, 1998 .....................................................................2
Consolidated Statement of Net Assets Available for Benefits with
Fund Information - June 30, 1997 .....................................................................5
Consolidated Statement of Changes in Net Assets Available for Benefits with
Fund Information - June 30, 1998 .....................................................................8
Consolidated Statement of Changes in Net Assets Available for Benefits with
Fund Information - June 30, 1997 .....................................................................11
Notes to Consolidated Financial Statements ...............................................................14
Additional Information
Schedule of Assets Held for Investment Purposes ......................................................Schedule I
Schedule of Reportable Transactions ..................................................................Schedule II
Schedule of Non-Exempt Transactions ..................................................................Schedule III
</TABLE>
<PAGE> 3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Plan Administrator and the
Participants of the Thrift Plans of
Consolidated Natural Gas Company and
Its Participating Subsidiaries
In our opinion, the consolidated financial statements as listed in the
accompanying index present fairly, in all material respects, the consolidated
net assets available for benefits of the Thrift Plans of Consolidated Natural
Gas Company and Its Participating Subsidiaries (the "Thrift Plans") at June 30,
1998 and 1997 and the consolidated changes in net assets available for benefits
for the years then ended, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Plans'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedules I, II and III is presented for purposes of additional analysis and is
not a required part of the basic financial statements but is additional
information required by the Employee Retirement Income Security Act of 1974. The
Fund Information in the consolidated statements of net assets available for
benefits and the consolidated statements of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for benefits and the changes in net assets available
for benefits of each fund or thrift trust. Schedules I, II and III and the Fund
Information 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.
PricewaterhouseCoopers LLP
600 Grant Street
Pittsburgh, Pennsylvania 15219
January 11, 1999
1
<PAGE> 4
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
CONSOLIDATED STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
AT JUNE 30, 1998
<TABLE>
<CAPTION>
GENERAL AND SHORT-TERM
THRIFT TRUSTS
-----------------------------------------
Consolidated Cash
Natural Gas (General
Company Investments
Common and Money Funds
Stock Fund Market Funds) Combined
------------ ------------ -----------
<S> <C> <C> <C>
Assets:
Cash ...................................... $ -- $ 44,595 $ 44,595
Consolidated Natural Gas Company
common stock, at market .................. 189,519 -- 189,519
Temporary investments, at cost (which
approximates market value) ................ -- 9,678,832 9,678,832
Loans to participants ..................... -- 12,665 12,665
Interest receivable ...................... -- 68,326 68,326
Contributions and loan deductions due
from employers ........................... -- 875,564 875,564
---------- ----------- -----------
TOTAL ASSETS ................ 189,519 10,679,982 10,869,501
Liabilities:
Accounts payable .......................... -- 20,691 20,691
---------- ----------- -----------
Net assets available for benefits ........ $ 189,519 $10,659,291 $10,848,810
========== =========== ===========
</TABLE>
The accompanying notes are an integral
part of these consolidated financial statements.
2
<PAGE> 5
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
CONSOLIDATED STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
AT JUNE 30, 1998
<TABLE>
<CAPTION>
Alternate and Long-Term Thrift Trusts
- -------------------------------------------------------------------------------------------------------------------------------
Consolidated Fixed
Natural Gas Dominion Diversified Investment
Company Resources Equity Cash Stable Value
Common Stock Incorporated and (General and Fixed
and CNG Common Diversified Investments Investment S&P 500 Small Stock
Stock Funds Stock Fund Funds Fund) Funds Index Fund Fund
------------- ----------- ----------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash ................ $ -- $ -- $ 57 $ 58,345 $ 33 $ -- $ --
Consolidated Natural
Gas Company common
stock, at market ... 495,847,701 -- -- -- -- -- --
Dominion Resources,
Incorporated common
stock, at market.... -- 2,143,253 -- -- -- -- --
Common stock, at
market value ....... -- -- 57,588,263 -- -- -- --
Temporary
investments, at
cost (which
approximates market
value).............. 4,445,235 -- 2,156,888 2,560,000 1,745,280 71,425 46,400
Insurance Company
Contracts, at contract
value (which approximates
market value)......... -- -- -- -- 286,745,749 -- --
Registered
Investment Company
Holdings, at market.... -- -- 2,927,983 -- -- 39,069,739 20,885,211
Common/Collective
Trusts, at market..... -- -- -- -- -- -- --
Loans to
Participants ....... -- -- -- -- -- -- --
Dividends and
interest
receivable ........ 11,172 -- 446,789 27,464 5,806 -- 35,777
Receivable from
sale of common
stock ............. -- -- 18,673 -- -- -- --
Contributions and
loan deductions due
from employers .... -- -- 448 64,530 75,886 -- --
Interfund accounts -
receivable/
(payable) ......... (559,359) (153,494) (3,611) 1,850,143 (1,025,642) -- --
------------ ---------- ----------- ----------- ------------ ----------- -----------
TOTAL ASSETS ....... 499,744,749 1,989,759 63,135,490 4,560,482 287,547,112 39,141,164 20,967,388
Liabilities:
Accounts payable.. 237 -- 1,377,373 2,418,214 -- 413,416 22,406
------------ ---------- ----------- ----------- ------------ ----------- -----------
Net assets available
for benefits....... $499,744,512 $1,989,759 $61,758,117 $ 2,142,268 $287,547,112 $38,727,748 $20,944,982
============ ========== =========== =========== ============ =========== ===========
</TABLE>
The accompanying notes are an integral
part of these consolidated financial statements.
3
<PAGE> 6
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
CONSOLIDATED STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
AT JUNE 30, 1998
<TABLE>
<CAPTION>
Alternate and Long-Term Thrift Trusts
- --------------------------------------------------------------------------------------------------------------------
Conservative Moderate Growth Total
International Intermediate Balanced Balanced Balanced Participants' Funds for all
Equity Fund Bond Fund Fund Fund Fund Loan Fund Combined Plans
----------- ----------- ------------ ----------- -------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash ................ $ -- $ -- $ -- $ -- $ -- $ -- $ 58,435 $ 103,030
Consolidated Natural
Gas Company common
stock, at market.... -- -- -- -- -- -- 495,847,701 496,037,220
Dominion Resources,
Incorporated common
stock, at market.... -- -- -- -- -- -- 2,143,253 2,143,253
Common stock, at
market value........ -- -- -- -- -- -- 57,588,263 57,588,263
Temporary
investments, at
cost (which
approximates market
value)............. 29,162 8,675 69,240 103,760 32,829 -- 11,268,894 20,947,726
Insurance Company
Contracts, at contract
value (which approximates
market value) .... -- -- -- -- -- -- 286,745,749 286,745,749
Registered
Investment Company
Holdings, at market...11,304,651 5,977,538 -- -- -- -- 80,165,122 80,165,122
Common/Collective
Trusts, at market..... -- -- 3,456,813 13,068,653 12,943,426 -- 29,468,892 29,468,892
Loans to
Participants....... -- -- -- -- -- 9,732,552 9,732,552 9,745,217
Dividends and
interest
receivable ........ -- 27,895 -- -- -- -- 554,903 623,229
Receivable from
sale of common
stock ............. -- -- -- -- -- -- 18,673 18,673
Contributions and
loan deductions due
from employers .... -- -- -- -- -- 108,037 248,901 1,124,465
Interfund accounts -
receivable/
(payable) ......... -- -- -- -- -- (108,037) -- --
----------- ---------- ---------- ----------- ----------- ---------- ------------ ------------
TOTAL ASSETS ....... 11,333,813 6,014,108 3,526,053 13,172,413 12,976,255 9,732,552 973,841,338 984,710,839
Liabilities:
Accounts payable.. 23,790 34 55,000 4,802 69,078 -- 4,384,350 4,405,041
----------- ---------- ---------- ----------- ----------- ---------- ------------ ------------
Net assets available
for benefits....... $11,310,023 $6,014,074 $3,471,053 $13,167,611 $12,907,177 $9,732,552 $969,456,988 $980,305,798
=========== ========== ========== =========== =========== ========== ============ ============
</TABLE>
The accompanying notes are an integral
part of these consolidated financial statements.
4
<PAGE> 7
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
CONSOLIDATED STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
AT JUNE 30, 1997
<TABLE>
<CAPTION>
GENERAL AND SHORT-TERM
THRIFT TRUSTS
-----------------------------------------
Consolidated Cash
Natural Gas (General
Company Investments
Common and Money Funds
Stock Fund Market Funds) Combined
------------ ------------ -----------
<S> <C> <C> <C>
Assets:
Cash ...................................... $ -- $ 53,106 $ 53,106
Consolidated Natural Gas Company
common stock, at market .................. 1,269,060 -- 1,269,060
Temporary investments, at cost (which
approximates market value) ................ -- 13,503,803 13,503,803
Loans to participants ..................... -- 12,665 12,665
Interest receivable ...................... -- 66,574 66,574
Contributions and loan deductions due
from employers ........................... -- 1,049,111 1,049,111
---------- ----------- -----------
TOTAL ASSETS ................ 1,269,060 14,685,259 15,954,319
Liabilities:
Accounts payable .......................... -- 3,874 3,874
---------- ----------- -----------
Net assets available for benefits ........ $1,269,060 $14,681,385 $15,950,445
========== =========== ===========
</TABLE>
The accompanying notes are an integral
part of these consolidated financial statements.
