<PAGE> 1
CONSOLIDATED NATURAL GAS CO - 11-K Annual Report of Thrift Plans
Date Filed:12/23/99
===============================================================================
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, 1999 AND 1998
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, 1999 AND 1998
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, 1999 .....................................................................2
Consolidated Statement of Net Assets Available for Benefits with
Fund Information - June 30, 1998 .....................................................................5
Consolidated Statement of Changes in Net Assets Available for Benefits with
Fund Information - June 30, 1999 .....................................................................8
Consolidated Statement of Changes in Net Assets Available for Benefits with
Fund Information - June 30, 1998 .....................................................................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,
1999 and 1998 and the consolidated changes in net assets available for benefits
for the years then ended, in conformity with accounting principles generally
accepted in the United States. 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 auditing standards generally accepted in the
United States 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 supplemental schedules of assets held
for investment purposes, reportable transactions, and non-exempt transactions
are presented for purposes of additional analysis and are not a required part of
the basic financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The 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. These supplemental schedules and fund
information are the responsibility of the Plan's management. The supplemental
schedules and 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
December 17, 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, 1999
<TABLE>
<CAPTION>
GENERAL AND SHORT-TERM
THRIFT TRUSTS
----------------------------------------
Consolidated Cash
Natural Gas (General
Company Investments
Common and Money Funds
Stock Fund Market Funds) Combined
------------ ------------- --------
Assets:
<S> <C> <C> <C>
Cash ....................................... $ -- $ 212,266 $ 212,266
Consolidated Natural Gas Company
common stock, at market .................. 146,286 -- 146,286
Temporary investments, at cost (which
approximates market value) ................. -- 4,889,737 4,889,737
Loans to participants ...................... -- 12,665 12,665
Interest receivable ........................ -- 3,298 3,298
Employee contribution and loan repayment
receivable ............................... -- 316,750 316,750
---------- ---------- ----------
TOTAL ASSETS .................. 146,286 5,434,716 5,581,002
Liabilities:
Accounts payable ........................... -- 23,153 23,153
---------- ---------- ----------
Net assets available for benefits ........ $ 146,286 $5,411,563 $5,557,849
========== ========== ==========
</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, 1999
<TABLE>
<CAPTION>
Alternate and Long-Term Thrift Trusts
- -----------------------------------------------------------------------------------------------------------------------------------
Consolidated Fixed
Natural Dominion Diversified Investment
Gas 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
------------- ----------- ----------- ----------- ------------ ---------- -------------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Cash ..................... $ -- $ -- $ -- $ 1,075,068 $ -- $ -- $ --
Consolidated Natural
Gas Company common
stock, at market ........ 495,540,474 -- -- -- -- -- --
Dominion Resources,
Incorporated common
stock, at market ........ -- 1,877,517 -- -- -- -- --
Common stock, at
market value ............ -- -- 71,841,044 -- -- -- --
Temporary
investments, at
cost (which
approximates market
value) .................. 10,075,200 -- 1,395,610 1,600,000 875,473 42,399 56,912
Insurance Company
Contracts, at contract
value (which approximates
market value) ........... -- -- -- -- 279,837,752 -- --
Registered
Investment Company
Holdings, at market ..... -- -- 3,038,670 -- -- 54,292,931 20,212,901
Common/Collective
Trusts, at market ....... -- -- -- -- -- -- --
Loans to
Participants ............ -- -- -- -- -- -- --
Dividends and
interest
receivable .............. 28,313 -- 74,488 22,176 71,930 -- --
Receivable from
sale of common
stock ................... -- -- -- 1,174,213 -- -- --
Employee contribution
and loan repayment
receivable .............. -- -- -- -- -- -- --
Interfund accounts -
receivable/
(payable) ............... 444,093 (10,678) (8,916) 959,655 (1,277,629) -- --
------------- ----------- ------------ ------------ ------------- ------------- -------------
TOTAL ASSETS ............. 506,088,080 1,866,839 76,340,896 4,831,112 279,507,526 54,335,330 20,269,813
Liabilities:
Accounts payable ......... 1,600,534 -- 443,293 2,632,769 -- -- --
------------- ----------- ------------ ------------ ------------- ------------- -------------
Net assets available
for benefits ............ $ 504,487,546 $ 1,866,839 $ 75,897,603 $ 2,198,343 $ 279,507,526 $ 54,335,330 $ 20,269,813
============= =========== ============ ============ ============= ============= =============
</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, 1999
<TABLE>
<CAPTION>
Alternate and Long-Term Thrift Trusts
- ------------------------------------------------------------------------------------------------
Conservative Moderate
International Intermediate Balanced Balanced
Equity Fund Bond Fund Fund Fund
----------- ----------- ------------ ----------
Assets:
<S> <C> <C> <C> <C>
Cash ..................... $ -- $ -- $ -- $ --
Consolidated Natural
Gas Company common
stock, at market ........ -- -- -- --
Dominion Resources,
Incorporated common
stock, at market ........ -- -- -- --
Common stock, at
market value ............ -- -- -- --
Temporary
investments, at
cost (which
approximates market
value) .................. 29,280 9,518 4,133 34,235
Insurance Company
Contracts, at contract
value (which approximates
market value) ........... -- -- -- --
Registered
Investment Company
Holdings, at market ..... 11,824,870 6,792,555 -- --
Common/Collective
