<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1993
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _______ to _______
Commission File No. 1-2700
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
El Paso Natural Gas Company Retirement Savings Plan (herein referred
to as the "Plan")
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
El Paso Natural Gas Company (herein referred to as the "Company")
One Paul Kayser Center
100 North Stanton
El Paso, Texas 79901
<PAGE> 2
REQUIRED INFORMATION
Item 4.
Financial Statements and Exhibits
(a) Financial Statements and Supplemental Schedules for the
Year Ended December 31, 1993 and the Six Months Ended
December 31, 1992:
Report of Independent Accountants
Financial Statements:
Statement of Net Assets Available for Plan Benefits with
Fund Information as of December 31, 1993
Statement of Net Assets Available for Plan Benefits with
Fund Information as of December 31, 1992
Statement of Changes in Net Assets Available for Plan
Benefits with Fund Information for the Year Ended
December 31, 1993
Statement of Changes in Net Assets Available for Plan
Benefits with Fund Information for the Six Months Ended
December 31, 1992
Notes to Financial Statements
Supplemental Schedules:
Schedule I
Schedule of Assets Held for Investment Purposes as
of December 31, 1993
Schedule II
Schedule of Reportable Transactions for the Year
Ended December 31, 1993
(b) Exhibits:
Consent of Coopers & Lybrand
1
<PAGE> 3
INDEX OF FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<S> <C>
(a) Financial Statements and Supplemental Schedules for the Year Ended
December 31, 1993 and the Six Months Ended December 31, 1992:
Report of Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Financial Statements:
Statement of Net Assets Available for Plan Benefits with Fund Information
as of December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statement of Net Assets Available for Plan Benefits with Fund Information
as of December 31, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statement of Changes in Net Assets Available for Plan Benefits with Fund
Information for the year ended December 31, 1993 . . . . . . . . . . . . . . . . 5
Statement of Changes in Net Assets Available for Plan Benefits with Fund
Information for the six months ended December 31, 1992 . . . . . . . . . . . . . 6
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Supplemental Schedules:
Schedule I - Schedule of Assets Held for Investment Purposes as of
December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Schedule II - Schedule of Reportable Transactions
for the year ended December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . 19
(b) Exhibits:
Consent of Coopers & Lybrand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
2
<PAGE> 4
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 by the undersigned hereunto duly authorized.
El Paso Natural Gas Company
Retirement Savings Plan
By /s/ H. BRENT AUSTIN
H. Brent Austin
Senior Vice President and
Chief Financial Officer
Date: June 27, 1994
<PAGE> 5
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
AND REPORT OF INDEPENDENT ACCOUNTANTS
December 31, 1993 and 1992
<PAGE> 6
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
AND REPORT OF INDEPENDENT ACCOUNTANTS
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Financial Statements:
Statement of Net Assets Available for Plan Benefits with Fund Information
as of December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statement of Net Assets Available for Plan Benefits with Fund Information
as of December 31, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statement of Changes in Net Assets Available for Plan Benefits with Fund
Information for the year ended December 31, 1993 . . . . . . . . . . . . . . . . . . 5
Statement of Changes in Net Assets Available for Plan Benefits with Fund
Information for the six months ended December 31, 1992 . . . . . . . . . . . . . . . 6
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Supplemental Schedules:
Schedule I - Schedule of Assets Held for Investment Purposes as of
December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Schedule II - Schedule of Reportable Transactions
for the year ended December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
1
<PAGE> 7
(COOPERS & LYBRAND LOGO)
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
El Paso Natural Gas Company
We have audited the the financial statements of the El Paso Natural Gas Company
Retirement Savings Plan (the "Plan") as listed in the index on page 1. These
financial statements are the responsibility of the management of El Paso
Natural Gas Company. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits as of
December 31, 1993 and 1992, and the changes in net assets available for plan
benefits for the year ended December 31, 1993 and the six months ended December
31, 1992, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic Plan
financial statements taken as a whole. The supplemental schedules listed in
the index on page 1 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. The Fund Information in the statements of net assets available for plan
benefits and the statements of changes in net assets available for plan
benefits is also presented for the purpose of additional analysis and is not a
required part of the basic financial statements. The aforementioned
supplemental schedules and Fund Information have not been subjected to a
separate audit and we express no separate opinion on such information.