5
<PAGE> 8
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
CONSOLIDATED STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
AT JUNE 30, 1997
<TABLE>
<CAPTION>
Alternate and Long-Term Thrift Trusts
- -------------------------------------------------------------------------------------------------------------------------------
Consolidated Fixed
Natural Gas Dominion Diversified Investment
Company Resources Equity Cash Stable Value
Common Stock Incorporated and (General and Fixed
and CNG Common Diversified Investments Investment S&P 500 Small Stock
Stock Funds Stock Fund Funds Fund) Funds Index Fund Fund
------------- ----------- ----------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash ................ $ -- $ -- $ -- $ 1,015,908 $ -- $ -- $ --
Consolidated Natural
Gas Company common
stock, at market ... 504,116,988 -- -- -- -- -- --
Dominion Resources,
Incorporated common
stock, at market.... -- 3,033,801 -- -- -- -- --
Common stock, at
market value ....... -- -- 36,711,029 -- -- -- --
Temporary
investments, at
cost (which
approximates market
value).............. 4,142,166 -- 1,420,716 3,435,000 7,608,107 12,000 --
Insurance Company
Contracts, at contract
value (which approximates
market value)......... -- -- -- -- 277,884,686 -- --
Registered
Investment Company
Holdings, at market.... -- -- 3,219,101 -- -- 16,885,948 11,532,732
Common/Collective
Trusts, at market..... -- -- -- -- -- -- --
Loans to
Participants ....... -- -- -- -- -- -- --
Dividends and
interest
receivable ........ 14,845 -- 52,424 45,709 37,646 6,026 369
Receivable from
sale of common
stock ............. -- -- 61,750 -- -- -- --
Contributions and
loan deductions due
from employers .... -- -- -- 42,285 -- -- --
Interfund accounts -
receivable/
(payable) ......... 1,247,310 (332,450) 33,339 1,936,976 (2,570,331) -- --
------------ ---------- ----------- ----------- ------------ ----------- -----------
TOTAL ASSETS ....... 509,521,309 2,701,351 41,498,359 6,475,878 282,960,108 16,903,974 11,533,101
Liabilities:
Accounts payable.. 1,427,352 -- 144,754 2,097,259 -- -- --
------------ ---------- ----------- ----------- ------------ ----------- -----------
Net assets available
for benefits....... $508,093,957 $2,701,351 $41,353,605 $ 4,378,619 $282,960,108 $16,903,974 $11,533,101
============ ========== =========== =========== ============ =========== ===========
</TABLE>
The accompanying notes are an integral
part of these consolidated financial statements.
6
<PAGE> 9
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
CONSOLIDATED STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
AT JUNE 30, 1997
<TABLE>
<CAPTION>
Alternate and Long-Term Thrift Trusts
- --------------------------------------------------------------------------------------------------------------------
Conservative Moderate Growth Total
International Intermediate Balanced Balanced Balanced Participants' Funds for all
Equity Fund Bond Fund Fund Fund Fund Loan Fund Combined Plans
----------- ----------- ------------ ---------- -------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash ................ $ -- $ -- $ -- $ -- $ -- $ -- $ 1,015,908 $ 1,069,014
Consolidated Natural
Gas Company common
stock, at market.... -- -- -- -- -- -- 504,116,988 505,386,048
Dominion Resources,
Incorporated common
stock, at market.... -- -- -- -- -- -- 3,033,801 3,033,801
Common stock, at
market value........ -- -- -- -- -- -- 36,711,029 36,711,029
Temporary
investments, at
cost (which
approximates market
value)............. -- -- 11,750 5,600 -- -- 16,635,339 30,139,142
Insurance Company
Contracts, at contract
value (which approximates
market value) .... -- -- -- -- -- -- 277,884,686 277,884,686
Registered
Investment Company
Holdings, at market... 8,715,157 3,105,348 -- -- -- -- 43,458,286 43,458,286
Common/Collective
Trusts, at market..... -- -- 2,072,703 8,515,599 7,778,819 -- 18,367,121 18,367,121
Loans to
Participants....... -- -- -- -- -- 9,467,059 9,467,059 9,479,724
Dividends and
interest
receivable ........ 13,591 1,427 -- -- -- -- 172,037 238,611
Receivable from
sale of common
stock ............. -- -- -- -- -- -- 61,750 61,750
Contributions and
loan deductions due
from employers .... -- -- -- -- -- 314,844 357,129 1,406,240
Interfund accounts -
receivable/
(payable) ......... -- -- -- -- -- (314,844) -- --
---------- ---------- ---------- ---------- ---------- ---------- ------------ ------------
TOTAL ASSETS ....... 8,728,748 3,106,775 2,084,453 8,521,199 7,778,819 9,467,059 911,281,133 927,235,452
Liabilities:
Accounts payable.. -- -- 75,424 69,438 73,124 -- 3,887,351 3,891,225
---------- ---------- ---------- ---------- ---------- ---------- ------------ ------------
Net assets available
for benefits....... $8,728,748 $3,106,775 $2,009,029 $8,451,761 $7,705,695 $9,467,059 $907,393,782 $923,344,227
========== ========== ========== ========== ========== ========== ============ ============
</TABLE>
The accompanying notes are an integral
part of these consolidated financial statements.
7
<PAGE> 10
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
YEAR ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
GENERAL AND SHORT-TERM
THRIFT TRUSTS
---------------------------------------
Consolidated Cash
Natural Gas (General
Company Investments
Common and Money Funds
Stock Fund Market Funds) Combined
----------- ------------ -----------
<S> <C> <C> <C>
ADDITIONS
Additions to net assets attributed to:
Contributions:
From participating employees ........... $ -- $14,189,964 $14,189,964
Transfer to Long-Term Thrift Trust ......... (288,716) (266) (288,982)
Dividend income ........................... -- 12,919 12,919
Interest income ........................... -- 565,203 565,203
Net appreciation (depreciation) in fair
value of investments...................... (772,418) -- (772,418)
----------- ----------- -----------
TOTAL ADDITIONS ........... (1,061,134) 14,767,820 13,706,686
----------- ----------- -----------
DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants ............. 18,407 18,789,914 18,808,321
----------- ----------- -----------
TOTAL DEDUCTIONS .......... 18,407 18,789,914 18,808,321
----------- ----------- -----------
Net increase/(decrease) ................... (1,079,541) (4,022,094) (5,101,635)
Net assets available for benefits:
Beginning of year ......................... 1,269,060 14,681,385 15,950,445
----------- ----------- -----------
End of year ............................... $ 189,519 $10,659,291 $10,848,810
=========== =========== ===========
</TABLE>
The accompanying notes are an integral
part of these consolidated financial statements.
8
<PAGE> 11
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS WITH FUND INFORMATION
YEAR ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
Alternate and Long-Term Thrift Trusts
- -------------------------------------------------------------------------------------------------------------------------------
Consolidated Fixed
Natural Gas Dominion Diversified Investment
Company Resources Equity Cash Stable Value
Common Stock Incorporated and (General and Fixed
and CNG Common Diversified Investments Investment S&P 500 Small Stock
Stock Funds Stock Fund Funds Fund) Funds Index Fund Fund
------------- ----------- ----------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Additions to net assets
attributed to:
Contributions:
From participating
employees .......... $ -- $ -- $ -- $ -- $ -- $ -- $ --
From participating
employers .......... -- -- -- -- -- -- --
Other ............... -- -- -- -- -- -- --
------------ ----------- ----------- ----------- ------------ ----------- -----------
8,297,684 -- 3,258,706 213,537 6,246,799 3,335,313 2,760,641
Transfer from General
and Short-Term
Thrift Trusts........ 288,716 -- -- 266 -- -- --
Dividend Income:
Consolidated Natural
Gas Company
common stock ....... 14,218,160 -- 78,280 144,193 2,690,006 -- --
Other ............... 147,815 -- 819,383 17,989 -- -- 35,274
Interest income ....... 167,136 -- 126,906 196,465 18,498,688 -- --
Net appreciation
(depreciation) in
fair value of
investments .......... 40,598,206 183,411 13,346,613 -- -- 7,033,390 2,754,105
Interfund
conversions - net .... (59,291,451) (813,532) 5,837,262 6,988,174 21,431,362 13,117,829 4,794,356
------------ ----------- ----------- ----------- ------------ ----------- -----------
TOTAL ADDITIONS ... 4,426,266 (630,121) 23,467,150 7,560,624 48,866,855 23,486,532 10,344,376
------------ ----------- ----------- ----------- ------------ ----------- -----------
DEDUCTIONS
Deductions from net
assets attributed to:
Benefits paid to
participants ......... 12,775,711 81,471 3,062,638 9,796,975 44,279,851 1,662,758 932,495
------------ ----------- ----------- ----------- ------------ ----------- -----------
TOTAL DEDUCTIONS .. 12,775,711 81,471 3,062,638 9,796,975 44,279,851 1,662,758 932,495
------------ ----------- ----------- ----------- ------------ ----------- -----------
Net increase/(decrease) (8,349,445) (711,592) 20,404,512 (2,236,351) 4,587,004 21,823,774 9,411,881
Net assets available
for benefits:
Beginning of year .... 508,093,957 2,701,351 41,353,605 4,378,619 282,960,108 16,903,974 11,533,101
------------ ----------- ----------- ----------- ------------ ----------- -----------
End of year ......... $499,744,512 $ 1,989,759 $61,758,117 $ 2,142,268 $287,547,112 $38,727,748 $20,944,982
============ =========== =========== =========== ============ =========== ===========
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
9
<PAGE> 12
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS WITH FUND INFORMATION
YEAR ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
Alternate and Long-Term Thrift Trusts
- -----------------------------------------------------------------------------------------------------------------------
Conservative Moderate Growth Participants' Total
International Intermediate Balanced Balanced Balanced Loan Funds for all
Equity Fund Bond Fund Fund Fund Fund Fund Combined Plans
