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 year ended December 31, 1999
Commission File No. 33-46641
ENERGEN CORPORATION EMPLOYEE SAVINGS PLAN
(Full title of the plan)
ENERGEN CORPORATION
605 Richard Arrington, Jr. Boulevard North
Birmingham, Alabama 35203-2707
Required Information. The Plan is subject to the Employee Retirement Income
Security Act of 1974 ("ERISA"). Therefore, in lieu of the requirements of Items
1-3 of Form 11-K, the financial statements and schedules of the Plan for the two
fiscal years ended December 31, 1999 and 1998, which have been prepared in
accordance with the financial reporting requirements of ERISA, and the consent
of Pricewaterhouse Coopers, are filed as a part of this annual report:
Signatures: Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the Plan) have duly caused
this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
ENERGEN CORPORATION EMPLOYEE SAVINGS PLAN
/s/ W. D. Self June 23, 2000
W. D. Self Date
Chairman of Energen Benefits Committee and
Vice President-Human Resources and
Administration, Energen Corporation
/s/ G. C. Ketcham June 23, 2000
G. C. Ketcham Date
Member of Energen Benefits Committee and
Executive Vice President, CFO and Treasurer,
Energen Corporation
Energen Corporation Employee Savings Plan
Financial Statements and Supplemental Schedules
For the Years Ended December 31, 1999 and 1998
Energen Corporation Employee Savings Plan
Table of Contents
Pages
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits
December 31, 1999 and 1998 2
Statements of Changes in Net Assets Available for Plan Benefits
for the years ended December 31, 1999 and 1998 3
Notes to Financial Statements 4 - 8
Supplemental Schedules:
*Schedule H, Line 4i - Schedule of Assets Held
for Investment Purposes as of December 31, 1999 9
*Schedule H, Line 4j -Schedule of Reportable
Transactions for the year ended December 31, 1999 10 - 11
*Refers to item number in Form 5500 (Annual Return/Report of Employee Benefit
Plan) for the year ended December 31, 1999.
Report of Independent Accountants
To the Energen Benefits Committee
Energen Corporation Employee Savings Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and changes in net assets available for plan benefits present fairly,
in all material respects, the net assets available for benefits of the Energen
Corporation Employee Savings Plan (the Plan) as of December 31, 1999 and 1998
and the 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 Plan's
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 made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
table of contents are presented for the purpose of additional analysis and are
not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
reporting and disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
May 24, 2000
<PAGE> 1
Energen Corporation Employee Savings Plan
Statements of Net Assets Available for Plan Benefits
December 31, 1999 and 1998
1999 1998
ASSETS
Investment in Energen Corporation
common stock (cost $38,694,893
and $34,802,047 at December
31, 1999 and 1998, respectively) $ 56,584,724 $ 58,059,031
Other investments (cost $39,749,353 and
$34,039,398 at December 31, 1999 and
1998, respectively) 51,873,958 44,452,945
Loans to participants 4,799,208 5,253,655
Cash surrender value of life insurance 70,374 91,123
Employer contributions receivable 578,533 639,591
Employee contributions receivable 286,469 303,645
$114,193,266 $ 108,799,990
LIABILITIES AND PARTICIPANTS' BALANCES
Participants' balances $114,193,266 $ 108,799,990
The accompanying notes are an integral part of these financial statements.
<PAGE> 2
Energen Corporation Employee Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits
December 31, 1999 and 1998
1999 1998
Additions:
Employer contributions $ 3,284,679 $ 3,227,635
Employee contributions 4,632,672 5,181,373
Interest and dividend income 5,620,683 4,629,171
Net (depreciation) appreciation in the
fair value of investments (1,023,312) 3,156,420
(Decrease) increase in cash
surrender value (17,284) 10,904
Other (disbursements) receipts (6,060) 172,275
12,491,378 16,377,778
Deductions:
Distributions to participants 7,093,638 6,293,204
Insurance premiums 3,465 5,651
Fees and other distributions 999 733
7,098,102 6,299,588
Net increase 5,393,276 10,078,190
Participants' balances:
Beginning of year 108,799,990 98,721,800
End of year $114,193,266 $108,799,990
The accompanying notes are an integral part of these financial statements.
<PAGE> 3
Energen Corporation Employee Savings Plan
Notes to Financial Statements
December 31, 1999 and 1998
1. Description of Plan
General - The Energen Corporation Employee Savings Plan is a defined
contribution plan covering substantially all employees of Energen
Corporation and its subsidiaries, principally Alabama Gas Corporation,
Energen Resources Corporation, EGN Services, Inc. and Basin Pipeline
Corp. (collectively referred to as the Company).
Employees are eligible to participate in the Plan after completing six
months of service as defined in the Plan. Individual accounts are maintained
for each participant in the Plan and are adjusted for allocation of assets
purchased with the Company's Employee Stock Ownership Plan (ESOP)
contribution, employee contributions, employer contributions, and investment
results. An administrative committee and a trustee are appointed by the
Company to administer the Plan and trust, respectively. The Company
generally pays the administrative expenses of the Plan.