However, the aforementioned supplemental schedules and Fund Information have
been subjected to the auditing procedures applied in the audit 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/ COOPERS & LYBRAND
El Paso, Texas
June 20, 1994
2
<PAGE> 8
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1993
ASSETS
<TABLE>
<CAPTION>
Fund Information
----------------
Company BR S&P 500 International OTC Asset
Income Stock Stock Index Equity Equity Allocation
Fund Fund Fund Fund Fund Fund Fund
--------- --------- --------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at
fair value:
Company common
stock $19,067,616
BR common stock $3,514,074
Equity interest $14,337,348 $3,317,467 $5,757,561 $8,852,739
Loan Fund
Short-term cash
investments $ 1,190,328 244,615
Deposits with
insurance
companies at
contract value 164,850,410
------------ ----------- ---------- ----------- ---------- ---------- ----------
Total investments 166,040,738 19,312,231 3,514,074 14,337,348 3,317,467 5,757,561 8,852,739
------------ ----------- ---------- ----------- ---------- ---------- ----------
Dividends and
interest
receivable 951,511 142,345 12,080 120 49 88 281
Employer contributions
receivable 1,935 437 249 51 142 203
Participant contributions
receivable 2,183 493 281 58 161 229
------------ ----------- ---------- ----------- ---------- ---------- ----------
Total receivables 955,629 143,275 12,080 650 158 391 713
------------ ----------- ---------- ----------- ---------- ---------- ----------
Total assets 166,996,367 19,455,506 3,526,154 14,337,998 3,317,625 5,757,952 8,853,452
------------ ----------- ---------- ----------- ---------- ---------- ----------
Net assets available
for Plan benefits $166,996,367 $19,455,506 $3,526,154 $14,337,998 $3,317,625 $5,757,952 $8,853,452
============ =========== ========== =========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Fund Information
-------------------------------
Loan
Fund Total
----------- -------------
<S> <C> <C>
Investments, at
fair value:
Company common
stock $ 19,067,616
BR common stock 3,514,074
Equity interest 32,265,115
Loan Fund $11,904,356 11,904,356
Short-term cash
investments 1,434,943
Deposits with
insurance
companies at
contract value 164,850,410
----------- ------------
Total investments 11,904,356 233,036,514
----------- ------------
Dividends and
interest
receivable 1,106,474
Employer contributions
receivable 3,017
Participant contributions
receivable 3,405
----------- ------------
Total receivables -- 1,112,896
----------- ------------
Total assets 11,904,356 234,149,410
----------- ------------
Net assets available
for Plan benefits $11,904,356 $234,149,410
=========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 9
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
December 31, 1992
ASSETS
<TABLE>
<CAPTION>
Fund Information
----------------
Company BR S&P 500 International OTC
Income Stock Stock Index Equity Equity
Fund Fund Fund Fund Fund Fund
----------- ---------- --------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investments, at
fair value:
Company common
stock $13,380,871
BR common stock $8,434,080
Equity interest $10,953,396 $1,158,926 $3,025,439
Loan Fund
Short-term cash
investments $ 2,713,761 74,521
Deposits with
insurance
companies at
contract value 160,599,007
------------ ----------- ---------- ----------- ---------- ----------
Total investments 163,312,768 13,455,392 8,434,080 10,953,396 1,158,926 3,025,439
------------ ----------- ---------- ----------- ---------- ----------
Dividends and
interest
receivable 1,015,975 102,038 27,769 52 10 28
Employer contributions
receivable 554,475 77,848 47,677 9,322 20,067
Participant contributions
receivable 591,327 84,953 46,701 8,692 18,550
------------ ----------- ---------- ----------- ---------- ----------
Total receivables 2,161,777 264,839 27,769 94,430 18,024 38,645
------------ ----------- ---------- ----------- ---------- ----------
Total assets 165,474,545 13,720,231 8,461,849 11,047,826 1,176,950 3,064,084
------------ ----------- ---------- ----------- ---------- ----------
Net assets available
for Plan benefits $165,474,545 $13,720,231 $8,461,849 $11,047,826 $1,176,950 $3,064,084
============ =========== ========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Fund Information
----------------
Real
Estate Loan
Fund Fund Total
-------- ----------- -------------
<S> <C> <C> <C>
Investments, at
fair value:
Company common
stock $ 13,380,871
BR common stock 8,434,080
Equity interest $211,387 15,349,148
Loan Fund $11,000,126 11,000,126
Short-term cash
investments 2,788,282
Deposits with
insurance
companies at
contract value 160,599,007
-------- ----------- ------------
Total investments 211,387 11,000,126 211,551,514
-------- ----------- ------------
Dividends and
interest
receivable 4 1,145,876
Employer contributions
receivable 2,206 711,595
Participant contributions
receivable 2,522 752,745
-------- ----------- ------------
Total receivables 4,732 - 2,610,216
-------- ----------- ------------
Total assets 216,119 11,000,126 214,161,730
-------- ----------- ------------
Net assets available
for Plan benefits $216,119 $11,000,126 $214,161,730
======== =========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 10
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
Fund Information
----------------