------------- ------------ ------------ ----------- ------------ ------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Additions to net assets
attributed to:
Contributions:
From participating
employees ......... $ -- $ -- $ -- $ -- $ -- $ -- $ 13,642,974 $ 27,832,938
From participating
employers ......... -- -- -- -- -- -- 16,402,374 16,402,374
Other .............. -- -- -- -- -- -- 703,747 703,747
------------ ----------- ----------- ----------- ----------- ---------- ------------ ------------
1,930,741 629,884 379,025 1,621,418 2,075,347 -- 30,749,095 44,939,059
Transfer from General
and Short-Term
Thrift Trusts......... -- -- -- -- -- -- 288,982 --
Dividend Income:
Consolidated Natural
Gas Company
common stock ....... -- -- -- -- -- -- 17,130,639 17,143,558
Other ............... -- 4 -- -- -- -- 1,020,465 1,020,465
Interest income ....... -- -- -- -- -- 730,585 19,719,780 20,284,983
Net appreciation
(depreciation) in
fair value of
investments .......... 451,384 447,364 321,025 1,500,323 1,420,042 -- 68,055,863 67,283,445
Interfund
conversions - net .... 813,791 2,062,569 866,309 1,929,569 2,315,533 (51,771) -- --
------------ ----------- ----------- ------------ ----------- ----------- ------------ ------------
TOTAL ADDITIONS ... 3,195,916 3,139,821 1,566,359 5,051,310 5,810,922 678,814 136,964,824 150,671,510
------------ ----------- ----------- ------------ ----------- ----------- ------------ ------------
DEDUCTIONS
Deductions from net
assets attributed to:
Benefits paid to
participants ......... 614,641 232,522 104,335 335,460 609,440 413,321 74,901,618 93,709,939
------------ ----------- ----------- ----------- ----------- ----------- ------------ -----------
TOTAL DEDUCTIONS .. 614,641 232,522 104,335 335,460 609,440 413,321 74,901,618 93,709,939
------------ ----------- ----------- ----------- ----------- ----------- ------------ -----------
Net increase/(decrease) 2,581,275 2,907,299 1,462,024 4,715,850 5,201,482 265,493 62,063,206 56,961,571
Net assets available
for benefits:
Beginning of year .. 8,728,748 3,106,775 2,009,029 8,451,761 7,705,695 9,467,059 907,393,782 923,344,227
------------ ----------- ----------- ----------- ----------- ----------- ------------ ------------
End of year ........ $ 11,310,023 $ 6,014,074 $ 3,471,053 $13,167,611 $12,907,177 $ 9,732,552 $969,456,988 $980,305,798
============ =========== =========== =========== =========== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
10
<PAGE> 13
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
YEAR ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
GENERAL AND SHORT-TERM
THRIFT TRUSTS
--------------------------------------
Consolidated Cash
Natural Gas (General
Company Investments
Common and Money Funds
Stock Fund Market Funds) Combined
---------- ----------- ------------
<S> <C> <C> <C>
ADDITIONS
Additions to net assets attributed to:
Contributions:
From participating employees ............. $ -- $14,910,757 $14,910,757
Dividend income ............................. -- 24,295 24,295
Interest income ............................. -- 561,867 561,867
Net appreciation (depreciation) in fair
value of investments ...................... (224,799) -- (224,799)
---------- ----------- -----------
TOTAL ADDITIONS ............. (224,799) 15,496,919 15,272,120
---------- ----------- -----------
DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants ............... 126,570 15,502,889 15,629,459
---------- ----------- -----------
TOTAL DEDUCTIONS ............ 126,570 15,502,889 15,629,459
---------- ----------- -----------
Net increase/(decrease) ..................... (351,369) (5,970) (357,339)
Net assets available for benefits:
Beginning of year ........................... 1,620,429 14,687,355 16,307,784
---------- ----------- -----------
End of year ................................. $1,269,060 $14,681,385 $15,950,445
========== =========== ===========
</TABLE>
The accompanying notes are an integral
part of these consolidated financial statements.
11
<PAGE> 14
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS WITH FUND INFORMATION
YEAR ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
Alternate and Long-Term Thrift Trusts
- -------------------------------------------------------------------------------------------------------------------------------
Consolidated Fixed
Natural Gas Dominion Diversified Investment
Company Resources Equity Cash Stable Value
Common Stock Incorporated and (General and Fixed
and CNG Common Diversified Investments Investment S&P 500 Small Stock
Stock Funds Stock Fund Funds Fund) Funds Index Fund Fund
------------- ----------- ----------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Additions to net assets
attributed to:
Contributions:
From participating
employees .......... $ -- $ -- $ -- $ -- $ -- $ -- $ --
From participating
employers .......... -- -- -- -- -- -- --
Other ............... -- -- -- -- -- -- --
------------ ----------- ----------- ----------- ------------ ----------- -----------
9,848,390 -- 2,771,496 231,472 6,662,775 2,077,743 2,347,623
Dividend Income:
Consolidated Natural
Gas Company
common stock ....... 14,786,430 -- 60,382 165,949 3,630,176 -- --
Other ............... 212,976 -- 708,550 12,007 -- -- --
Interest income ....... 72,081 -- 65,027 295,022 17,456,002 -- --
Net appreciation
(depreciation) in
fair value of
investments .......... 10,001,349 (385,060) 7,511,728 -- -- 3,599,978 2,186,816
Interfund
conversions - net .... (58,831,768) (344,630) 387,910 6,672,818 40,012,270 5,572,913 2,476,967
------------ ----------- ----------- ----------- ------------ ----------- -----------
TOTAL ADDITIONS ... (23,910,542) (729,690) 11,505,093 7,377,268 67,761,223 11,250,634 7,011,406
------------ ----------- ----------- ----------- ------------ ----------- -----------
DEDUCTIONS
Deductions from net
assets attributable to:
Benefits paid to
participants ......... 12,238,841 152,456 1,484,249 9,384,052 44,861,151 557,374 208,612
------------ ----------- ----------- ----------- ------------ ----------- -----------
TOTAL DEDUCTIONS .. 12,238,841 152,456 1,484,249 9,384,052 44,861,151 557,374 208,612
------------ ----------- ----------- ----------- ------------ ----------- -----------
Net increase/(decrease) (36,149,383) (882,146) 10,020,844 (2,006,784) 22,900,072 10,693,260 6,802,794
Net assets available
for benefits:
Beginning of year .... 544,243,340 3,583,497 31,332,761 6,385,403 260,060,036 6,210,714 4,730,307
------------ ----------- ----------- ----------- ------------ ----------- -----------
End of year ......... $508,093,957 $ 2,701,351 $41,353,605 $ 4,378,619 $282,960,108 $16,903,974 $11,533,101
============ =========== =========== =========== ============ =========== ===========
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
12
<PAGE> 15
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS WITH FUND INFORMATION
YEAR ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
Alternate and Long-Term Thrift Trusts
- -----------------------------------------------------------------------------------------------------------------------
Conservative Moderate Growth Participants' Total
International Intermediate Balanced Balanced Balanced Loan Funds for all
Equity Fund Bond Fund Fund Fund Fund Fund Combined Plans
------------- ------------ ------------ ----------- ------------ ------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Additions to net assets
attributed to:
Contributions:
From participating
employees ......... $ -- $ -- $ -- $ -- $ -- $ -- $ 12,313,082 $ 27,223,839
From participating
employers ......... -- -- -- -- -- -- 16,107,387 16,107,387
Other .............. -- -- -- -- -- -- 1,234,986 1,234,986
------------ ----------- ----------- ----------- ----------- ---------- ------------ ------------
1,816,895 596,501 324,953 1,458,376 1,519,231 -- 29,655,455 44,566,212
Dividend Income:
Consolidated Natural
Gas Company
common stock ....... -- -- -- -- -- -- 18,642,937 18,667,232
Other ............... -- -- -- -- -- -- 933,533 933,533
Interest income ....... -- -- -- -- -- 848,712 18,736,844 19,298,711
Net appreciation
(depreciation) in
fair value of
investments .......... 1,255,191 255,776 241,579 1,316,454 1,391,670 -- 27,375,481 27,150,682
Interfund
conversions - net .... 1,670,850 357,507 306,926 1,051,637 1,252,228 (585,628) -- --
------------ ----------- ----------- ------------ ----------- ----------- ------------ ------------
TOTAL ADDITIONS ... 4,742,936 1,209,784 873,458 3,826,467 4,163,129 263,084 95,344,250 110,616,370
------------ ----------- ----------- ------------ ----------- ----------- ------------ ------------
DEDUCTIONS
Deductions from net
assets attributable to:
Benefits paid to
participants ......... 153,514 249,848 103,979 295,944 178,539 462,525 70,331,084 85,960,543
------------ ----------- ----------- ----------- ----------- ----------- ------------ -----------
TOTAL DEDUCTIONS .. 153,514 249,848 103,979 295,944 178,539 462,525 70,331,084 85,960,543
------------ ----------- ----------- ----------- ----------- ----------- ------------ -----------
Net increase/(decrease) 4,589,422 959,936 769,479 3,530,523 3,984,590 (199,441) 25,013,166 24,655,827
Net assets available
for benefits:
Beginning of year .. 4,139,326 2,146,839 1,239,550 4,921,238 3,721,105 9,666,500 882,380,616 898,688,400
------------ ----------- ----------- ----------- ----------- ----------- ------------ ------------
End of year ........ $ 8,728,748 $ 3,106,775 $ 2,009,029 $ 8,451,761 $ 7,705,695 $ 9,467,059 $907,393,782 $923,344,227
============ =========== =========== =========== =========== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
13
<PAGE> 16
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended June 30, 1998 and 1997
NOTE 1 - BACKGROUND AND DESCRIPTION OF PLANS:
The following description of the Thrift Plans of Consolidated Natural Gas
Company and Its Participating Subsidiaries("Plans") provides only general
information. Participants should refer to the Plans' Prospectuses and Summary
Plan Descriptions for more complete descriptions of the Plans' provisions.