Trusts, at market ....... -- -- 3,604,189 16,129,132
Loans to
Participants ............ -- -- -- --
Dividends and
interest
receivable .............. -- -- -- --
Receivable from
sale of common
stock ................... -- -- -- --
Employee contribution
and loan repayment
receivable .............. -- -- -- --
Interfund accounts -
receivable/
(payable) ............... -- -- -- --
----------- ----------- ----------- -----------
TOTAL ASSETS ............. 11,854,150 6,802,073 3,608,322 16,163,367
Liabilities:
Accounts payable ......... -- -- -- --
----------- ----------- ----------- -----------
Net assets available
for benefits ............ $11,854,150 $ 6,802,073 $ 3,608,322 $16,163,367
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Growth Total
Balanced Participants Funds for all
Fund Loan Fund Combined Plans
-------- ------------ --------- ------------
Assets:
<S> <C> <C> <C> <C>
Cash ..................... $ -- $ -- $ 1,075,068 $ 1,287,334
Consolidated Natural
Gas Company common
stock, at market ........ -- -- 495,540,474 495,686,760
Dominion Resources,
Incorporated common
stock, at market ........ -- -- 1,877,517 1,877,517
Common stock, at
market value ............ -- -- 71,841,044 71,841,044
Temporary
investments, at
cost (which
approximates market
value) .................. 39,911 -- 14,162,671 19,052,408
Insurance Company
Contracts, at contract
value (which approximates
market value) ........... -- -- 279,837,752 279,837,752
Registered
Investment Company
Holdings, at market ..... -- -- 96,161,927 96,161,927
Common/Collective
Trusts, at market ....... 15,507,097 -- 35,240,418 35,240,418
Loans to
Participants ............ -- 9,455,940 9,455,940 9,468,605
Dividends and
interest
receivable .............. -- -- 196,907 200,205
Receivable from
sale of common
stock ................... -- -- 1,174,213 1,174,213
Employee contribution
and loan repayment
receivable .............. -- 106,525 106,525 423,275
Interfund accounts -
receivable/
(payable) ............... -- (106,525) -- --
------------- -------------- -------------- --------------
TOTAL ASSETS ............. 15,547,008 9,455,940 1,006,670,456 1,012,251,458
Liabilities:
Accounts payable ......... -- -- 4,676,596 4,699,749
------------- -------------- -------------- --------------
Net assets available
for benefits ............ $ 15,547,008 $ 9,455,940 $1,001,993,860 $1,007,551,709
============= ============== ============== ==============
</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, 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
------------ ------------ -----------
Assets:
<S> <C> <C> <C>
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
Employee contribution and loan
repayment receivable ................ -- 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.
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, 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
------------- ----------- ----------- ----------- ------------ ---------- ----------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C>
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 -- -- -- --
Employee contribution
and loan repayment
receivable .......... -- -- 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 $20,944,982
============ ========== =========== =========== ============ =========== ===========
</TABLE>
The accompanying notes are an integral
part of these consolidated financial statements.
6
<PAGE> 9
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
CONSOLIDATED STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
AT JUNE 30, 1998
<TABLE>
<CAPTION>
Alternate and Long-Term Thrift Trusts
- ----------------------------------------------------------------------------------------------------------------------------------
Conservative Moderate Growth Total
International Intermediate Balanced Balanced Balanced Participants' Funds for all
Equity Fund Bond Fund Fund Fund Fund Loan Fund Combined Plans
----------- ----------- ------------ ----------- -------- ------------ --------- ------------
Assets:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash .................$ -- $ -- $ -- $ -- $ -- $ -- $ 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
Employee contribution
and loan repayment
receivable .......... -- -- -- -- -- 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.
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, 1999
<TABLE>
<CAPTION>
GENERAL AND SHORT-TERM
THRIFT TRUSTS
--------------------------------------
Consolidated Cash
Natural Gas (General
Company Investments
Common and Money Funds
Stock Fund Market Funds) Combined
---------- ----------- ------------
ADDITIONS
<S> <C> <C> <C>
Additions to net assets attributed to:
Contributions ........................... $ -- $ 13,891,033 $ 13,891,033
Transfer from (to) Long-Term Thrift Trust 11,749 (53,841) (42,092)
Dividend income ......................... -- 4,682 4,682
Interest income ......................... -- 534,968 534,968
Net (depreciation) in fair
value of investments .................. (1,966) -- (1,966)
------------ ------------ ------------
TOTAL ADDITIONS ......... 9,783 14,376,842 14,386,625
------------ ------------ ------------
DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants ........... 53,016 19,624,570 19,677,586
------------ ------------ ------------
TOTAL DEDUCTIONS ........ 53,016 19,624,570 19,677,586
------------ ------------ ------------
Net (decrease) .......................... (43,233) (5,247,728) (5,290,961)
Net assets available for benefits:
Beginning of year ....................... 189,519 10,659,291 10,848,810
------------ ------------ ------------
End of year ............................. $ 146,286 $ 5,411,563 $ 5,557,849
============ ============ ============
</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, 1999
<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
------------- ----------- ----------- ----------- ------------ ---------- ----------
ADDITIONS
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Contributions $8,060,725 $ -- $4,141,064 $173,058 $5,831,742 $4,815,506 $2,848,193
Transfers from
General and Short-Term
Thrift Trusts.......... 42,092 -- -- -- -- -- --
Dividend Income:
Consolidated Natural
Gas Company
common stock ....... 14,320,763 -- 113,164 123,108 1,747,812 -- --