Company BR S&P 500 International OTC
Income Stock Stock Index Equity Equity
Fund Fund Fund Fund Fund Fund
---------------- ------------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Dividends $ 546,260 $ 65,135
Interest $ 11,391,093 8,528 16 $ 1,826 $ 28,059 $ 640,987
Net appreciation
(depreciation) in
the fair value of
investments -- 2,328,575 953,842 1,215,936 662,699 (237,510)
---------------- ------------- ----------- ------------ ----------- -----------
Net investment
income 11,391,093 2,883,363 1,018,993 1,217,762 690,758 403,477
Contributions:
Employer 6,057,303 1,136,097 -- 664,135 116,524 337,232
Participants 6,447,784 1,237,649 -- 707,546 123,490 360,960
Net loan activity 313,590 (708,167) -- 80,604 20,320 61,902
Interfund transfers (9,153,055) 2,511,662 (5,334,096) 916,233 1,267,874 1,815,299
Benefits paid to
participants (13,534,893) (1,325,329) (620,592) (296,108) (78,291) (285,002)
---------------- ------------- ----------- ------------ ----------- -----------
Net increase -
(decrease) 1,521,822 5,735,275 (4,935,695) 3,290,172 2,140,675 2,693,868
Net assets available
for Plan benefits:
Beginning of period 165,474,545 13,720,231 8,461,849 11,047,826 1,176,950 3,064,084
---------------- ------------- ----------- ------------ ----------- -----------
End of period $ 166,996,367 $ 19,455,506 $ 3,526,154 $ 14,337,998 $ 3,317,625 $ 5,757,952
================ ============= =========== ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Fund Information
----------------
Asset Real
Allocation Estate Loan
Fund Fund Fund Total
------------ --------- ------------- -------------
<S> <C> <C> <C> <C>
Dividends $ 611,395
Interest $ 244,669 $ (2,117) $ 945,817 13,258,878
Net appreciation
(depreciation) in
the fair value of
investments 64,921 2,371 -- 4,990,834
------------ --------- ------------- -------------
Net investment
income 309,590 254 945,817 18,861,107
Contributions:
Employer 149,678 16,289 -- 8,477,258
Participants 151,633 17,033 -- 9,046,095
Net loan activity 19,797 9,552 202,402 --
Interfund transfers 8,223,344 (247,261) -- --
Benefits paid to
participants (590) (11,986) (243,989) (16,396,780)
------------ --------- ------------- -------------
Net increase -
(decrease) 8,853,452 (216,119) 904,230 19,987,680
Net assets available
for Plan benefits:
Beginning of period -- 216,119 11,000,126 214,161,730
------------ --------- ------------- -------------
End of period $ 8,853,452 $ -- $ 11,904,356 $ 234,149,410
============ ========= ============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 11
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
INFORMATION
FOR THE SIX MONTHS ENDED DECEMBER 31, 1992
<TABLE>
<CAPTION>
Fund Information
----------------
Company BR S&P 500 International OTC Real
Income Stock Stock Index Equity Equity Estate
Fund Fund Fund Fund Fund Fund Fund
------ ------- ----- ------- ------------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Dividends $ 195,887 $ 60,007 $ 25,300 $ 273,947
Interest $ 6,143,908 23,483 $ 17,584 1,520 2,739 $ --
Net appreciation
(depreciation) in
the fair value of
investments -- 2,921,427 1,151,286 442,176 (106,837) 181,634 (11,588)
------------ ----------- ----------- ----------- ---------- ---------- --------
Net investment
income 6,143,908 3,140,797 1,211,293 459,760 (80,017) 458,320 (11,588)
Contributions:
Employer 3,715,068 530,329 -- 316,205 62,772 146,857 14,984
Participants 4,169,302 597,145 -- 350,702 69,193 161,958 16,988
Transfer from BR Plan 154,368,303 5,358,573 15,056,475 9,613,336 941,649 2,301,710 215,607
Net loan activity (81,137) (270,941) -- 23,956 (1,128) 1,375 (4,094)
Interfund transfers 1,446,889 4,728,930 (7,271,728) 697,578 186,811 226,692 (15,172)
Benefits paid to
participants (4,287,788) (364,602) (534,191) (413,711) (2,330) (232,828) (606)
------------ ----------- ----------- ----------- ---------- ---------- --------
Net increase 165,474,545 13,720,231 8,461,849 11,047,826 1,176,950 3,064,084 216,119
Net assets available
for Plan benefits:
Beginning of period -- -- -- -- -- -- --
------------ ----------- ----------- ----------- ---------- ---------- --------
End of period $165,474,545 $13,720,231 $ 8,461,849 $11,047,826 $1,176,950 $3,064,084 $216,119
============ =========== =========== =========== ========== ========== ========
</TABLE>
<TABLE>
<CAPTION>
Loan
Fund Total
---- -----
<S> <C> <C>
Dividends $ 555,141
Interest $ 393,191 6,582,425
Net appreciation
(depreciation) in
the fair value of
investments -- 4,578,098
----------- ------------
Net investment
income 393,191 11,715,664
Contributions:
Employer -- 4,786,215
Participants -- 5,365,288
Transfer from BR Plan 10,274,966 198,130,619
Net loan activity 331,969 --
Interfund transfers -- --
Benefits paid to
participants -- (5,836,056)
----------- ------------
Net increase 11,000,126 214,161,730
Net assets available
for Plan benefits:
Beginning of period -- --
----------- ------------
End of period $11,000,126 $214,161,730
=========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 12
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN
The El Paso Natural Gas Company Retirement Savings Plan (the "Plan")
was established effective January 1, 1992 and implemented July 1, 1992
in connection with the separation of El Paso Natural Gas Company (the
"Company") from the Company's former parent, Burlington Resources Inc.