All employee and employer contributions are made pursuant to the terms of
the Plans and are held in funds administered by Trustees under four declarations
of trust,i.e., the Alternate Thrift Trust, the General Thrift Trust, the
Long-Term Thrift Trust and the Short-Term Thrift Trust, implementing the
following Plans:
1. System Thrift Plan of Consolidated Natural Gas Company and Its
Participating Subsidiaries for Employees Who Are Not Represented by a
Recognized Union ("System Thrift Plan")
2. Thrift Plan of The East Ohio Gas Company for Employees
Represented by The Natural Gas Workers Union, Local 555, SEIU, AFL-CIO
("East Ohio Union Thrift Plan")
3. Thrift Plan of CNG Transmission Corporation and Hope Gas, Inc.
for Employees Represented by Allegheny Mountain Gas Workers' Union,
Local No. 999, SEIU, AFL-CIO
4. Thrift Plan of The Peoples Natural Gas Company for Employees
Represented by Gas Employees' Union, Local 666, SEIU, AFL-CIO ("Peoples
Thrift Plan")
5. Thrift Plan of The River Gas Division of The East Ohio Gas Company
for Employees Represented by Allegheny Mountain Gas Workers' Union, Local
999, SEIU, AFL-CIO
6. Thrift Plan of Consolidated Natural Gas Service Company, Inc. for
Employees of the Computer Operations Department Represented by The Natural
Gas Workers Union, Local 555, SEIU, AFL-CIO
7. Thrift Plan of The West Ohio Gas Division of The East Ohio Gas
Company for Employees Represented by Local Union No. 308-C, The Utility
Workers Union of America, AFL-CIO
8. Thrift Plan of The West Ohio Gas Division of The East Ohio Gas
Company for Employees Represented by Local Union No. 308, The Utility
Workers Union of America, AFL-CIO
9. Virginia Natural Gas, Inc. Employee Savings Plan ("VNG Employee
Savings Plan")
10. Virginia Natural Gas, Inc. Hourly Savings Plan ("VNG Hourly
Savings Plan")
The Plans are defined contribution plans. The participants in the Plans are
eligible employees of Consolidated Natural Gas Company and its participating
subsidiaries (the "Company"). Each employee is eligible to participate in his
employer's thrift plan on an entirely voluntary basis. Participation by an
employee becomes effective immediately upon completion and delivery to the
employer of an authorization form furnished by the employer. The Plans are
subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended (ERISA).
Under the Plans, participants may elect to contribute not less than 2% nor
more than 16% (15% for participants with thirty or more years of service and
participants in the Peoples Thrift Plan) of their earnings each pay period, in
increments of 1%. If the participant elects that his employer make pretax
contributions on his behalf, such contributions cannot exceed 6% (10% for
participants in the System Thrift Plan, The East Ohio Union Thrift Plan, the VNG
Employee Savings Plan and the VNG Hourly Savings Plan), in multiples of 1%, of
his earnings each pay period subject to applicable Internal Revenue Code ("IRC")
limitations.
Participants immediately vest in their contributions and earnings thereon.
Participants vest in the employer's matching contribution and related earnings
based on years of continuous service and are fully vested after five years of
credited service. The employer's matching contribution, except for the VNG
Employee Savings Plan and the VNG Hourly Savings Plan ("VNG Plans"), is based
upon the participant's contribution rate and length of service. Under the VNG
Plans, the employer's matching contribution is based solely on the participant's
contribution rate.
In all plans except the VNG Plans, retired participants may elect to
receive an amount equal to their vested Alternate/Long-Term Thrift Trust account
balance either in a lump sum or in installments. For terminations other than
retirements, participants can only receive their vested Alternate/Long-Term
Thrift Trust account balance as a lump sum distribution. Upon termination,
participants can only receive their General/Short-Term Thrift Trust account
balance as a lump sum distribution. In the VNG Plans, participants can only
elect to receive a lump sum distribution equal to their vested account balance.
14
<PAGE> 17
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Years Ended June 30, 1998 and 1997
Alternate Thrift Trust
----------------------
All monies, except for monies attributable to the VNG Plans, are invested
in any one or more of the following four options in multiples of 25%: (1)
Company common stock,(2) units of participation in a Diversified Fund composed
of securities other than securities of the Company and entities primarily
engaged in the natural gas business, (3) the Fixed Investment Fund and (4) the
General Investments Fund.
Under the VNG Hourly Savings Plan all monies are invested in any one or
more of the following five options in 1% increments: (1) Company common stock,
(2) the Conservative Balanced Fund, (3) the Moderate Balanced Fund, (4) the
Growth Balanced Fund and (5) the General Investments Fund. Participants may
transfer funds among the investment options.
Under the VNG Employee Savings Plan, all company matching contributions are
invested in Company common stock. Employee contributions, both after-tax and
elected pre-tax, are invested in either one or both of the following options in
multiples of 50%: (1) Company common stock and (2) the General Investments Fund.
Under the VNG Plans, for periods prior to February 1, 1990, participants
could elect to purchase shares of Dominion Resources, Incorporated ("DRI")
common stock.
The Company common stock investment option permits the participant to
purchase shares of Company common stock continuously or from cash accumulated in
his account. Dividends on Company common stock are credited to the participant's
account and invested in accordance with the terms of the Plans. Dividends on DRI
common stock are credited to the participant's account and invested in
additional shares of Company common stock. Except under the VNG Plans, upon
written request the participant may purchase all or any portion of Company
common stock credited to his account at the then current market price and the
cash proceeds of any such sale shall be credited by the Trustees to his account.
Under the Diversified Fund investment option, the participant may purchase
units of participation in the Diversified Fund continuously or from cash
accumulated in his account at the then market value. Also, the participant may
sell any units in his account at the month-end market value of net assets of the
Diversified Fund.
Cash may be deposited in the Fixed Investment Fund which invests in group
annuity contracts with one or more insurance companies. Investments under the
contracts mature at various intervals. The interest rates credited monthly to
participants' accounts represent a composite of the income earned under the
contracts with the insurance companies. The average yield and crediting interest
rates for the fiscal years ended June 30, 1998 and 1997 were 6.5% and
6.4%,respectively.
The Conservative Balanced Fund, the Moderate Balanced Fund and the Growth
Balanced Fund are common/collective trusts and each is designed to accomplish a
specific investment objective. To accomplish this, each fund has a different
diversified mix of stock, bond and short-term fixed income investments.
Cash deposited which is not invested in any of the other available
investment options is invested in the General Investments Fund. This fund
invests in authorized securities and savings accounts. The earnings thereon are
credited pro rata to participants' accounts at the end of each month.
15
<PAGE> 18
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Years Ended June 30, 1998 and 1997
In addition, a participant, except for those participating in the VNG
Employee Savings Plan, may convert funds from the above mentioned investment
options to a loan account for the purpose of making a loan. A participant may
borrow an amount not exceeding the lesser of three months base pay or 50% of the
then current value of his vested account balance. If such amount exceeds
$10,000, the amount of the loan can not exceed $50,000 reduced by the
participant's highest outstanding loan balance over the previous twelve months.
Loan repayments, including interest, are deposited in the participant's account
and invested in accordance with the participant's then current investment
direction. The effective annual interest rate on loans is 8-1/2%.
General Thrift Trust
--------------------
All monies received are invested in the General Investments Fund which
invests in authorized securities and savings accounts. The earnings thereon are
credited pro rata to participants' accounts at the end of each month. All or a
portion of the participants' balance in the General Investments Fund, except
earnings on contributions made after January 1, 1987, may be used to purchase
Company common stock at the direction of the participants. Dividends earned on
such stock are deposited in participants' accounts and are subject to the
withdrawal provisions of the General Thrift Trust. Shares purchased prior to
January 1,1982, are registered in the names of participants and are held by the
Trustees. Dividends on pre-1982 shares are paid directly to the participant.
Shares purchased subsequent to January 1, 1982 are registered in the name of the
Trustees and credited to the participant's account.
The withdrawal provision of the General Thrift Trust permits the
participant to withdraw his contributions and earnings thereon, in cash and/or
Company common stock, from his account. In addition, a participant may
substitute cash for stock equal to the cost of Company common stock held for him
by the Trustees.
The VNG Plans do not participate in the General Thrift Trust.