Contributions - Contributions to the Plan consist of employee elective
contributions, Company matching and ESOP contributions, and rollover
contributions. Employee elective contributions, if any, are made in an
amount equal to any whole percentage of the employee's compensation, not to
exceed 15% thereof and not less than 2% thereof. The Plan currently offers
13 mutual funds and an insurance investment contract as investment options
for participants. Company matching contributions are presently being funded
by the fifteenth business day of the following month and are invested
directly into Energen Corporation stock. This contribution is currently 50%
of each employee's elective contribution up to 6% of the employee's
compensation. This contribution level is at the discretion of the board of
directors of the Company. Contributions by highly compensated employees are
subject to certain limitations as prescribed by the Plan.
Company ESOP contributions are presently being funded each quarter and are
at the discretion of the board of directors. The formula used to allocate
the ESOP contribution is determined annually. Current contribution levels
range from 2.25% to 7% of the employee's annual compensation, based on the
employee's age. The amount of forfeited nonvested accounts at December 31,
1999 and 1998 was approximately $43,000 and $17,500, respectively, and was
held primarily in the Vanguard Money Market Reserve-Prime Portfolio account.
The Company plans to use all of this amount to reduce its future
contributions to the Plan.
Vesting - Each participant has a fully vested and nonforfeitable right in
any elective and rollover contributions and earnings thereon. A
participant's matching and ESOP contribution accounts become fully vested
upon the earlier of normal retirement, disability, death, termination of the
Plan, three years of service as a plan member, or five years of service.
<PAGE> 4
Individual Accounts - Each participant has an individual account which is
divided into an elective contribution account, a matching contribution
account, an ESOP contribution account, and a rollover account. Purchases of
stock are allocated to individual participants' elective, matching, and ESOP
accounts as set forth in the Plan. Stock purchased with the Company matching
contributions is allocated based on the ratio of a participant's
compensation, as defined in the Plan, for the plan year to total
compensation of all such participants for the plan year. Stock purchased
with cash dividends or with the proceeds of other distributions from the
Plan's assets and stock received in kind by the trustee as a stock split,
dividend, or other distribution of stock so held is allocated based on the
ratio of a participant's account balance to the total account balances of
all participants as of the record dates of the dividend or distribution.
Cash dividends attributable to shares which have not yet been allocated to
individual participants' accounts shall be used to purchase shares for
allocation in the same manner that shares purchased with the Company
matching contributions are allocated.
Investments - The investments of the Plan are held by Vanguard Fiduciary
Trust Company, under an agreement dated October 1, 1991.
Prior to December 31, 1986, there was a life insurance option available to
participants of the Plan. No new contracts may be purchased under this
option; however, participants that were enrolled in this option may still
contribute to this fund which invests in universal life insurance policies.
Loans - Participants may borrow from their vested individual accounts up to
amounts prescribed in the Plan. The interest rates on these loans at
December 31, 1999 ranged from 7.00% to 11.50%.
Termination of the Plan - While the Company has not expressed any intent to
terminate the Plan or suspend contributions, it may do so at any time and
for any reason. In the event of termination, the Energen Benefits Committee
may, with the Company's approval either (1) continue the Trust Fund either
through the existing trust agreement or through successor funding media or
(2) terminate the Trust Fund, pay all expenses, and direct the payment of
benefits, either in the form of lump-sum distributions, transfer to another
qualified plan, or any form selected by the committee. Any assets
attributable to unallocated financed shares that remain after all vested
account balances under the Plan have been paid will be returned to the
employer. Distribution to a member of his elective contribution account
which is not otherwise distributable on account of his separation from
service, attainment of age 59-1/2, or hardship will be made only where no
successor to the Plan is established.
2. Summary of Significant Accounting Policies
Basis of Financial Statements - The financial statements of the Plan are
maintained on the accrual basis and have been prepared in conformity with
accounting principles generally accepted in the United States.
Investment Valuation - The investment in common stock of Energen Corporation
is stated at quoted market value as determined by the latest sales price
thereof reported by the principal securities exchange on which the stock is
traded on the last business day of the year. Purchases of securities are
recorded on the trade dates. The investment in money market instruments
represents the value of contributions made, adjusted for investment income,
benefit payments, and administrative expenses. Investments in mutual funds
are carried at the fair value of funds' shares, which is based upon the
market value of the underlying investments. The cost of securities sold is
determined at average cost.
The Plan presents in the statement of changes in net assets the net
appreciation (depreciation) in the fair value of its investments which
consists of the realized gains and losses and the unrealized appreciation
(depreciation) on those investments.
Reclassification - Certain reclassifications have been made in the
previously reported financial statements and accompanying notes to make the
prior year amounts comparable to those of the current year. Such
reclassifications had no effect on previously reported net income, total
assets, or stockholders' equity.
Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions affecting the reported amounts
of assets and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
3. Income Tax Status
The Plan is exempt from federal income taxes under Section 501(a) of the
Internal Revenue Code. The Plan obtained its latest determination letter on
July 3, 1997, in which the Internal Revenue Service stated that the Plan, as
then designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since receiving the
determination letter. However, the plan administrator and the Plan's tax
counsel believe that the Plan is currently designed and being operated in
compliance with the applicable requirements of the Internal Revenue Code.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
<PAGE> 6
4. Investments
Investments at December 31, 1999 and 1998 are as follows:
1999 1998
Market Cost Market Cost
Energen Corporation
common stock $ 56,584,724 $ 38,694,893 $58,059,031 $34,802,047
Money market and short-
term investments 9,022,025 9,022,025 8,111,875 8,111,875
Mutual funds 42,851,933 30,727,328 36,341,070 25,927,522
$ 51,873,958 $ 39,749,353 $44,452,945 $34,039,397
The change in unrealized appreciation was $3.7 million decrease in 1999 and
$.4 million increase in 1998.
The following is a summary of assets held in excess of 5% of the Plan's net
assets at December 31:
1999 1998
Energen Corporation
common stock $ 56,584,724 $ 58,059,031
Vanguard 500 Index Fund $ 17,491,943 $ 13,879,827
VMMR - Prime Portfolio $ 9,022,025 $ 8,111,874
Vanguard Morgan Growth Fund $ 8,122,733 $ 5,887,717
Vanguard Wellington Fund $ 5,468,516
5. Nonparticipant-Directed Investments
Information about the net assets and significant components of the changes
in net assets relating to the nonparticipant-directed investment is as
follows:
1999 1998
Net Assets:
Common stock $ 56,584,724 $ 58,059,031
For the Year For the Year
Ended 1999 Ended 1998
Changes in Net Assets:
Contributions $ 5,324,792 $ 5,502,020
Dividends 2,001,342 1,826,226
Net depreciation (3,987,478) (881,142)
Benefits paid to
participants (2,979,872) (2,720,533)
Transfers to
participant-directed
investments (1,833,091) (1,123,233)
$ (1,474,307) $ 2,603,338
Supplemental Schedules
Energen Corporation Employee Savings Plan
Form 5500, Schedule h, Line 4i -
Schedule of Assets Held for Investment Purposes
December 31, 1999
c. Description of Investment
b.Identity of Issuer, Including Maturity Date,
Borrower,Lessor, Rate of Interest, Collateral, e. Current
a. or Similar Party Par of Maturity Value d. Cost Value
* Energen Corporation Common stock $38,694,893 $56,584,724
* W.L. Morgan Growth Fund Mutual fund 6,011,740 8,112,733
* Vanguard Index 500 Portfolio Mutual fund 8,805,430 17,491,943
* VMMR-Prime Portfolio Money market fund 9,022,025 9,022,025
* Wellington Fund Mutual fund 5,246,585 5,600,414
* Vanguard Long-term Corporate
Bond Fund Mutual fund 1,318,713 1,201,519
* Windsor II Fund Mutual fund 5,102,403 4,979,005
* International Growth Fund Mutual fund 1,804,733 2,540,141
* Life Strategy Growth Portfolio Mutual fund 639,370 886,536
* Vanguard Index Small Cap
Portfolio Mutual fund 451,574 491,024
* Life Strategy Income Portfolio Mutual fund 136,491 134,245
* Life Strategy Conservative
Growth Mutual fund 505,323 602,152
* Intermediate-Term
Corporate Bond Mutual fund 143,074 136,725
* Life Strategy Moderate Growth Mutual fund 561,892 675,497
* Loan Fund (participant loans) 7% to 11.5% 4,799,208 4,799,208
Cash surrender value of life insurance 70,374 70,374
$ 83,313,828 $113,328,265
* Denotes party-in-interest to the Plan
<PAGE> 9
Energen Corporation Employee Savings Plan
Form 5500, Schedule H, Line 4j -
Schedule of Reportable Transactions
For the Year Ended December 31, 1999
I. Single transactions exceeding 5% of assets.
Schedule Attached.
NOTE - Information required in Columns e, f, and h is inapplicable.
II. Series of transactions involving property other than securities.
NONE
III. Series of transactions of same issue exceeding 5% of assets.
Schedule Attached.
NOTE - Information required in Columns e, f, and h is inapplicable.
IV. Transactions in conjunction with same person involved in reportable single
transactions.
<PAGE> 10
Energen Corporation Employee Savings Plan
Form 5500, Schedule H, Line 4j -
Schedule of Reportable Transactions
For the Year Ended December 31, 1999
a. Identity
of Party b.Description c.Purchases d.Sales g.Cost of i.Net Gain
Involved of Asset Price Number Price Number Asset or (Loss)
Energen
Corporation Common Stock $7,199,416 114 $4,644,605 179 $3,306,523 $1,338,082
VMMR Prime
Portfolio Money market $4,133,565 181 $3,223,380 157 $3,223,380 $ --
<PAGE> 11
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-46641) of Energen Corporation of our report dated
May 24, 2000 relating to the financial statements and supplemental schedules of
the Energen Corporation Employee Savings Plan, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
Birmingham, Alabama
June 27, 2000