("BR"). On July 1, 1992, all investments in the BR Retirement Savings
Plan ("BR Plan") related to the Company's participant accounts were
transferred to the Plan. The Plan is a successor to the defined
contribution plan originally established by the Company on January 1,
1961.
The following description of the Plan provides only general
information. Participants should refer to the Plan documents for a
more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan covering all employees of the
Company and controlled group affiliates, except members of any unit
covered by a collective bargaining agreement. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
Contributions
Participants may make basic contributions to the Plan on a before-tax
or after-tax basis. Federal income taxes on before-tax contributions,
company matching contributions and the earnings from the investments
in the Plan are deferred until amounts are withdrawn from the Plan.
A participant may elect to make regular monthly basic contributions
from two percent to eight percent (in whole percentage amounts) of his
or her total eligible compensation. The Company will make matching
contributions equal to a participant's basic contributions of up to
six percent of eligible compensation where the participant has fewer
than ten years of employment with the Company, or up to eight percent
of eligible compensation where the participant has ten or more years
of employment. In addition, if a participant has elected the maximum
basic contribution eligible for a matching company contribution, he or
she may make after-tax supplemental contributions to the Plan from one
percent to five percent (in whole percentage amounts) of his or her
eligible total compensation. A participant may also elect to have all
or a portion of the allocation available to him or her under the
Company FlexPlan transferred to this Plan as flex contributions and
may make an approved rollover contribution of a distribution received
from another qualified employee benefit plan. There are certain legal
limitations applicable to contributions to the Plan.
7
<PAGE> 13
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
1. DESCRIPTION OF PLAN (Continued)
Participant Accounts
Each participant's account is credited with the participant's
contributions, the Company's matching contribution and the
participant's share of net earnings or losses of his or her respective
investment funds elected under the Plan. Net investment gains and
losses in a particular investment fund are allocated in proportion to
the respective participants' account balances in that fund. The
benefit to which a participant is entitled is solely that which can be
provided from the participant's account.
Vesting
A participant's interest in his or her account under the Plan is fully
vested at all times.
Payment of Benefits
Upon separation from service with the Company, a participant whose
account balance has exceeded $3,500 may elect to receive either a
lump-sum amount equal to the value of his or her account or to defer
the distribution. A deferred distribution may take the form of either
a lump-sum distribution payable within, or installments payable over,
a period which ends on or before April 1 of the year following the
calendar year in which the participant attains age 70-1/2. A
participant whose account balance has never been more than $3,500 will
receive an immediate lump-sum distribution of the amount equal to his
or her account balance. Certain in-service withdrawals may be
available, as provided by the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investments
Pooled temporary investments and loans are carried at cost which
approximates fair value. Deposits with banks or insurance companies
are carried at contract value. All other investments are carried at
fair value as determined by quoted market prices.
8
<PAGE> 14
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Investments (Continued)
The following table presents the fair values of investments.