Other ............... 120,057 -- 890,187 9,824 -- 590,520 148,541
Interest income ....... 225,070 -- 99,616 107,113 18,083,554 -- --
Net appreciation
(depreciation) in
fair value of
investments .......... 15,659,361 129,838 12,579,584 -- -- 8,660,650 780,378
Interfund
conversions - net .... (15,646,079) (188,010) 465,580 6,759,771 10,110,099 4,687,006 (3,113,973)
------------ ----------- ----------- ----------- ------------ ----------- -----------
TOTAL ADDITIONS ... 22,781,989 (58,172) 18,289,195 7,172,874 35,773,207 18,753,682 663,139
------------ ----------- ----------- ----------- ------------ ----------- -----------
DEDUCTIONS
Deductions from net
assets attributable to:
Benefits paid to
participants ......... 18,038,955 64,748 4,149,709 7,116,799 43,812,793 3,146,100 1,338,308
------------ ----------- ----------- ----------- ------------ ----------- -----------
TOTAL DEDUCTIONS .. 18,038,955 64,748 4,149,709 7,116,799 43,812,793 3,146,100 1,338,308
------------ ----------- ----------- ----------- ------------ ----------- -----------
Net increase (decrease) 4,743,034 (122,920) 14,139,486 56,075 (8,039,586) 15,607,582 (675,169)
Net assets available
for benefits:
Beginning of year .... 499,744,512 1,989,759 61,758,117 2,142,268 287,547,112 38,727,748 20,944,982
------------ ----------- ----------- ----------- ------------ ----------- -----------
End of year ......... $504,487,546 $ 1,866,839 $75,897,603 $ 2,198,343 $279,507,526 $54,335,330 $20,269,813
============ =========== =========== =========== ============ =========== ===========
</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
AT JUNE 30, 1999
<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.......... $ 1,756,580 $ 727,538 $ 472,132 $ 1,834,445 $ 2,210,839 $ -- $ 32,871,822 $ 46,762,855
Transfers from General
and Short-Term Thrift
Trust................. -- -- -- -- -- -- 42,092 --
Dividend Income:
Consolidated Natural
Gas Company
common stock ....... -- -- -- -- -- -- 16,304,847 16,309,529
Other ............... -- 627,110 -- -- -- -- 2,386,239 2,386,239
Interest income ....... -- 2,088 -- -- -- 737,777 19,255,218 19,790,186
Net appreciation
(depreciation) in
fair value of
investments .......... 760,588 (438,826) 283,538 1,984,926 2,065,970 -- 42,466,007 42,464,041
Interfund
conversions - net .... (1,237,627) 356,923 (472,732) 52,512 (1,196,511) (576,959) -- --
----------- ---------- ---------- ----------- ----------- ---------- -------------- --------------
TOTAL ADDITIONS ... 1,279,541 1,274,833 282,938 3,871,883 3,080,298 160,818 113,326,225 127,712,850
----------- ---------- ---------- ----------- ----------- ---------- -------------- --------------
DEDUCTIONS
Deductions from net
assets attributable to:
Benefits paid to
participants ......... 735,414 486,834 145,669 876,127 440,467 437,430 80,789,353 100,466,939
----------- ---------- ---------- ----------- ----------- ---------- -------------- --------------
TOTAL DEDUCTIONS .. 735,414 486,834 145,669 876,127 440,467 437,430 80,789,353 100,466,939
----------- ---------- ---------- ----------- ----------- ---------- -------------- --------------
Net increase/(decrease) 544,127 787,999 137,269 2,995,756 2,639,831 (276,612) 32,536,872 27,245,911
Net assets available
for benefits:
Beginning 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
----------- ---------- ---------- ----------- ----------- ---------- -------------- --------------
End of year ........ $11,854,150 $6,802,073 $3,608,322 $16,163,367 $15,547,008 $9,455,940 $1,001,993,860 $1,007,551,709
=========== ========== ========== =========== =========== ========== ============== ==============
</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, 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............................... $ -- $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 depreciation in fair value of
investments............................... (749,301) -- (749,301)
----------- ----------- -----------
TOTAL ADDITIONS ........... (1,038,017) 14,767,820 13,729,803
----------- ----------- -----------
DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants ............. 41,524 18,789,914 18,831,438
----------- ----------- -----------
TOTAL DEDUCTIONS .......... 41,524 18,789,914 18,831,438
----------- ----------- -----------
Net(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.
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, 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
------------- ----------- ----------- ----------- ------------ ---------- -----------
ADDITIONS
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Contributions......... $ 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
in fair value of
investments .......... 43,696,992 251,228 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 ... 7,525,052 (562,304) 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 ......... 15,874,497 149,288 3,062,638 9,796,975 44,279,851 1,662,758 932,495
------------ ----------- ----------- ----------- ------------ ----------- -----------
TOTAL DEDUCTIONS .. 15,874,497 149,288 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.
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, 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
------------- ------------ ------------ ----------- ------------ ------------- -------- -----------
ADDITIONS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Contributions.......... $ 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
in fair value of
investments .......... 451,384 447,364 321,025 1,500,323 1,420,042 -- 71,222,466 70,473,165
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 5,810,922 678,814 140,131,427 153,861,230
------------ ----------- ----------- ------------ ----------- ----------- ------------ ------------
DEDUCTIONS
Deductions from net
assets attributed to:
Benefits paid to
participants ......... 614,641 232,522 104,335 335,460 609,440 413,321 78,068,221 96,899,659
------------ ----------- ----------- ----------- ----------- ----------- ------------ -----------
TOTAL DEDUCTIONS .. 614,641 232,522 104,335 335,460 609,440 413,321 78,068,221 96,899,659
------------ ----------- ----------- ----------- ----------- ----------- ------------ -----------
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.