Long-Term Thrift Trust
----------------------
All monies received are invested in units of participation in any one or
more of the following ten options in 1% increments: (1) the CNG Stock Fund, (2)
the Diversified Equity Fund, (3) the S&P 500 Index Fund, (4) the Small Stock
Fund,(5) the International Equity Fund, (6) the Fixed Investment Stable Value
Fund,(7) the Intermediate Bond Fund, (8) the Conservative Balanced Fund, (9) the
Moderate Balanced Fund and (10) the Growth Balanced Fund.
In addition, a participant may convert funds from the above mentioned
investment options to a loan account for the purpose of making a loan. A
participant may borrow an amount not exceeding the lesser of three months base
pay or 50% of the then current value of his vested account balance. If such
amount exceeds $10,000, the amount of the loan can not exceed $50,000 reduced by
the participant's highest outstanding loan balance over the previous twelve
months. Loan repayments, including interest, are deposited in the participant's
account and invested in accordance with the participant's then current
investment direction. The effective annual interest rate on loans is 8-1/2%.
Each of the investment options is valued daily. Participants may transfer
funds as often as daily among the investment options. Certain restrictions apply
to the amount of funds which can be transferred from the CNG Stock Fund to other
investment options.
The CNG Stock Fund invests primarily in shares of Company common
stock. Participants may purchase units of participation in the CNG Stock Fund
continuously or from funds transferred from other investment options. Dividends
on Company common stock held in the CNG Stock Fund are invested in additional
units of the CNG Stock Fund and credited to participants' accounts.
16
<PAGE> 19
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Years Ended June 30, 1998 and 1997
The Diversified Equity Fund is a commingled fund that invests primarily in
the common stocks of large U.S. companies.
The S&P 500 Index Fund is a fund of a registered investment company that
invests proportionately in all or nearly all of the stocks that are included in
the Standard & Poor's 500 Stock Index.
The Small Stock Fund is a fund of a registered investment company that
invests in stocks of small to mid-sized U.S. companies.
The Fixed Investment Stable Value Fund invests in group annuity
contracts with one or more insurance companies and other short-term fixed income
securities. Investments under the contracts mature at various intervals. The
interest rates credited daily to participants' accounts represent a composite of
the income earned under the contracts with the insurance companies and the
revenue earned from short-term fixed income securities. The average yield and
crediting interest rates for the fiscal years ended June 30, 1998 and 1997 was
6.5% and 6.4%, respectively.
The International Equity Fund is a fund of a registered investment company
that invests in stocks of large non-U.S. companies.
The Intermediate Bond Fund is a fund of a registered investment company
that invests primarily in fixed income securities of various maturities such as
obligations of the U.S. Government, corporate debt securities, mortgage and
other asset-backed securities and money-market investments.
The Conservative Balanced Fund, the Moderate Balanced Fund and the Growth
Balanced Fund are common/collective trusts and each is designed to accomplish a
specific investment objective. To accomplish this, each fund has a different
diversified mix of stock, bond and short-term fixed income investments.
Short-Term Thrift Trust
-----------------------
All monies received are invested in units of participation in the Money
Market Fund. The Money Market Fund is a common/collective trust that invests
primarily in U.S. Treasury Bills, U.S. Treasury Notes, corporate notes,
commercial paper, floating rate notes and repurchase agreements.
The withdrawal provision of the Trust permits the participant to withdraw
his contributions and earnings thereon in cash from his account.
17
<PAGE> 20
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Years Ended June 30, 1998 and 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Significant accounting policies are described below.
Basis of Accounting
The consolidated financial statements of the Plans are prepared on the
accrual basis of accounting.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities and changes
thereon and disclosure of contingent assets and liabilities at the date of the
financial statements. Actual results could differ from those estimates.
Investments
Investments in securities are stated as follows:
1. Company common stock is stated at quoted market value. Company
common stock has been purchased for participants on the open market, directly
from the Company and, in certain circumstances, as shares or fractional shares
from terminating employees' Thrift Plan and Employee Stock Ownership Plan
accounts and other stockholders. Such shares or fractional shares are allocated
among the accounts of participants directing the Trustees to purchase Company
common stock.
2. DRI common stock, which is held for the account of individual
participants in the VNG Employee Savings Plan and VNG Hourly Savings Plan,
successors to the Virginia Power Employee Savings Plan and Virginia Power Hourly
Savings Plan ("Predecessor Plans"), respectively, is stated at quoted market
value. The Predecessor Plans were sponsored by Virginia Electric & Power
Company, a subsidiary of DRI.
18
<PAGE> 21
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Years Ended June 30, 1998 and 1997
3. Securities, registered investment company holdings, and other
investments are stated at quoted market value. Common/collective trusts are
stated at fair value based on the net asset values of the underlying
securities. Temporary investments are stated at cost which approximates
market value.
4. The Fixed Investment and Fixed Investment Stable Value Funds
are stated at contract value. Contract value represents contributions and
income earned in the fund, less withdrawals. The fair market value of the
contracts approximates the contract value.
Dividends received on all shares of Company common stock held in the
Alternate Thrift Trust, except for the VNG Plans, are invested in accordance
with the participant's current investment election under the terms of the Plans.
However, if any portion of a participant's investment is directed to the
purchase of Company common stock, all dividends on Company common stock are
invested in such stock. Under the VNG Plans, all dividends on Company common
stock are reinvested in such stock. Dividends received on all shares of DRI
common stock are invested in additional shares of Company common stock.
Dividends received on all shares of Company common stock held in the Long-Term
Thrift Trust are reinvested in additional units in the CNG Stock Fund.
Diversified Fund Units of the Alternate Thrift Trust are prorated to
participants on the basis of unit cost calculated at the end of each month.
Diversified Equity Fund Units of the Long-Term Thrift Trust are prorated to
participants based on the unit value calculated at the end of each day.
Realized gains and losses on the sale of investments are determined using
the average cost method.
Participants in the System Thrift Plan and the East Ohio Union Thrift Plan
bear the investment management, marketing, transfer agent and administrative
expenses for each investment option except for expenses in connection with the
Fixed Investment Stable Value Fund, which are borne by the Company. Investment
management, marketing, transfer agent and administrative expenses for the
Conservative Balanced Fund, the Moderate Balanced Fund and the Growth Balanced
Fund investment options under the VNG Hourly Savings Plan are borne by the
participants investing in these options. Participating employers bear all other
administrative expenses of the Plans and of the General, Alternate, Short-Term
and Long-Term Thrift Trusts ("Trusts"). Brokerage and similar charges are
included in the participants transaction costs.
The Trusts are maintained in accordance with the Plans to provide for the
custody and investment of employee and employer contributions. They are
administered by individual trustees (the "Trustees") who are appointed by and
serve at the pleasure of the Company for a term of three years. The Trustees are
employed by and are officers of various subsidiaries of the Company. The
Trustees serve without compensation from the Plans or Trusts.
FORFEITURES
- -----------
At June 30, 1998, forfeited nonvested accounts totaled $488,959. These
accounts will be used to reduce future employer contributions. Also, for the
year ended June 30, 1998, employer contributions were reduced by forfeited
nonvested accounts.
NOTE 3 - TAX STATUS OF THE PLANS:
The Internal Revenue Service has determined that the Plans are
designed in accordance with the applicable sections of the IRC and has informed
the sponsoring companies of the Plans accordingly by letters dated October 12,
1995, October 18, 1995, October 31, 1995, November 1, 1995, November 3, 1995 and
May 5, 1996. The Plans have been amended since receiving the determination
letters. However, the Plans' administrator and tax counsel believe that the
Plans are designed and are currently being operated in compliance with the
applicable requirements of the IRC.
19
<PAGE> 22
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
Years Ended June 30, 1998 and 1997
NOTE 4 - UNITS OF PARTICIPATION AND RELATED UNIT VALUE:
The number of units and unit value of funds held by Diversified Equity and
Diversified Funds and common/collective trusts are as follows:
<TABLE>
<CAPTION>
June 30, 1998 June 30, 1997
---------------------- ----------------------
Units Unit Value Units Unit Value
----- ---------- ----- ----------
<S> <C> <C> <C> <C>
Diversified Equity and
Diversified Funds............ 246,760 $245.24 218,937 $182.38
Common/Collective Trusts:
Conservative Balanced Fund... 217,000 $15.93 146,688 $14.13
Moderate Balanced Fund....... 712,576 $18.34 534,225 $15.94
Growth Balanced Fund......... 667,531 $19.39 460,557 $16.89
</TABLE>
NOTE 5 - PLAN AMENDMENTS:
The System Thrift Plan was amended effective August 13, 1996 to exclude
from participation nonresident aliens working outside the United States who are
employed by the Company.
The following changes were made to the East Ohio Union Thrift Plan effective
January 1, 1998:
1. Funds in the Alternate Thrift Trust were transferred to the Long-Term
Thrift Trust, while funds in the General Thrift Trust were transferred
to the Short-Term Thrift Trust.
2. The Long-Term Thrift Trust offers ten investment choices: five stock
funds, two fixed income funds and three balanced funds. The Consolidated
Natural Gas Company Common Stock Fund and the Fixed Investment Fund
continue to be options but were redesignated the CNG Stock Fund and
Fixed Investment Stable Value Fund, respectively.
3. Contributions can be invested in any one or more of the ten investment
options in increments of 1%.
4. The General Investments Fund under the Alternate Thrift Trust was
eliminated. Participants with balances in this Fund were required to
reinvest such amounts in the investment options available at that time.
5. Investment options are valued daily and transfers among options are
permitted daily.