Investments that represent five percent or more of the Plan's net
assets are separately identified:
<TABLE>
<CAPTION>
December 31, 1993 December 31, 1992
----------------- -----------------
<S> <C> <C>
Investments at fair value:
Equity interest:
Company Stock Fund $ 19,067,616 $ 13,380,871
S&P 500 Index Fund 14,337,348 10,953,396
Other 21,441,841 12,829,832
Loan Fund:
Participant Loans 11,904,356 11,000,126
Other 1,434,943 2,788,282
------------------ ------------------
68,186,104 50,952,507
------------------ ------------------
Investments at contract value:
Deposits with Insurance Companies
Bankers Trust Company BASIC
#92407, 5.61%, matures 9/30/00 17,155,595 14,091,990
Metropolitan Life Insurance Company
#13264, 5.95%, matures 12/30/96 11,903,654 11,213,034
Prudential Insurance Company
#GA6697, 8.15%, matures 11/20/00 13,315,089 14,582,699
Other 122,476,072 120,711,284
------------------ ------------------
164,850,410 160,599,007
------------------ ------------------
$ 233,036,514 $ 211,551,514
================== ==================
</TABLE>
The Plan presents in the Statement of Changes in Net Assets Available
for Plan Benefits with Fund Information the net appreciation
(depreciation) in the fair value of its investments which consists of
the realized gains (losses) and the unrealized appreciation
(depreciation) on those investments.
Purchases and sales of securities are reflected on a trade-date basis.
The basis of securities sold is determined by average cost.
Investment Income
Dividend and interest income from investments is recorded as earned on
an accrual basis and allocated to participants' accounts based upon
each participant's proportionate share of assets in each investment
fund.
9
<PAGE> 15
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Investment Income (Continued)
Dividend income is reported in accordance with the Internal Revenue
Service ("IRS") Form 5500 instructions. This income represents
dividend income for those funds holding equity securities, (i.e., the
Company Stock Fund and the BR Stock Fund).
Interest income represents income received from deposits with
insurance companies, short-term investments and dividends received
from funds invested in commingled equity funds.
Expenses
All administrative expenses and professional fees incurred by the Plan
are borne by the Company, other than nominal charges for maintaining
deferred accounts. Any expenses directly relating to the purchase,
sale or transfer of the Plan's investments are charged to the
particular investment fund to which the expense relates.
3. INVESTMENT OF FUNDS
A participant can direct the investment of his or her account balance
and contributions to any one or more of the following investment funds
except as specifically noted:
Company Stock Fund- invested entirely in common stock of the Company.
As with investments in any single stock, this fund may be more
volatile (that is, more subject to larger up and down swings in value)
than a fund that is diversified among the stocks of many companies.
Participants who invest in the Company Stock Fund may instruct the
trustee regarding the voting of the Company's common stock allocated
to the participant's accounts.
BR Stock Fund- invested entirely in the common stock of BR which was
transferred to the Plan from the BR Plan. This fund is a temporary
fund into which no new investment can be made and which will terminate
June 30, 1994. At the termination of the fund, the trustee will
liquidate any remaining BR common stock and will reinvest the proceeds
in the Company Stock Fund, unless another investment election is made
by the participant.
Income Fund - invested primarily in a diversified portfolio of
investment contracts offered by major insurance companies. The
contracts may also be placed with banks. Each contract provides for a
specified rate of interest for the term of the contract. The
contracts provide that there will not be a reduction in principal due
to a change in interest rates. However, like all of the Plan's
investment funds, there is an element of risk to the participants.
Many of the contracts are backed solely by the general credit or
claims paying ability of the company issuing the contract. Other
contracts provide additional protection because they are invested in
securities backed by the United States government. This fund is
managed by PRIMCO Capital Management, Inc.
10
<PAGE> 16
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
3. INVESTMENT OF FUNDS (Continued)
S&P 500 Index Fund - one measure of the stock market's performance is
the "Standard and Poor's 500 Index," an index that measures the
performance of the stocks of 500 large companies. The fund invests
primarily in those 500 stocks; consequently its performance should
track closely with that index. This fund is managed by Bankers Trust
Company.
International Equity Fund - invested primarily in the stocks of major
companies outside the United States. The purpose of this fund is to
invest in companies in locations and businesses around the world where
economic conditions are favorable for growth. Because of global
monetary exchange, economic and political conditions, the risks and
returns for this fund can vary significantly from investments in
domestic stocks. This fund invests in the publicly traded mutual fund
known as the Vanguard World Fund-International Growth Portfolio,
managed by Schroder Capital Management International, Inc. for the
Vanguard Group Inc.
Over-The-Counter ("OTC") Equity Fund- invested primarily in companies
whose stock is not traded on one of the major stock exchanges (such as
the New York or American Stock Exchange). Many of these, therefore,
are smaller and newer companies. The long-range goal of the fund is
to achieve substantial growth in the money invested. No emphasis is
placed on investing for dividend or interest income. Smaller company
stocks may be subject to more erratic swings than stocks of larger
companies. The managers of this fund may invest up to 100 percent of
the fund's assets in interest-earning securities, such as United
States Government bonds, on a temporary basis, when they believe
market conditions warrant this type of conservatism. This fund
invests in the publicly traded mutual fund known as the Fidelity OTC
Portfolio, managed by Fidelity Management & Research Company.