13
<PAGE> 16
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended June 30, 1999 and 1998
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 the United Gas Workers Union, Local No. 69 -
Division II, SEIU, AFL-CIO ("CNG Transmission and Hope Gas Union Thrift
Plan")
4. Thrift Plan of The Peoples Natural Gas Company for Employees
Represented by the United Gas Workers Union, Local 69 - Division I,
SEIU, AFL-CIO ("Peoples Union Thrift Plan")
5. Thrift Plan of The River Gas Division of The East Ohio Gas Company
for Employees Represented by the United Gas Workers Union, Local No. 69 -
Division II, SEIU, AFL-CIO ("River Union Thrift Plan")
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 ("Computer Operations Union
Thrift Plan")
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 ("West Ohio Clerical Union Thrift
Plan")
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 ("West Ohio Physical Union Thrift
Plan")
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 Union 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 West Ohio Clerical Union Thrift Plan, the West Ohio Physical 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
14
<PAGE> 17
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Years Ended June 30, 1999 and 1998
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"), ranges from
1% to 10% each pay period based upon the participant's contribution
rate and length of service. Under the VNG Plans, the employer's matching
contribution ranges from 1% to 3% each pay period 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.
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% based on
the investment elections of the participants: (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 based on the investment
elections of the participants: (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% based on the investment elections of the
participants: (1) Company common stock and (2) the General Investments Fund.
Participants may change their investment options at any time.
Under the VNG Plans, 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 deposited in the Fixed Investment Fund is invested in group annuity
contracts with one or more insurance companies. Investments under the contracts
mature at various intervals. The interest rates credited monthly to
15
<PAGE> 18
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Years Ended June 30, 1999 and 1998
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, 1999 and 1998 were
6.5%, respectively.
The Conservative Balanced Fund, the Moderate Balanced Fund and the Growth
Balanced Fund are common/collective trusts designed to accomplish specific
investment objectives. 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.
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.
The loans are secured by the balance in the participant's account and bear
interest at a fixed rate commensurate with local prevailing rates at the time
the loans are made, as determined by the Trustees. For the plan years ended
June 30, 1999 and 1998, the interest rate on loans was 8-1/2%. Loan
repayments, including interest, are deposited in the participant's account
and invested in accordance with the participant's then current investment
elections.
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. 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 December 31, 1981 are
registered in the name of the Trustees and credited to the participant's
account. Dividends earned on such stock are deposited in participants'
accounts and are subject to the withdrawal provisions of the General Thrift
Trust.
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 based on the investment
elections of the participants: (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.
Participants may change their investment options at any time.
In addition, a participant may convert funds from the above mentioned
16
<PAGE> 19
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Years Ended June 30, 1999 and 1998
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. The loans are secured by the balance in the participant's account and
bear interest at a fixed rate commensurate with local prevailing rates at the
time the loans are made, as determined by the Trustees. For the plan years
ended June 30, 1999 and 1998, the interest rate on loans was 8-1/2%.Loan
repayments, including interest, are deposited in the participant's account and
invested in accordance with the participant's then current investment elections.
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.
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, 1999 and 1998 was
6.5%, 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 designed to accomplish specific
investment objectives. 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, 1999 and 1998
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. Certain prior year amounts have been reclassified
for comparative purposes.
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
therein, 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.
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
18
<PAGE> 21
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.
Purchases and sales of investments are recorded on a trade-date
basis. Realized gains and losses on the sale of investments are determined
using the average cost method.
Net appreciation (depreciation) in fair value of investments includes both
realized and unrealized gains (losses).
Participants in the System Thrift Plan, the East Ohio Union Thrift Plan,
the West Ohio Clerical Union Thrift Plan and the West Ohio Physical 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.
Benefits are recorded when paid.
FORFEITURES
At June 30, 1999 and 1998, forfeited nonvested accounts totaled $285,034
and $488,959, respectively. These accounts will be used to reduce future
employer contributions. Also, for the year ended June 30, 1999, employer
contributions were reduced by $494,238 from forfeited nonvested accounts.
NOTE 3 - MERGER OF THE COMPANY AND DRI:
On February 22, 1999, the Company and DRI announced that a definitive
merger agreement was approved by the boards of directors of both
companies. On May 11, 1999, the Company announced that the Board of Directors
had unanimously approved an Amended and Restated Agreement and Plan of Merger
with DRI.
The shareholders of both the Company and DRI and all applicable state
regulatory commissions and federal regulatory agencies have approved
the merger. Certain of these approvals occurred subsequent to June 30, 1999.
The merger transaction is conditioned, among other things, upon the opinions of
counsel on the tax-free nature of the stock portion of the transaction.
NOTE 4 - CONTRIBUTIONS:
Contributions included in the Consolidated Statement of Changes in Net Assets
Available for Benefits with Fund Information consist of the following:
19
<PAGE> 22
<TABLE>
<CAPTION>
Year ended June 30, 1999
---------------------------------------------------------
General and Short- Alternate and Long-
Term Thrift Trusts Term Thrift Trusts Total
------------------ ------------------- -----
<S> <C> <C> <C>
From participating employees $13,891,033 $14,675,418 $28,566,451
From participating employers -- 17,100,182 17,100,182
Rollovers from other qualified
employee benefit plans -- 1,096,222 1,096,222
----------- ----------- -----------
Total $13,891,033 $32,871,822 $46,762,855
=========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Year ended June 30, 1998
---------------------------------------------------------
General and Short- Alternate and Long-
Term Thrift Trusts Term Thrift Trusts Total
------------------ ------------------- -----
<S> <C> <C> <C>
From participating employees $14,189,964 $13,642,974 $27,832,938
From participating employers -- 16,402,374 16,402,374
Rollovers from other qualified
employee benefit plans -- 703,747 703,747
----------- ----------- -----------
Total $14,189,964 $30,749,095 $44,939,059
=========== =========== ===========
</TABLE>
NOTE 5- TAX STATUS OF THE PLANS:
The Internal Revenue Service has determined that the Plans and related
Trusts are designed in accordance with the applicable sections of the
Internal Revenue Code (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.