6. Participants pay investment management, marketing, transfer agent and
administrative expenses for each investment option, except the Fixed
Investment Stable Value Fund.
7. Participants pay a $25 loan origination fee.
8. Participants are able to gradually transfer balances in the CNG Stock
Fund to any of the other available investment options.
9. Participants are permitted to contribute up to 10% of their regular
earnings on a pretax basis, subject to applicable IRC limitations.
The following changes were made to the VNG Hourly Savings Plan effective
January 1, 1998:
1. The Plan offers five investment choices: one stock fund, one fixed
income fund and three balanced funds. The Consolidated Natural Gas
Company Common Stock Fund and the General Investments Fund continue to
be options.
2. Contributions can be invested in any one or more of the five investment
options in increments of 1%.
3. Transfer among the investment options is permitted monthly.
4. There are no age or service requirements for participation.
5. Loans are permitted under the plan and participants pay a $25 loan
origination fee.
6. Participants pay investment management, marketing, transfer agent and
administrative expenses for each of the three balanced funds.
NOTE 6 - TRANSACTIONS WITH PARTIES-IN-INTEREST:
Shares of Company common stock may be purchased directly from the Company
or on the open market. During the fiscal year ended June 30, 1998, a total of
20,000 shares at a cost of $1,115,850 were purchased on the open market and 974
shares at a cost of $57,082 were purchased directly from the Company. During the
fiscal year ended June 30, 1997, a total of 1,817 shares at a cost of $100,604
were purchased directly from the Company.
20
<PAGE> 23
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
Years Ended June 30, 1998 and 1997
NOTE 7 - PLAN TERMINATION:
Although it has not expressed any intent to do so, the Company has the
right under the Plans to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA and any applicable
collective bargaining agreements. In the event of Plan termination, participants
will become 100% vested in their accounts.
NOTE 8 - BENEFIT OBLIGATIONS:
Benefit obligations being processed for distribution to persons who have
withdrawn from participation in the Plans are as follows:
<TABLE>
<CAPTION>
GENERAL AND SHORT-TERM TRUSTS
---------------------------------------
JUNE 30, 1998 JUNE 30, 1997
------------- -------------
<S> <C> <C>
Consolidated Natural Gas Company
Common Stock Fund................ $ -- $ 8,891
Cash (General Investments and
Money Market Funds).............. 982 40,681
-------- -------
Funds Combined............. $ 982 $49,572
======== =======
</TABLE>
<TABLE>
<CAPTION>
ALTERNATE AND LONG-TERM TRUSTS
----------------------------------------
JUNE 30, 1998 JUNE 30, 1997
------------- -------------
<S> <C> <C>
Consolidated Natural Gas
Company Common Stock and
CNG Stock Funds.................. $212,399 $ 904,342
Diversified Equity and
Diversified Funds................ 8,926 18,072
Cash (General Investments Fund).... 183,258 303,465
Fixed Investment Stable Value and
Fixed Investment Funds........... 468,452 122,707
Participants' Loan Fund............ -- 8,857
S&P 500 Index Fund................. 15 60
Small Stock Fund................... 21 557
International Equity Fund.......... 4,630 1,059
Intermediate Bond Fund............. -- 9
Conservative Balanced Fund......... 14 --
Moderate Balanced Fund............. -- 19,180
Growth Balanced Fund............... 6,940 1,891
-------- ----------
Funds Combined............... $884,655 $1,380,199
======== ==========
</TABLE>
<TABLE>
<CAPTION>
TOTAL FOR ALL PLANS
----------------------------------------
JUNE 30, 1998 JUNE 30, 1997
------------- -------------
<S> <C> <C>
Consolidated Natural Gas
Company Common Stock and
CNG Stock Funds.................. $212,399 $ 913,233
Diversified Equity and
Diversified Funds................ 8,926 18,072
Cash .............................. 184,240 344,146
Fixed Investment Stable Value and
Fixed Investment Funds........... 468,452 122,707
Participants' Loan Fund............ -- 8,857
S&P 500 Index Fund................. 15 60
Small Stock Fund................... 21 557
International Equity Fund.......... 4,630 1,059
Intermediate Bond Fund............. -- 9
Conservative Balanced Fund......... 14 --
Moderate Balanced Fund............. -- 19,180
Growth Balanced Fund............... 6,940 1,891
-------- ----------
Total for all Plans.......... $885,637 $1,429,771
======== ==========
</TABLE>
21
<PAGE> 24
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - (CONCLUDED)
Years Ended June 30, 1998 and 1997
NOTE 9 - INVESTMENTS:
The following investments represent 5% or more of the combined Plans' net
assets available for benefits:
<TABLE>
JUNE 30, 1998 JUNE 30, 1997
------------- -------------
<S> <C> <C>
Corporation Common Stock Fund........ $496,037,220 $505,386,048
Insurance Company Contracts:
Aetna Life Insurance
Company #010463................. 90,614,143 90,876,701
Connecticut General Life
Insurance Company #16355........ 59,305,326 55,477,837
</TABLE>
NOTE 10 - SUBSEQUENT EVENTS:
The following changes will be made, effective November 1, 1998, to The
Thrift Plan of The West Ohio Gas Division of The East Ohio Gas Company for
Employees Represented By Local Union No. 308-C, The Utility Workers Union of
America, AFL-CIO and The Thrift Plan of The West Ohio Gas Division of The East
Ohio Gas Company For Employees Represented By Local Union No. 308, The Utility
Workers Union of America, AFL-CIO and, effective July 1, 1999, to the Thrift
Plan of CNG Transmission Corporation and Hope Gas, Inc. for Employees
Represented by Allegheny Mountain Gas Workers' Union, the Thrift Plan of the
River Gas Division of The East Ohio Gas Company for Employees Represented by
Allegheny Mountain Gas Workers' Union and the Thrift Plan of Consolidated
Natural Gas Service Company, Inc. for Employees of the Computer Operations
Department Represented by The Natural Gas Workers Union:
1. Funds in the Alternate Thrift Trust will be transferred to the Long-Term
Thrift Trust, while funds in the General Thrift Trust will be
transferred to the Short-Term Thrift Trust.
2. The Long-Term Thrift Trust will offer ten investment choices: five stock
funds, two fixed income funds and three balanced funds. The Consolidated
Natural Gas Company Common Stock Fund and the Fixed Investment Fund will
continue to be options but will be redesignated as the CNG Stock Fund
and Fixed Investment Stable Value Fund, respectively.
3. Contributions can be invested in any one or more of the ten investment
options in increments of 1%.
4. The General Investments Fund under the Alternate Thrift Trust will be
eliminated. Participants with balances in this Fund will be required to
reinvest such amounts in the investment options available at that time.
5. Investment options will be valued daily and transfers among options will
be permitted daily.
6. Participants will pay investment management, marketing, transfer agent
and administrative expenses for each investment option, except the Fixed
Investment Stable Value Fund.
7. Participants will pay a $25 loan origination fee.
8. Participants will be able to gradually transfer their balances in the
CNG Stock Fund to any of the other available investment options.
9. Participants will be permitted to contribute up to 10% of their regular
earnings on a pretax basis, subject to applicable IRC limitations.
22
<PAGE> 25
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
ADDITIONAL INFORMATION
SCHEDULE I-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
JUNE 30, 1998
<TABLE>
<CAPTION>
GENERAL AND SHORT-TERM THRIFT TRUSTS
SHARES, UNITS
DESCRIPTION PRINCIPAL COST OF CURRENT
IDENTITY OF ISSUE OF INVESTMENT AMOUNT ASSET VALUE
----------------- ------------- ------ ----- -----
<S> <C> <C> <C> <C>
Consolidated Natural Gas Company* Common Stock 3,219 82,127 189,519
Mellon Bank, N.A.* EB Temporary Investment Fund 4,065,832 4,065,832 4,065,832
American Express Credit Corporation Dated 4/28/98, 5.49%, due 7/01/98 475,000 475,000 475,000
American Express Credit Corporation Dated 5/01/98, 5.49%, due 7/01/98 175,000 175,000 175,000
American Express Credit Corporation Dated 5/15/98, 5.50%, due 7/01/98 475,000 475,000 475,000
American Express Credit Corporation Dated 5/19/98, 5.51%, due 7/20/98 200,000 200,000 200,000
American Express Credit Corporation Dated 5/26/98, 5.51%, due 7/01/98 515,000 515,000 515,000
American Express Credit Corporation Dated 6/15/98, 5.51%, due 8/03/98 500,000 500,000 500,000
American Express Credit Corporation Dated 6/29/98, 6.02%, due 7/01/98 110,000 110,000 110,000
Associates Corp. of North America Dated 4/29/98, 5.48%, due 7/01/98 440,000 440,000 440,000
Associates Corp. of North America Dated 6/01/98, 5.54%, due 7/01/98 935,000 935,000 935,000
Prudential Funding Corporation Notes Dated 4/20/98, 5.48%, due 7/01/98 778,000 778,000 778,000
Prudential Funding Corporation Notes Dated 6/08/98, 5.48%, due 7/01/98 285,000 285,000 285,000
Prudential Funding Corporation Notes Dated 6/09/98, 5.51%, due 8/03/98 150,000 150,000 150,000
Prudential Funding Corporation Notes Dated 6/18/98, 5.49%, due 7/01/98 175,000 175,000 175,000
Prudential Funding Corporation Notes Dated 6/23/98, 5.58%, due 7/02/98 400,000 400,000 400,000
Loan Fund Participant Loans, Interest 8.5% -- 12,665 12,665
*PARTY IN INTEREST.