Asset Allocation Fund- invested primarily in a portfolio that includes
stocks, bonds and short-term instruments in a mixture reflecting the
fund manager's determination of an appropriate allocation of fund
assets among these securities based on current market conditions and
the objective of seeking high total return with reduced risk over the
long term. This fund was made available for investment as of October
1, 1993. This fund invests in the publicly traded mutual fund known
as the Fidelity Asset Manager, managed by Fidelity Management &
Research Company.
Real Estate Fund- this fund, which was invested in the PREFER Fund
(Prime Real Estate of Employee Retirement) managed by Equitable Real
Estate Investment Management, Inc., remained in existence until the
close of business on September 30, 1993. All remaining accounts in
such fund at that date were transferred to other investment funds in
accordance with elections made by participants or default rules that
apply in the absence of participant elections.
11
<PAGE> 17
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
3. INVESTMENT OF FUNDS (Continued)
The following number of participants were invested in the various
funds at December 31, 1993 and 1992:
<TABLE>
<CAPTION>
Number of
Fund Participants
---- ------------
1993 1992
---- ----
<S> <C> <C>
Company Stock Fund 1,227 1,122
BR Stock Fund` 123 274
Income Fund 2,552 2,710
S&P 500 Index Fund 747 596
International Equity Fund 241 136
OTC Equity Fund 458 270
Asset Allocation Fund 428 -
Real Estate Fund - 60
</TABLE>
Loan Fund - To obtain a loan, the participant must have a total
account balance (excluding participant's IRA account) of at least
$2,000. Loan amounts may be from $1,000 to $50,000 but which may not
be more that 50 percent of the total balance in the participant's
account, excluding any Individual Retirement Account ("IRA") balance.
The 50 percent limit is reduced by the participant's highest
outstanding loan balance during the prior one-year period. Each loan
is made from, and repaid to, the borrowing participant's account so as
not to affect the accounts of other participants. A participant may
not obtain more than one loan during any 12-month period and may not
have more than two loans outstanding. The interest rate on a loan is
one percent above the prime rate, which is determined on the first
business day of the month preceding the quarter in which the loan is
taken. The interest rate is fixed for the term of the loan. The
repayment period may be from one to five years. Loans outstanding are
included in the Loan Fund in the accompanying Statement of Net Assets
Available for Plan Benefits with Fund Information.
4. MUTUAL BENEFIT LIFE INSURANCE COMPANY
The Income Fund had investments in Mutual Benefit Life Insurance
Company ("Mutual Benefit") of $6,694,959 and $6,591,098 at December
31, 1993 and 1992, respectively. Mutual Benefit has been in
rehabilitation, under the control of the Commissioner of Insurance of
the State of New Jersey, since July 16, 1991.
12
<PAGE> 18
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
4. MUTUAL BENEFIT LIFE INSURANCE COMPANY (Continued)
On November 10, 1993, the Superior Court of New Jersey confirmed a
plan of rehabilitation (the "Rehabilitation Plan") for Mutual Benefit.
Under the Rehabilitation Plan, Mutual Benefit offered its contract
holders the option either to accept restructured insurance contracts
(opt-in), or to surrender their contracts for cash and receive an
opt-out value of 55 percent of their account values on July 16, 1991.
On March 28, 1994, an election to opt-in was made on behalf of the
Plan by PRIMCO Capital Management, Inc., investment manager for the
Income Fund.
Amounts invested in Mutual Benefit that become due are not available
to investors because of the rehabilitation. As a result, Mutual
Benefit advised the Plan that the due dates on matured contracts have
been extended. The Plan has decided, based on guidance from the
rehabilitator, to use an interest rate of three percent for 1993 and
1992 for the extended contracts. Once the Rehabilitation Plan becomes
final, interest rates will be adjusted from January 1, 1992, as
necessary. Management does not believe that there will be a material
loss resulting from the Rehabilitation Plan.
5. CONCENTRATION OF CREDIT RISK
The Plan invests in various investment funds, as described in Note 3,
based upon participant instructions. The Income Fund held
approximately 71 percent and 76 percent of the invested assets of the
Plan at December 31, 1993 and December 31, 1992, respectively.
Management believes that the funds' investments are well diversified
and that no investment in any one company subjects the Plan to any
material concentration of credit risk.