NOTE 6- 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, 1999 June 30, 1998
---------------------- ----------------------
Units Unit Value Units Unit Value
----- ---------- ----- ----------
<S> <C> <C> <C> <C>
Diversified Equity and
Diversified Funds 252,978 $ 295.99 246,760 $ 245.24
Common/Collective Trusts:
Conservative Balanced Fund 208,817 $ 17.26 217,000 $ 15.93
Moderate Balanced Fund 769,153 $ 20.97 712,576 $ 18.34
Growth Balanced Fund 687,987 $ 22.54 667,531 $ 19.39
</TABLE>
NOTE 7- PLAN AMENDMENTS:
The following changes were made to the East Ohio Union Thrift Plan
effective January 1, 1998, and effective November 1, 1998 to the West Ohio
Clerical Union Thrift Plan and the West Ohio Physical Union Thrift Plan:
20
<PAGE> 23
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 8- 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, 1999, a total of
35,555 shares at a cost of $1,847,484 were purchased on the open market and
63,500 shares at a market value of $3,859,837 were sold. 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 at the prevailing market price.
21
<PAGE> 24
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
Years Ended June 30, 1999 and 1998
NOTE 9- 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 10- 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, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
Consolidated Natural Gas Company
Common Stock Fund .......................... $ -- $ --
Cash (General Investments and
Money Market Funds) ........................ 2,300 982
------ ------
Funds Combined ....................... $2,300 $ 982
====== ======
</TABLE>
<TABLE>
<CAPTION>
ALTERNATE AND LONG-TERM TRUSTS
-------------------------------
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
Consolidated Natural Gas
Company Common Stock and
CNG Stock Funds .......................... $266,931 $212,399
Diversified Equity and
Diversified Funds ........................ 229,684 8,926
Cash (General Investments Fund) ............ 69,657 183,258
Fixed Investment Stable Value and
Fixed Investment Funds ................... -- 468,452
Participants' Loan Fund .................... 5,817 --
S&P 500 Index Fund ......................... 121,055 15
Small Stock Fund ........................... 44,823 21
International Equity Fund .................. 37,460 4,630
Intermediate Bond Fund ..................... -- --
Conservative Balanced Fund ................. -- 14
Moderate Balanced Fund ..................... -- --
Growth Balanced Fund ....................... -- 6,940
-------- --------
Funds Combined ....................... $775,427 $884,655
======== ========
</TABLE>
22
<PAGE> 25
<TABLE>
<CAPTION>
TOTAL FOR ALL PLANS
-------------------------------
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
Consolidated Natural Gas
Company Common Stock and
CNG Stock Funds .......................... $266,931 $212,399
Diversified Equity and
Diversified Funds ........................ 229,684 8,926
Cash (General Investments and
Money Market Funds) .................... 71,957 184,240
Fixed Investment Stable Value and
Fixed Investment Funds ................... -- 468,452
Participants' Loan Fund .................... 5,817 --
S&P 500 Index Fund ......................... 121,055 15
Small Stock Fund ........................... 44,823 21
International Equity Fund .................. 37,460 4,630
Intermediate Bond Fund ..................... -- --
Conservative Balanced Fund ................. -- 14
Moderate Balanced Fund ..................... -- --
Growth Balanced Fund ....................... -- 6,940
-------- --------
Total for all Plans .................. $777,727 $885,637
======== ========
</TABLE>
NOTE 11- INVESTMENTS:
The following investments represent 5% or more of the combined
Plans' net assets available for benefits:
<TABLE>
<CAPTION>
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
Corporation Common Stock Fund ........ $495,686,760 $496,037,220
Barclays Global Investors
S & P 500 Stock Fund ............... 54,292,931 --
Insurance Company Contracts:
Aetna Life Insurance
Company #010463 ................. 79,377,557 90,614,143
Connecticut General Life
Insurance Company #16355 ........ 63,414,354 59,305,326
Metropolitan Life
Insurance Company ............... 51,291,801 --
</TABLE>
NOTE 12- SUBSEQUENT EVENTS:
The following changes were made effective July 1, 1999 to the CNG
Transmission and Hope Gas Union Thrift Plan, the Peoples Union Thrift Plan, the
River Union Thrift Plan and the Computer Operations Union Thrift Plan:
1. Funds in the Alternate Thrift Trust were transferred to the
Long-Term Thrift Trust, while funds in the General Thrift Trust will
be transferred to the Short-Term Thrift Trust.
23
<PAGE> 26
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.
The following changes were made effective July 1, 1999 to the VNG
Plans:
1. Funds in the Alternate Thrift Trust were transferred to the
Long- Term Thrift Trust.
2. Participants became eligible to contribute to the
Short-Term Thrift Trust Money Market Fund.
3. The Long-Term Thrift Trust began to 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 continued to be options but were redesignated as
the CNG Stock Fund and Fixed Investment Stable Value Fund,
respectively.
4. Contributions could be invested in any one or more of the
ten investment options in increments of 1%.
5. 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.
6. Investment options began to be valued daily and transfers
among options began to be permitted daily.
7. Participants began to pay investment management, marketing,
transfer agent and administrative expenses for each investment option,
except the Fixed Investment Stable Value Fund.
8. Participants could gradually transfer their balances in the
CNG Stock Fund to any of the other available investment options.
Also effective July 1, 1999, the valuation and recordkeeping functions
previously administered by Towers Perrin were transferred to Dreyfus Retirement
Services on behalf of the following:
1. The VNG Plans; and
2. Investments in the Alternate and General Thrift Trusts for
the River Union Thrift Plan, Computer Operations Union Thrift Plan,
Peoples Union Thrift Plan and the CNG Transmission and Hope Gas Union
Thrift Plan.