</TABLE>
23
<PAGE> 26
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
ADDITIONAL INFORMATION
SCHEDULE I-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
(CONTINUED)
JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES, UNITS
DESCRIPTION PRINCIPAL COST OF CURRENT
IDENTITY OF ISSUE OF INVESTMENT AMOUNT ASSET VALUE
----------------- ------------- ------ ----- -----
ALTERNATE AND LONG-TERM THRIFT TRUSTS
<S> <C> <C> <C> <C>
Consolidated Natural Gas Company Stock* Company Common Stock 8,422,257 302,976,951 495,847,701
Dominion Resources, Inc. Common Stock 52,595 1,373,578 2,143,253
Abbott Laboratories Common Stock 10,400 374,844 426,400
Air Products & Chemicals, Inc. Common Stock 21,100 826,634 844,000
Albertsons Inc. Common Stock 10,100 528,287 523,311
Allstate Corp. Common Stock 7,300 691,499 668,410
Alza Corp. Common Stock 600 25,698 25,950
American Home Products Corp. Common Stock 1,000 48,427 51,750
American International Group Inc. Common Stock 3,862 247,473 563,852
American Online, Inc. Common Stock 400 9,406 42,050
Amgen Inc. Common Stock 1,300 72,628 84,987
AMR Corp. Common Stock 5,600 358,487 466,200
Anadarko Petroleum Corp. Common Stock 800 38,781 53,750
Associates First Capital Corp. Common Stock 5,041 260,884 387,844
AT&T Corp. Common Stock 14,000 874,768 799,750
Autodesk Inc. Common Stock 4,700 184,752 181,537
Avery Dennison Corp. Common Stock 4,800 163,554 258,000
Avon Products Inc. Common Stock 3,400 274,248 263,289
Baker Hughes Inc. Common Stock 3,800 143,205 131,339
Bankamerica Corp. Common Stock 5,000 269,116 432,500
Bank of New York Co. Inc. Common Stock 3,700 151,881 225,238
Bank One Corp. Common Stock 4,800 272,660 267,902
Becton Dickenson & Co. Common Stock 4,700 207,462 364,838
Bell Atlantic Corp. Common Stock 15,400 679,447 702,625
Bellsouth Corp. Common Stock 4,200 168,001 281,925
Boston Scientific Corp. Common Stock 200 8,519 14,325
Bristol Myers Squibb Co. Common Stock 8,700 528,887 999,960
British Petroleum PLC Common Stock 4,800 369,828 423,600
British Petroleum PLC ADR 200 13,858 17,650
Browning-Ferris Industrial Inc. Common Stock 300 10,918 10,425
Burlington Northern Santa Fe Corp. Common Stock 6,900 670,888 677,497
Canadian Pacific LTD Common Stock 5,900 141,823 167,412
Candence Design System Inc. Common Stock 4,500 132,104 140,625
Cardinal Health Inc. Common Stock 9,575 737,722 897,656
Cigna Corp. Common Stock 4,800 328,890 331,200
Cisco Systems Inc. Common Stock 5,300 344,175 487,933
Citicorp Common Stock 3,935 473,854 587,299
Clorox Co. Common Stock 105 8,782 10,041
Coca-Cola Co. Common Stock 500 26,683 42,750
Coca-Cola Enterprises, Inc. Common Stock 1,300 18,351 50,862
Colgate-Palmolive Co. Common Stock 500 22,274 44,000
Comerica Inc. Common Stock 9,500 588,060 628,187
</TABLE>
24
<PAGE> 27
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
ADDITIONAL INFORMATION
SCHEDULE I-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
(CONTINUED)
JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES, UNITS
DESCRIPTION PRINCIPAL COST OF CURRENT
IDENTITY OF ISSUE OF INVESTMENT AMOUNT ASSET VALUE
----------------- ------------- ------ ----- -----
<S> <C> <C> <C> <C>
Computer Associates Int'l Inc. Common Stock 5,700 196,494 316,709
Conagra Inc. Common Stock 2,800 67,315 88,726
Dana Corp. Common Stock 3,700 116,297 197,950
Dayton Hudson Corp. Common Stock 4,900 143,084 237,650
Deere & Co. Common Stock 2,600 138,310 137,394
Dell Computer Corp. Common Stock 200 12,997 18,563
Dial Corp. Common Stock 7,300 125,986 189,347
Dominion Resources Inc. Common Stock 7,500 293,650 305,625
Dresser Industries Inc. Common Stock 9,200 372,860 405,379
Electronic Data Systems Corp. Common Stock 4,900 210,575 195,696
El Paso Natural Gas Common Stock 6,600 196,071 252,450
EMC Corp. Common Stock 500 8,921 22,406
Equitable Cos Inc. Common Stock 2,000 80,044 149,876
Federal National Mortgage Association Common Stock 15,100 847,277 917,325
First Chicago NBD Corp. Common Stock 9,500 905,244 841,937
First Union Corp. Common Stock 13,900 774,523 809,675
Florida Progress Corp. Common Stock 18,800 760,239 773,150
Flowers Industries Inc. Common Stock 8,000 185,896 163,504
Ford Motor Co. Common Stock 17,900 462,516 1,056,100
Fort James Corp. Common Stock 6,700 259,004 298,987
FPL Group Inc. Common Stock 6,300 359,107 396,900
General Electric Co. Common Stock 20,700 675,089 1,881,113
General Motors Corp. Common Stock 500 19,199 23,562
General Reinsurance Corp. Common Stock 2,600 448,285 659,100
Gillette Co. Common Stock 1,100 43,518 62,562
Glaxo Wellcome PLC Common Stock 3,500 122,975 209,346
Glaxo Wellcome PLC ADR 300 9,555 17,944
Goodrich (B.F.) Common Stock 3,300 159,494 163,762
GTE Corp. Common Stock 16,500 849,222 917,812
Guidant Corp. Common Stock 5,200 350,248 370,828
Halliburton Co. Common Stock 5,900 276,943 262,184
Hartford Financial Services Group, Inc. Common Stock 8,600 739,554 983,625
Hartford Life Inc. Common Stock 100 5,696 5,694
Health Management Associates Inc. Common Stock 4,100 105,554 137,096
Healthsouth Corp. Common Stock 14,800 351,343 394,982
Hewlett-Packard Co. Common Stock 8,175 480,451 489,478
Home Depot Inc. Common Stock 15,400 561,845 1,279,170
Honeywell Inc. Common Stock 2,200 161,680 183,839
Host Marriott Corp. Common Stock 2,000 26,048 35,625
Intel Corp. Common Stock 11,400 764,686 845,025
International Business Machines Corp. Common Stock 3,900 269,777 447,771
Johnson & Johnson Common Stock 6,500 267,630 481,000
Jones Apparel Group Inc. Common Stock 7,600 182,731 277,879
Lear Corp. Common Stock 200 9,905 10,262
Lilly (Eli) & Co. Common Stock 1,300 36,964 86,125
Linear Technology Corp. Common Stock 3,300 206,224 199,033
Liz Claiborne Inc. Common Stock 5,050 246,425 263,862
</TABLE>
25
<PAGE> 28
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
ADDITIONAL INFORMATION
SCHEDULE I-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
(CONTINUED)
JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES, UNITS
DESCRIPTION PRINCIPAL COST OF CURRENT
IDENTITY OF ISSUE OF INVESTMENT AMOUNT ASSET VALUE
----------------- ------------- ------ ----- -----
<S> <C> <C> <C> <C>
Lowes Companies Inc. Common Stock 11,200 225,495 454,305
Lucent Technologies Inc. Common Stock 15,996 603,559 1,330,675
Marsh & McLennan Companies Inc. Common Stock 12,750 389,791 770,584
Masco Corp. Common Stock 4,900 238,043 296,450
Maxim Integrated Products Inc. Common Stock 4,600 167,000 145,765
MBNA Corp. Common Stock 6,100 171,689 201,684
McDonald's Corp. Common Stock 200 12,376 13,800
Medtronic Inc. Common Stock 500 16,526 31,875
Merck & Co. Inc. Common Stock 5,900 450,175 789,125
Microsoft Corp. Common Stock 15,000 904,186 1,625,625
Millennium Chemicals Inc. Common Stock 5,000 116,856 169,375
Mobil Corp. Common Stock 4,700 350,129 360,137
Monsanto Co. Common Stock 700 40,301 39,112
Montana Power Co. Common Stock 8,600 227,354 298,850
Morgan Stanley Dean Witter Discover & Co. Common Stock 9,600 262,518 877,200
Morton International Inc. Common Stock 3,200 112,504 80,000
Mylan Labs Inc. Common Stock 5,600 116,687 169,400
National Service Indus Inc. Common Stock 6,000 305,429 305,250
Nationsbank Corp. Common Stock 1,800 113,658 138,038
New Century Energies Inc. Common Stock 8,100 397,350 368,048
Nextel Communications Inc. Common Stock 900 15,845 22,388
Nokia Corporation ADR 500 8,586 36,375
Norfolk Southern Corp. Common Stock 4,200 120,025 125,215
Northern Telecom Ltd. Common Stock 5,100 241,162 289,425
Northrop Grumman Corp. Common Stock 2,000 152,013 206,250
Norwest Corp. Common Stock 16,200 646,326 607,500
Office Depot Inc. Common Stock 400 12,441 12,625
Ogden Corp. Common Stock 3,900 107,150 107,983
Oracle Corp. Common Stock 5,900 114,114 144,922