6. TAX STATUS
The Plan is intended to be a qualified plan pursuant to Section 401(a)
of the Internal Revenue Code of 1986, as amended ("Code") and,
accordingly, the trust established under the Plan to hold the Plan's
assets is intended to be exempt from Federal income taxes pursuant to
Section 501(a) of the Code. Management has submitted to the IRS a
request for ruling on the tax-qualified status of the Plan and trust,
and expects a favorable determination letter.
7. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. Upon
termination, the Plan's assets would be distributed to the
participants, as soon as possible and legally permitted, on the basis
of their account balances existing at the date of termination as
adjusted for investment gains and losses.
13
<PAGE> 19
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(Continued)
8. RECONCILIATION WITH FORM 5500
Net assets shown in Items 31 and 32 of Form 5500 reflect a liability
in a total amount of $1,663,545 and $2,349,119 in benefit claims that
have been processed and approved but not paid by the Plan as of
December 31, 1993 and December 31, 1992, respectively. These amounts
are not considered Plan liabilities under generally accepted
accounting principles and, therefore, are not presented as liabilities
or benefits paid in the accompanying statements of Net Assets
Available for Plan Benefits with Fund Information and Changes in Net
Assets Available for Plan Benefits with Fund Information.
14
<PAGE> 20
SUPPLEMENTAL SCHEDULES
15
<PAGE> 21
SCHEDULE I
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1993
<TABLE>
<CAPTION>
Number of
Shares
(Units) or
Principal
Amount of
Bonds and Market
Notes Cost Value
--------- ------------ ------------
<S> <C> <C> <C>
COMMON STOCK FUNDS
Company Stock Fund 529,656 $ 14,062,922 $ 19,067,616
BR Stock Fund 82,928 3,130,312 3,514,074
Directed account cash fund 244,615 244,615 244,615
------------ ------------
Total investments -
Common Stock Funds 17,437,849 22,826,305
------------ ------------
INCOME FUND
Deposits with Insurance Companies
John Hancock Mutual Life Insurance Company
#6433, 6.60%, matures 11/6/2007 2,665,467 2,665,467 2,665,467
Confederation Life Insurance Co.
#62667, 8.55%, matures 6/1/94 1,853,762 1,853,762 1,853,762
#62668, 9.54%, matures 1/9/95 1,545,077 1,545,077 1,545,077
#62670, 8.80%, matures 1/16/95 765,529 765,529 765,529
#62671, 8.66%, matures 7/8/96 735,662 735,662 735,662
#62672, 8.88%, matures 7/8/98 736,257 736,257 736,257
#62673, 9.32%, matures 10/2/95 2,165,315 2,165,315 2,165,315
Ohio National Life Insurance Co.
#5472, 8.75%, matures 10/26/94 3,586,853 3,586,853 3,586,853
#5473, 8.75%, matures 12/11/94 2,838,564 2,838,564 2,838,564
Canada Life Assurance Company
#45637, 8.98%, matures 12/15/94 1,772,219 1,772,219 1,772,219
#45638, 8.60%, matures 3/26/94 3,764,117 3,764,117 3,764,117
#45639, 9.32%, matures 10/2/95 2,164,786 2,164,786 2,164,786
Commonwealth Life Insurance Co.
#ADA00303ST, 4.52%, matures 3/31/94 700,064 700,064 700,064
#ADA00444FR, 8.31%, matures 9/1/94 4,276,618 4,276,618 4,276,618
#ADA08804LT, 7.18%, matures 6/29/94 644,345 644,345 644,345
Mutual Benefit Life Insurance Co.