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
JUNE 30, 1999
<TABLE>
<CAPTION>
SHARES, UNITS
DESCRIPTION PRINCIPAL COST OF CURRENT
IDENTITY OF ISSUE OF INVESTMENT AMOUNT ASSET VALUE
----------------- ------------- ------ ----- -----
<S> <C> <C> <C> <C>
GENERAL AND SHORT-TERM THRIFT TRUSTS
Consolidated Natural Gas Company Stock* Company Common Stock 2,408 $ 84,847 $ 146,286
Mellon Bank, N.A. * EB Temporary Investment Fund 4,439,737 4,439,737 4,439,737
American Express Credit Corporation Dated 4/12/99, 4.80%, due 7/1/99 100,000 100,000 100,000
American Express Credit Corporation Dated 5/21/99, 4.77%, due 7/1/99 150,000 150,000 150,000
American Express Credit Corporation Dated 5/25/99, 4.80%, due 7/1/99 100,000 100,000 100,000
Prudential Funding Corporation Notes Dated 4/20/99, 4.78%, due 7/1/99 100,000 100,000 100,000
Loan Fund Participant Loans, Interest 8.5% 12,665 12,665
* Party-in interest
</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, 1999
<TABLE>
<CAPTION>
SHARES, UNITS
DESCRIPTION PRINCIPAL COST OF CURRENT
IDENTITY OF ISSUE OF INVESTMENT AMOUNT ASSET VALUE
----------------- ------------- ------ ----- -----
<S> <C> <C> <C> <C>
ALTERNATE AND LONG-TERM THRIFT TRUSTS
Consolidated Natural Gas Company Stock* Company Common Stock 8,157,045 $ 304,905,268 $ 495,540,474
Dominion Resources, Inc. Common Stock 43,348 1,083,410 1,877,517
Abbott Laboratories Common Stock 10,400 376,700 473,162
AK Steel Holding Corporation Common Stock 7,000 184,552 157,500
Alaska Air Group Inc. Common Stock 3,400 169,744 141,950
Albertson's, Inc. Common Stock 4,900 256,961 252,656
Allstate Corp. Common Stock 14,400 681,466 516,600
ALZA Corp. Common Stock 900 37,106 45,787
Ameren Corp. Common Stock 9,800 383,642 376,075
America Online, Inc. Common Stock 6,300 827,608 695,900
American Greetings Corp. Common Stock 5,200 132,704 156,650
American Home Products Corp. Common Stock 500 27,421 28,688
American International Group Inc. Common Stock 5,630 253,143 659,174
Ameritech Corp. Common Stock 10,000 637,455 735,000
Amgen Inc. Common Stock 1,200 33,520 73,050
AmSouth Bancorporation Common Stock 3,600 111,917 83,475
Anheuser Busch Cos, Inc. Common Stock 8,975 685,662 636,664
Applied Materials, Inc. Common Stock 5,400 292,982 398,925
Associates First Capital Corp. Common Stock 9,582 240,745 424,553
AT&T Corp. Common Stock 19,650 818,361 1,096,715
Avon Products Inc. Common Stock 4,900 192,283 271,950
Bank of America Corp. Common Stock 7,900 438,587 579,169
Bank of New York Inc. Common Stock 7,400 156,688 271,488
Bank One Corp. Common Stock 11,800 687,295 702,837
Bell Atlantic Corp. Common Stock 9,600 425,371 627,600
BellSouth Corp. Common Stock 12,900 334,056 604,312
Black & Decker Corp. Common Stock 6,700 377,056 422,937
Borg- Warner Automotive, Inc. Common Stock 4,900 271,654 269,500
Bristol- Myers Squibb Co. Common Stock 12,500 391,545 880,469
British Petroleum PLC ADR 4,800 368,277 520,800
Burlington Northern Santa Fe Corp. Common Stock 16,900 547,514 523,900
Cadence Design System Inc. Common Stock 10,200 283,265 130,000
Cardinal Health Inc. Common Stock 16,225 866,900 1,040,428
CBS Corp. Common Stock 26,200 1,189,895 1,138,200
Centex Corp. Common Stock 3,600 139,485 135,225
Chase Manhattan Corp. Common Stock 5,300 408,704 459,075
Circuit City Group Common Stock 300 16,738 27,900
Cisco Systems Inc. Common Stock 25,300 1,050,985 1,627,419
Citigroup Inc. Common Stock 52,800 1,909,341 2,508,000
Clear Channel Communications, Inc. Common Stock 625 39,085 43,086
Coca-Cola Co. Common Stock 500 29,636 31,000
Coca-Cola Enterprises, Inc. Common Stock 1,500 32,157 44,625
Colgate-Palmolive Co. Common Stock 2,400 177,824 236,900
Comerica Inc. Common Stock 9,500 588,678 564,657
Computer Associates Int'l Inc. Common Stock 5,700 224,918 313,450
Conoco, Inc. Common Stock 1,000 28,247 27,875
Costco Cos, Inc. Common Stock 300 18,166 24,019
Dana Corp. Common Stock 2,200 70,421 101,337
Dayton Hudson Corp. Common Stock 5,475 175,699 355,875
Dell Computer Corp. Common Stock 10,700 329,094 395,900
</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, 1999
<TABLE>
<CAPTION>
SHARES, UNITS
DESCRIPTION PRINCIPAL COST OF CURRENT
IDENTITY OF ISSUE OF INVESTMENT AMOUNT ASSET VALUE
----------------- ------------- ------ ----- -----
<S> <C> <C> <C> <C>
Dial Corp. Common Stock 7,000 121,894 260,312
Dominion Resources Inc. Common Stock 7,500 294,405 324,844
El Paso Energy Corp. Common Stock 4,000 120,421 140,750
EMC Corp. Common Stock 6,600 344,433 363,000
Enron Corp. Common Stock 800 51,977 65,400