Peoplesoft Inc. Common Stock 600 24,114 28,200
Pepsico Inc. Common Stock 30,000 1,098,960 1,235,639
Perkin Elmer Corp. Common Stock 2,200 156,575 136,814
Pfizer Inc. Common Stock 5,875 487,679 638,541
Philip Morris Companies Inc. Common Stock 15,200 419,671 598,500
Phillips Petroleum Co. Common Stock 15,000 524,000 722,820
Pitney Bowes Inc. Common Stock 11,400 340,917 548,625
Precision Castparts Corp. Common Stock 100 5,677 5,338
Procter & Gamble Co. Common Stock 15,475 1,289,454 1,409,199
Quaker Oats Co. Common Stock 4,600 243,838 252,715
Revlon Inc. Common Stock 2,000 83,985 102,750
Ryder System Inc. Common Stock 5,400 175,151 170,440
SBC Communications Inc. Common Stock 5,100 195,733 204,000
Schering-Plough Corp. Common Stock 3,300 105,590 302,363
Schlumberger Limited Common Stock 4,100 318,376 280,083
Service Corp. Intl Common Stock 5,900 191,228 252,963
SmithKline Beecham PLC ADR 500 13,659 30,250
Sofamor/Danek Group Inc. Common Stock 300 19,143 25,969
</TABLE>
26
<PAGE> 29
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
ADDITIONAL INFORMATION
SCHEDULE I-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
(CONTINUED)
JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES, UNITS
DESCRIPTION PRINCIPAL COST OF CURRENT
IDENTITY OF ISSUE OF INVESTMENT AMOUNT ASSET VALUE
----------------- ------------- ------ ----- -----
<S> <C> <C> <C> <C>
Southwest Airlines Co. Common Stock 10,400 250,615 307,455
Staples Inc. Common Stock 5,750 117,700 166,393
State Street Corp. Common Stock 1,900 103,510 132,050
Sun Co. Inc. Common Stock 6,600 276,462 256,166
Sun Microsystems Inc. Common Stock 4,800 199,328 208,502
Sundstrand Corp. Common Stock 2,200 125,253 125,950
Tenet Healthcare Corp. Common Stock 8,100 282,815 253,125
Textron Inc. Common Stock 4,200 246,161 301,090
Tektronix Inc. Common Stock 1,750 68,542 61,906
TJX Companies Inc. Common Stock 8,400 127,183 202,650
Tommy Hilfiger Corp. Common Stock 4,900 211,689 306,250
Travelers Group Inc. Common Stock 17,300 920,556 1,048,813
Travelers Prop Casualty Common Stock 5,600 246,680 240,100
Tyco International Ltd. Common Stock 6,900 362,621 434,700
UAL Corp. Common Stock 3,200 277,738 249,600
United Healthcare Corp. Common Stock 2,200 142,906 140,114
United Technologies Corp. Common Stock 13,800 906,557 1,276,500
US Bancorp Common Stock 5,600 218,876 240,800
USA Waste Services Inc. Common Stock 8,300 381,757 409,813
UST, Inc. Common Stock 3,600 112,653 97,200
USX - Marathon Group Common Stock 4,300 132,200 147,546
Viacom Inc. Common Stock 3,600 194,968 209,700
Wal-Mart Stores Inc. Common Stock 4,900 124,580 297,675
Warnaco Group Inc. Common Stock 6,400 269,222 271,603
Warner-Lambert Co. Common Stock 1,200 30,422 83,250
Washington Mutual Inc. Common Stock 600 26,092 26,063
Worldcom Inc. Common Stock 2,000 45,503 96,875
Xerox Corp. Common Stock 9,615 629,473 977,124
Zeneca Group PLC ADR 300 13,461 13,163
The Chase Manhattan Bank, N. A. Domestic Liquidity Fund 344,760 344,760 344,760
Mellon Bank, N. A. * EB Temporary Investment Fund 8,364,134 8,364,134 8,364,134
Aetna Life Insurance Company General Asset/Separate Accounts 90,614,143 90,614,143 90,614,143
Connecticut General Life Insurance Company General Asset Account 59,305,326 59,305,326 59,305,326
Continental Assurance Company Separate Account 43,314,871 43,314,871 43,314,871
John Hancock Mutual Life Insurance Company General Asset Account 41,977,453 41,977,453 41,977,453
Pacific Mutual Life Insurance Company Separate Account 3,340,926 3,340,926 3,340,926
Metropolitan Life Insurance Company Separate Account 48,193,030 48,193,030 48,193,030
American Express Credit Corporation Dated 6/29/98, 6.02%, due 7/01/98 615,000 615,000 615,000
American Express Credit Corporation Dated 6/30/98, 5.95%, due 7/02/98 1,120,000 1,120,000 1,120,000
Prudential Funding Corporation Dated 6/25/98, 5.55%, due 7/20/98 325,000 325,000 325,000
Prudential Funding Corporation Dated 6/30/98, 5.62%, due 7/14/98 500,000 500,000 500,000
INVESCO Trust Co. Equity Fund Registered Investment Co. Holdings 62,424 1,339,513 2,475,124
</TABLE>
27
<PAGE> 30
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
ADDITIONAL INFORMATION
SCHEDULE I-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
(CONTINUED)
JUNE 30, 1998
<TABLE>
<CAPTION>
SHARES, UNITS
DESCRIPTION PRINCIPAL COST OF CURRENT
IDENTITY OF ISSUE OF INVESTMENT AMOUNT ASSET VALUE
----------------- ------------- ------ ----- -----
<S> <C> <C> <C> <C>
MasterWorks S&P 500 Stock Fund Registered Investment Co. Holdings 1,642,276 31,254,333 39,069,739
Pegasus Mid-Cap Opportunity Fund Registered Investment Co. Holdings 990,290 19,300,655 20,885,211
PIMCO Total Return Fund Registered Investment Co. Holdings 557,606 5,885,906 5,977,538
RCM Growth Equity Fund Inc. Registered Investment Co. Holdings 63,160 394,985 452,859
T. Rowe Price International Stock Fund Registered Investment Co. Holdings 740,803 10,276,384 11,304,651
Capital Guardian Conservative Account Common/Collective Trust 217,000 3,185,065 3,456,813
Capital Guardian Moderate Account Common/Collective Trust 712,576 10,476,625 13,068,653
Capital Guardian Growth Account Common/Collective Trust 667,531 10,451,830 12,943,426
Loan Fund Participant Loans, interest 8.5% ---- 9,732,552 9,732,552
----------- ----------- -----------
Total 322,791,566 759,000,414 982,841,442
=========== =========== ===========
</TABLE>
28
<PAGE> 31
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
ADDITIONAL INFORMATION
SCHEDULE II-SCHEDULE OF REPORTABLE TRANSACTION
JUNE 30, 1998
<TABLE>
<CAPTION>
NUMBER OF PURCHASE SELLING COST OF NET
PARTY INVOLVED DESCRIPTION OF ASSET TRANSACTIONS PRICE PRICE ASSET GAIN/(LOSS)
- -------------- -------------------- ------------ -------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mellon Bank, N.A. EB Temporary Investment Fund 554 110,938,035 0
647 114,794,050 114,794,050
</TABLE>
29
<PAGE> 32
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
ADDITIONAL INFORMATION
SCHEDULE III-SCHEDULE OF NON-EXEMPT TRANSACTIONS
JUNE 30, 1998
<TABLE>
<CAPTION>
(c)
DESCRIPTION OF (g) (j)
(b) TRANSACTIONS INCLUDING EXPENSES (i) NET GAIN
(a) RELATIONSHIP OF MATURITY DATE, RATE OF (d) (e) (f) INCURRED (h) CURRENT OR (LOSS)
IDENTITY OF PLAN, EMPLOYER, OR INTEREST, COLLATERAL, PAR PURCHASE SELLING LEASE WITH COST OF VALUE OF ON EACH
PARTY INVOLVED OTHER PARTY-IN-INTEREST OR MATURITY VALUE PRICE PRICE RENTAL TRANSACTION ASSET ASSET TRANSACTION
- -------------- ----------------------- ------------------------- -------- ------- ------ ----------- ------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Plan Sponsor/Employer Employee contributions $219,896* N/A N/A N/A N/A $219,896 N/A
not timely remitted to
the Plan
</TABLE>
* This represents total amount of contributions that have been withheld from
employees, but not remitted timely into trust by the plan sponsor.
30
<PAGE> 33
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Trustees have duly caused this annual report to be signed by the undersigned
hereunto duly authorized.
THRIFT PLANS OF CONSOLIDATED NATURAL GAS
COMPANY AND ITS PARTICIPATING SUBSIDIARIES
(Name of Plan)
By Donald W. Borneman
-----------------------------
(DONALD W. BORNEMAN, Trustee)
Dated: January 11, 1999
31
<PAGE> 34
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 2-77204, 2-97948, 33-40478, 33-44892, 333-18783 and
333-33505) and in the Prospectuses constituting part of the Registration
Statements on Form S-3 (Nos. 33-63931, 333-10869 and 333-25347) of Consolidated
Natural Gas Company of our report dated January 11, 1999, appearing on page 1 of
this Form 11-K.
PricewaterhouseCoopers LLP
Pittsburgh, PA 15219
January 11, 1999