#50204003, 3.00%, matures 12/29/03 2,228,908 2,228,908 2,228,908
#50204002, 3.00%, matures 12/29/03 2,687,100 2,687,100 2,687,100
#50204001, 3.00%, matures 12/29/03 1,778,951 1,778,951 1,778,951
Mass Mutual Life Insurance Company
#10514, 6.61%, matures 7/5/02 9,192,357 9,192,357 9,192,357
#10733, 5.95%, matures 7/5/00 5,000,792 5,000,792 5,000,792
Bankers Trust Company BASIC
#92407, 5.61%, matures 9/30/00 17,155,595 17,155,595 17,155,595
Hartford Life Insurance Company
#9498, 5.46%, matures 12/19/94 4,966,061 4,966,061 4,966,061
</TABLE>
16
<PAGE> 22
SCHEDULE I
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (CONTINUED)
DECEMBER 31, 1993
<TABLE>
<CAPTION>
Number of
Shares
(Units) or
Principal
Amount of
Bonds and Market
Notes Cost Value
--------- ----------- ------------
<S> <C> <C> <C>
INCOME FUND (Continued)
Deposits with Insurance Companies (Continued)
Metropolitan Life Insurance Company
#13264, 5.95%, matures 12/30/96 11,903,654 11,903,654 11,903,654
Prudential Insurance Company
#GA7481, 5.94%, matures 9/30/98 4,734,976 4,734,976 4,734,976
#GA6697, 8.15%, matures 11/20/00 13,315,089 13,315,089 13,315,089
#GA7325-211, 7.57%, matures 5/1/97 4,795,655 4,795,655 4,795,655
#GA7325-212, 5.38%, matures 9/28/95 3,144,651 3,144,651 3,144,651
Aetna Life Insurance Company
#14233-1990-001, 9.77%, matures 12/29/97 4,670,838 4,670,838 4,670,838
#14233-1991-001, 9.71%, matures 9/15/97 4,576,103 4,576,103 4,576,103
#14233-1991-002, 8.44%, matures 3/31/97 4,285,716 4,285,716 4,285,716
Continental Assurance
#12800-036, 6.52%, matures 11/21/95 1,617,516 1,617,516 1,617,516
#12800-016, 7.75%, matures 5/24/94 2,574,694 2,574,694 2,574,694
#12800-026, 6.52%, matures 11/21/95 404,379 404,379 404,379
#12800-006, 8.57%, matures 4/1/97 4,454,121 4,454,121 4,454,121
State Mutual Life
#1955A01, 9.45%, matures 5/5/94 1,269,646 1,269,646 1,269,646
#1955A02, 8.44%, matures 6/3/96 2,982,334 2,982,334 2,982,334
Provident National Assurance
#027-05307, 8.46%, matures 7/15/96 5,260,672 5,260,672 5,260,672
#028-05452, 5.08%, matures 7/31/97 6,948,001 6,948,001 6,948,001
United of Omaha Life
#10383, 8.40%, matures 3/4/96 1,140,395 1,140,395 1,140,395
New York Life Insurance Co.
#06749-001, 5.70%, matures 3/16/98 3,644,296 3,644,296 3,644,296
#06749-002, 5.62%, matures 5/14/98 3,091,460 3,091,460 3,091,460
#06749-003, 5.75%, matures 6/30/98 4,102,864 4,102,864 4,102,864
Allstate Life Insurance Co.
#5529, 5.59%, matures 12/2/98 2,708,951 2,708,951 2,708,951
----------- -----------
Total Deposits with Insurance Companies 164,850,410 164,850,410
----------- -----------
Temporary Investments
Directed account cash fund 1,190,328 1,190,328 1,190,328
----------- -----------
Total investments - Income Fund 166,040,738 166,040,738
----------- -----------
</TABLE>
17
<PAGE> 23
SCHEDULE I
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (Continued)
December 31, 1993
<TABLE>
<CAPTION>
Number of
Shares
(Units) or
Principal
Amount of
Bonds and Market
Notes Cost Value
--------- ---- -----
<S> <C> <C> <C>
LOAN FUND
Participant Loans, 7% to 12.5% 11,904,356 11,904,356 11,904,356
------------ ------------
OTHER EQUITY SECURITIES
S&P 500 Index Fund 14,502 9,070,564 14,337,348
International Equity Fund 245,556 2,768,981 3,317,467
OTC Equity Fund 238,507 5,658,561 5,757,561
Asset Allocation Fund 574,853 8,787,818 8,852,739
------------ ------------
Total equity securities 26,285,924 32,265,115
------------ ------------
Total investments $221,668,867 $233,036,514
============ ============
</TABLE>
18
<PAGE> 24
Schedule II
EL PASO NATURAL GAS COMPANY
RETIREMENT SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 31, 1993
<TABLE>
<CAPTION> Number of
Transactions Cost of
------------ Purchase Selling Securities Net
Purchases Sales Price Price Sold Gain/Loss
--------- ----- -------- ------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Description of Securities
Bankers Trust Company Pyramid
Directed Account Cash Fund 393 275 $80,337,727 $81,691,067 $81,691,067 --
</TABLE>
19
<PAGE> 25
<TABLE>
<CAPTION>
Exhibit
Number Index to Exhibits
- - ------- -----------------
<S> <C>
23.1 Consent of Coopers & Lybrand
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
the El Paso Natural Gas Company Retirement Savings Plan (the "Plan") on Form
S-8 (File No. 33-48853, filed on June 26, 1992) of our report dated June 20,
1994, on our audits of the financial statements and supplemental schedules of
the Plan as of December 31, 1993 and 1992, and for the year ended December 31,
1993 and the six months ended December 31, 1992, which report is included in
this Annual Report on Form 11-K.
/s/COOPERS & LYBRAND
COOPERS & LYBRAND
El Paso, Texas
June 28, 1994