Equitable Cos Inc. Common Stock 3,800 252,308 254,600
Ericsson L M Tel Co. ADR 1,000 30,989 32,937
Exxon Corp. Common Stock 7,800 626,820 601,574
Federal National Mortgage Association Common Stock 14,200 808,840 970,788
First Tennessee National Corp. Common Stock 8,100 298,002 310,332
First Union Corp. Common Stock 12,900 719,184 606,350
Firstar Corporation Common Stock 600 17,865 16,800
Florida Progress Corp. Common Stock 11,400 464,615 470,962
Flowers Industries Inc. Common Stock 13,100 282,044 284,106
Ford Motor Co. Common Stock 13,800 406,174 778,838
FPL Group Inc. Common Stock 5,200 300,052 284,050
General Electric Co. Common Stock 22,100 814,723 2,497,300
Gillette Co. Common Stock 450 21,546 18,450
Glaxo Wellcome PLC ADR 3,800 135,570 215,175
Global TeleSystems Group, Inc. Common Stock 200 11,500 16,200
Goodrich (B.F.) Common Stock 12,600 503,339 535,500
Grace (W R) & Co. Common Stock 9,000 155,725 165,625
GTE Corp. Common Stock 12,300 637,500 931,550
Guidant Corp. Common Stock 2,600 87,562 133,706
Hartford Financial Services Group, Inc. Common Stock 17,000 734,615 991,312
Hartford Life Inc. Common Stock 2,100 111,326 110,513
Healthsouth Corp. Common Stock 39,800 556,458 594,419
Heinz (H.J.) Co. Common Stock 6,400 347,205 320,801
Hewlett-Packard Co. Common Stock 1,700 114,093 170,850
Home Depot Inc. Common Stock 17,700 341,290 1,140,544
Honeywell, Inc. Common Stock 4,500 318,616 521,437
Host Marriott Corp. Common Stock 1,100 11,820 13,063
Ingersoll Rand Co. Common Stock 6,900 326,271 445,912
Intel Corp. Common Stock 30,350 1,437,008 1,805,825
International Business Machines Corp. Common Stock 13,100 671,077 1,693,175
Johnson & Johnson Common Stock 1,475 96,627 144,550
Kansas City So. Ind. Inc. Common Stock 2,800 146,034 178,675
Lear Corp. Common Stock 9,500 425,484 472,625
Lilly (Eli) & Co. Common Stock 5,100 358,218 365,288
Lincare Holdings Inc. Common Stock 5,400 207,729 135,000
Lincoln National Corp. Common Stock 5,200 249,277 272,026
Lowe's Companies Inc. Common Stock 7,500 152,020 425,156
Lucent Technologies Inc. Common Stock 22,202 617,191 1,497,247
Marsh & McLennan Companies Inc. Common Stock 12,850 400,992 970,278
Masco Corp. Common Stock 9,700 236,094 280,088
MBNA Corp. Common Stock 15,700 418,487 480,812
McDonald's Corp. Common Stock 750 33,463 30,844
MCI WorldCom Inc. Common Stock 19,600 912,900 1,686,825
Merck & Co. Inc. Common Stock 15,200 840,457 1,124,425
Microsoft Corp. Common Stock 37,800 1,361,199 3,409,087
Mobil Corp. Common Stock 4,400 327,768 435,550
Montana Power Co. Common Stock 1,800 48,079 126,900
Motorola, Inc. Common Stock 2,300 179,001 217,925
Mylan Labs Inc. Common Stock 13,500 358,235 357,750
National Service Industries Inc. Common Stock 6,000 305,430 216,000
Network Appliance Inc. Common Stock 2,900 129,288 162,037
</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, 1999
<TABLE>
<CAPTION>
SHARES, UNITS
DESCRIPTION PRINCIPAL COST OF CURRENT
IDENTITY OF ISSUE OF INVESTMENT AMOUNT ASSET VALUE
----------------- ------------- ------ ----- -----
<S> <C> <C> <C> <C>
New Century Energies Inc. Common Stock 7,900 387,466 306,619
NEXTEL Communications Inc. Common Stock 600 11,111 30,112
NIKE, Inc. Common Stock 500 25,507 31,688
Nokia Corp. ADR 700 9,144 64,094
Nortel Networks Corp. Common Stock 5,600 234,149 486,150
Ogden Corp. Common Stock 200 5,723 5,387
Omnicare, Inc. Common Stock 12,500 250,047 157,812
Outback Steakhouse Inc. Common Stock 3,100 114,731 121,868
PE Corp - Celera Genomics Group Common Stock 1,250 26,184 20,234
PE Corp - PE Biosystems Group Common Stock 2,500 255,333 286,875
Pfizer, Inc. Common Stock 5,300 465,909 581,225
Philip Morris Companies Inc. Common Stock 23,500 810,359 944,406
Precision Castparts Corp. Common Stock 100 5,677 4,250
Procter & Gamble Co. Common Stock 8,625 721,392 769,781
Quaker Oats Co. Common Stock 4,600 244,477 305,325
QUALCOMM Inc. Common Stock 200 13,581 28,700
Raytheon Co. Common Stock 200 13,513 14,100
Reliant Energy Inc. Common Stock 4,500 128,872 124,312
Reynolds & Reynolds Common Stock 6,700 147,680 156,194
Royal Dutch Petroleum Co. ADR 11,500 647,940 692,875
Ryder System Inc. Common Stock 5,300 170,869 137,725
SBC Communications Inc. Common Stock 7,700 310,167 446,600
Schering-Plough Corp. Common Stock 13,800 480,679 731,200
Schlumberger Limited Common Stock 200 11,715 12,737
Sempra Energy Common Stock 18,300 376,269 414,038
Smurfit-Stone Container Corp. Common Stock 7,400 97,675 152,163
Sprint Corporation Common Stock 2,600 139,057 137,350
STMicroelectronics N.V. Common Stock 175 11,396 12,130
Sunoco Inc. Common Stock 6,600 275,704 199,237
Tandy Corp. Common Stock 11,000 217,746 537,625
Tellabs, Inc. Common Stock 9,400 370,278 635,087
Teradyne Inc. Common Stock 8,000 406,652 574,000
Texas Instruments, Inc. Common Stock 2,375 225,308 344,000
Textron, Inc. Common Stock 4,200 246,161 345,713
Thomas & Betts Corp. (Tenn) Common Stock 100 4,252 4,725
Time Warner Inc. Common Stock 8,300 569,825 609,350
Tommy Hilfiger Corp. Common Stock 7,200 340,911 529,150
Travelers Property Casualty Corporation Common Stock 5,600 246,680 219,101
Tricon Global Restaurants, Inc. Common Stock 3,300 157,696 178,613
Tyco International Ltd. Common Stock 17,100 971,287 1,620,225
US Airways Group, Inc. Common Stock 100 7,551 4,356
UAL Corp. Common Stock 5,800 492,616 376,925
United Technologies Corp. Common Stock 24,938 921,794 1,788,100
UST Inc. Common Stock 3,600 113,083 105,313
Viacom Inc. Common Stock 12,600 398,741 554,400
Viad Corp. Common Stock 5,200 171,554 160,876
Wal-Mart Stores Inc. Common Stock 23,700 736,719 1,143,525
Warner-Lambert Co. Common Stock 3,650 239,106 252,982
Waste Management, Inc. Common Stock 9,175 427,506 493,156
Wells Fargo & Co. Common Stock 19,700 724,656 842,175
Xilinx Inc. Common Stock 300 14,481 17,175
XL Capital Limited ADR 100 5,811 5,650
The Chase Manhattan Bank, N. A. EOD Liquidity Fund 215,090 215,090 215,090
Aetna Life Insurance Company General Asset/Separate Accounts 79,377,557 79,377,557 79,377,557
</TABLE>
28
<PAGE> 31
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, 1999
<TABLE>
<CAPTION>
SHARES, UNITS
DESCRIPTION PRINCIPAL COST OF CURRENT
IDENTITY OF ISSUE OF INVESTMENT AMOUNT ASSET VALUE
----------------- ------------- ------ ----- -----
<S> <C> <C> <C> <C>
Connecticut General Life Insurance Company General Asset Account 63,414,354 63,414,354 63,414,354
Continental Assurance Company Separate Account 44,783,192 44,783,192 44,783,192
John Hancock Mutual Life Insurance Company General Asset Account 38,767,686 38,767,686 38,767,686
Pacific Mutual Life Insurance Company Separate Account 2,203,162 2,203,162 2,203,162
Metropolitan Life Insurance Company Separate Account 51,291,801 51,291,801 51,291,801
Mellon Bank, N. A. * EB Temporary Investment Fund 12,562,671 12,562,671 12,562,671
American Express Credit Corporation Dated 6/21/99, 4.73%, due 7/01/99 850,000 850,000 850,000
American Express Credit Corporation Dated 6/28/99, 5.20%, due 7/01/99 150,000 150,000 150,000
American Express Credit Corporation Dated 6/30/99, 5.50%, due 7/01/99 600,000 600,000 600,000
INVESCO Trust Co. Equity Fund Registered Investment Co. Holdings 56,737 1,353,583 2,508,898
Barclays Global Investors S&P 500 Stock Fund Registered Investment Co. Holdings 1,980,048 42,303,314 54,292,931
One Group Diversified Mid-Cap Fund Registered Investment Co. Holdings 920,442 17,943,409 20,212,901
PIMCO Total Return Fund Registered Investment Co. Holdings 670,538 7,066,567 6,792,555
RCM Growth Equity Fund Inc. Registered Investment Co. Holdings 77,452 464,669 529,772
T. Rowe Price International Stock Fund Registered Investment Co. Holdings 757,034 10,816,241 11,824,870
Capital Guardian Conservative Account Common/Collective Trust 208,817 3,194,115 3,604,189
Capital Guardian Moderate Account Common/Collective Trust 769,153 12,225,916 16,129,132
Capital Guardian Growth Account Common/Collective Trust 687,981 11,603,398 15,507,097
Loan Fund Participant Loans, interest 8.5% -- 9,455,940 9,455,940
----------- -------------- ---------------
Total Long-Term and Short-Term Thrift Trust 314,713,979 $ 774,223,825 $ 1,009,166,431
=========== ============== ===============
</TABLE>
29
<PAGE> 32
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
ADDITIONAL INFORMATION
SCHEDULE II-SCHEDULE OF REPORTABLE TRANSACTIONS
JUNE 30, 1999
<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 703 $158,473,317 0
723 $143,650,947 $143,650,947
</TABLE>
30
<PAGE> 33
THRIFT PLANS OF CONSOLIDATED NATURAL GAS COMPANY AND
ITS PARTICIPATING SUBSIDIARIES
ADDITIONAL INFORMATION
SCHEDULE III-SCHEDULE OF NON-EXEMPT TRANSACTIONS
JUNE 30, 1999
<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 $56,648* N/A N/A N/A N/A $56,648 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.
31
<PAGE> 34
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: December 23, 1999
32
<PAGE> 35
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. 33-92765, 33-63931, 333-10869 and 333-25347) of
Consolidated Natural Gas Company of our report dated December 17, 1999,
appearing on page 1 of this Form 11-K.
PricewaterhouseCoopers LLP
Pittsburgh, PA 15219
December 17, 1999
